Marketing 1.0, 2.0 and 3.0

in

Sri Lanka

Prepared by,

Waruna Kodituwakku, Upul Rathnayake, Gihan Mendis, Thisara Ranatunga, Lamali

Ediriweera, Inthuja Theivendran

University of Colombo School of Computing

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Table of Contents Executive Summary ................................................................................................................................ 2

Background of the project ....................................................................................................................... 3

1. Marketing 1.0 ...................................................................................................................................... 4

1.1 Ceylon Steel Corporation Limited .................................................................................................... 4

1.2 Marketing 1.0 with Ceylon Steel Corporation ................................................................................. 4

1.2.1 How the CSC see the market ................................................................................................. 4

1.2.2 Key marketing concept .......................................................................................................... 5

1.2.3 One-to-Many interaction ........................................................................................................ 5

2. Marketing 2.0 ...................................................................................................................................... 6

2.1 Ceylon Cold Stores (CCS) ............................................................................................................ 6

2.2 Marketing 2.0 with Ceylon Cold Stores ........................................................................................ 6

2.2.1 Promotion of the products ...................................................................................................... 6

2.2.3 Use of Information Technology ............................................................................................. 7

2.2.3 Smarter Consumer with Mind and Heart ............................................................................... 7

2.2.4 Differentiation, Corporate and Product Positioning ............................................................... 7

3. Marketing 3.0 ...................................................................................................................................... 8

3.1 Maliban Group .............................................................................................................................. 8

3.2 Marketing 3.0 with Maliban Biscuit manufactures ....................................................................... 9

3.2.1 Attitude towards the Environment ......................................................................................... 9

4. Marketing 4.0 .................................................................................................................................... 10

4.1 Reaching target customers .......................................................................................................... 10

4.2 Choosing the audience ................................................................................................................ 10

4.3 Interaction ................................................................................................................................... 11

4.4 How companies see the market ................................................................................................... 11

4.5 Marketing Guidelines .................................................................................................................. 11

4.6 The forces enabling the concept .................................................................................................. 11

4.7 Objective ..................................................................................................................................... 11

5. Reference List ................................................................................................................................... 12

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Executive Summary

The concept of marketing has evolved through several phases. During the period of Industrial Revolution, the marketing was product-centric. Mass production with the lowest possible cost was the thrust of the marketing strategy. This phase is also known as “Marketing 1.0”. In Sri Lanka the Ceylon Steel Corporation is an example for a company which uses this marketing strategy. Its products have fewer competitors, and the company is more concerned about the availability, affordability and reliability of the product.

The second phase or the consumer-centric marketing is also known as “Marketing 2.0”. The guiding principle is that the consumer has a heart and a mind and accordingly the marketing process should focus on providing what the consumers want. In Sri Lanka Ceylon Cold Stores follows Marketing 2.0. It tries to understand the consumers’ preferences, segment them and cater to those segments through product differentiation and customer specific marketing strategies. Technology and procedures are in place to continuously listen to the customers and provide them value for money.

The ‘Marketing 3.0” takes a step forward by adding ‘spirit’ also to the marketing concept in addition to heart and mind of the consumer. This concept strictly adheres to ethical standards in addition to consumer focused marketing. Quality is not compromised in search of quick and larger profitability. Maliban Biscuit Manufacturers in Sri Lanka is engaged in food products including infant milk food. And they are following Marketing 3.0, by supplying reliable and best quality products.

After that our suggestion is the next era of Marketing will be “Virtual Marketing” where people are interacting with virtually developed places to exchange products and obtain and provide services. The process of marketing can widely expand through virtual environments as most of the people in the world are now becoming a part of these diversified environments.

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Background of the project

Consumers are getting smarter in making choices. Companies are no longer telling them what to buy; they are listening to the consumers and paying attention to word-of-mouth marketing now more than ever.

In this ever changing technological era of 21st century, global marketing advancements have amazed us all. But unfortunately, the educational gaps among the Sri Lankan consumers as product end users have left many of them far behind.

The goal of this project is to analyze few companies in Sri Lanka that use marketing 1.0, marketing 2.0 and marketing 3.0 concepts. Furthermore in this project, the causes of the marketing evolution are also discussed. This analysis has been categorized under different marketing concepts for easy comprehension of how companies are following these versions separately and come up with the suggestions for what it could it be the next marketing concept.

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1. Marketing 1.0

Before the industrial revolution the production of goods were not in large scale only produced the amount needed for the community. After the industrial revolution people began to manufacture goods for selling purpose. Creating or producing a good was the main objective of industrialists. Production is the core concept in marketing 1.0. They provide large amounts of products to the market as they thought that the customer would think that widely available products are the best products to use. So the companies tend to manufacture goods in large amounts and made them available at a law price. If the price is low and easily affordable, more customers are willing to buy the particular product. When the demand increases the supplier has to increase the supply.

The standard product was produced in aim of achieving low cost and economies of scale Ford model T car is the best example this.

1.1 Ceylon Steel Corporation Limited Ceylon Steal Corporation was started in 1961. Since 1961 the CSC went through a number of improvements and in 2009 Ceylon Steel Corporation Limited (LANWA) was formed.

Vision statement

“To be a global player in the steel industry.”

Mission statement

“Focusing on research and innovation, developing infrastructure with state of the art technology, nurturing professional of caliber, delivering steel products which are the preferred choice of the industry for their quality, standards and affordability”

1.2 Marketing 1.0 with Ceylon Steel Corporation

1.2.1 How the CSC see the market The vision statement of the company reveals that the company needs to play a major role in the global context. They try to be the leader of the steel industry. CSC is trying to provide the steel products that are widely available in the world. They expect buyers who have greater need of steel for construction field in locally as well as globally. In the mission statement they emphasize that their products will confirm affordability. That is one of the fundamental characteristics of marketing1.0.

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1.2.2 Key marketing concept CSC is focusing on producing steel products. Rather than giving priority to the customer value and their needs they push their products to the market and expects wider market.

Here they are the king in the steel industry in Sri Lanka and they are focusing on one-to-many transactions as they can dominate the steel industry. They are planning to earn transactions not only for local market but also for global market.

1.2.3 One-to-Many interaction The company is not specific customer oriented but large groups of customer interactions are expected. CSC is more interested in increasing its output rather than the needs of the customer. The company itself is providing steel for a wide range of customers.

When we look at the structure of the market that is catered by the Ceylon steal cooperation customers are demanding few types of steel products in larger quantity. When it comes to competitors there is no major competitor for the company (Only small competitors like Asoka Steel etc.) This is very much similar to an environment like early stage of industrial revolution.

In this kind of Situation Company is more focused on producing the products quantity in large quantities. They are note in to extensive level of advertising and positioned them as “Pioneer and undisputed leader in steel production”

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2. Marketing 2.0

The evolution of marketing concept had several phases. The first was product-centric marketing which prevailed during the period of industrialization era. It is called “Marketing 1.0”. It was followed by the second and the more modern phase of customer-centric marketing which is called “Marketing 2.0” - according to Philip Kotler. In this marketing 2.0 concept the main principle is that the product consumer has a heart and a mind.

If their opinions are being appreciated by the business entity, the customers in turn value and support those product brands. Those opinions, either negative or positive, tend to add value to the company’s business as well as to its products and services.

Customers also like to behave in a community that allows them to interact easily with other potential customers via blogs, discussion forums, RSS feeds, bookmarking, etc. Companies also can join in these discussions and get right into the heart of the conversations in a way to connect with their customers. By providing tips and advice on how customers can use their products and allowing for instant feedback from them through the company blog or Instant Messaging (IM) platforms integrated to their websites, they can quickly respond to questions from customers.

2.1 Ceylon Cold Stores (CCS)

Ceylon Cold Stores had its modest beginning in 1866 as the Ceylon Ice Company, which imported and used the country's first ice making machine. In 1998 the addition of a modern bottling plant enhanced the production capacity considerably at the Kaduwela factory. In 2007 John Keells reinvested close to one billion rupees in state of the art factory line to improve its services to the market demands.

Vision statement

“Our passion is to deliver pleasure and nutrition throughout people’s lives through exciting and superior products, wherever and they chooses to eat and drink.”

2.2 Marketing 2.0 with Ceylon Cold Stores

2.2.1 Promotion of the products Think like a customer is the way CCS uses to evaluate what their customers need. CCS achieves this by Knowledgeable, available and friendly staff and by providing Good value for money of customers. CCS uses TV, radio, paper advertisements and online advertising in order to attract and maintain customers. Furthermore CCS acts as a sponsor for many sport events.

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2.2.3 Use of Information Technology CCS uses Information Technology as an enabling force. Their web site is acting as a mass advertising source. CCS also deals with social networking by using Facebook and Twitter. Consumers can add their comments and share their ideas through this facility.

2.2.3 Smarter Consumer with Mind and Heart CSS sees the market as a one with smart consumers who have minds and hearts. The taste and variety of the beverages and ice cream satisfies the customers’ heart. The affordable prices provide consumers with mental satisfaction, while all these ensure customer return-ability. They are working to keep good relationship with their customers.

2.2.4 Differentiation, Corporate and Product Positioning CCS mainly produces beverages and ice creams. As example for differentiating Ice Cream CSS offer many flavors such as strawberry, vanilla, Hakuru Mix, Chocolate, etc. By this process of distinguishing a product from others, they make it more attractive to a particular target market. CCS uses “our passion is to deliver pleasure and nutrition throughout people’s lives, through exciting and superior products, whenever they choose to eat and drink” as the overall utterance and other product specific utterances for product positioning.

2.2.5 Value propositions - Functional and Emotional

An effective value proposition should lead to a relationship between the brand and the customer, drive the customer’s purchasing decisions and good brand’s positioning. As example for beverages, CCS produces soft drinks, mineral water and energy drinks. Their functional values are taste, power, freshness and etc. They are directly linked to customer decisions and user experiences.

Emotional benefits provide consumers with a positive feeling when they purchase or use an “Elephant House” brand. They add richness and depth to the experience of owning and using the brand. When customers purchase products they have a trust on the quality.

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3. Marketing 3.0

Disparate usual marketing that emphasizes mind and heart benefits to a consumer, Marketing 3.0 includes a third dimension – ‘spirit.’ Businesses will need to define themselves not just in terms of products and profitability, but in terms of their values and larger connect with the community.

Marketing 3.0 in this sense, of a link between heart, mind and spirit to a company’s mission, vision and values is extremely relevant today. In this information age, people are no longer willing to take brands at face value. Consumers are now not just care about what product companies giving to them. They also care about the company’s reputation and impact of their buying. The new dimensions are not just Value or Benefit, but include Genuineness and Social Impact as well.

The global recession that we are still recovering is a product of sires of cooperate scandals (like World com, Enron incidents) which took place in mainly US & UK. Because of the gravity the situation grows these incidents capture the attention of the law makers as well as marketers because now days investors as well as customers are interested in the supplier as well as the commodity he provide before make any judgment because both of them are cared about his many and his life.

3.1 Maliban Group

From a humble tea shop to one of Sri Lanka’s most recognized brands, Maliban has come a long way in just over seventy years. In 1935 Mr. Angunugaha Gamage Hinniappuhamy started simple tea kiosk on the 1st Cross Street in Colombo Fort and name his shop as Maliban which is the name of the street which it’s operating .In that time its only notice by few pedestrians who walk by but it’s the birth of a trade name which recognize by the whole world.

Vision statement

“To be the most successful and respected food Company in Sri Lanka.”

Mission statement

“To win the hearts and minds of consumers by delivering food propositions with exceptional quality, safety & value whilst being environmentally & socially responsible, creating employee satisfaction and returning optimum value to stakeholders.”

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3.2 Marketing 3.0 with Maliban Biscuit manufactures

3.2.1 Attitude towards the Environment

Company’s one of main theme is act with good qualities which promotes act with good qualities and intention their advertisements are good example for this like helping for adults, respect for teachers, act responsibly and etc.

When we look at the environment that Maliban Company operates it’s made up with large no of marketing segments and they have to compete with large no of competitors to keep up their market share. In a situation like this it more likely to push company in to unethical behaviors.

But they have maintained a good reputation by simply following one rule “If you cannot give the product to your family member do not give it to the customer” it’s a simple rule to maintain high quality standard and treating customers with an emotional connection. There is also number of CSR projects and philanthropies carried out by them and this things suggest that the company itself also presenting as a good citizen of the company not only focusing on product perspective.

3.2.2 Use of New Technology

Due to the incidents like oil spill in the Gulf of Mexico Now a day’s stakeholder community focuses on the hidden costs as well as accounting profit. As a responsible cooperate citizen Maliban have spent considerable amount money and time on industrial waste management, for the effort made by them it was appreciated by the Geo Responsibility Awards also.

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4. Marketing 4.0

Marketing 4.0 will be Virtual Marketing where people are interacting with virtually developed places to exchange products and obtain and provide services. The process of marketing can widely expand through virtual environments as most of the people in the world are now becoming a part of these diversified environments. Virtual environments give people a real sense but actually they are not. User will experience it as real. Thus this is an effective way of reaching unimaginable customer bases. Marketing is a social and managerial process so even though it is a virtual environment there should be a social interaction and managerial process.

When people began to develop social networks people might not thought about what it is capable of and the power of such a concept. The beauty is billions of people are currently involving with social networking activities.

4.1 Reaching target customers

Targeted customer bases are the most important part in marketing 4.0 because without a good customer base it is pointless doing activities to promote or sell a product. To evaluate customer values there should be a good customer base. Through virtual marketing one can reach for an unbelievable market where people are gathering and creating an ideal environment to market products and opportunities. These are the places where one can access the global human interaction by just sitting in front of a computer. It is easier than putting huge effort to build a sound customer base in the local market. This concept addresses not a local market but a huge global market. For example Facebook is connected over 8 million people. Hence reach ability for a particular target portion of customers can be achieved while employing less effort, time and cost.

4.2 Choosing the audience

Choosing the relevant audience or a type of customer for a particular business requirement is very easy as people have to register with their information such as age, location, interests and priorities. Customer acceptance for a particular business can be easily identified by using simple text and small pictures of the goods or services that are going to provide. The cost of advertising is very low but it addresses huge market with different orientations. Building up a good business environment is quite easy and cost effective through the virtual marketing. Building up the proper community around a business can be achieved via ‘like’ comments to strengthen the idea among visitors.

Example: Colleges, Campuses, Educational Institutes can use the concept of virtual marketing successfully by optimizing their websites. Providing virtual tours inside the institute, pictorial representations of class rooms, library facilities, lecturer panels, and student comments will establish the real image or the brand name inside the potential students

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even though they are in the far corners of the world. The real impression can establish or positioning can be done effectively with virtual marketing.

The business entities can provide a better communication with customers by allowing the customer to interact with the business organization to clarify anything regarding their products or services.

4.3 Interaction

Customers as well as business organizations virtually interact with each other and share information about brands, make exchanges and obtain experiences over products and services. So this is Many-to-Many virtual interaction.

4.4 How companies see the market

Virtual environments are being grown rapidly. Along with the rapid growth the chance of directing new customers towards companies is easy where customer also get the maximum benefit by putting less effort. Better place to give value for the customers according to their specific needs and wants while concerning psychological patterns of the virtual human interaction.

4.5 Marketing Guidelines

Collaboration with customers, Vision and Mission of the company, Virtual experience and Value of the customer are key guide lines for marketing 4.0.

4.6 The forces enabling the concept

Concept of 3D modeling, web development, virtual environments where people can interact with and get the real-time like experience and fast internet connectivity are playing important roles here. And also without multimedia it is impossible to create successful virtual interactions with rich feedbacks. Hence these are very important forces which are helping to build up and activate the concept of virtual marketing.

4.7 Objective

Make the world better and easily accessible place for everyone in the world without considering physical geographical barriers. No matter where are you, no matter whom you are and no matter what are you doing, if you need something elsewhere in the world you can buy it share it and enjoy the freedom of satisfaction.

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5. Reference List

Ceylon Cold Stores PLC, 2010, Heritage, [online], Available: http://ccs.lk/heritage.html, [Accessed Date: 3rd January 2012] Headmint, 2012, MARKETING 3.0 - by Philip Kotler - Article - Headmint International, [online], http://www.headmintinternational.com/en-GB/Article/42.aspx, [Accessed Date 10th January 2012]

John Sansom SQL Server DBA in the UK, 2011, Think Like a Customer, [online], http://www.johnsansom.com/think-like-a-customer/, [Accessed Date: 4th January 2012]

MaRS, 2011, Value proposition | Entrepreneur's Toolkit, [online], http://www.marsdd.com/entrepreneurs-toolkit/articles/value-proposition, [Accessed Date: 5th January 2012]

Startupnation, 2011, Satisfied customers – everyone, [online], http://www.startupnation.com/business-articles/1103/1/AT_What-Customers-Want.asp, [Accessed Date: 3rd January 2012] Wikipedia, Internet marketing - Wikipedia, the free encyclopedia, [online], http://en.wikipedia.org/wiki/Internet_marketing, [Accessed date: 7th January 2012]

Wikipedia, Marketing - Wikipedia, the free encyclopedia, [online], http://en.wikipedia.org/wiki/Marketing, [Accessed date: 7th January 2012]

Wikipedia, Personalized marketing - Wikipedia, the free encyclopedia, [online], http://en.wikipedia.org/wiki/Personalized_marketing, [Accessed date: 7th January 2012]