Marketing: The Concept vs. Marketing: The Department

I see much debate on LinkedIn groups about marketing (and have started a bit of this myself, I must admit). A lot of the issue boils down to the concept of marketing vs. the reality of the marketing department in most organizations. Let me explain.

The concept of marketing is reflected in the 4Ps of the marketing mix (please, let’s not go into whether it’s 4Ps, 5Ps, 25Ps or 125Ps: It makes my hair hurt). The 4Ps refer to Product, Price, Promotion and Place.

Product – Defining, developing and creating a product (including a service) to meet a market need. Includes research, development and production.

Price – Determining what customers are willing to pay for the product and the profit margin the company can expect.

Promotion – Encompasses multiple media (advertising, public relations, word of mouth, etc.) to communicate the benefits of the product. Also includes sales.

Place – How the customer purchases the product and the market environment (economic, social, legal).

As you can see, the 4Ps of the marketing mix are very broad and touch just about every department in a company. In most companies these functions are handled by different departments including marketing, communications, product development, sales, finance, legal, research, etc.. I have yet to see a marketing department handle all of these activities directly, or to even be responsible for all of it. In fact, in many companies even the sales department and the marketing department report to different executives.

Many of the arguments that break out on LinkedIn are really about this contrast of marketing as a concept in which every part of the company has some responsibility verses marketing as a department, which typically has responsibility for a few discreet pieces of the marketing mix. Typically one of the great divides is the sales/marketing debate. By the classic 4Ps definition, sales is part of “promotion” so it is part of the marketing mix. Yet in many companies, sales is a separate department from marketing and reports to a different executive. In those situations where the functions are combined in one department, the leader is more often than not a sales executive and the marketing function plays a subservient role to sales. So again marketing (the department) is far different than marketing (the concept).

I am working with a client (a professional services firm) helping to improve sales support activities. In the early conversations, we were getting bogged down in what is marketing, branding, sales, sales promotion, sales support, etc.. Rather than spending a lot of time and energy trying to get to accepted definitions for each of these, I suggested we just focus on specific activities and how those activities could be improved. By putting the focus on activities, and not departments and definitions, we identified a few areas to document the current state and to make recommendations for improvements.

Next time you find yourself getting sucked into the quagmire of a marketing discussion, ask the qualifying question: Are we talking about marketing (the concept) or marketing (the department)?

Marketing Happiness

Waiting in traffic in my town last week, I glanced at the storefront of a residential builder that will be developing a small townhouse community in the center of town.  In the window were the company’s name and its tagline “Simply Happy”.  “Now that’s a big promise to deliver on, “ I thought.  What makes one person happy may not make another person happy.

Of course, marketing the concept of happiness is nothing new.  Coca-Cola has been using the tagline “Open Happiness” since 2009.  But Coke doesn’t necessarily make me feel happy.  I don’t think, “Wow, I’m happy because I’m having a Coke!”.  It is just something to drink and I would be just as satisfied with Pepsi if the restaurant served that.  And if they didn’t serve either (is that possible?), I would drink something else.

The happiness theme was driven home for me when I was consulting to a wealth management firm last year.  The principals of the company were very focused on happiness as a marketing concept to pitch to clients and prospects.  When I quizzed them on what they delivered that would make clients happy, they said what you would expect: Focusing on the client’s lifestyle goals; providing peace of mind in retirement; accumulating resources so a surviving spouse can continue to live a certain lifestyle; leaving money to children, grandchildren, charities, etc.

If we really think about it, every product has one of two basic goals:

Make us happy – These are products that we enjoy and could include electronics, dining experiences, travel, entertainment, etc.  The actual use of the product makes us feel good.

Avoid unhappiness – These are often products that take the drudgery out of life, minimize the amount of work we have to do, alleviate ailments, save money or time, etc.

The problem with jumping right to happiness as the ultimate benefit is that every company in a given category could conceivably make me happy because the product will make me happy (or avoid unhappiness).  So there is no differentiation in that.  What differentiates one company from another is how it will make me happy. In the building category I mentioned earlier, one builder might offer a wider array of options with no up-charges, one might pay closing costs, one might double the warranty length, one might specialize in new homebuyers or retirees.  Each of these benefits will appeal to a different type of buyer.  There is no cookie cutter for happiness.

So before you reach for the easy way out with the “happiness” button, think about what your company does that will make customers happy and how what it does makes customers happier than a competitor can.  In defining this, you’ll find the foundation of your positioning, so happiness does not come across sounding like an empty promise.


Lessons from NCAA Underdogs and Favorites

Dayton, Harvard, Mercer.  Much is made of lessons we can learn from underdogs in the NCAA basketball tournament.  These teams overcome the odds to beat the favorites. They’re feel-good stories that make us smile.

The problem is they usually don’t win it all.  Sure an underdog can beat a favorite on any given day, but can they win on a consistent basis?  Of course, if they start to win on a consistent basis, they’re no longer an underdog.  For a number of years the Gonzaga Bulldogs seemed to be the underdog in the NCAA tournament that advanced past the opening rounds on a regular basis.  It became a bit of a joke. This year they were the 8th seed in their bracket.  Not necessarily a favorite but not an underdog either.

As the Final Four was, well, finalized Sunday night, it was four of the usual suspects left in the brackets.  Perennial powerhouses UConn (7), Florida (1), Wisconsin (2) and Kentucky (8) are in.  The numbers in parenthesis are the seeds each team had in their brackets.  For example, UConn was the 7 highest out of 16 teams in its bracket.  In other words, all of these teams were in the top half of the brackets based on their performance over the length of the season and conference championships.  And two of the Final Four were in the 8 first and second seeds in the entire field of 64.

Strong teams with effective processes in recruiting and coaching outperform year over year.  I can hear the underdog lovers already: “What about ((fill in your favorite underdog team that advanced to the Final Four))?”  What about them?  They didn’t win the championship and they faded from sight. They were great Cinderella stories, winning with emotion and momentum, and we all loved them.  But they didn’t win it all.  This is not to say a team cannot rise from underdog status to a consistent favorite.  Just look at Villanova.

So if underdogs teach us that anything can happen, what can we learn from the teams that make the tournament, the Sweet Sixteen, Elite Eight and Final Four year after year after year?  Simply, they do it through consistency.  They are committed to being the best and put in place all the elements needed to execute on that mission.  Yeah, it is boring and it makes many people want to see them knocked out of the big tournament.  But that is just jealousy.

Smart marketers know they want to be like these legacy teams that consistently outperform their competitors, rather than the teams that get the occasional big win.  Sure, the winners take losses now and then, but they learn from those losses and come back stronger.  That is what makes them winners.

The other distinguishing characteristic is that they are true teams.  Players graduate or are drafted, but younger players take their place, often recruited and coached to fit in the team’s system.  The coaches are focused on the present and recruiting for the future.  And everyone understands his role and plays to his strengths. The program just keeps rolling along.

The Marketing “Win” of the Bracket Challenge

Well, it was all over on Friday night.  Not the NCAA basketball tournament: That will drag on for another two weeks.

No one picked all the winners of the first round of NCAA’s March Madness so no one was left in contention for the $1 billion prize for picking the winners of every game in the tournament in the Billion Dollar Bracket Challenge.  By game 25 of the first 32 games there were no contestants left standing, done in primarily by upsets by Mercer, Harvard and Dayton.

Still to be determined are the winners of the 20 prizes that will go to those who picked the most accurate brackets.  These people will each receive $100,000 towards their current mortgage or a new mortgage.

Not that there was much of a question that anyone would win the big prize.  In terms of random odds, it was a 1-in-9 quadrillion chance.  Statisticians said that someone who followed college basketball on a regular basis and used some long-term results of the NCAA tournament might lower the odds to a still-astronomical 1-in-128 billion chance of winning.  Still, it is nice to dream.

The big win was for Quicken Loans, which partnered with Yahoo and Warren Buffet’s Berkshire Hathaway on the contest.  It is unclear at this point what the other parties contributed to the contest and how many people actually participated (the plan was that up to 15 million people could enter the contest).  So for $2 million in prizes, the cost of buying insurance from Berkshire Hathaway and running television commercials, Quicken Loans received tens of millions of dollars in publicity about the contest.

But the big win was collecting information on millions of people (contact information, age, value of their property, mortgage balance, home buying plans, etc.).  One direct marketing expert in the mortgage business put the value of this information as at least $50 per person and maybe as much as $300.  Let’s say only 10 million people entered the contest, and putting the value of that information at the low end of $50 per entrant, Quicken Loans received information worth $500 million.  Wow!

Oh and I forgot, participants also had to sign up for a Yahoo account, so Yahoo must have pitched in some funds for the contest and received millions of new members.  Some will undoubtedly use Yahoo services, which should help the company sell more advertising.

And Warren Buffet had his and his company’s name connected to a big story (like he needed the publicity!) and his company probably made a million or two on the premium for the insurance.  Despite the incredible odds against someone winning, Quicken Loans couldn’t take the chance.

And the “losers” in all this?  Hard to tell.  No one was forced to enter the contest and there was no cost to enter.  But giving up personal information was the price of entry.  If you didn’t want to provide the information, you just had to close the browser window.  Or if you entered and don’t want to hear from Quicken Loans or Yahoo in the future, you just have to unsubscribe to their emails or close your account.   But it is just another lesson that “free” rarely is.


Strategy and Changing the World

At a recent board meeting of a non-profit where I am a trustee, I asked if we should spend more time on the long-term strategy (5 to 10 years) for the organization. A fellow trustee held up his iPhone and said the device was barely thought of 10 years ago and look how it had changed everything.  His concern: It was not a good use of our time to think about a strategy that far out.  I answered that the iPhone was part of one person’s strategy 10 years ago and maybe even 30 years ago.  He (Steve Jobs) might not have known what the final product would be, but he had a strategy to change the world through personal computing by putting the user first.

My fellow trustee is right:  We can never know with any certainty what the future will be.  But that does not absolve us from thinking about what we want our companies to be in that future.  Put another way, is your company going to succeed in a changing world or be a victim of it?  Or more importantly, will you and your company change the world?

Let’s use the iPhone as an example.  Research in Motion was well ensconced at the top of the personal digital assistant space when the iPhone was introduced.  Its Blackberry had dethroned the Palm Pilot (I think I still have mine in a closet somewhere) by effectively integrating phone, email, calendar and the personal computer.  It was the darling of the business and entertainment world.  But Apple added a better user internet experience and the availability of third-party applications to create even greater usefulness for the iPhone.  Since then, RIM has been playing defense and watching its market share and profitability evaporate.  You can debate whether the iPhone is revolutionary or evolutionary, but it delivered on Jobs’ strategy of creating products with elegant design and enhanced user experiences.

This was all part of Jobs’ goal to change the world.   In John Scully’s book about his tenure as the CEO of Apple he told of how Jobs wooed him from Pepsi by asking if he wanted to sell sugared water the rest of his life or if he wanted to join Jobs and Apple and change the world?  Given framing the choice like that, who could resist the offer to change the world?

Strategy sets a goal for where the company wants to be, but it does not lock in a specific course for getting there.  Smart leaders know there are many ways to reach the goal and the path will change often during the journey.  But being clear about the strategic goal serves as a beacon that keeps the company from straying too far without thinking about the consequences.

Is thinking about long-term strategy a waste of time?  Only if the strategy is put in a draw to gather dust.  But if it is used to guide decision making about people and investments in a changing world, it can lead to breakthroughs of the iPhone variety that actually change the world.


The Value of Super Bowl Advertising

The teams that will represent the NFC and AFC have been decided, the reformatted Pro Bowl has been played and now we turn our attention to the really big question about the Super Bowl. Not who will win the game or even the logic of holding it in colder-than-usual New York in February this year. The real argument is whether an advertisement during the big game is worth the $4 million price tag for a 30-second spot (just media time, no production).

My friend Steve sent me a note a few weeks ago about a study done by a company called Communicus that showed 80% of ads aired during the 2012 and 2013 Super Bowls didn’t increase purchases or purchase intent. Wow! This number is significantly lower than the 60% of ads that don’t increase purchases or purchase intent in general, according to the firm’s research. You can find more details in the Ad Age article .

One reason cited for the lower than average purchase effect of Super Bowl advertising is the one-and-done aspect of Super Bowl ads. Often, companies don’t run their Super Bowl ad on a consistent basis so there is no reinforcing of the message with repetition, especially if the ad did not test well in post-game surveys. Unless the ad goes viral and becomes the talk of the workplace on Monday morning, it is likely to be relegated to the creative group’s portfolio.

Another issue cited with Super Bowl advertising is that, in attempts to go for entertainment value, the ads miss the mark in terms of brand strategy. This, again, makes the ads feel “one off” and less likely to influence purchase decisions.

This assumes the primary objective in advertising during the Super Bowl is to increase purchase intent. (Save the emails please, I know it should be the primary objective.) But sometimes it feels like the Super Bowl advertising circus is just that: A circus of who can pull-off the most amazing stunt, whether or not it makes sense. There is also the arms-race scenario where companies just try to out-do competitors whether or not it fits with the company’s marketing strategy. This results in a decision about which ad will create the most buzz, not which ad will sell the most product or at least move more people closer to buying.

Of course the other argument is the definition of “value”, which is really in the mind of the buyer. With so many long-term buyers of Super Bowl advertising willing to plop down millions every year, I have to assume they are measuring value in ways that go beyond increased purchases and purchase intent.

The other interesting point raised by Communicus’ research is in terms of 60% of general television advertising not increasing purchases or purchase intent. In the 100+ years since John Wanamaker said half his advertising was wasted, Communicus seems to come pretty close to the same conclusion for modern day marketers. Of course, the company claims to be able to tell you which half of your ads is being wasted.

So enjoy the Super Bowl pre-game hype, follow the weather predictions, tune in for the game and argue which ads were the “best”. But now you know, that “best” will rarely mean that the ad sold the most product.

Santa: The Brand

The Megyn Kelly saga got me thinking about Santa Claus as a brand.  In case you missed it, Kelly, an anchor on FoxNews, created a firestorm last week when she made statements that Santa and Jesus are/were white.  She claims her remarks were a tongue-in-cheek reaction to a piece in Slate by an African-American writer and people should lighten up.  African-Americans took umbrage to the whole thing, which led to more talking heads, editorials, etc.

Let’s put aside the whole debate about whether Santa is “real”.  There has been a historical image of Santa as a white man, which probably originated with St. Nicholas, who lived in current-day Turkey in the fourth century and appears to be white in most paintings.  Thomas Nast drew Santa Claus as a white man and that became the basis for most Santa depictions in the U.S. from that point on.

But so much has changed from the original story of St. Nicholas to what we now know as Santa Clause.  Different European cultures added flourishes, including his mode of transportation.  So does it really matter what race he is?  If blacks want to perceive him as black or Hispanics want to view him as Hispanic or Asians want to perceive him as Asian, who cares?  Or if some people don’t want to perceive him as a him, who cares?

You probably don’t have to go too far beyond your family and friends to find various perceptions about what Santa does.  Some don’t want to set up their children for disappointment so they tell the kids from an early age that Santa doesn’t exist and that presents are just exchanged between people.  Others instill that Santa brings all the presents (really tough to keep everything concealed until Christmas Eve) and others come down somewhere in the middle with Santa existing but bringing just a few things if the kids have been good.  He might enter a home through the chimney, a fire escape or a door.

With this wide range of thoughts and beliefs about what Santa does or doesn’t do, why can’t we have different images of the jolly old elf?  And why not a number of Santas to lighten the load?   Just because Thomas Nast drew what became the typecast for Santa back in the 1860s, doesn’t mean that is how everyone has to view Santa.  Why not thin or young or more of a spirit?

Until Santa hires a branding firm, an image consultant and a PR rep, we can define Santa as we want and picture him/her as we want (or not at all).   So this is one time when I will break one of my central tenets of branding and lobby for inconsistency in the Santa image.  Or maybe a different consistency based less on physical appearance and more on what Santa represents: Giving to those we love and sharing with those less fortunate than us.  I hope that is the Santa brand that we all can believe in!

Best wishes for safe and restful holidays, and a happy and healthy 2014!


Another Brand Misconception

“Rob Ford scandal hurting Toronto’s global brand, research finds.” So said the headline from The Globe and Mail , Toronto’s daily newspaper on November 20, 2013 that popped up in my weekly Google alerts for “brands”. Great, I thought, it will be interesting to see how all the press and comedians’ jokes about Toronto Mayor Rob Ford’s alleged drug problems and his fight with the city council over retaining his power have impacted perceptions of the city’s brand. It was not to be.The article quoted a company called Cormex Research and its CEO Andrew Laing about all the negative coverage in traditional press, talk shows and social media. But the article made no mention of the impact of the story among Toronto’s key audiences, including residents, tourists and executives doing business or considering doing business in the city. A quick look at the Cormex web site looks like they are a media monitoring and scoring company.

“Toronto’s brand globally is hip and smart, generated by its cultural industries such as TIFF and performers such as Drake, and its education and research organizations like the University of Toronto and the Hospital for Sick Kids. Now there’s a new narrative – bad political governance – and it’s quickly overtaking the good news story that is Toronto globally,” Laing said in the article.

The folks at Cormex seem to be making a presumptive leap that negative press automatically results in negative brand perceptions. To find out what is really happening with the Toronto brand Cormex should be asking people for their perceptions because that is where the brand lives: In the minds of the city’s important audiences. I have little doubt that all the negative attention is not helping Toronto’s brand. I have visited Toronto a number of times (although not in the past 15 years) and have very favorable views of the city as cultural and well run. I am viewing the mayor’s problems as an outlier. How quickly the city’s government resolves the issue will determine if my perceptions change.

I contrast this with the drug problems of Marion Berry, the former mayor of Washington, D.C., who was convicted of smoking crack cocaine. At the time, D.C. had a serious crime problem, including drug-related crime, and Berry’s conviction just reinforced those image problems. The D.C. brand was pretty much in tatters at the time, so it is hard to say if Berry’s conviction had any impact on the brand. Like Toronto’s current situation, the mayor’s problems didn’t help.

The moral of the story: The only thing that matters is customers and prospects’ view of the brand. Of course what the press says, your CEO says, analysts say and the Twitterverse says can influence brand perceptions, but you never know until you ask your customers and prospects. As anyone who has tried to rebrand knows, it is very difficult to change negative perceptions and it can be also be hard to change positive perceptions among true brand loyalists. It generally takes more than one negative incident to erode years of brand equity.


Avoiding Corporate Humblebragging

The flap this week about Mitt Romney’s son, Josh, tweeting about saving four people in a car wreck, created some interesting debate about humblebragging.  Humblebrag, a term coined by comedian Harris Wittels in 2011, basically means appearing to be humble, while you are actually bragging.  Josh Romney tweeted a picture of himself smiling in front of the totaled car that ran into a house with the caption:  “Was first on scene to big accident, see pic of car in the house. I lifted 4 people out to safety. All ok. Thankful.”.  I’ll leave it to you if that fits the definition of humblebragging or not.

Social media has created a ton of humblebragging from stars, politicians, friends and family members.  But there is also a fair share of corporate humblebragging as companies feature their good works or winning an award in their advertising, social media and public relations campaigns. You know, the “we’re humbled to help firefighters who have risked their lives to protect our community” commercial.  Are they really humbled or are they bragging?

Like the case of Josh Romney, corporate hummblebragging is a judgment call.  One person may see a company talking about how it helped others as perfectly normal, while another person might call out the company.

Here are a few suggestions to avoid corporate humblebragging:

Let the beneficiaries talk about it – Rather than the company being the communicator of support to a charitable organization, let the people who benefited from it talk about how it helped them.

Let employees talk about how giving back made them feel – Employees often play an active role in supporting a cause and when they talk about how it makes them feel, it can be very powerful.

Let customers help – We see it all the time, but especially at the holidays: Retailers asking if you would like to donate to a charity as you complete your purchase.  If the retailer matches customers’ donations, it becomes a partnership in helping a cause.  The company can feature customers talking about what it meant to them to help.  Or at least the company can acknowledge how customers helped raise funds.

The common thread of these suggestions is a focus on people, not the company. (Contrary to Josh Romney’s dad’s view that “corporations are people, my friend”, they’re not.)  Featuring people (not the CEO) puts a face on the cause and a focus on who is benefiting.

But if you don’t want to take any of these approaches, here’s one last bit of advice: Just brag and forget being humble about it.  At least you won’t be accused of humblebragging.

Assumptions and Termites

“Assumptions are the termites of relationships.”

That quote was from the leader of an educational session I attended last week on leadership of boards of directors at non-profit organizations.  The session had nothing to do with branding and marketing, but I jotted down the quote because I thought it was such a powerful thought.  On the ride home, I thought about how assumptions damage our relationships, whether personal and professional, and, by extension, with customers and prospects.

Before I get into that, a few words about termites.  Termite colonies live in and feed off wood.  They create a hole and then work away quietly in the interior of the tree or the wood of a building without anyone noticing.  Usually the damage is detected only when the wood structure fails or is discovered by an inspector.  The termite inspector will poke a screwdriver in the sill plate (the wood that rests on the foundation).  If the screwdriver sinks in, it means termites have compromised the plate and it is going to cost big money to fix.

So what does this have to do with branding and marketing?  Sometimes we assume we know everything about our customers, but the relationship is being undermined by those assumptions.  This is sometimes seen in a bunch of executives sitting in a conference room making decisions that impact customers without any input from those customers.

I remember one of these occasions, when I sat in on a business unit’s monthly leadership meeting (I was in a corporate shared services group at the time).  After listening to the issues and the course of action the business unit planned to take, I asked “Has anyone talked to any clients about this?”.  Silence.  After some discussion, it was agreed that one of the business unit leaders would call a few key clients to get feedback about the proposed action.   The executive later reported that the clients he spoke with understood what the company wanted to do and appreciated the opportunity to give feedback.

Asking customers about key initiatives and changes before they are implemented not only gives you an opportunity to fine tune the implementation, but it can create stronger relationships with customers because it shows you value and trust their insights.  If you adjust your plans to account for their thoughts, it can also help gain buy-in to the changes.

How do we avoid the assumption game?  One way is to always be testing customer satisfaction.  Don’t assume customers are happy because they continue buying from your company.  They may have other reasons for buying from your company, such as the pain of change, and they just haven’t reached the tipping point of dissatisfaction.  I think about New York Mayor Ed Koch’s trademark “How I am doing?” question that he asked of people he met anywhere in the city.  People often told him the unbridled truth, which gave him a real sense of his constituents’ (customers’) feelings on his performance.

Most importantly, use the method your customers are most comfortable with.  For some this can be a formal survey and for others its will be an informal chat.  You can ask them how they prefer to give input about the relationship, which in itself can be a powerful relationship-building tool.  The key is to capture the information so it can be used to improve your company’s performance and its relationship with customers so you can keep the termites at bay.


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