1.0 ‘Marketing and Sales are like two sides of the same coin – Distinguishable but inseparable.’ Critically discuss this statement and explain the inter-relationship between Marketing and Sales.
Marketing and Sales are an integral part of any organization.
Peter Drucker says ‘the aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.’ (Forbes 2012) Although this old adage is not totally true, it does imply that they are essentially just two different points in the same continuum that brings sustainable business overtime. Marketing would probably use the best strategy possible to attract the right customer and encourage and coax them to engage in the brand. Sales representatives can no longer sit back and wait for marketing to generate leads for them to follow up. They need to take an active initiative in this digital world to get the customer to ‘act’.
The whole existence of an organization depends on how well the sales and marketing activity is performed in a competitive environment so that it ensures the organization’s long term sustainability. This fact does not however imply that the other functions of a business are less important, but it can be argued that a strategically managed Sales and Marketing function ensure sustainable top line growth of an organization which is the key to its success. (Arline 2015)
Examining the difference between the two terms would help comprehend their distinctiveness.
Kotler (2011) defines Marketing as ‘the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires.’ On the other hand Sales is defined as ‘the act of selling something: the exchange of goods, services, or property for money.’ (Merriam-Webster n.d.)
Welch (2015) states in his online article that Sales teams need ‘to be able to leverage the right content at the right time to make every customer interaction count’. This show how Sales and Marketing though they are two distinct functions are definitely intertwined.
Source: Kotler (2011)
The above illustration clearly depicts that the customer goes through a series of decision making hurdles; hence screening through information is vital. In order to go through this process organizations use marketing tools and tactics to position their products and services to be more attractive than that of their competitors. Apple is a good example of a company that seem to effortlessly dominate the market with the media hype and buzz they create with marketing for any new product launch they do. Kaputa (2012) states that there are five things that Apple does right ‘
‘ They cultivate an air of secrecy and intrigue to fuel speculation and buzz.
‘ They create the illusion of scarcity to increase demand
‘ They focus on a “friendly” customer experience.
‘ They wow customers through design and packaging
‘ They create a passionate brand community of fans who identity with Apple’s brand values
For an organization to be driving its value, it should ideally drive its value proposition to its customers. One of the primary functions here would be to complement the sales organization by supporting to build the BRAND so the customers’ decision making unit is positively influenced. However this cannot be done in isolation but the strategic marketing aspect should consider a cross section of areas. Pinterest’s value proposition is clearly stated in their website ‘ ‘A few (million) of your favourite things’. (Pinterest 2015) In just a handful of words, they have communicated who they are and what they do. The entertainment value of this site across multiple platforms (desktop or mobile) is shown through a very simple image, and a bright red call-to-action button jumps out from the page, begging a viewer to become a user.
Source : Pinterest (2015)
Having considered above, it’s clear that none can exist in isolation. Marketing and sales are two integral parts of an organization or brand and more often both needs to complement each other for sustained growth.
2.0 Identify and explain the characteristics of world class marketing organizations. Illustrate with examples of your choice.
World class marketing organizations are those who delivery customer expectations consistently and beyond. (Delivering customer value thereby driving shareholder value). Keeping up to challenge is in no means an easy task for any organization competing in competitive environments. The organizations that adopt a comprehensive marketing value drivers are usually expected to perform better that most companies. The shareholder expectation for an organization is to have a greater ROI, sustainable profits, year-on-year growth etc., and a fully integrated marketing strategy will deliver these results. Marketing is considered to be the main driving force of an organization.
Source : Porter & Lee (2013)
World renowned Brands and their marketing strategies
The term ‘world class organizations’ brings to mind brands such Apple, Coca Cola, McDonalds, BMW, Gillette, Google, Microsoft etc. and the list could go on.
All these brands lead in its own space in the value chain and deliver complete customer value. Customers remember leaders or winners in the market place. It’s similar to a sport where you remember ‘Usain Bolt’ as the fastest man in the world but if you ask a consumer who is the second fastest man, in most cases the question will not be answered. In this example it is evident that being the best has taken a lot of hard work and commitment over many years.
In similar circumstances, to be the best it takes robust brand strategies and organization commitment over consistently long periods of time in many multiple sectors within the organization. Let’s try to list some common facts about what these great brands/organization have in common. Some of those key characteristics are highlighted below
‘ Organization is geared for world class performance
Organization first and foremost needs to have best and world class human resources and technology adopted at all times. The quest for continued operational excellence with the input to create an output that is world class. Airbus empowers it plants across the world that are responsible for delivering aircraft components to the final assembly line and provides the necessary resources and leverage. (Airbus n.d.)
‘ Innovate, Adopt, Creating new needs of customer
It’s vital for organizations to innovate better than its competitors in the industry, this would mean, in both inputs and output, to continuously bring down costs to stay competitive and innovate products and services beyond customer expectations. With the advancement of technology the innovations are short lived. The best example that illustrates this is the Apple iPhone’s revolution to the world according to Isaacson (2012). It did not take much time for Samsung to emulate what Apple came out with and to give a strong challenge. The example shows, the organizations need to continue this effort even if they are the market leaders!
Another example is the Coca Cola’s buddy bottle. The idea was Coke’s but Pepsi actually did come out with the product before Coke launched it. This means you got to be robust and fast in a fast moving world. (McCabe 2012)
It is important to always ensure a rich pipeline of new products are delivered to sustain the brands.
‘ Create a winning Brand Positioning Strategy and ensure every aspect in the organization is ready to deliver it meaningfully
Organizations must work towards out-performing the competitors at all times and work towards continued development of the brand to stay ahead. Products should stay relevant to customer needs where it would provide a meaningful difference and a unique value to the customer at all times and it’s not about quantity but it’s all about quality.
3.0 ‘Competitors are necessary evils in Marketing.’ Critically discuss this statement and outline the information required of competitors.
Mohan Pandithege, Managing Director, Hayleys Group of Companies states the following as the advantages and disadvantages of competition in the marketplace. (Personal Communication, 5th May 2015)
Organization needs to be sharp and robust Organization having to continuously innovate (NPD) to sustain the product/brand with heavy investments
Consumers tend to have many choices to select from (Product differentiation) Having to face strong competition with regards to price/market share
Cuts wastage as Organization take steps to manage costs Pushes up Investment and prolongs ROI
Companies moving to forward and backward integration Having to spend huge monies in advertising and packaging
Companies being able to put on a value to the brand and thereby increase the organization asset value Risk of price wars and running margins down
Enhances overall organizations productivity
Examples that could be sighted to explain the above are many.
Customers would not buy the company’s product just because the pricing is right. They look for the value in the product. If the organizations brand/product is unable to communicate and link up the brands value, it will not sustain the product in the market. In a highly competitive market organization try to deliver superior value above the competitors’ brand. The value needs to be delivered in many facets. Porter & Lee (2013) say, ‘Those organizations’large and small, community and academic’that can master the value agenda will be rewarded with financial viability and the only kind of reputation that should matter’excellence in outcomes and pride in the value they deliver.’
Ceylon Biscuits Limited is known to have an innovative brand (MUNCHEE) and held the Market Challenger position in terms of market share in Sri Lanka in the 1990’s until the organization took aggressive and sustainable steps to take on and challenge the Market Leader Maliban in the mid 1990’s. What’s interesting is the market share in the 1990’s for MUNCHEE was around 20% and the market leader Maliban held over 60%. (The Sunday Times 2010)
The organization took on the competition head on by developing multiple strategies to beat competition from branding, New product development, packing, strong and innovative advertising campaigns, improving product quality significantly, backward and forward integration etc. (The Sunday Times 2010)
At the end of a decade MUNCHEE emerged as the most popular biscuit brand in Sri Lanka as it reached up to 60% market share and had a growth of over 900% in a decade and managed to reverse the market shares held. It happened so that MALIBAN dropped to less than 25% market share and took over the Market Challenger position after 10 years! (The Sunday Times 2010)
Applying the Differentiation strategy
Source : Porter (1985)
Organizations in managing competition can adopting the above model developed by Porter (1985). The brand or the product needs to be positioned within the model for optimum sustainability based on internal resources and capabilities & competencies of an organization. (Porter 1985)
If the organization is planning to enter the automobile industry, or driving towards a new model/make the brand could identify where the rest of the competing products are in the market first.
For example :
1. Overall cost leadership – Toyota
2. Cost Focus – Maruti (Indian small car maker)
3. Differentiation – Honda
4. Differentiation Focus – BMW or Mercedes Benz
4.0 Despite ‘brands’ being acknowledged as the most valuable asset of organizations, certain organizations do not invest adequately in brand building. Why is this the case and what advice would you provide such organizations.
Understanding the definition of branding would help explain the case.
‘The process involved in creating a unique name and image for a product in the consumers’ mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers’ (Business Dictionary n.d.)
There can be many reasons sighted for Organizations not to invest in branding and the following could be stated as some reasons,
1. Not having Management commitment at the highest level
Lehner & Halliday (n.d.) say that the commitment to build a brand for sustained growth should have a top down approach. The commitment from the CEO is most necessary to drive the brand along its value proposition and brand personality. The brand personality should bring out what the product would offer and this needs to be understood at all levels of the hierarchy.
2. Brand value being intangible.
This is a grey area in most organizations. A powerful brand name is an extremely valuable asset. Successful organizations spend a lot of time towards resourcing the brand building initiatives to expand the brand scope.
‘A valuable brand delivers a return for the company on two dimensions,’ says David Reibstein, professor of marketing at the University of Pennsylvania’s Wharton School. ‘Either it allows the company to charge a premium price or it adds more volume or market share.’ (Badenhausen 2014)
Source: Forbes (2014)
3. Organizations are more keen in putting up healthy results in the short term rather than working towards sustainability
The Senior Management in organisation showing keenness to show profits in the short terms thus eliminating investment in the brand. A brand campaign is a strategic and an expensive initiative and managers not seeing long term value is considered as a major reason.
4. Business processes not being aligned to the value proposition offered by the product
The business process should be aligned to the value that the brands potential indicates. For example 3M is known to be the most innovating company in the world. Why? Because it has more than 55000 different products in the market with different characterises. It’s known to be spending the ‘big bucks’ in research and development to keep the organizations cutting edge competitiveness. It’s known to come out with many different new products to the market every year. (3M n.d.)
If the organization is different to the above example, the real value in branding will not be visible to both internal and external stakeholders.
It is inevitable that marketing is the essential need for any business organization to succeed and create sustainable growth in industries. Best practices of companies such as Apple, Samsung, CBL, Airbus and Coca Cola, to name a few, have shown that creating the exchange of values with the customer and innovating and creating within the organization can not only build the brand but also help create world class organizations.
3M n.d., A Culture of Innovation, Available from http://solutions.3m.com/3MContentRetrievalAPI/BlobServlet?lmd=1349327166000&locale=en_WW&assetType=MMM_Image&assetId=1319209959040&blobAttribute=ImageFile
Airbus n.d., Production, Available from http://www.airbus.com/company/aircraft-manufacture/how-is-an-aircraft-built/production/
Arline, Katherine 2015, How to create an effective marketing plan, Business News Daily, Available from http://www.businessnewsdaily.com/4-creating-effective-business-marketing-plan.html
Badenhausen, Kurt 2014. Apple, Microsoft and Google are World’s most Valuable Brands, Forbes, Available from http://www.forbes.com/sites/kurtbadenhausen/2014/11/05/apple-microsoft-and-google-are-worlds-most-valuable-brands/
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Isaacson, Walter 2012, The Real Leadership Lessons of Steve Jobs, Harvard Business Review, Available from http://hbr.org/2012/04/the-real-leadership-lessons-of-steve-jobs
Kaputa, Catherine 2012, 5 Marketing Tools Apple Exploits To Build The Hype, Fast Company, Available from http://www.fastcompany.com/3001650/5-marketing-tools-apple-exploits-build-hype
Kotler, Phillip 2011, Dr. Philip Kotler Answers Your Questions on Marketing, Kotler Marketing Group, Available from http://www.kotlermarketing.com/phil_questions.shtml
Lehner, Matthias & Halliday, Sue Vaux n.d., Branding sustainability: Opportunity and risk behind a brand-based approach to sustainable markets, Available from http://www.ephemerajournal.org/contribution/branding-sustainability-opportunity-and-risk-behind-brand-based-approach-sustainable
McCabe, Maisie 2012, Coke launches first new bottle size in almost 20 years, Available from http://www.marketingmagazine.co.uk/article/1122934/coke-launches-first-new-bottle-size-almost-20-years
Merriam-Webster n.d., Definition of Sale, Available from http://www.merriam-webster.com/dictionary/sale
Pinterest 2015, Available from http://www.pinterest.com
Porter, Michael E. & Lee, Thomas H. 2013,. The Strategy That will Fix Health Care, Harvard Business Review, Available from http://hbr.org/2013/10/the-strategy-that-will-fix-health-care
Porter, Michael 1985, Competitive Advantage, Free Press, p12
The Sunday Times 2010, CBL records 900% growth in the last decade, Business Times, Available from http://www.sundaytimes.lk/100627/BusinessTimes/bt37.html
Welch, Patrick 2015,. Moneyball: Use Content Intelligence and Analytics to Build a Successful Sales Team Content Marketing Institute, Available from http://contentmarketinginstitute.com/2015/02/moneyball-content-sales-team/