On the verge of marketing 4.0

Now no one doubts the need to understand and study the behavioral characteristics of different age groups. For marketing activities, such work is extremely important. How do different generations differ, and how do these differences affect and shape marketing?

On the verge of marketing 4.0

Philip Kotler is an internationally renowned marketing specialist. I was lucky to learn from him. I was amazed at how lively and non-ossified mind this man possesses at his age. As they say, God forbid everyone!

Philip Kotler said a wonderful thought: “Give the client a choice and he will keep all his money with you . ” And for many years this phrase has worked perfectly, hundreds and thousands of studies have been carried out that tell how a person chooses a particular product.

Three eras of marketing by Kotler

Everyone knows the formula for choosing from three items of goods: a cheap analogue, a product that the seller wants to sell, and a very expensive analogue. The selling process would be more difficult without these cheap and expensive alternatives. All this is true and fair, and these methods must be used.

However, everything flows and changes, and now it’s time for new marketing strategies. And although it is not customary to count generations of marketing in Russia, as Philip Kotler said, the era of marketing of the third wave has already begun. Be sure to read his book Marketing 3.0, for a modern marketer it is a “must read”. In this book, the author has collected a vast experience of his work, and it is another proof of how unique a person Kotler is.

Perhaps the science of marketing has gone through many stages from its origins. But if we talk about modern marketing, there are three stages in its development over the past 100 years, which, according to Kotler, are called marketing 1.0, 2.0 and 3.0.

From product to emotion

The main task of marketing is the sale of manufactured products. And if earlier it was about simple goods for the mass consumer. In those years, manufacturers sought to produce as many standardized products as possible, through unification, to reduce the cost of its production and make it available to a wide range of buyers. This was Marketing 1.0, which was built around the product.

The Ford T car was an excellent example of this strategy. It was about him that Henry Ford said: “The buyer will receive a Model T of any color, provided that this color is black.” To exaggerate, in the era of Marketing 1.0, the main thing was to produce the product.

Nowadays, information technology has entered a new stage in the development of marketing – marketing 2.0. Consumers began to compare different products and choose the best ones in terms of price and quality. In the era of Marketing 2.0, the main thesis has become “the customer is always right”. Manufacturers want to meet the needs of their customers by offering them a wide range of functionalities and alternatives. Thus, if to generalize, then marketing 2.0 is the era of production of a unique product, as much as possible and closer to meeting the needs of a particular consumer. A soda drink with names on the label has become a shining symbol of the era of Marketing 2.0. So, the manufacturer inspires the consumer that this particular bottle was produced specifically for him. The marketing activity of most Russian companies is now at this stage.

Marketing 3.0 is currently under development. And for companies, a person has ceased to be just a consumer with a set of requirements for a product, he has become a full-fledged being with thoughts, emotions and soul. Customers have begun to opt for solutions that can improve the world. They increasingly choose products and services that will help them satisfy not only physical needs, but also bring emotions and even satisfy mental needs.

Companies that are already operating in the context of Marketing 3.0 have a mission, vision and values ​​that are important to the world as a whole. And since in the marketing of this version it is generally accepted that all customer requests deserve attention, they began to call it social or emotional marketing.

Generation X is being replaced by Generation Y

This timeline shows the evolution of marketing as a profession and even a science, and also demonstrates how customer behavior has changed. And these changes are closely related to the change of generations. People born in the 40’s and 60’s belong to the baby boomer generation. Generation X is those who were born in the 60s and 80s, and generation Y is those born in the 80s and 2000s. Those born in 2000 and later belong to Generation Z.                                  

A generation change occurs every 20 years. And right now, the main buying generation X is gradually being replaced by Generation Y. That is, millennials born before the year 2000 are now entering their maximum power.

Generation X needed a choice, they wanted to choose from a wide range of products. They needed to be provided with full information about the technical and other characteristics of the product, and then they made a choice on their own. For generation X, the main task was to collect information that helped to find the pros and cons of the product and make the right choice. This fit perfectly with Marketing 2.0.

For Generation Y, the choice factor has receded into the background. Of course, they also want to choose, but they attach greater importance to social significance, the environment, caring for their future and the future of loved ones, just people in general. Generation Y values ​​their time very much, so they do not spend it on gathering information and making choices. After all, this is the time that they can spend on themselves. The main choice for Generation Y can be formulated as: “Who do I trust to gather information for me and, in fact, make a choice”.

Generation Y is able to quickly assimilate information from various sources, but does not “dig” as deeply as generation X does. For people of formation Y, emotions are more important. It is this generation that is maximally “hooked” on emotional consumption. It is not rational to buy a new iPhone every year, because the previous one works the same way as the new one, and you can only see the difference between generations of smartphones when there are 3-5 years between them. However, crowds of people buy new iPhones every year, because for them such a purchase is charged with the emotions of owning a new thing. Shopping with emotions “I want a new one!” – this is already marketing 3.0. There is also another side here: for example, products in eco packaging, as well as companies that give a certain percentage of their sales to “world peace”, to “fight cancer” and so on. That is, they do not just give money or act as sponsors, they have made these actions part of their marketing strategy. And such companies are already playing in the third generation marketing field.

A new era of marketing

Will there be a fourth wave of marketing? Necessarily! After all, the next generation has already been formed almost completely: representatives of generation Z will be born only in the next two years. How exactly they will buy is still impossible to say for sure, since they have only recently begun to enter the “buyers” age category. They are now the first representatives of generation Z, born in the transitional “generational” years 2000-2005. And for this period, the influence of the values ​​and behavioral stereotypes of generation Y is still strong. But new studies that study the characteristics of the generation of young people show that it is already possible to start writing a book about marketing 4.0.

About the Author

Alexander Gruzdev is an extraordinarily experienced consultant in business analytics. Since he was 14, Mr. Gruzdev was working in the market research industry and started several businesses including gambling organizations, retail shops, and real estate.

Since his first entrepreneurial endeavors began, he never quit market research – in fact, during the last 15 years Mr. Gruzdev held the positions of general manager and shareholder in this segment. His experience in global market intelligence spans over 20 countries including Europe, Russia, Asia, and the MENA region, for more than 100 different customers.