The pandemic has revolutionized our work, shopping, and private life. Its influence also affected the way we manage the relationship between the brand and the customer, i.e. conduct marketing activities. It is time to implement new solutions that will help adapt to changes in the market and customer expectations. We are entering a new, fifth phase of marketing. From this article you will learn what distinguishes it from the previous ones and how to use its assumptions in practice.
How did marketing develop?
First defined in 2021 by Philip Kotler, Hermawan Kartajaya and Iwan Setiawan in the book “Marketing 5.0 Technology for Humanity”, the fifth generation of marketing, is the fruit of evolution that has been ongoing since the 1990s. Everything that happened between Marketing 1.0 and 3.0 is the so-called era of the traditional approach to advertising and promotional activities, in which the product, customer, and values were the core foundations. Marketing 4.0 entered the world of digital, starting a revolution that is being continued in the current new chapter – Marketing 5.0. Its greatest need and ambition is to balance the role of technology and human values. To better understand the idea behind Marketing 5.0, it is worth looking at it in this broader context:
Marketing 1.0 (product-oriented) – companies produce as many products as possible and offer as many services as possible, focusing on sales.
Marketing 2.0 (consumer-oriented) – companies recognize their customers/consumers, but focus on segmentation and positioning, i.e. meeting the most important needs.
Marketing 3.0 (CSR) – companies are beginning to pay attention to their customers, as well as the vision, mission, and values that underlie their marketing strategy.
Marketing 4.0 (digital) – companies focus on digital marketing by combining online and offline activities.
Marketing 5.0 (integrating people and machines) – companies use the potential of new generation technologies and new customer experience, i.e. automation and empathy.
What is Marketing 5.0?
As we learn from the book by Kotler and his colleagues, an important inspiration for Marketing 5.0 is the Japanese concept of Society 5.0, which operates in a cyberphysical system that harmoniously combines deep digitization and reality. – Technology can and must be used for the good of humanity. Marketing 5.0, by definition, involves the use of technologies that imitate human behaviour to communicate, deliver, and increase value at every stage of the purchase path. One of the key issues here is Next Tech, i.e. new generation technologies that imitate the actions of marketers – conclude the authors.
This marketing concept is intended to be a response to three main challenges that specialists in this area are currently struggling with, namely:
- generational differences – in the values, needs, requirements, and preferences of customers and consumers of different generations;
- economic stratification – the result of which is an increase in the number of the richest and poorest consumers while at the same time we experience the disappearance of the so-called middle class;
- digital divide – associated with unequal distribution of digital competences and polarization into supporters and opponents of the wide use of technology.
Marketing 5.0 is therefore an approach that takes into account social, emotional, and spiritual (or, in other words, broadly human) conditions in the context of dynamic technological development in order to create value not only for a specific consumer, but also for the entire society or the planet. To achieve this, we need to stop thinking in terms of the binary division between people and machines. The path to achieving marketing perfection is the integration of human capabilities and technology.
Five features of fifth generation marketing
According to the Marketing 5.0 concept, it should be:
- Data-driven – optimizing and personalizing brand communications based on customer data.
- Predictive – designing the results of marketing activities before launching a campaign or introducing a product to the market.
- Contextual – providing a personalized experience to each customer through the appropriate place, time, and contact channel.
- Augmented – using virtualization to make the customer experience more attractive, as well as automation to reduce the burden on marketers with repetitive tasks.
- Agile – created by an interdisciplinary team that deals with the conceptualization, design, development, and validation of products and services, as well as marketing activities themselves within the entire organization.
This does not mean that in fifth generation marketing, marketers are replaced by machines – quite the contrary. By using Next Tech, they can make better decisions based on knowledge from specific data, predict the results of their strategies, more efficiently combine digital and real aspects of customer experience, increase the efficiency of their work, and respond faster to market dynamics and customer needs.
Marketing 5.0 = Next Tech + New CX
What exactly is meant by the concept of Next Tech, which lies at the basis of Marketing 5.0? Kotler means dynamically developing new generation technologies, such as artificial intelligence (AI), neuro-linguistic programming (NLP), robotics, augmented and virtual reality (AR and VR), the Internet of Things (IoT) and blockchain. According to his assumption, a combination of these technologies should be used at all points of contact between the customer and the product, service or brand.
This is intended to serve one purpose – moving away from the traditional sale of products and services to providing new, unique experiences (New CX), which will combine digital and real (physical) aspects of interaction with the brand, and often even completely blur the boundaries of this division.
New CX consists of five elements that create a complete path followed by customers or consumers:
- Aware – customers become familiar with the product, service or brand.
- Appeal – customers become interested in the product, service or brand.
- Ask – customers learn more about the product, service, and brand.
- Act – customers make a purchase after becoming confident about the product, service or brand.
- Advocate – customers who are satisfied with the product or service recommend the brand to others.
How to use the potential of Marketing 5.0 in your company?
The first step towards Marketing 5.0 is automation. This involves the use of AI, ML, NLP and other tools on a large scale, going beyond the most frequently automated area of e-mail marketing. The key here is strategic thinking about the competences of technology and specialists who will manage individual stages of the sales funnel. You can use a chatbot to obtain data about leads and take care of them as part of an information campaign. Further stages – based on direct interpersonal interactions, negotiations or understanding of mutual, often individual needs – i.e. offer, consultations, and final sale, should be left in the hands of qualified teams. Achieving this type of synergy of technology and human empathy is the application of Marketing 5.0 in practice.
A great ally of such a transformation will be inbound marketing, which, unlike outbound marketing, is characterized by much greater subtlety and precision of activities. It is based on three foundations – using all available channels, creating high-quality content, and providing real value to customers. This approach focuses on the relationship from the first contact of the potential customer with the brand to after-sales care. If your products or services solve the problems of the customer you want to reach, you can communicate something much more valuable and attractive as part of your inbound marketing activities. It is about being sure that your brand will support the client when he encounters problems with a given product or service, and when he wants to use them in an innovative context or share this experience with his own recipients.
We should also not forget about the “achievements” of Marketing 3.0 and 4.0, whose “work” is continued by the new, fifth era of marketing. Values, social and environmental sensitivity, cooperation with brand ambassadors and combining offline and online experiences (e.g. in e-commerce and stationary stores) are directions that are still worth pursuing. At the same time, we have to ensure the authenticity of the message – for example, CSR activities must be identical with the values behind your brand and its organizational culture, so that they are not perceived by customers and consumers as a token PR stunt. Credibility is a valuable currency in Marketing 5.0, which – to paraphrase the subtitle of Kotler’s book – works “in the service of humanity”.
By introducing these activities, you can enter a new, fifth era of marketing, which – by combining the strongest points of technology and marketers – can become an accelerator of success in a dynamically changing market reality.