Interview With Milton Kotler – President, Kotler Marketing Group
Milton Kotler has over forty years of professional experience in marketing strategy and management. He is Chairman and President of Kotler Marketing Group (KMG, Inc.), headquartered in Washington DC, with offices in Beijing, Shanghai and Shenzhen, China. Milton founded Kotler Marketing Group in 1985 and is the sole owner of the company.
Kotler Marketing Group conducts projects in marketing strategy, management and training. Milton Kotler has led projects for Motorola, Ford Motor, Northwestern Mutual Trust Bank, AT&T, IBM, JP Morgan Private Banking and SAS Airlines. Company clients include Exxon Mobil, American Express, Microsoft, Novartis, British Telecom, Pfizer, and other Fortune 1,000 companies. Tony Kotler directs the Washington office of Kotler Marketing Group. Milton Kotler manages KMG China.
Milton Kotler incorporated Kotler Marketing Group China in 2004 as a wholly owned foreign enterprise. It currently has offices in Beijing, Shenzhen and Shanghai and a staff of 50 professionals who provide consulting and training services in four divisions: Strategic marketing; urban and industrial planning and investment attraction; strategic branding, media and design; and marketing and sales training.
Milton Kotler has been active in China for since 1999. He is an economic advisor to the Mayors of Xian, Dalian and Harbin. He has delivered public seminars in over 50 Chinese cities and is author of A Clear-Sighted View of Chinese Business Strategy, Renmin University Press, Beijing; 2003 and two earlier books in the U.S. on urban policy.
His brother Philip gratuitously introduced me to Milton. After reading about the work of the Kotler Marketing Group and given the emerging role of China in the world economy, I knew Milton would have a valuable perspective to share on the practical role of place branding in economic development. Yet again, Philip’s intuition proved to be on point.
What are your working definitions for brand and branding?
A brand is a product or service offer desired by the customer because it is a unique and trusted solution for his or her problem. This applies to offers from companies as diverse as IBM, McDonalds, the iPhone, and Godiva chocolates. Note that a brand, as in the case of McDonalds, can be cheaper than a competitive substitute. Trust can be thought of as the documented confirmation of others about the offer’s quality, attributes and other features of value.
Why is place branding important in economic development?
The economic development of all Places compete with each other for investment, business, talent and tourism. Place branding is an essential tool in winning this competition. Place branding has to convince external and internal resources that your place as the best place to solve their problem.
What are the typical reasons for failure of place branding efforts?
The most typical reason is the lack of a Place branding strategy, targeted and consistent programs or sufficient organization to implement strategy and programs. Too often strategy is egocentric rather than customer-centric. Place branding has to be customized for target segments that are strong enough to meet economic objectives. Finally, Place branding requires an operational structure to give it continuity and measurement. It cannot be accomplished as a limited advertising campaign.
Do you think reapplication of private sector product and corporate branding principles to the branding of places can be effective?
Yes, but a division must be made. Tourism selection is guided by emotional factors in the same manner as B2C spending; but, business investment and talent attraction are guided principally by economic value, as is the case in B2B purchasing. Naturally, there is a spill over. Career oriented talent seeks emotionally satisfying life style communities. Emotionally driven tourists are also cost conscious.
Product development to ensure sustained relevancy and competitiveness is important in product branding, how does this translate into place branding?
Places have to continuously refresh their destinations with new cultural, entertainment, shopping, and dining experiences, or customers will not return. This is the same as adding new features to a product to win customer replacement purchase.
Does the concept of life-cycle management have a role in place branding?
There are two ways to define life cycle management. It can be defined as having to do with the growth and decline of places. Or, you could think of it as offering a variety of options that are suited for people in different age groups.
Places lose their appeal with changing life styles in society, economic circumstances, available substitutes and changing demographics. Las Vegas will probably never again regain its glory days because people can game on cruises and go to even more spectacular places like Macao. Conversely, Branson Missouri has been saved by demographics of an aging population that cherishes the aging performers of their youth. As to the second meaning of places serving different age groups, this is a much more difficult than Toys-R-Us and Babies-R-Us, or Gap and Gap for Kids. Disney always struggles with this problem. Epcot was for adults to complement Magic Kingdom’s appeal to children.
What are your thoughts on the Strengthening Brand America Project?
I think it is a worthwhile Project, but a very difficult one for a variety of reasons. Let’s look at branding for tourism, investment, business and talent separately.
Tourist Attraction – The U.S. visa impediments are a great drawback to this lucrative segment of economic development. It is very cumbersome for the wealthy visitors from China and the Middle East to travel easily and frequently to the U.S.. Upon arrival, they confront a customs area that looks like a military zone. There are many great attractions in the U.S., but we have to brand the entry and exit points as welcoming and au revoir zones if we ever want visitors to return.
Business Attraction – This is largely a local challenge, and the states and cities are doing a good job of soliciting overseas businesses to locate in their jurisdictions. They have to pump more incentives and marketing expertise into this effort. There is little the federal government can do on this front by itself. The Federal government has to support State and city effort.
Investment Attraction – A lot of foreign money is flowing into the U.S. as a safe haven within the global monetary turmoil. But this is different than attracting investment into corporate America for equity and debt financing, as well as acquisitions and mergers, for growth. This is more than a matter of branding. It is a matter of economic opportunity and an advantageous legal and fiscal environment. It is hard to attract investment with the world’s second highest corporate tax, and there are endless regulatory constraints on foreign investment. I am hopeful that some of these problems will be corrected by the next U.S. administration. Political power has to invite, rather than inhibit investment.
Talent Attraction – U.S. graduate education, R&D and corporate headquarters are among the strongest assets of the U.S. for attracting talent. We have the brand, but we do not have the laws to wholeheartedly invite qualified educated foreigners to come or keep them here if they wish to remain. This is a political problem, not a branding problem.
What is your outlook for Brand America?
America is still a great brand. Our historic brand was always freedom and an open door to both immigration and opportunity. Homeland security and anti-immigration are challenging the authenticity of our brand and our defensiveness has resonance throughout the world. In my opinion, this is not a branding problem, but a political problem.