In Praise of Marketing
Marketers do a surprisingly poor job
of marketing Marketing, says professor John Quelch. "They do not
appreciate, let alone articulate, the economic and social benefits of
marketing." Here is the story that needs to be told. Key concepts include:
- Seventeen million Americans engaged in marketing go about their daily work contributing brilliantly but often unknowingly to our quality of life.
- Respectable marketers need to work harder to expose and shut down the charlatans.
- Modern marketing is more than just selling. It involves design, branding, communication, and distribution.
- Marketing is as much art as science, as much right brain as left brain.
Many
dismiss marketing as manipulative, deceptive, and intrusive. Marketing, they
argue, focuses too much of our attention on material consumption. More
recently, Benjamin Barber, in his 2007 book Consumed, claims that
marketing is "sucking up the air from every other domain to sustain the
sector devoted to consumption." He is correct. Coca-Cola, Nike, and Starbucks command more loyalty among many consumers
than any political party, trade union, church, or mosque. Indeed,
Starbucks founder Howard Schultz sought to make his coffee shops the
"third place" in our lives, after home and work.
Marketing
is an American success story. No country on earth is better at marketing than
the United States. The latest Interbrand listing of the most valuable global
brands reveals seven American brands in the top ten and sixty in the top
hundred, more than twice the expected numbers based on the United States'
command of 28 percent of the world economy.
“In most product categories
in most countries, there are strong local brands reflecting local tastes that
coexist alongside global brands.”
Marketing
by producers to consumers is as old as the bazaar. But modern marketing is more than just selling. It involves the design of products and services in response to consumer
needs, latent or explicit. It involves branding these products and services,
communicating their benefits to intermediaries and end consumers, and
distributing them. All of these activities involve value creation. In return,
producers extract value through the prices they set in the marketplace. The
advent of commercial radio and, after World War II, commercial television
enabled marketers to drive home the benefits of their national brands and to
announce quickly the launch of new products and services to a nationwide
audience. The willingness of producers to build their brands through
advertising supported the emergence of a diverse array of media for the
American consumer to enjoy. Moreover, these investments in marketing attracted
talented businesspeople into the marketing field. Best practices in marketing were
documented so its effectiveness improved over time.
Why
marketing developed in the U.S.
By the 1960s, American brands had
benefited from so much cumulative investment in marketing that they were
unquestionably the strongest brands in the world. There were three reasons why
marketing developed in the United States ahead of Europe. First, the sheer size
of the U.S. demanded it. Second, the ambitions of American inventors and
entrepreneurs demanded the broadest possible distribution. The Wal-Mart
mission, for example, is to lower the cost of living for everyone everywhere.
Third, American society was open to marketing while, in Europe, business or
"trade" was viewed as less worthy a profession. Marketing in the
United States benefited mightily from the endorsement of management guru Peter
Drucker, who famously stated: "Because its purpose is to create a
customer, the business enterprise has two—and only these two—basic functions:
marketing and innovation. Marketing and innovation produce results; all the
rest are costs." Warren Buffett, America's most celebrated investor, has
religiously invested in companies with strong brand names such as Coca-Cola and
American Express. To this day, the proportion of company chief executives who
have risen through the marketing ranks is much higher in the United States than
Europe.
The marketers at Wal-Mart, Google,
and Lenovo are in the best tradition of Henry Ford and his Model T. They seek
to democratize access to their products by bringing good quality to the mass
market at an affordable price. And not just the domestic mass market, the
global mass market. In his landmark 1983 article "The Globalization of Markets," Harvard Business School's Theodore Levitt wrote of
"the one great thing all markets have in common is an overwhelming desire
for dependable, world-standard modernity in all things, at aggressively low
prices." With the fall of communism in the 1980s and 1990s, American
brands, ambitious, confident, and flush with capital soon established
beachheads in the emerging economies. Local consumers, long denied access to
Western brands and often victims of shoddy local imitations, were quick to try
and adopt the former forbidden fruit.
Was this democratization of access
to American brands a Trojan horse for American cultural imperialism? No. In
most product categories in most countries, there are strong local brands
reflecting local tastes that coexist alongside global brands. Retailing and
distribution remain largely local. And American consumers show a desire for
increasing cultural variety in their life experiences, eating more often at
ethnic restaurants and vacationing more often in faraway places. In many
categories, increased global demand drove costs and retail prices down,
prompting global production to shift to economies with lower input costs. The
manufacture of personal computer components is now concentrated in Asia and
manufacturers are constantly seeking to drive costs lower still in order to hit
retail price points that will enable additional millions of poor people to buy
in. As prices have fallen, Asian brands such as Asus and Acer of Taiwan have
gained share while IBM sold its PC business to Lenovo.
“Critics of marketing tend to overestimate the level of
intentional deception and the vulnerability of consumers.”
In addition to globalization, a
second force enabling marketing to bring good quality to the masses is
technology. Today, the Internet, supported like most of the diverse media that
preceded it by brand advertising rather than subscription, is further democratizing
access to markets. The ability of consumers to compare prices over the web
irons out cross-border price differences and expands trade. A poor farmer in
India can check commodity prices on the Internet before he sells his crop to
the local buyer. Thanks to a progressive decline in data processing and storage
costs, technology now enables marketers to offer consumers much more choice
including the ability to tailor solutions to individual needs at only slightly
greater cost. American Express and Harrah's Entertainment, both heavy investors
in IT, now tailor their marketing communications to the buying patterns or
sales potential of tightly defined consumer segments or, indeed, of individual
consumers.
Engaged
consumers
The interactive nature of the
Internet means that customers are now engaged more than ever in the co-creation
of brand meaning and the development of marketplace offerings. Procter &
Gamble recently invited consumers to vote on suggested new flavors for Crest
toothpaste. H.J. Heinz worked with Google to invite submissions of
thirty-second video ads for Heinz ketchup; over 2,000 entries were received.
Then-Senator Obama's website was an impressive vehicle for engaging voters,
many of them new to politics, as donors, volunteers, and idea generators.
Marketers aim to satisfy the needs of consumers at all levels of income
wherever they live in the world, surely a worthy goal. Why then is marketing
criticized so often? And why do marketers offer such little resistance? There
are two main reasons. First, marketing is not a profession. Second, marketing
is not a science.
Unlike accounting or the law,
marketing is not a profession. Anyone can call himself or herself a marketer.
The absence of entry barriers allows for greater creativity, imagination, and
new ideas. But the flip side is that manipulation and deception of consumers by
irresponsible marketers is all too common. Absent professional exams and codes
of conduct, abusers of the marketing toolkit are subject only to the sanctions
of the marketplace and the law. The vast majority of marketers are honest and
respect their customers but, collectively, they need to work harder to expose
and shut down the charlatans.
At the same time, critics of
marketing conflate their objection to harmful products such as tobacco with
hostility towards the marketing toolkit harnessed to present them to the
public. They also tend to overestimate the level of intentional deception and
the vulnerability of consumers. As advertising icon David Ogilvy famously said
in an earlier era: "The consumer is not a moron. She is your wife."
Perhaps marketers would be more
self-confident about their contributions if marketing were a science with clear
dos and don'ts. In fact, marketing is as much art as science, as much right
brain as left brain. Many chief financial officers might still agree with John Wanamaker's
famous adage: "Half my advertising is wasted. I just don't know which
half." But our understanding of what works in marketing, how and why, has
advanced greatly in the last twenty years. Low-cost data analysis enables
marketers to understand what level and mix of incentives will produce behavior
change, even down to the level of the individual consumer. Marketers have no
interest in annoying consumers by delivering messages to those who are not
interested in their products or services. It is now possible for chief
marketing officers to calculate return on marketing investment and to report
regularly to the corporate board progress against three or four brand and
consumer health metrics that can predict subsequent business performance.
Even with these advances, marketers
still do a surprisingly poor job of marketing Marketing. They do not
appreciate, let alone articulate, the economic and social benefits of
marketing. Marketplace exchanges are based on mutual trust between buyers and
sellers. They create value for both parties. The billions of successful daily
marketplace transactions are an important part of the glue that holds our
society together. Good marketers offer consumers choices. Choice stimulates
consumption and economic growth and facilitates personal expression. Good
marketers provide consumers with information about new products and services,
thereby accelerating their adoption. All these benefits are routinely
overlooked as the 17 million Americans engaged in marketing, selling, and customer
service routinely try to fly under the radar of social critics and go about
their daily work contributing brilliantly but often unknowingly to our quality
of life.
by John Quelch http://hbswk.hbs.edu/item/6015.html
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