Wow! Marketing that Works
    Category: Column By : Hermawan Kartajaya Read : 1738 Date : Monday, December 02, 2013 - 07:33:20

    What is the difference between Michael Porter and the late Peter Drucker? Porter is known as a strategy guru while Drucker was the ultimate management guru. Porter advocates the importance of a sustainable competitive advantage while Drucker believed that the purpose of a business is to create a customer. Porter co-founded the Monitor Group, and was later acquired by Deloitte after filing for bankruptcy in 2012. Drucker, on the other hand, largely focused on education and writing.

    I highlighted the comparison when I spoke in China Marketing Conference 2013 in Beijing last November. I argued that Porter's competition and Drucker's customer are indeed important elements for any company. The concept of 3C's (customer-competitor-company) has been summarized by Kenichi Ohmae in his groundbreaking book “The Mind of the Strategist.”

    I liked the 3C model but I felt compelled to add the fourth C which is “change.” My own 4Cs model has been the basis for “Repositioning Asia,” my first book with Philip Kotler in 2000. Now with the growth of the Internet, I add a fifth C, “connectivity,” which is the new foundation for sustainability. A company that is connected to its competitors, customers, and change will be very responsive to the dynamic business landscape.

    Contrary to Indonesia, which aims to increase exports due to rupiah depreciation, China aims to enlarge its domestic market due to the yuan appreciation. In the past, Chinese companies relied solely on cost leadership to become the factory of the world. Today, they must rely on differentiation strategies to build strong brands in the domestic market.

    The government wants to improve the competitiveness of local companies. Due to the sluggish economies in the U.S. and Europe, sales of Chinese products have declined in those markets. That was the reason that the government body, the China Council for the Promotion of International Trade (CCPIT), invited me as a keynote speaker to offer marketing solutions.


    To me, this domestic market orientation brings two challenges for Chinese firms:

    1. They need to understand customers better. 
Before, the focus was to ship products outside. Today, they need to engage customers from end to end. That is why it is essential to understand what I call a “customer path.” In a connected world, this path has five stages: Aware, Appeal, Ask, Act and Advocate. Customers go through stages of finding a brand, liking it, researching it, buying it and eventually advocating it, to their friends in their social networks. Thus, the challenge is to create a brand that is strong on social networks.

    2. They need to become more competitive. 
No longer do they offer just affordable products and services. They need to create a positive customer experience. At the highest level, they need to engage their customers through life-transforming personalization. That way, customers will not only express a WOW moment when they encounter Chinese goods and services.

    An example for Chinese companies is Apple. Steve Jobs constantly created a Wow factor with products such as the iPhone and iPad. He created not only these products, but also new customer experience and engagement. Chinese firms need to learn how to have the Wow factor as Jobs did with Apple.