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 / Second Quarter 2002 / Issue 27(originally published by Booz & Company)


Marketing: Are You Really a Realist?

Sustained growth, brand differentiation, and persuasive advertising are romantic fantasies. It’s time for marketers to set achievable goals.

Illustration by Lars Leetaru
Marketing is under pressure, largely because it is judged by such goals as creating sustainable growth and maximizing shareholder value. If brands don’t grow, the reasoning runs, then marketing must be failing.

Marketing goals are, in a word, romantic — in the dictionary sense of being imaginative, visionary, and remote from experience. Indeed, marketing often lives in a pretend world where anything goes. If we crave loyalty, marketers put on a loyalty program. To reposition a brand, they say, “For young people.” To appear proactive, they intone, “Added values.”

Who sets these improbable objectives? Marketers do. Yet I believe marketing is needed because it aims to impose customer orientation on our more naturally self-focused production mind-set. But even a consumer orientation will not work if romantic (or unachievable) goals are set.

Many goals in marketing are unrealistic. They are doomed to failure from the start. Such dreams include sustained growth, brand differentiation, persuasive advertising, profit maximization, and knowledge management. When marketers fail to reach these unreachable goals, they give marketing a bad name. A point-by-point analysis now exposes the romantic vision and identifies the alternative market reality.

Goal 1: Sustained Growth
When marketers are asked about their goals, they usually say growth. Most brands and most companies, however, do not grow relative to the market. And that leads the world at large to claim that marketing has failed (again). In fact, the failure happens only because marketers set unachievable goals of big, sustained organic growth — and people believe them.

A year ago, the McDonald’s Corporation was in the news for making a giant marketing turnaround. Having spent more than $1 billion to bring more variety to its menu, the company decided to change directions and simplify its core offerings and grow. “There is a plan to double the business,” a spokesperson confirmed.

But when a company states, “The mission of this company is growth,” it should add, “Unfortunately, last year…” Continuing organic growth is rare. Most often, the result will not be like-for-like growth in market share, any more than it was the preceding year, when the company trumpeted the same objective. Jim Collins discovered that out of the 1,435 companies he analyzed, only 11 became great. (See “Climbing to Greatness with Jim Collins,” by Art Kleiner, s+b, Fourth Quarter 2001.) Big and sustained growth seems usually to be gained only through mergers and acquisitions.

The inhibiting factor is competition. If you are a 20 percent brand, you still have 80 percent of the market against you. Survival — not growth — is therefore the name of the game: You still want to be 20 percent next year. You usually will be, if you work at it. Anything more, like gaining from a competitor error, is an occasional bonus.

But can a no-growth-except-sometimes strategy be acceptable in marketing? I believe so. Colleagues in other parts of the company do not set growth as their dominant target. Finance, accounting, human resources, production, quality control, and new product development do not have to hype themselves up by constantly chasing rainbows.

Goal 2: Brand Differentiation
For most marketers, it goes almost without saying that a brand needs to be different if it is to be bought. John Murphy, founder of Interbrand, the world’s leading brand consultancy, recently told Market Leader, a quarterly journal of the Marketing Society, “You must ensure, most importantly, that your brand is differentiated in a meaningful though not necessarily a massive way….Give the consumer a reason to buy your brand rather than a competitor’s.”

But this is romantic, if ubiquitous, make-believe. What single advertising-given “reason” do people have for choosing Pepsi versus Coke? American Airlines versus United Airlines? Hertz versus Avis? Bingo versus Bango? Why should some lightweight selling proposition change anyone’s behavior? Or even a mammoth reason, like changing dark chocolate into white? Effective marketing is not that simple.

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