Monday, September 9, 2013
Transforming Marketing – Making Marketing Matter
"The business enterprise has two - and only two - basic functions:
marketing and innovation."
The importance of marketing has never been more critical. We find ourselves competing in an “age of sameness” where products and services, regardless of the sector or geography, are basically the same. They work in the same way. They do the same things. As such, the market and its customers have been commoditizing category offerings. As a result, customers are reducing their selection criteria in virtually every category predominantly to cost. This phenomenon is underscored by frequent and deep discounting, the rising use of tenders, rapid growth of promotional sales as a percentage of total sales, decline in ASP (Average Selling Price), etc. Organizations cannot win by price discounting in a marketplace that is willing to settle for GAQ (Generally Accepted Quality), particularly given developing countries, and emerging new companies, willingness to deliver it at bargain basement prices.
However, despite the importance and need for marketing, the way many corporations employ it would suggest that marketing is not one of two basic functions Professor Drucker identified. It is not even an essential function. For many organizations marketing just doesn’t matter. They play at small “m” marketing whose function is staff versus line management. It is focused tactically on sales force support and promotion. Moreover, these organizations treat marketing as an expense as opposed to an investment; one of the first to be cut when targeted profit levels are threatened.
Marketing can and should matter. In order for it to matter marketers (and their organizations) need to embrace Brand Animated Marketing (BAM), which is concerned with creating brand loyalty. To “create” means to bring the customer into existence (for your offering). “Brand” is much more than the physical features and attributes of a product or service. It is the special relationship and bond that is engendered with the customer built upon positive experiences. “Loyalty” is about creating unswerving devotion to the brand that can insulate it from attempts by competitors to make inroads into your business (regardless of whether it be through discount or promotional pricing, product improvements, new entries, etc.).
|Small "m" marketing
||Brand Animated Marketing
Sales Force Support - Staff Function
|General "Line" Management
|Sell Product Features
||Create Brand Experience
|Marketing is an expense
||Marketing is an investment with MROI
|Insipid, uninspired marketing that is invisible
||Pipeline of BIG marketing ideas that get noticed and cxompele customer behavior
So how do we transform marketing so that it creates enduring relationships built upon meaningfully differentiated and satisfying experiences with brands that grow top line sales while increasing profit margins, rather than stick-out as a questionable expense item to be cut from the budget? How do we go from small “m” marketing to BAM?
- Audit your marketing department – Check to determine if marketing is functioning consistent with the role you’ve identified. BAM is about adding value and accountability. Is marketing working on the rights things, and doing each in the right way? Are your brands guided by a brand positioning strategy statement that is strategically appropriate and technically sound? Are marketing plan elements consistent across all your brands? Do they identify needed customer behaviors that tie to the achievement of the financial forecast? Are marketers analyzing performance and measuring return on investment from their initiatives that evidences their accepting accountability for results? These are some of the many areas to be covered in an audit and addressed.
- Put the customer first – To win in the marketplace the organization needs to better serve customers than its competitors. This starts with marketers targeting those customers it wants and can successfully win over with brands (not products!). This is not about selling what product development conjures in their labs but what product development creates based upon legitimate and productive customer insights discovered by marketing. It’s not about clinical testing that shows you are on par with everyone else in the category for efficacy, safety and tolerability but that demonstrates meaningful advantages to the customer segment the organization has chosen to serve. It is neither pursuing everyone nor trying to be all things to all customers. This will dilute the brand’s relevance and further contribute to the age of sameness.
- Get beyond the product you sell to focus on the experience you deliver – Marketers need to address the “whole” product. The product is comprised of the physical attributes, which we refer to as “tangibles,” many of which are shared by competitors. The “whole” product also includes “intangibles” that provide meaningful value in delivering a favorable experience and shaping customer perceptions of the brand. For example, in the case of Apple Corporation’s Mac computers the intangibles include the use of the Genius Bar to provide face-to-face, exceptional customer service; and One-to-One assistance with personal projects and to learn how to get the most out of Apple products. Neither of these intangibles is found inside the physical product but is part of the brand offering and totality of a “winning” experience.
- Innovate – Marketing must innovate continuously to deliver meaningful differentiation and win in the marketplace. Doing the same things, and doing them in the same way, leaves organizations vulnerable to competitive inroads. Innovation is not succumbing to the latest craze of adopting the de-rigueur digital vehicle or social medial platform, but developing BIG Ideas that are capable of compelling customers to choose your brand. All ideas must be consistent with the brand’s positioning strategy, to build brand equity. Innovation is about creating disruptions that lead customers to choose the organization’s brands. A culture of innovation demands that marketing develop a pipeline of proven initiatives that drive growth.
- Create a learning organization – We cannot accept the conventional wisdom. We need to demand and know what we are getting from our marketing. If we don’t know then when times are tough (or, as we find today, tougher) the marketing budget gets cut. Therefore, we need to measure results and demonstrate a favorable marketing return on investment (MROI). This also includes developing a robust testing program that enables marketers to generate, test and measure marketing initiatives, and learn of their value in building the business and creating a favorable MROI. Those that prove successful may then be employed in subsequent years to deliver predictable results (as opposed to being empty promises of hope).
- Pull together an “A” team of marketers – This starts with the marketing leadership. Really, how can organizations expect marketing leadership to come from another function such as the sales department (without having had meaningful experience in marketing)? Would we promote a marketer to become chief financial officer? Yet many marketing departments are led by non-marketers who don’t understand or appreciate the value of marketing. The chief marketing officer needs to be a marketing professional, one with vision, the requisite marketing discipline, and capable of creating a learning organization. Additionally, marketing needs to be staffed with highly disciplined, yet creative managers who have the capability to become general managers. Finally, each should be a “thought leader” since the key strategic element in winning in this age of sameness is how we think (differently than the competition.
- Demand excellence and accept nothing less - Many organizations desire marketing excellence. In fact, they create4 marketing excellence programs revolving around key competencies that they've determined following months, if not years, of study. However, most of these programs need to go further. First, they need to train for the "mission" (e.g., developing a competitive brand positioning, building a marketing plan that is driven by MBO - Marketing By Objectives, etc.) rather than focus on individual, isolated competencies. Fulfilling the mission is engaging in live action learning so it's applied immediately and will be reinforced daily. Second, they need to focus on achieving "excellence" versus simply bringing marketers up to a norm.
We need to transform marketing to make it matter more if it is to serve its rightful role as an essential function of the corporation in creating brand loyalty. Let’ start by moving from small “m” marketing to Brand Animated Marketing. BAM!
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