All too often, companies find themselves trapped: their products have become too mature, and their manufacturing costs have become too high, even after several cost reduction programs.
Unfortunately, most of them are unaware that they probably have a core resource willing and ready to reestablish their growth engine and revitalize their market presence – their work of marketing. Sadly, this is typically the first cost to go when cost reduction programs become the only foreseeable action.
The value of good marketing
What can good marketing do to increase growth and profitability? Good marketing can
- Enable a price premium by creating and communicating preference to and distinction among targeted segments
- Identify and initiate new revenue with your existing products from new/adjacent markets
- Generate portfolio growth by leading your business in the discovery, development, and delivery of new products at the right time and rapidly
- Take advantage of your value-adding support activities by learning the value for these activities, defining new value propositions, and getting paid for their delivery
- Define productivity improvements by limiting resource allocation only to those activities that add value.
- Change the game through discovery of new business models, allowing you to reconfigure value adding chain relationships and redesign your value propositions to attack these new opportunities.
Why are we not aware of these unfulfilled opportunities?
Many companies don’t have a marketing function, and those that do either define marketing as their communications group (often called outbound marketing) or have marketing processes that seem to maintain status quo (which explains why marketing is seen as a cost).
Companies that don’t have a marketing function might see the potential for contribution as the responsibility of others—others for whom marketing is not central to their job description and who, thus, don’t have a clear understanding of the market environment.
Why is marketing the right organization to do this work?
The primary work of marketing is to bring an understanding of the market environment to steer the development, design, communication, and delivery of the entire business offering to the market. Marketing does this by engaging several work streams:
- Transforming an understanding of the market into a winning marketing strategy
- Segmenting and targeting markets to tailor and focus the value propositions and get paid (price) according to differentiated value
- Establishing the most powerful brand positioning for each targeted segments and assure the right message and supporting communications are clear and on target
- Developing the right routes to market and assure the channels are supported for maximum impact
- Guiding the sales people in establishing sales plans consistent with the marketing strategy and providing the sales tools they need to be successful
- Testing and monitoring for rapid adjustments and continue to sense the market to anticipate change and trends
Capturing marketing profits
- Internalize good marketing business practices that
- Incorporate the work of marketing into all relevant business practices, especially making understanding of the market a core work process and the foundation for all market facing work
- Ensure that the marketing strategy, especially what must happen to realize profits from marketing work
- Establish a process that translates marketing strategy into actions and creates accountability for leading performance
- Build organizational capacity and capacity to the work of marketing
- Establish and lead processes for innovation, marketing, and customer management
- Address human capital, information capital and create a climate for change
- Create a market driven organization, utilizing customer and market learnings to drive decision making, and optimize value adding chain relationships