Marketing techniques aimed at creating needs and responding to them with specific products were used as early as ancient Greece and Rome. In this publication, we describe the communications revolution, with particular emphasis on Philip Kotler's Marketing 5.0 concept.
This article covers his earlier marketing concepts— marketing 1.0, marketing 2.0, marketing 3.0, and marketing 4.0. But let's start from the beginning...
What is marketing?
There are many definitions of marketing, but one of the most popular and generally accepted is that of the American Marketing Association. It posits that:
Marketing is the activities and processes that create an exchange of value between a company and its customers, using strategies that enable the organization to understand the needs and desires of its customers and build long-term and profitable relationships with customers by offering a personalized consumer experience.
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In other words, marketing is the process of planning, implementing and controlling business activities aimed not only at attracting attention and persuading consumers to make a purchase through the digital market, but also at satisfying their needs and desires.
Marketing activities include, among others, market research, offer creation, multi-channel strategies, communicating with customers, distributing products and services, brand management (also using web analytics tools ) and building the company's image.
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Marketing in the past
Advertising signs placed on building walls, attracting customers' attention by calling for and encouraging them to purchase goods, or artistic patronage . These techniques, among others, were used in ancient Rome to reach target groups and awaken in them the need for specific goods.
It was no different in ancient Greece. Merchants resorted to free consultations and advice on how to use the product to achieve the best results. Additionally, they offered free samples, a practice still practiced today in various sectors of the market (including the black market), organized public speeches, and presented their wares in the most popular venues—markets and shops specializing in cosmetics, perfumes, oils, and jewelry.
Some invested in trademarks that helped make their brand more recognizable.
Marketing today
Modern marketing has been evolving since the second half of the 19th century, driven by the Industrial Revolution and the development of mass production. It was during this time that the first advertising agencies emerged, and their dynamic activities, supported by radio and television in the 20th century, were amplified.
Today, marketing is an integral part of every company's operations and encompasses a wide range of activities, including market research, strategic planning, brand promotion, sales, and customer service . The strategy encompasses numerous channels for reaching customers with advertising messages. Campaign results are measurable, and using algorithms and artificial intelligence, they can be automatically optimized 24/7.
Kotler and his marketing concept
One of the most influential figures in the field of marketing is Philip Kotler. He is an American economist, professor of marketing at the Kellogg School of Management at Northwestern University, and author or co-author of over 80 industry books, including "Marketing Management," "Principles of Marketing," and " Marketing 4.0: Moving from Traditional to Digital ."
He points out that the traditional customer-to-purchase path is becoming longer and more convoluted . Consumers now have completely different expectations, make informed choices, and are sensitive to social and environmental issues. To transform conscious consumers into loyal and satisfied customers, we need to begin practicing value-based marketing and Marketing 4.0 — that is, combining the human factor with modern technology. This is precisely what the transformation to Marketing 5.0 is all about.
How to implement it in practice? In Marketing 5.0: Technology for Humanity, Kotler offers straightforward, practical advice. Simply apply it to the specific marketing discipline used within your organization and implement it broadly. The foundation of this process will be:
- Offering consumers valuable products and services,
- Building long-term relationships,
- Generating profits for the company,
- Supporting expert knowledge with technology and artificial intelligence,
- Creating unique shopping experiences by personalizing the message,
- In-depth analysis of collected data and the ability to draw logical conclusions.
- Business agility and flexibility in times and industries where change occurs continuously.
How Marketing is Changing - Kotler and His Concepts
The core of Kotler's Marketing 1.0 concept was the product and its sale. Over time, this model was enriched by considering customer needs and desires. Marketing 2.0, 3.0, 4.0, and 5.0 concepts are subsequent stages of its development, taking into account technological advances and changes in customer behavior and expectations.
Let's take a closer look at them.
Marketing 1.0 – above all, a good product
Marketing 1.0 dominated the 50s and 60s. The relatively small number of available products and their lack of variety forced companies to focus on mass production. Marketing was practically nonexistent. The limited availability of goods meant that ensuring quality, relatively low prices, and a focus on functionality through communication were sufficient to ensure that products flew off the shelves at lightning speed.
The concept failed to account for differences between customers and their needs. The lack of a personalized approach to consumers and the need to adapt to changing market conditions forced the theory to evolve into Marketing 2.0.
Marketing 2.0 – the priority is the customer and his satisfaction
While marketing 1.0 focused on the product, marketing 2.0 recognized the need to build relationships with the customer and actively engage them in the process. The focus, beyond high product quality and the best possible price, shifted toward satisfaction, which encompassed more than just the aforementioned aspects.
Entrepreneurs began to recognize that customers were diverse, as were their needs. Consequently, messages were more personalized, as well as… audible and visible! The development of modern technologies allowed the use of media other than just traditional ones . Interactive and, above all, two-way communication allowed for direct contact with the recipient. Social media and websites became powerful and readily used tools , standing up to the press and television.
Marketing 3.0 – Value Has… Value! Human-Centric Marketing
Quality, competitive pricing, and a focus on meeting real customer needs are clearly not enough. Growing consumer awareness and changing behaviors require companies to incorporate values with which customers identify into their strategies. This is another key to success, resulting in brand recognition and loyalty.
Audiences don't want organizations focused solely on achieving business goals. As we read in the book Marketing 5.0 Technologies Next Tech:
For this reason, companies build their identities and strive to differentiate themselves in the market based on their values. The products they offer and the activities they undertake should not only generate profits but also provide solutions to the most serious social and environmental problems.
Despite the passage of time, consumer expectations on this particular issue have remained unchanged, and have even intensified. According to a 2022 report by the HAVAS agency, 77% of consumers expect brands to support those affected by the crisis . These figures are further fueled by the pandemic and the geopolitical situation.
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Marketing 4.0 – Welcome to the Digital World of Marketing Opportunities
After marketing focused on intellectual support for customers and offering them functionality within a product or service (marketing 1.0), we have moved on to taking care of the emotional sphere (marketing 2.0) and responding to spiritual expectations (marketing 3.0).
The rampant marketing machine, fueled by technological advancements and the growing importance of social media and content marketing, has no intention of stopping. Marketing 4.0 is the maximization of modern technology to optimize profits from campaigns and business activities.
Marketing 4.0 emphasizes personalization and interaction . Consumers expect personalized experiences and are willing to engage with a brand only if they feel it understands their needs and preferences. Marketing 4.0 also involves the use of data analytics and artificial intelligence to understand customer behavior and adapt marketing activities in real time.
Marketing's Sudden Acceleration… Transformation 5.0
The authors of Marketing 5.0: Technology for Humanity believed that marketers were still in a transitional phase of transforming business practices, and that adopting the next marketing concept was still a long way off. The pandemic, which forced us to change our way of working and living, significantly accelerated the pace of implementing new assumptions. It was time for further modifications to adapt to the dynamic changes in the market and consumer expectations.
Kotler's Marketing 5.0 – Man and Machine
Marketing 5.0 isn't just about wrapping product functionality in a layer of emotion and spirituality. It's also much more than leveraging modern technologies, artificial intelligence , and multi-channel customer communication, primarily through social media.
Kotler's new concept addresses the biggest challenges marketers face as they adapt to the modern business environment and three important phenomena. These are:
- Generation gap —that is, profound differences in preferences, values, and expectations between different generations of consumers. Rapid technological developments and social changes are driving differences in consumer behavior and preferences.
- Economic polarization —expressed through the stratification between rich and poor, leading to increased social segregation and difficulty accessing resources. Social polarization affects every aspect of life. Kotler highlights the shift in social distribution—currently, the largest populations inhabit the highest and lowest social classes, with the middle class disappearing. As we read in the book "Marketing 5.0," people at both ends have conflicting life priorities and worldviews, which undermines understanding. Consumers are increasingly shifting the responsibility for remedying this situation through an inclusive and sustainable approach to wealth accumulation to companies.
- Digital divide — addressing unequal access to and skills in using digital technologies among different social groups. Philip Kotler also addresses the division between supporters and opponents of digitalization, resulting from inconsistent assessments of the opportunities and threats associated with it.
The concept of Marketing 5.0 is a response to audience expectations that go beyond companies' mere business goals. Let's take a closer look.
Marketing 5.0 – what is it?
This approach takes into account emotional, spiritual, and social factors embedded in rapid technological progress, creating value for customers, society, and the natural environment. Businesses are intended to follow these guidelines when creating offerings, communicating with customers, and building lasting relationships with them.
As we can read in Kotler's book,
Marketing 5.0 involves the use of technologies that imitate human behavior to create, communicate, deliver, and enhance the value experienced by customers throughout their purchasing journey. One of the key aspects of Marketing 5.0 is next-generation technologies, or "next tech," which are designed to mimic the competencies of human marketers. These include artificial intelligence , natural language processing, sensor technology, robotics, augmented and virtual reality, the Internet of Things, and blockchain. The combination of these technologies is the enabler of Marketing 5.0.
As we read in Kotler's book, known as the bible for managers and digital marketing professionals, " we must reject the human-machine dichotomy. To deliver an outstanding consumer experience, the integration of digital and human interactions is becoming imperative."
All this to strengthen existing marketing practices.
Without a doubt, Kotler's book opens a completely new chapter in the history of marketing. It will help disoriented marketers learn what it really means to enhance the value of a service or product, to raise awareness of the use of artificial intelligence and technology, and to practice value marketing through social media.
We are moving away from traditional marketing to reach the real needs of informed consumers and business partners, using the experience and knowledge of experts, supported by advanced technology.
Next-generation technologies combined with human empathy
The pandemic and its associated social distancing have led to a significant acceleration in the digitalization of businesses. They have also forced consumers to become more open to solutions utilizing modern digital technologies. Examples of this are readily available. In food services, this will include the ability to order food for home delivery. Hotels are already using automated cleaning systems, and airports are implementing contactless check-in processes.
According to the core tenets of Marketing 5.0, digitalization should be present at all customer touchpoints with the brand —from marketing to post-sales service, creating a synchronized and, above all, personalized consumer experience. It is most desirable for it to occur at three levels:
- Informational — based on offering complete answers in a personalized offer. This can take the form of a marketing message, a product selection, or a price promotion. For example, by leveraging geolocation, companies can target messages to people located near a brand's physical location.
- interactive — offering rich and valuable interaction through two-way communication. The goal is to move the customer from awareness to action. Interactions guarantee a greater commitment to purchasing a product or service.
- Immersive — referring to the user's engagement with an artificially created sensory experience. The goal is to blur the line between the physical and digital worlds to make the shopping journey as enjoyable as possible.
The strategy for implementing digitalization and creating consumer experiences must be tailored to the level of maturity of the organization and the specific industry sector in which it operates.
Do you know that…
The combination of machine analytics and human empathy will only become increasingly important. A McKinsey study found that 44% of global customers are willing to use webrooming (viewing products online and then purchasing them in-store), and 23% are willing to use showrooming (testing a product in-store and then ordering it online). As you can see, combining online and offline pays off! In a hybrid shopping journey, it's crucial to incorporate various channels, both technology-based and those based on direct human interaction, to create a comprehensive customer experience.
Without a doubt, Kotler's book opens a completely new chapter in the history of marketing. It will help disoriented marketers learn what it really means to enhance the value of a service or product, to raise awareness of the use of artificial intelligence and technology, and to practice value marketing through social media.
How to build digital potential?
Brands operating in the spirit of Marketing 5.0 must move away from merely selling goods or services and focus on offering exceptional digital experiences. At the same time, they must not forget about building lasting relationships with customers, which in an age of rapidly evolving technologies have become a scarce commodity. Therefore, how customers can make a purchase, how they will be cared for by the brand at every touchpoint, and how the experience of using the purchased product or service will be crucial. Moving forward, modern companies should leverage digitalization at every stage of service, including post-sales support. They also cannot neglect strengthening social proof—using, for example, recommendations from satisfied customers.
Using next tech at 7 touchpoints:
- advertisement,
- content marketing,
- direct marketing,
- sale,
- distribution channels,
- product/service offer,
- after-sales service.
Leveraging human potential in the customer journey
It's primarily based on experience, flexibility, empathy, and creativity. It's also important to remember that machines cannot replace humans in efforts to build honest, genuine, and cordial relationships, including between company and client.
At Verseo, we are moving away from traditional marketing to reach the real needs of informed consumers and business partners, using the experience and knowledge of experts, supported by advanced technology.
Magnetic Marketing at Verseo
At Verseo, we're going completely digital in 2023. We want to be an example to others, allowing them to learn from our mistakes and successes.
5 Pillars of Verseo
- Human Touch
To fully harness the power of technology, a human touch is essential. In this new reality, the slogan from one of Verseo's campaigns, "human-machine," takes on a completely new meaning. Humans are still at the center. Our distinguishing features are communication (understood as the ability to converse with technology), legendary service, experience, creativity, and, most importantly, the capacity for skepticism and judgment. These are areas beyond the scope of machine competence, yet crucial to achieving success.
- High Marketing Culture
A new marketing culture based on transparency, collaboration, and partnership. We're introducing a new approach to the client, which we call the Hospitality Factor. We focus on a holistic view of the business, shared goal setting, and a win-win approach. Clients always know who's serving them, and each client receives a percentage of the commission. This ensures that everyone is committed to achieving their goals together. We operate at the forefront of our approach, striving to always be one step ahead, setting new trends in technology and client relationships.
- AI/Machine Learning – Verseo DNA.
We boast the most extensive experience in the field of algorithms in the country. We have dedicated teams of so-called special forces for the most challenging topics related to technology and analytics. Currently, every element of the agency and marketing channel utilizes AI/Machine Learning as a background.
- Next tech
Every customer activity is a form of stored and processed data. A transaction, a phone call, an email, a location, or activity. We want and can use all of this. This provides us with vast amounts of data that must be analyzed. Today, every company must create its own data ecosystem. We created a marketing data warehouse to support our clients and lower the initial barrier to entry: the cost of such technologies. We have our own analytical department and extensive support for business intelligence in building reports.
- Multichannel, Multiscreening, Augmented Reality
Everything, everywhere, at once. Companies need comprehensive, multifaceted advertising channel management in the face of the growing generational divide and social polarization, for professional marketing management. The ability to reach, understand context, and predict customer needs amidst the daily exabytes of data is becoming the golden grail of marketing.
Sustainability, inclusivity, agility, and flexibility are all layered on top of this . Technology will increasingly imitate human behavior. Online and offline converge, augmented reality, the growth of advertising tools and channels, different generations, and the infinite scalability of AI.
We have solutions for this, which we're already implementing with clients in their organizations. Want to get to know us even better? Let us know, we're waiting for you!
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Marketing 5.0 FAQs
Marketing 5.0, a concept developed by Philip Kotler, involves using human-like technologies (such as artificial intelligence and machine learning) to create, communicate, and deliver value throughout the customer journey. At its heart is the combination of advanced digital tools and human empathy.
While earlier stages of evolution focused on the product (1.0), the customer (2.0), human values (3.0), and the transition to digital (4.0), Marketing 5.0 combines cutting-edge technology with the human element. Human-machine collaboration involves technology analyzing vast amounts of data, while humans provide relevant, empathetic, and authentic context.
This concept addresses three main problems in today's market:
- Generational gap – drastic differences in behavior and expectations between different generations of consumers.
- Polarization of society – conflicting life priorities and worldviews of people, forcing companies to take responsibility for sustainable development.
- Digitalization – the need to blur the boundaries between the physical and digital worlds in the post-pandemic era.
To implement this concept in a company, it's necessary to build a dedicated ecosystem for collecting and analyzing data (every interaction, email, or transaction is valuable information). The next step is to leverage next tech and AI at customer touchpoints (including advertising, after-sales service, and distribution), while also focusing on personalization and delivering real value.
Verseo is moving away from traditional marketing in favor of a model tailored to modern needs. Its operations are based on five pillars: Human Touch (expert care and the human factor), High Marketing Culture, AI/Machine Learning (automation and optimization), next tech, and multichannel. This benefits both informed consumers and business partners.
Summary
The above article covers the following topics:
- The definition of marketing as a process of exchanging value between a company and its customers and its contemporary applications.
- Evolution from ancient sales techniques to modern tools supported by AI and algorithms operating 24/7.
- Kotler's concepts: Marketing 1.0 focused on the product, 2.0 on the customer, 3.0 on social values, 4.0 on digitalization and personalization.
- Marketing 5.0 as a response to the generational gap, economic polarization, and the digital divide, combining next tech with human empathy.
- Using next tech at seven customer touchpoints and the role of the human factor in building authentic relationships.
- The Verseo model is based on five pillars: Human Touch, High Marketing Culture, AI/Machine Learning, next tech and multichannel.
