From a technical background, I never really understood what marketing was. I think a lot of people think of marketing as the sales back office, those in sales who prefer to stay in the office, the ones that organise the brochures and events, and think on how a product can be dressed up to sell more. Studying marketing management has made me realise that a marketing department is so much more.
Sales is only a small facet of a marketing departments concern. I believe a great marketing department will ask (and prove) things like:
Who are the customers?
What problem are we solving for them?
What is the essence of our value proposition?
Marketing should be less about putting dressing on the product and more about understanding and improving the essence of what the product does for the end user. A key benefit of this way of thinking is that it opens the mind to considering other opportunities to deliver similar customer value and lessens reliance on a particular product. We see this now, with electricity companies, rebranding themselves as energy companies, or how apple has successfully repositioned from computers to encompassing “your whole digital life”.
The product or service you provide will be disrupted at some point, and this reframing will help prevent such an event from being a business disaster. Maybe even it will be your company doing the disruption.
In 1960, Theodore Levitt wrote a seminal article for the Harvard Business Review titled Marketing Myopia (see a copy of it here) that helps to reframe marketing.
There are a large number of takeouts/key points from the article, some of which I have put below:
- Obsolescence is inevitable
- No Industry is safe, even those commonly thought of as ‘safe bets’
- Every industry was once a growth industry.
- Do not rely on population growth or increasing customer affluence
- Do not focus on the product, instead focus on the consumer’s needs
This is a marketing article, right? Seems more like strategy! You bet, welcome to marketing! So much more than a sales back office…
Levitt goes on to recommended a number of strategies to help companies cope with the effects of change and survive major disruption.
- Define your companies industry broadly
- Be Customer Orientated (vs Product Orientated)
- Embrace Creative Destruction
- Apply scientific method to studying customer problems
There are two points I want to talk about specifically, embracing creative destruction, and application of the scientific method for business problems.
One of the hot words right now in the start-up world is ‘disrupt’. Everyone is talking about what is the next industry to be disrupted; in the way Apple disrupted the record industry with the iPod and iTunes.
Start-up’s do not own this concept though, this article shows Levitt was imploring companies to embrace ‘creative destruction’, aka disruption, in 1960. He states that companies need to be prepared to destroy their own highly profitable assets to keep the value proposition to the end customer relevant, and defend themselves from someone else doing the creative destruction.
Another parallel to the start-up world is the mantra of applying the scientific method to test hypotheses about customers and their problems. I think this is crucial, and Levitt sums this up in the following paragraph:
The irony of some industries orientated towards technical research and development is that the scientists who occupy the high executive positions are totally unscientific when it comes to defining their companies overall needs and purposes. They violate the first two rules of the scientific method- being aware of and defining their companies’ problems, and then developing testable hypotheses about solving them. They are scientific only about the convenient things, such as laboratory and product experiments.
I couldn’t agree more. Assuming you know what customers want, and then building new or improved products on this assumption, is a recipe for problems. Get out of the office and test your hypothesis!
Marketing – it’s so much more than the sales back office. It’s deeply understanding the customer’s problems and how your business can solve them. It is customer and value strategy. Business recognition of this is critical for ongoing success.
In a future post, I will talk about the application of the scientific method from the start-up world’s perspective.