Marketing as Strategy: Understanding the CEO's Agenda for Driving Growth and Innovation: Understandind the CEO's Agenda for Driving Growth and Innovation [Englisch] [Gebundene Ausgabe]

With increasing pressures on CEOs to deliver profits in the short term and increasing concerns of Board members about financial reporting requirements, the corporate agenda is less and less likely to include marketing issues. Yet in every organization, it is marketing's answers to the who?, what? and how? questions that build the growth engine of the enterprise. Professor Kumar explains why leaders must have their eyes on the marketing ball.

Though Professor Kumar is a marketing academic, his book is useful not just for marketers, but also for CEO's and general managers. He convincingly argues why marketing must be elevated from the tactical responsibility to sell more of our products and services to a strategic influence in the future direction of the organization.

To do this, he suggests that marketing no longer employ the traditional four Ps model of product, promotion, price and place (distribution) but rather a more strategic approach he calls the Three Vs: valued customer (who to serve), value proposition (what to offer) and value network (how to deliver).

With practical suggestions and examples, he details a menu of seven marketing initiatives that will drive growth and innovation in all organizations. The seven transformational initiatives along with some questions from the checklists provided are:

1. From Market Segments to Strategic Segments: Who are our valued customers?; Which customers are unhappy with current offerings in the industry?; Is the target large enough to meet our sales objectives?; What is our value proposition?; Does it fit the needs of customers we are trying to serve?; What benefits are we delivering?; Can we deliver and earn a profit?

2. From Selling Products to Providing Solutions: Do we guarantee customers outcomes and benefits instead of product performance?; Have our sales people developed consulting skills and deep industry knowledge?; Have we developed effective processes to allocate resources to solution projects?

3. From Declining to Growing Distribution Channels: What service outputs will the new channel provide?; How will the relative importance and power of existing channels change?; Which competitors will enter the new channel?; What changes in channel incentives to existing members will competitors try? What new competences do we need to enter the new channel?

4. From Branded Bulldozers to Global Distribution Partners: Have we identified our most valuable clients on a worldwide basis?; Are there single points of contact for global customers?; Have we optimized our supply chain for global efficiency?; Have we harmonized pricing structures?

5. From Brand Acquisitions to Brand Rationalization: Which brands are contributing to our profits?; What needs-based segments exist in each category?; How much sales revenue would we risk by deleting non-core brands?; What is the role of the corporate brand?; How will we articulate our program to stakeholders?

6. From Market-Driven to Market-Driving: Are new ideas routinely imported from the outside?; Do we tolerate failures and have processes in place to learn from failures?; Do we mix people on teams to generate new ideas?; Do we ensure that radical ideas do not lose resources to incremental ideas?

7. From Strategic Business Unit Marketing to Corporate Marketing: How does the organization rate on customer focus in processes, including new product development, order fulfillment, customer relationship management?; Is the organization organized around customers?; Are metrics and rewards related to impact on customers?; Does the organization systematically learn about customers?

Read this important new book to learn how to live up to today's pressing challenges of identifying new markets, keeping prices up and retaining customers.

It is ironic that while still more firms increasingly talk about customer-focus and CRM, the marketing function is losing ground to other functions in the firm when it comes to driving broad organizational initiatives to create value for the customer.

One example is projects to obtain better handling of customer relations (CRM) that focus on coordinating everything that a firm does towards customers. The CRM philosophy in its nature transcends the traditional functional silos. As a minimum, it requires that sales, customer service, call centre, shipping, finance, and obviously marketing will have to cooperate to create the best total experience for the customer.

COMPANY-WIDE PERSPECTIVE
It demands a mindset that is strategic, company-wide and focused on the bottom-line. And it requires the participants' desire and capability to work with advanced IT systems. If marketing is to lead these extensive projects, it simply isn't enough to be a specialist in tactical issues, such as market research, creative ad campaigns, printed sales brochures, media plans, or web content management.

But the future for marketing is still bright, though. At least, this is the opinion of professor Kumar who now teaches at the London Business School - following eight years as marketing professor at the Swiss IMD MBA-school. His book is in reality a defence for marketing and targeted at the top management.

In the new future role, marketing leaders need to help the firm implement organizational change with a focus of creating value to the customer. This has always been the core theme of marketing. But to make a difference, marketing people need increasingly to:
> Focus less on own functional silo and more on broad and multi-disciplinary activities across the firm
> Focus less on short-term tactics and more on long-term, overall strategy
> Focus less on getting increasing marketing budgets and more on the firm's bottom-line

WHO-WHAT-HOW
The book manages to create a number of interesting ideas to increase the status of marketing. Central in Kumar's work is the 3V-model that covers the following terms: Valued Customer (who?), Value Proposition (what?), and Value Network (how?).

Kumar shows with a lot of illustrative graphics, interesting checklists, and well-described cases from the real world - e.g. EasyJet -, how his ideas can be converted into practice.

Instead of the 3V model's slightly academic terms, I recommend the three easy-to-understand questions: who, what, and how. That is "who to serve", "what to offer", and "how to produce and deliver".

Kumar urges us to move from superficial market segments to strategic segments, i.e. where the organization must design separate delivery systems (how?) in order to obtain success.

The marketing philosophy always starts externally at the customer (who?) and works backwards towards solutions (what?), and finally adapts the firm's delivery system (how?). But a strong trend during the last decade has been on the internal perspective on core competences, such as procurement or production. This method means that we start with own unique capabilities in the delivery system (how?), which then is translated into solutions (what?) and finally customers (who?). Radical innovation often is created this way, e.g. the "walkman". In practice of business development, we usually have to work in both directions. Marketing people will have to do the same.

By drawing your own "who-what-how" profile and do the same for your competitors, you'll often reach useful conclusions that are valuable for obtaining a real strategic differentiation. This could push to the strategic innovation with a company-wide perspective. This process could the marketing function lead.

QUALITY AWARD
I find Kumar's book readable, provocative and full of perspective. Marketing's grand old man, Philip Kotler, has written the preface and this serves a quality award, which it deserves. The two chapters on brand rationalisation and distribution channels, respectively, are both updated from the author's articles in Harvard Business Review, which again is a sign of quality.

A final hint! If you cannot wait for the book to arrive, then consider using the author's website (www.nirmalyakumar.com). With a free login, you'll get access to a few of his ideas and concepts.

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

Because there are already so many excellent books on marketing (e.g. Levitt's The Marketing Imagination) and strategy (e.g. Kaplan and Norton's The Strategy-Focused Organization) now in print, why another? In fact, Kumar provides a unique and compelling analysis of the interdependence of marketing and strategy. As Philip Kotler notes In the Foreword, Kumar "introduces a framework for analyzing and planning marketing strategy in terms of the three Vs': valued customer, value proposition, and value network...[he also] proposes ways to deal with growing commoditization, price pressure, and the increasing market power of global mega-retailers...[as he strives] to show how the marketing discipline `could become more strategic, cross-functional, and bottom-line oriented' than ever before." This book will be of substantial value to all organizations (regardless of their size and nature) which are in urgent need of driving their growth and innovation.

Kumar carefully organizes his material within eight chapters whose titles indicate what each covers such as From Market Segments to Strategic Segments (for me, the most valuable chapter in this book) and From Branded Bulldozers to Global Distribution Partners (a chapter which will probably be of greatest interest to small-to-midsize companies with strategic alliances with global corporations). I agree with Peter Drucker's assertion that "the business enterprise has two and only two basic functions: marketing and innovation produce results; all the rest are costs." I also agree with Warren Buffett who suggested that price is what is charged for whatever is sold; value is what the buyer thinks it's worth. As Kumar observes in the final chapter, "Marketing must prove that it is willing and ready for its leadership role in transforming the company. It must convince others of its unique capabilities, resources and skills, and its mind-set to lead -- and that it has matured as a discipline to become [as noted by Kotler] more strategic, cross-functional, and bottom-line oriented."

This book helps its reader to understand "the strategic marketplace challenges that all CEOs face today," an obhective which is especially important now when CEOs seek strategic leadership from marketers inorder to exploit new business opportunities, build strong brand and customer franchises, increase the organization's overall customer responsiveness, redefine industry distribution channels, enhance global effectiveness, and reduce such risks as industry price pressures. As Kumar suggests, "It is about marketers doing better things rather than simply doing things better." For whatever reasons (Kumar suggests several), those responsible for marketing seldom aspire to lead major transformational projects that involve cross-functional, multi-national teams sponsored by the CEO. In this volume, Kumar offers what he calls "The CEO's Marketing Manifesto" (please see Figure 1.1 on page 9) which can guide and inform transformational marketing initiatives. Indeed, his entire book coiuld well serve as an operations manual for such initiatives.

Well-done!