The decline and fault of marketing

The following column, which appears in every other issue, presents a counter-conventional look at contemporary advertising and marketing.Marketing is dead. In its own vernacular, marketing is at the end of its life cycle.On the Boston Consulting Group matrix, it long ago...

The following column, which appears in every other issue, presents a counter-conventional look at contemporary advertising and marketing.

Marketing is dead. In its own vernacular, marketing is at the end of its life cycle.

On the Boston Consulting Group matrix, it long ago ceased to be a star. Marketing is now a cow. Time to harvest. Time to divest.

The evidence supporting the decline and death of marketing is there if you choose to look at it.

All the mission statements written during the last decade rededicating individual companies to their customers point to the failure of marketing in serving those customers in the first place.

Confirm failure

All the promotions, coupons, discounts, confirm that failure. Clearly, it does not take marketing to do the moronic: to sell a product by giving it away, by bribing people to choose it.

To be fair, the decline of marketing is not all marketing’s fault. The world has changed, as has the audience for all that marketing activity.

Remember, marketing is a relatively new discipline. It was formalized after the Second World War to create ‘consumer demand,’ thereby absorbing the incredible, no-longer-needed military manufacturing capacity.

The consumer society, fuelled by marketing, boomed during the 1950s and ’60s. But that ended in the 1970s.

Harvard economist Benjamin Friedman writes in Day of Reckoning that our consumer society came to a crashing halt during the Arab oil embargo.

Oil is the elixir which made consumption possible, providing everything from fuel for cars, to plastic for disposable razors.

Reality of limitation

Facing a shortage in this indispensable commodity, our society, for the first time, came to terms with the reality of limitation.

While we have continued to live with a consumer consciousness, the standard of living, a measure of how much we consume, has been stuck ever since.

Inflation robbed us of buying power in the late ’70s. And what we did buy in the ’80s was mostly leveraged.

This long recession, and the painful economic restructuring we are enduring, is the sobering consequence of having binged on debt.

(England’s standard of living is now lower than before the start of the Thatcher boom. Feel familiar?)

We understand now that we must adjust to an economy of limitation because we are living on a fragile planet, which is, itself, limited.

Slowly but inexorably, society’s values are shifting – from consumption to conservation; from obsession for more, to responsibility and stewardship.

Resisting current

Marketing, as the discipline promoting consumption, is resisting the current of history. It is at odds with the needs of the planet.

Marketing’s obsolescence is not only theoretical.

Marketing is fundamentally about building brands, creating entities that inspire the custom and loyalty of buyers and users.

The evidence now suggests that marketing’s effectiveness in building brands is waning.

Last year, BusinessWeek reported on a study by DDB Needham Worldwide which found that ’62% of consumers polled in 1990 say they buy only well-known brands, compared to 77% in 1975.’

This is alarming.

Despite the considerable investment in marketing infrastructure and activities, despite all the research, planning, revising, testing and implementing, there has been a general 20% drop in brand loyalty.

Such return on investment for any other activity in today’s results-obsessed business climate would be unacceptable.

Japanese

It is interesting that many Japanese companies do not have formal marketing departments.

The activities we usually associate with that discipline – reaching out to the customer for input, competitive intelligence, strategies for adding value – are intuitive and culturally ingrained.

The attitude of marketing permeates every activity and is too important to delegate to a single department.

In North America, we have tended to focus on the product. In Japan, they usually focus on bringing value to the relationship with the customer.

That is why their brands are often corporations. Sony. Canon.

People not only buy products, they engage in a broader relationship, sharing the values and ethos and attitude of the company brand.

Theodore Levitt, probably the world’s most famous marketing professor, reminds us that marketing is not about managing a product, but about managing relationships between buyers and sellers.

We have heard this language before, but Levitt is emphatic. He believes the most important asset any company has is its relationship with its customers.

Relationships are far more complicated, far more fragile, than products.

The systems and structures of marketing geared to products are not only ill-suited to nurturing these relationships, they are often detrimental to them.

When the product comes first, the customer is neglected. And, ultimately, the company suffers.

Defeats innovation

The bureaucracy of marketing defeats innovation. How else do you explain that the most sophisticated of marketers missed huge shifts in the very markets they were responsible for?

Where were ibm’s vaunted marketing people when Apple Computer introduced the pc? Where were Nabisco’s when Dave Nichols of Loblaws added more chocolate chips to one recipe in his line of President’s Choice cookies?

Where were the marketing people Procter & Gamble and Lever Bros. when The Body Shop’s Anita Roddick conceived of personal hygiene products that were all-natural, environmentally responsible and animal-friendly?

This is not a matter of being out-marketed. This is about being ‘out-customered.’

Deconstructing

Many companies understand this. That is why many are deconstructing, remaking themselves in a scale, and with structures that are more conducive to improving service to customers.

Marketing, too, must deconstruct. It must escape its own conventions.

John Dalla Costa is an author and consultant to senior business executives. His first book, Meditations on Business: Why Business As Usual Won’t Work Anymore, came out in 1991 and he is hard at work on a second. Dalla Costa spent 16 years in advertising, and was president and chief executive officer of Toronto ad agency Miller Myers Bruce DallaCosta.