by Professor Malcolm McDonald
Organisations like Johnson and Johnson, P&G, Shell and the like create shareholder value by having an inspiring vision, clear strategies, rigorous segment and brand prioritisation, consistent innovation, superior value propositions, high employee morale, tight cost control and concern for all stakeholders. Above all, however, they also encapsulate their strategies in robust marketing plans. Our best scholars have argued the case for such processes and behaviours for decades.
Cranfield University School of Management was commissioned by the Worshipful Company of Marketors late in 2019 to undertake a research project on the role of the 20 20 Chief Marketing Officer (CMO) in the digital age. Although this was just before the Covid-19 pandemic, subsequent research confirms the main conclusions from that project. Also please note that we have used the abbreviation of CMO (Chief Marketing Officer), even though some organisations have started to drop the word “marketing” and replaced it with titles such as “Chief Customer Officer”, “Chief Brand Officer”, “Chief Trust Officer” and the like. This did not in any was affect the results of the Cranfield report.
Inter alia, the report outlined two extreme scenarios. One such dramatic, dichotomous, tongue-in-cheek comment in the report suggested that one possible option is to leave marketers to manage the logo, leaving the real business of managing customer relationships to data scientists! Against this scenario is that of the traditional CMO being the leader of the customer connection, with data scientists in a supporting role.
However, the most progressive CMOs see the digital environment as providing unprecedented opportunities for adapting to the ever-changing needs and wants of customers and their expectations of immediacy and convenience and whilst the report stresses the tensions between data scientists and marketers, the reality is that it does not matter what job titles are attached to the traditional role of market and customer sensing and the development of value propositions as long as this crucial role is being fulfilled.
Herein, however, lies the principal dichotomy facing the marketing community.
Much was made of traditional, rational, logical, step-by-step approaches to developing marketing strategies (i.e. strategic marketing planning) becoming less relevant due to the rapid changes in market development. The fieldwork confirmed that in social media, the need to be authentic and immediate cannot be accommodated by traditional central control over messages. Modern CMOs see their role as guiding and inspiring thousands in their firms to communicate consistent brand values and messages. The problem with doing this, however, is that new competitors are entering with unfamiliar tactics, boundaries are blurred and CMOs feel a profound sense of unease about decentralisation and the uncertain business model they face. As the report states: The dilemma facing CMOs is “how to maintain an integrated and coherent approach to the market.”
An article in Catalyst by Jarrett J in July 2019 compares this situation as being like a human without a brain, who would be just a collection of activities that cannot operate. Likewise a global marketing team needs a strategic plan, a north star to gather round, something that will guide compliance and accountability. So there remains a need to put in place consistent processes, systems and tools to enable marketing organisations to maximise effectiveness. Thus the need for strategic planning will always be a required skill of CMOs - in other words, we need to get back to the fundamental foundations of marketing strategy.
The author’s experience, not only from working with many of the world’s top performing companies, but also from interacting with hundreds of marketing leaders via the medium of webinars on Zoom and the like since the lock down, has convinced him that the skill of developing strategic marketing plans is in greater demand today that at any time in the history of marketing. Whilst the uncertainty about what the future holds for many of us will remain for some time, the only difference is that such plans will need to be more carefully and regularly monitored following their preparation and of course, amended accordingly.
The most common objective of modern commercial organisations is the sustainable creation of shareholder value. This can be achieved only by providing shareholders with a total return from capital growth and dividend yield that exceeds their risk-adjusted required rate of return for this particular investment. In today's highly competitive environment, the major sources of shareholder value creation are the intangible marketing assets of the business, such as brands, customer relationships and channels of distribution, the 80 per cent of the company's value that does not appear on the traditional balance sheet. Consequently, the critical future marketing strategies of a company, which indicate how these assets are to be developed, maintained and exploited, are the role of properly-trained marketing specialists, not some geek playing around with technology.
So a changed approach is necessary, which entails getting back to basics and this represents a major opportunity for our community. A recent article on the future of marketing in HBR re-emphasised the need for marketers with traditional marketing expertise and claimed that these basic capabilities are missing from our community.
In spite of much criticism of the state of marketing today, our research at Cranfield shows that successful marketers make a major contribution to corporate wealth by understanding markets, doing proper needs-based segmentation, developing quantified value propositions, competitive analysis, portfolio analysis and managing marketplace risk, all encapsulated in a strategic marketing plan. This is supported in a flurry of recent articles by the likes of McKinsey, Accenture, IBM and others too numerous to mention here giving evidence that organisations with CMOs doing these things are substantially more successful than those with CMOs who don’t drive strategy in these ways.
About the AuthorEmeritus Professor Malcolm H.B. McDonald MA(Oxon) MSc PhD DLitt DSc
Until 2003, Malcolm was Professor of Marketing and Deputy Director of Cranfield University School of Management, with special responsibility for E-Business. He is a graduate in English Language and Literature from Oxford University, in Business Studies from Bradford University Management Centre, and has a PhD from Cranfield University. He also has a Doctorate from Bradford University and from the Plekhanov University of Economics in Moscow. He has extensive industrial experience, including a number of years as Marketing and Sales Director of Canada Dry. Until the end of 2012, he spent seven years as Chairman of Brand Finance plc.
He spends much of his time working with the operating boards of the world’s biggest multinational companies, such as IBM, Xerox, BP and the like, in most countries in the world, including Japan, USA, Europe, South America, ASEAN and Australasia.
He has written forty six books, including the best seller "Marketing Plans; how to prepare them; how to use them", which has sold over half a million copies worldwide. Hundreds of his papers have been published.
Apart from market segmentation, his current interests centre around the measurement of the financial impact of marketing expenditure and global best practice key account management. He is an Emeritus Professor at Cranfield and a Visiting Professor at Henley, Warwick, Aston and Bradford Business Schools.