The two main contributors to the somewhat confused state in which marketing finds itself are:
1. The paradigm shift, led by the Nordic School, from the economics-centred 'tangible goods' logic to the relationship-centred 'service dominant' logic, which led to the view that as most customer-influencing personnel do not belong to the marketing department, by definition marketing has become less important.
2. The phenomenally rapid acceleration of digital technology.
Let me briefly expand on these issues.
Given the maturity of most markets, the failure of hundreds of fads such as 'marketing excellence' and of finance, with their ridiculous focus on short-term rounds of exotic debt instruments, excessive leverage, cost cutting and focus on cash, it is fair to conclude that future success will very much depend on a focus on markets and customers. It's also worth noting at this stage that the UK has twelve times more accountants per capita than Germany.
How many pence are there in a pound and how many of these can be cut? Cost cutting is finite, whereas creating value for customers in infinite and is limited only by our creativity and imagination - surely the role of marketing.
This represents a massive opportunity for the marketing 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. Another, in Management Today in October explained why excellence is no longer enough, as everyone is striving in the same direction. The consequence is that excellence has to be augmented by differentiation.
Neither has marketing's self-destructive focus on the measurement of tactical promotional expenditure in an attempt to prove that they are not wasteful, self-indulgent and innumerate helped our cause
Yet 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 market place risk.
So, the time has come to tell the world about the real contribution that world-class marketers make to the creation of shareholder value. This will not come from econometric models - although these are important - nor from simple measures of marketing effectiveness. Top executives still don't know how to convert, for example, brand equity to 'real' equity, whilst single numbers such as the net promoter score just do not convince anyone. Hence, the "show-us-the-money" school at the top of most companies.
So a totally new approach is necessary and this represents a major opportunity for our community.
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 percent 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.
The second major issue is how to deal with digital.
A recent Digital Social Research study of senior marketing directors across a range of businesses indicated that marketing is increasingly being seen as purely digital in many businesses, with the consequence that they are less involved in strategic decisions, with the danger that marketing becomes relegated to little more than a service function.
Yet, as Nicola Kemp said as long ago as November 2013: "For many companies, the greatest threat is not being out of touch with digital developments, but losing sight of fundamental needs of consumers and the underlying long-term drivers of their business".
One more quote to put the digital revolution in context came from Helen Edwards in the November 2014 issue of Marketing: "Yes, the fourth wave of digital marketing has arrived, but consumers are drowning in an ocean of branded pap and the interactive lifeline they really want to be thrown is the one whereby companies answer calls promptly, answer calls in person, keep their promises, make better products and contribute to a better world."
In conclusion, of course digital is important, representing as it does a valuable addition to an already-impressive list of two-way communication channels, but it is not marketing.
It is for these reasons that I fully support the direction CIM are taking.
Firstly, they were amongst the leaders in digital education. Secondly, they have become a leader in marketing education and its qualifications provide a totally up-to-date education in the core disciplines of marketing. But probably even more important, they are pushing hard to link CIM more closely to business and the key issues of the day, which will transform the way marketing is viewed and practised.
Legendary marketing guru Professor McDonald, cited as one of the top thinkers who have changed the landscape of marketing and author of over 40 books, will be visiting South Africa to present two one-day workshops in Midrand on 24 and 25 February 2015:
For more information and bookings, contact SBS Conferences on http://www.sbs.co.za/wcm2015/.
