PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | SPEECHES & EDITORIALS | 2000 | MARKETING IN THE NEW ECONOMY

Marketing in the New Economy Dr. Y.Y. Wong Founder and Chairman, Wywy Group Chairman, PBEC Singapore AS I SYNTHESIZED THE IDEAS FOR THIS ADDRESS, I could not dissociate my thoughts from the far-reaching implications of the new economy fuelled by the astonishing advances in technology. Today, at the click of a mouse anyone can access 800 million Web pages of public information. Most of us remain stunned by the radical Internet developments of the last 10 years, yet Professor Farber, the Chief Technologist at the Federal Communications Commission forecasts that we are in for an even wilder ride. New technology will bring forth changes that are even more dramatic. By way of example, new technology will mean that the bandwidth on a single strand of fiber will be roughly equivalent to the bandwidth on the entire backbone network in the US. When we consider that each bundle of fiber has thousands of strands, it is unimaginable what that will do to society. Bill Gates recently achieved a market value of US$602 billion built almost entirely on intangibles. An investment of US$1,000 in American Online 7 years ago would have grown to US$300,000. The same amount invested in Time Warner with sales of 500 times of AOL and 24 times the net income would be worth only US$4,000.00. The difference is that AOL has an intangible asset by the name of Stephen Case; with the vision, that chatting on a computer screen, was as important, as the phone and TV. Almost every new member of the Forbes list of 400 wealthiest individual built his or her fortune on technology but many of them are not technologists. Bill Gates has never written any revolutionary software. AOL's Stephen Case was a shampoo salesman. Michael Dell dropped out from College to sell computers. Intuit's Scott Cook was a P&G marketer before starting his software company. In 8 years, Japan's DoCoMo achieved a market capitalization of US$260 billion and annual profit of US$5 billion. But what is more exceptional is that I-mode the web phone service behind DoCoMo's success is the brainchild of a young lady who earlier worked for an ad-magazine. Technologies and communications reset the playing field for the emergence of the New Economy. However, technology is only an enabler. At its core, the new economy of intangible assets was created by entrepreneurship. Technology is about hardware and software, entrepreneurship is about "spiritware and "heartware." Technology, economic forces, or nature does not create businesses. Entrepreneurs create businesses including ebusinesses and it is the "spiritware" and "heartware" that determine success or failure. Entrepreneurship is a deceptively simple subject to discuss. My definition of entrepreneurship is the enthusiastic thrust to create purposeful ideas that are implemented with passion for extraordinary gains. I included the word "passion" to underscore that entrepreneurship is not an obsession or lust for money, but suffering being acted upon to fulfill dreams that are formed by truth and gripped by integrity. Exacerbating the confusion, marketing is also one of the most misused words in business. As Kotler has it; marketing takes a day to learn. Unfortunately it takes a lifetime to master. It is therefore not surprising that marketing has been used interchangeably with advertising, selling, even swindling and that has given business a negative image. Compounding the difficulty, even history views business disparagingly. Greek mythology has it that Hermes; the god of commerce is also the god of thieves. For a long time entrepreneurs were also known as entremanures. Marketing is simply the creation of happy and loyal customers. Marketing focuses on the needs of the buyers. Advertising prepares the consumers. Selling fulfills the needs of the seller. While scientists in laboratories invent great devices, marketers in the marketing office conceive great products. Ultimately customers buy great products not great devices. Although there will always be people who believe that one can learn to play the piano on television, that mud can make us beautiful and rubbing jelly help, us lose unwanted inches in seconds. Last year the total net worth of the 400 richest Americans reached US$1.2 trillion almost equal to the GDP of the United Kingdom and I wondered; why is the US the mother of all wealth creation and the beacon of entrepreneurship? The answer is simple. The physical expression of entrepreneurship is salesmanship. No where else in the world is salesmanship respected, admired and esteemed as much as the US. Yet, salesmanship is disdained in many societies. The real secret of Coca-Cola, the world's best known product is not a scientific formula but brilliant marketing and salesmanship. The press recently asked me if I am from the old or new economy and if I have invested into BtoC or BtoB businesses. I am neither from the old or the new economy. I am from the e-Economy; the Experience Economy. BtoC or BtoB does not motivate entrepreneurs. Entrepreneurs are only inspired by PtoP; Path to Prosperity, as the only purpose for a business is to create a profit. But profit is not for celebration. Profit is a cost that is needed for growth and expansion. In the old economy, a critical success factor was to know the unknowable so that we may do the undoable. In the new economy, it is not only what we know but also when we know. Today there is no more argument over change. The only remaining argument is what to change; what to add, what to keep, what to discard and how fast. The New Economy is not about the hype of the Internet, the hysteria accompanying the volatility of markets or hi-tech greed. Previously we had to be street-smart. Today we have to be boulevard sharp. But my venture capitalists friends at Silicon Valley insist that growing designer stubs, with or without a neck-tie, spotting the latest close cropped hairstyle, misspelling company names may be cool, but certainly not enough to IPO a high tech startup. The new economy is about lasting value created for the new millenium. We have to be e-relevant or we will be irrelevant. The new economy revolution is a revolution of ideas. But crazitivity is not creativity. Peter Drucker commented that the Internet is not a revolution in technology, machinery, techniques, or software. It is a revolution in concepts. But concepts are not deeds and concepts are only transformed into businesses when they are proselytized with zeal, carried with passion, sustained by conviction and fortified by faith. It needs entrepreneurial marketers and salespeople not just conceptualists and technologists. This was the Guest of Honour keynote address delivered at World Marketing Week for the Singapore Marketing Award 2000, presented at the Shangril-la Hotel on October 5, 2000.