by Vera Eisenbraun, Miryam Reck and Lisa Cibities

Marketing in mature markets

Typical for mature markets is little or no market growth. Consumers are well informed and products are more and more seen as commodities. Creative companies differentiate themselves in these markets with good services and extraordinary experiences.

In mature markets, consumers prefer companies, “whose activities have a positive socio-cultural impact”. (Kotler 2010, p. 121) Here, marketers face a challenge.

The requirement for companies is, to accept the social needs and to participate in finding solutions. The main social issues are: health, privacy and job losses due to offshoring. (Kotler 2010, p. 121-122)

There are two factors that force companies for transformation in mature markets:

1.) The need for future growth: The Walt Disney Company integrates the issue of health problems, specifically  obesity in children, into its business model. The aim is to transform the eating habits of children in collaboration with several partners. Therefore Disney Consumer Products (DCP) developed a set of nutrition guidelines called “better for you”. These internal guidelines are the basis for all Disney’s franchisees. Disney involves the future consumers, the children, to its business strategy. Negative trends in nutrition should be stopped by more health awareness. That’s an example how transformation can be caused. (Kotler 2010, p. 122-123)

2.) The call for strong differentiation: An example therefore is Wegmans Food Market. WalMart is a threat to the small supermarket chain Wegmans. Wegmans developed a strategy to differentiate themselves from WalMart. The strategy is: Wegmans helps its customers and employees with a healthy way of life. The concept is to replace home-cooked meals with healthy and tasty convenience food and to develop more health awareness (healthy and balanced nutrition and sports) to customers and employees. (Kotler 2010, p. 123-124)

From Philantrophy to Transformation

Nowadays more and more companies are engaged in so-called philanthropic activities. These are actions that can be classified as charitable or humane. Besides the ultimate company goal of making profits and fulfilling consumers needs, private businesses spend parts of their proceeds for social projects in their home country or abroad. The growth of these actions is the result of a change in the way of thinking within society. Today, people are more and more interested in buying products from companies that act in a social responsible way. Studies have shown that these companies

  • are preferred by consumers,
  • that people are willing to pay a higher price for their goods
  • and that they will advise the company and its products to family and friends. (Kotler 2010, p.126)

But for many companies the primary goal behind these actions is not to act as a good and moral person but to enhance the image of the company or to reduce the tax burden by dispensing money. Even if a company is really interested in doing something good for society, without a focus on creating revenues or improving the image, most charitable actions won’t affect the people on a long term basis. (Kotler 2010, p.125)

Only a “transformation in society” (Kotler 2010, p.125) will allow consumers to reach self-fulfillment. Kotler states that this transformation should be the aim for companies, instead of conducting short-term charity actions. On the way to “consumer empowerment” (Kotler 2010, p.127) and consumer “self-actualization” (Kotler 2010, p.127), companies can use the more advanced “cause marketing” (Kotler 2010, p.125). In this case the company does not only spend money for social projects, but also creates a connection between their products and services and certain motives or occasions. These projects show a strong linkage with the target group, that also includes the employees of the company.

American Express is known to be the first user of cause marketing. In this first campaign American Express claimed to donate one per cent of its credit card debits for the renovation of the Statue of Liberty in New York. Therefore American Express increased its credit card purchases, because their customers wanted to support the rebuilding. (Kotler 2010, p.125) As mentioned before, Cause Marketing is a more sustainable way of supporting social projects. But Kotler’s new approach tends to use these charitable actions in a more strategic way. At this point the company integrates its concerns for social problems into its objects and avoids showing their apprehensiveness in short-term PR campaigns. This new approach should lead the company to higher growth levels and a better distinction from competitors. The all-encompassing aim of this approach is to allow the consumers to go up the Maslow pyramid. Kotler considers this as the best form of marketing in mature markets. (Kotler 2010, p.127) If a company has decided to follow this new appendage it should pursue these three steps successively, in order to create a “socio-cultural transformation” (Kotler 2010, p.127):

Figure 1: Kotler, Philip; Kartajaya, Hermawan; Setiawan, Iwan (2010): Marketing 3.0: From Products to Costumers to the Human Spirit. Hoboken, New Jersey: John Wiley & Sons, p. 128.

Figure 1: Kotler, Philip; Kartajaya, Hermawan; Setiawan, Iwan (2010): Marketing 3.0: From Products to Costumers to the Human Spirit. Hoboken, New Jersey: John Wiley & Sons, p. 128.

If a company thinks of possibly supportable issues they should consider whether the subject matches with the company vision, its mission and its values. One also has to consider the business and social effects. Identifying the socio-cultural challenges means not only to determine the challenges of the present, but also to think about the challenges in the future. These might be: well-being (health and nourishment, even if the issues were caused by people itself), education, social justice or the security of data in the World Wide Web. (Kotler 2010, p.128 and p.130) After determining a socio-cultural challenge a company has to define the target groups. Therefore one needs to know its groups of interests. These could be “employees, consumers, distribution partners, retailer, subcontractors or the public” (Kotler 2010, p.130). It is recommendable that the company picks the target group that has the biggest influence onto the whole community. (Kotler 2010, p.130) In this case the target group typically consists:

  • of groups with a certain gender or special age attributes (women, teenagers, older people) (Kotler 2010, p.131),
  • of people that belong to middle-class,
  • or of minorities. (Kotler 2010, p.132)

After defining the target constituents companies should offer “transformational solutions” (Kotler 2010, p.132) for the community. In doing so the company or its management should keep in mind that the expectations are high. People expect companies to offer jobs, to create alterations and to solve their problems with their products. (Kotler 2010, p.132.) All these expectations should fulfill not only basic needs but also allow the consumer to go up the Maslow pyramid. To achieve this challenge companies should follow a three-step process:

Figure 2: Kotler, Philip; Kartajaya, Hermawan; Setiawan, Iwan (2010): Marketing 3.0: From Products to Costumers to the Human Spirit. Hoboken, New Jersey: John Wiley & Sons, p. 133.

Figure 2: Kotler, Philip; Kartajaya, Hermawan; Setiawan, Iwan (2010): Marketing 3.0: From Products to Costumers to the Human Spirit. Hoboken, New Jersey: John Wiley & Sons, p. 133.

In step one a group of company members from various departments conducts “ethnographic research” (Kotler 2010, p.133) to learn more about so-called “hidden challenges” (Kotler 2010, p.133). They will dive deep into certain societies and will try to collect sagas, images and aims to understand the basic desires of the people within. The following step focuses on creation. This encompasses the “identification of opportunities, the design of solutions and the development of prototypes through synthesis and brainstorming” (Kotler 2010, p.133). The goal is to determine how much the chosen society requests the prototype. Within the last step the term deliver is the most important. Here the team evaluates whether the new idea is realizable and if the developmental process should proceed. One has to keep in mind that this process can only be successful if they act together with other companies, the stakeholders and even with their contestants. (Kotler 2010, p.133.) Marketing 3.0 will begin when the solution offered by the company changes society. (Kotler 2010, p.134)

Final remarks

Philip Kotler’s concept, that mature markets should be treated differently than fast-growing markets is understandable and a good approach for future marketing. It also makes sense, that companies should link their company objects with long-term social deeds and by that, differentiate themselves from competitors and attain future growth. The claim that companies should act as responsible citizens and not only carry out short-term Social-PR actions seems to match the expectations of the consumers. They are more trustful to companies that are engaged in social activities that do not only aim for a short-term increase of revenues.

One has to critically review the main concept of this chapter, the so-called three stages of addressing social issues in marketing: Philanthropy – Cause Marketing – Socio-Cultural Transformation. Philanthropy is already integrated in marketing. Cause Marketing is more difficult to implement into the marketing strategies of companies, but there are successful examples of Cause Marketing, like the campaign from American Express. The object of any commercially managed company is and will be to maximize profits. Cause Marketing is a beneficial way to combine social concerns with economic goals. The last stage that Kotler defines is Socio-Cultural Transformation. The idea to enable consumers to go up the Maslow pyramid and therefore to create Socio-Cultural Transformation is ambitious and the question is, whether human beings accept extrinsic influence by a company on their lifestyle. One may think that consumers will rely on their intrinsic beliefs and ideas to reach self-actualization and won’t allow companies to influence themselves on such a high level. There arises also the question, how consumers would react to attempts of various companies to reach transformation in different areas and with contradictory aims. Companies also have to concentrate more onto the needs of consumers instead of primarily focusing on their own needs. This means, that in some cases they have to change their corporate strategy and shift their focus on the needs of consumers. That’s a decision with far-reaching consequences for a company.

Kotler describes his concept of Socio-Cultural Transformation with two examples: Disney and Wegmans. Both companies have changed their business concept for economic reasons. A positive side aspect of this realignment was that their consumers now have the opportunity to choose for a better lifestyle. However this was an alteration that was triggered by the companies and then realized by the customers.

Maybe that is a better way to describe this Marketing 3.0 concept: Companies can offer possibilities to enable positive effects onto society, but in the end it is the human-being that has to be willing to make a change in his/her life and by that, to reach self-actualization.

If a company wants to initiate a Socio-Cultural Transformation, it needs a very sensitive and credible way of communication to convince the consumers of the products or services and the veritable social acting of a company (human spirit marketing).


Kotler, Philip; Kartajaya, Hermawan; Setiawan, Iwan (2010): Marketing 3.0: From Products to Costumers to the Human Spirit. Hoboken, New Jersey: John Wiley & Sons.

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