Why robust business strategy needs to start with marketing.
What does it take to win in today’s highly competitive market where customers have ever increasing choice and with that, unprecedented power, to make or break a company? Competitiveness has always been the aim of strategy. But to be competitive, organisations need to take a more marketing-led approach to strategy development.
It’s useful to look at the origins of marketing and strategy which are very different. Marketing started in the 1940’s as a way to drive sales while strategy developed during the 1960s from military theory. Strategy was about how to beat the competition by increasing production efficiency, having unique assets, or R&D capabilities or segmenting your market carefully.
Marketing didn’t really focus on competitors and strategy didn’t focus much on customers. As customers have gained access to more and more choice, marketing has been forced to focus more on how to differentiate its products from the competition and strategy has had to understand customer behaviour better to be able to beat the competition.
This common focus around the customer has brought marketing and strategy closer together. But can this shared focus on the customer be exploited to drive competitiveness and does marketing have a larger role to play?
Traditionally, strategy has defined what’s unique about an organisation and set the direction and scope of the business over the long term. While marketing has typically been directed by the business strategy, tasked with taking it and translated it into a plan of action to promote and sell products or services by addressing customers’ needs. But should the process be reversed?
Today, having and maintaining a competitive organisational advantage doesn’t guarantee success.
Companies must find ways to continuously create value for customers. This is progressively difficult to do by simply adding product features. Today competitiveness comes from what else you can do for the customer. How can you deliver added value that enhances the customer experience during purchase and use of the product?
To do this marketing needs to play a broader role.
A strategy of cost reduction or product innovation can quickly be copied but creating a differentiated customer experience is harder to duplicate and customers are less likely to switch if their experience has been positive, contributing to greater customer loyalty.
The reason many Life Science companies struggle with marketing strategy is that they are technology and engineering driven which usually means that they are very product focussed. In addition, aligning strategy, marketing and branding is often challenging because they happen in different parts of the organisation. Strategy is usually the prerogative of the C-suite executives and the CMO is usually left to translate this into a marketing strategy. Marketing plans are often delegated to product teams who operate quite far from the CMO’s office. While the company brand is usually managed by a corporate function and there is little interaction with product brands which fall to product teams to manage.
Getting alignment between all parts of the organisation is difficult and in most cases, it requires corporate restructuring. This is what Procter and Gamble, who are frequently considered to be the leaders in marketing best practice, have done by putting brand at the centre of their marketing. In 2014 they changed how they approach marketing by putting Brand Directors in charge of product marketing. The Brand Directors have a very wide remit. They are in charge of strategy, marketing planning and financial performance for their brands. They oversee market intelligence, marketing communications and PR at a global level.
Life Science companies can learn from P&G’s approach. However, progress can only be made when Life Science CEOs (who often have a technical background and little marketing experience) are able to acknowledge the importance of marketing as a driver of competitive advantage and work towards instilling a more marketing led approach to strategy and throughout the organisation.
