As a Kellogg Graduate School of Management alumnus, it was a true honor to receive a copy of the most recent book by Philip Kotler, our prestigious S.C. Johnson and Son Distinguished Professor of International Marketing. Co-authored by Milton Kotler, “Winning Global Markets” lays out the case that, “The destiny of the economic world today is in the hands of the interplay between global MNCs (multi-national corporations) and global cities.”
The book does a very effective job at proving this claim.
Replete with global examples, the authors clearly show how “an inversion is taking place between the role of the nation and the role of its cities.” They create a compelling case that it is the multi-national corporation that has the power to create wealth for a city and to drastically change its cultural and civic landscape, and global cities that are more attractive economically than their countries as a whole. “Mid-size and large cities in developing countries generally have a growth rate exceeding that of their host countries,” say the authors, and “top cities have grown faster in GDP than the rate of their country’s GDP growth. Major cities are the source of a nation’s wealth, not the other way around.”
Thus, for marketers, this book turns on its head the current approach for determining where to expand globally for the greatest gain. Until now, the practice has been to consider which regions in which to expand, and then narrow it down to countries, only to select a city toward the end of the process after much negotiation with national government officials. The authors call this practice ‘out-of-date,’ asserting, “Business and marketing organizations have to overcome decades of thinking that global market expansion has to proceed at a global regional level and a country level…The strategic tendency of company marketers is to investigate opportunities at a national level and do business at a centralized government level. We call this the diplomatic route and it is out of date. Economic growth is not happening at the national level. Company marketers have to shift their focus to global city growth, and they must mine city region-level economic data for company growth opportunities.”
The book presents a clear process for doing this, along with concrete examples of companies that are successfully targeting global cities based on specific industry and supply needs.
On the flip-side, the book recognizes the imperative for cities to be exceptional marketers in their own right, attracting the right MNCs to their cities to fuel growth and wealth. “The presence of large global companies and their affiliates determines the wealth of cities and the well-being of their citizens. MNC’s have been the greatest cause of growing the middle classes of global cities.”
Just as marketers need to transform their old belief systems about how to approach the globalization process, so too do cities need to rethink their strategy of economic growth: “Conventional city economic planning emphasizes support for existing local small businesses and generation of new small business start-ups…For city economies to grow to global-city status, they have to attract mid sized and large MNC company headquarters and their business divisions. Support for small business is important, but it will not make a city great.”
The book then goes on to outline exactly how cities should be marketing themselves to compete for MNCs, and how nations can help their city economies.
I highly recommend this book for every marketer tasked with global strategy decisions, at all levels of a corporation, and every government official interested in enabling their city or country to truly thrive in the new global economy. The rules have changed. As Kotler and Kotler deftly show, to win global markets you have to keep up.