US: Firms should use public relations more effectively

Marketing professor says local companies should rely on Internet's influence for 'word of mouth' advertising

Bangkok Post
Thursday, August 16, 2007

By Umesh Pandey

Local companies looking to get more publicity as advertising budgets shrink should consider using more effective public relations campaigns and word of mouth to promote their products, a leading marketing professor said yesterday.

"The 21st century is going to be the century of 'word of mouth,'" Philip Kotler, eminent professor of international marketing at the Northwestern University Kellogg School of Management, said at the one-day seminar entitled "On 21st Century Marketing."

With the heavy flow of information on the internet, he said, word of mouth has increased dramatically as various portals allow consumers to complain or praise products that are accessible to many customers.

The Chicago-based professor, who has written numerous books on marketing and is considered one of the world's foremost experts in the field, said most companies overlook effective public relations as a way to get their message across.

Citing the example of the record-breaking sales of Apple's iPhone, he said that the company "did not pay a cent" for advertising but instead allowed its public relations department to create the hype. The strategy had customers queuing up in front of stores days ahead of the launch date.

"This is an area that is neglected by management and should be better utilised and not put in as a cost centre for the company," he said at the seminar, attended by about 700 participants.

Mr Kotler, who is on a trip across the Asean countries, said that businesses should first focus on customers, then employees, then partners and lastly on competitors. A firm should target a market where they can deliver superior value through differentiation and relevance.

Today's marketing strategies must take a holistic approach that considers all aspects of the company's operations, including internal marketing within the organisation, corporate social responsibility, relationship marketing and integrated marketing.

He said that companies looking to use word of mouth to market products or services should make their product or service something that a customer cannot live without.

"In a survey done lately, companies such as Starbucks and Harley-Davidson were named as a company people cannot live without," he said, adding that achieving such a status is the best marketing strategy to promote any product.

Mr Kotler said a recent study done by Jim Collins, author of the book Good to Great, showed that customers give their allegiance to companies that are the most profitable over a longer period of time and spend the least on marketing and advertising campaigns.

These companies also had policies to align the interests of stakeholders, pay executives modest salaries relative to those of average employees, allow everyone access to top management and pay higher compensation and benefits to employees, which subsequently makes them stay longer.

These companies, he said, relied on corporate culture as their greatest asset and their primary source of competitive advantage. They hire people who are passionate and view suppliers as their true partners.

"This is the 21st century paradigm for marketing," Mr Kotler said.

Date Posted: 8/16/2007