Many marketers now believe that the marketing function in many companies has less influence than it should have - or once had.
As one example, they frequently point out that the marketing function is usually responsible for creating and running promotional programs, but often has little or no influence over the other three "Ps" of the marketing mix - product, price, and place.
The idea that the fundamental purpose of a business is to understand customer wants and needs, and create products or services to satisfy those wants and needs emerged in the 1950s. As this concept gained traction, many marketing scholars embraced the view that the marketing function in a well-managed company would direct much of what the company does.
In my last post, I explained that the marketing function in most companies never gained the broad authority that marketing scholars anticipated. What actually happened was that strategy development became the primary mechanism senior company leaders used to make major decisions about the future of their business.
Over the past six decades, the strategy discipline has become the dominant method for describing the purpose of a business and creating the "recipe" for its success. In the words of Walter Kiechel:
"Strategy's coming to dominance as the framework by which companies understand what they're doing and want to do, the construct through which and around which the rest of their efforts are organized, eclipses any other change worked in the intellectual landscape of business over the past fifty years." (Emphasis in original) [Walter Kiechel, III, The Lords of Strategy: The Secret Intellectual History of the New Corporate World (Boston: Harvard Business Press, 2010)].
The rise of strategy to the dominant position in the hierarchy of business management tools effectively prevented the marketing function from gaining expansive decision-making authority in most, though not all, companies.
To understand how this happened, we need to look at what a complete strategy encompasses and where strategy is made in most organizations.
The What and Who of Strategy
Roger Martin, one of today's leading authorities on strategy, defines strategy this way: ". . . strategy is an integrated set of choices that uniquely position the firm in the industry so as to create sustainable advantage and superior value relative to the competition." [A.G. Lafley and Roger L. Martin, Playing to Win: How Strategy Really Works (Boston: Harvard Business Review Press, 2013)].
Martin goes on to describe strategy as the answers to five interrelated questions. The following illustration shows Martin's five core strategy questions and some of the subordinate questions that business leaders must answer to create a complete strategy.
Veteran marketers will recognize that answering some of these questions will require strategy makers to use several marketing principles and methods.
For example, the "Where will we play?" question will require strategy makers to decide whether and how to segment their market and select their target market. And the "How will we win?" question will require them to determine how they will deliver value to customers that is distinct from, and superior to, the value offered by competitors.
The rise of strategy also constrained the marketing function's decision-making authority because of who formulates strategy. In most companies, strategy development was (and still is) led by the CEO, and usually involves some or all of the company's C-level executives.*
So, as senior company leaders increasingly used strategy to define the purpose of their business and create their gameplan for success, they absorbed several market-related decisions into the strategy development process. As a result, those decisions became "strategy" decisions rather than "marketing" decisions.
Under these circumstances, the influence of the marketing function across the company will be largely based on the contribution it makes to the success of the company's strategy.
To maximize the influence of the marketing function, most marketing leaders will need to reframe the function's mission and objectives to make clear that the function's first priority is to support the company's strategy and strategy-making process.
In my next post, I'll explain how marketing leaders can use this approach to increase their influence with other senior company leaders and enhance the influence of the marketing function throughout the company.
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*In larger enterprises with multiple business units or brands, each business unit and brand will likely require a distinct strategy. These strategies are typically developed by each business unit leader or brand manager with input from his or her leadership team.
Top image courtesy of Stefan Erschwender via Flickr (CC).
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