Customer Reviews

Marketing As Strategy: Understanding the CEO's Agenda for Driving Growth and Innovation

5 star:		(7)
4 star:		(1)
3 star:		(1)
2 star:		(1)
1 star:		(1)

 

 

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!

Professor Nirmalya Kumar explores the world of Marketing from the CEO's perspective, making a strong case in favour of a major role for the marketing director in the developing of the company's strategy.

His message is clear: marketing and strategy are closely related, if not the very same thing, and in today's highly competitive environment no single company could afford to ignore this fact.

Perhaps two of the most important contributions of this book are the use of the "three Vs" approach (Valued customer, Value network and Value proposition) as a means to get answers to the three basic strategic questions: Who, How and What, and the section devoted to the discussion of the concept of strategic segmentation.

I had the privilege of having Professor Kumar during a term of my Sloan Fellowship Masters Programme at the London Business School, in 2003, and we used parts of his then unpublished manuscript to explore some of his revolutionary concepts. Even though nothing can replace having Nirmalya in front of you talking about his experience and incredible knowledge of the Marketing science, by reading this book you will have access to some of his most innovative ideas.

Definitively, a Marketing/Strategy reference book for the years to come

Marketing as Strategy follows the assumption that marketers have lost their seat at the big table because they no longer address the heavy strategic lifting in their respective companies. This may or may not be true. A good bit of the financial bent in most publicly held companies may have to do with the extreme pressures provided by SOX and related corporate governance issues in the post-Enron business landscape. As a result, most CEO's aren't marketers outside of marketing-driven industries.

However, the book is a good refresher for newly minted MBA's working for consumer packaged goods manufacturers. If this isn't you, just read chapter 7 on `market drivers', which is good reinforcement for anyone in early stage companies.

The premise is a good one - marketers can retake their place in the boardroom and executive suite and live more fulfilled professional lives. However, the suggestions given are positioned as inviolate rules. This assumption is incorrect. The idea that one should grow channels of distribution, not shrink them, is interesting but entirely dependent on factors specific to your industry and company. This clearly isn't an absolute. However, there are some good reminders to be studied here and the case studies are relatively fresh.

The seven big ideas are presented in chapters 2 through 8.

Chapter 2: From Market Segments to Strategic Segments: good thinking on ensuring your brand or company is focused on real differentiation from the ground up, not from the ad copy outwards. This is one of the better chapters.

Chapter 3: From Selling Products to Selling Solutions: it's a bit specious to say that `people don't buy power drills, they buy holes.' Actually, people buy power drills. They want holes. There are many ways to make a hole, one of which is by using a power drill, and one of those drills could be yours. Or not. Maybe they will buy your competitors' product instead. Ball bearing manufacturers might want to focus on being the best ball bearing manufacturers possible and not try to make motors. There is a kernel of truth here - know your customer, provide solutions to their problems, and differentiate yourself on these parameters - but the risk is that by taking too broad an interpretation, focus can be lost.

Chapter 4: From Declining to Growing Distribution Channels: not necessarily so. There are plenty of over-distributed products out there. There is also a huge amount of hype over `new' distribution options that fade over time. This is an over-statement. The chapter does provide a very good framework for analyzing channels, however.

Chapter 5: From Branded Bulldozers to Global Distribution Partners: a good read if you're working for a multinational corporation faced with global account issues. However, the `before' picture in branded bulldozers still has a lot of merit. This is not an adequate `before/after' comparison, as a result. You can be a good global distribution partner and still drive your agenda a la branded bulldozer.

Chapter 6: From Brand Acquisitions to Brand Rationalization: a good read if you're working for P&G, GM (you have my sympathies), or other brand-driven consumer company. Focus your brand strength. Mom and Apple Pie chapter.

Chapter 7: From Market-Driven to Market-Driving: this is great, as long as you're right. Don't focus on what your customers want, tell them what they want. "If we'd listened to our customers, we would have given them a faster horse", says Ford. And I think it was Andy Grove who said something along the lines of, "who cares what customers think - we haven't told them what to think." If you're right, you're in great shape. If you ignore your market, you might still be right. If you're wrong, you look very foolish. So good luck with this one.

Chapter 8: From Strategic Business Unit Marketing to Corporate Marketing: not necessarily so, again. There are as many reasons to decentralize as there are to centralize. Most F500 companies spend an inordinate amount of time switching back and forth between these two every few years because of corporate boredom and lack of imagination. This is not a magic bullet.

This book is a good read for those in the bulls-eye of its intended audience. It is not a general business read for marketers of all stripes in all industries. A good refresher, some good tools, but take everything you see here with a large grain of salt because these rules just don't apply to all situations as the book seems to promote.

I came across this book and wanted to read it. Its a very good book for budding marketers and professionals.

This book is more like a collection of reasonable "train of thought" chapters that seem to have been woven (in my opinion, not very effectively) into an overall structure. You wouldn't lose anything by treating them as individual articles.

The book starts off by talking about "strategic segments" which need a fundamentally augmented treatment over and above the 4P based differentiation that we are used to in marketing literature. I think this part of the book is well done, the insight is crisply presented and it sets up the book nicely.

However, after that the interim chapters on different elements of strategy/marketing, while OK as reads, do not really get to what one might argue are the main points related to specific areas (e.g. channels, branding etc.).

The last chapter is a good synopsis of the overall book and also presents a compelling overview of a customer focused marketing and strategy roadmap.

If short on time, just read the first couple of chapters and the last one.

The expertise of specialized, internal departments has enabled modern corporations to become more competitive and profitable. However, Nirmalya Kumar contends that one department - marketing - rarely helps in this quest. In fact, many CEOs complain that marketing has not evolved past its focus on basic tactics. Kumar wants to correct this problem and suggests a seven-step process marketers can follow to become flexible, strategic thinkers and leaders. He advocates forgetting about the classic "4 Ps" of marketing (price, promotion, position and placement) and embracing the "3 Vs" (valued customer, value proposition and value network). We recommend this book to serious marketers who want to work smarter, adopt new ideas and use them to change their companies.

We live in a service economy but pump our own gas. Customer Service keeps us on hold, is rude, clueless.

After 20 years, ATMs still ask the same 8 questions and repeatedly quiz longstanding customers Dinunzio, Johnson, Goldberg, Yoon and Krzykowky if we want to speak Spanish! CRM must stand for Can't Remember Me...

Zero-defect products are now expected. Loyalty is nil. From a features/function standpoint, product differentiation is less than .0001% - IBM, Dell, HP, Sun all have fast boxes. BMW, SAAB, Lexus, Mercedes, Audi all make great cars.

So how do companies capture customers? Create Value? Win?

Kumar addreses how marketing can help CEOs solve these and other problems with customer focus integrated into all functions, sound strategy and crisp tactics. Plus he has a plan to get to that transformational golden chalice - culture change that moves companies from what they sell to what they solve.

Kumar taught for years at IMD in Lausanne, the delux advanced management institute on the lake. Though the setting was sublime, he tackled gritty and immediate issues working with active Fortune 500 execs whose challenges were hardly "academic". Kumar shows his chops here by getting to the point, being crisp and focusing on linking marketing to value. Just what CEOs needs to hear... Well done!

This is a very good marketing book. It's very well written and sees marketing as a function which has effects on all the company so that it may hopefully acquire a 'marketing mindset'. Some parts take inspiration from Chan Kim's Blue Ocean strategy but the graphs are confusing and unclear. I will use it as a main textbook for my BA marketing course in college. Efficient, effective and enjoyable.
Sergio Ianni
[...]