If you’re a chief executive officer with choices to make around product, pricing, distribution, resource management, communications, and all the usual businessy stuff, what’s the most important element?
Business school wonks would probably plump for distribution. But these days distribution has been revolutionized by the internet. The way people buy has changed out of all recognition. The world is now flat, particularly in B2B where a lot of products are digital only. Distribution has in effect been commoditised.
What about product? Well, this isn’t the most important either because more often than not there are several companies offering the same or similar product. In fact, many products, particularly in high-tech, have components in common manufactured by a handful of companies in the Far East. Just think of the long-running patent battles between Apple and Samsung – the very best of enemies. You have to be spectacularly innovative to offer something unique, and even then it isn’t long before rivals have copied you and caught up. Business models, particularly online, are easily replicable.
What about price? If you have economies of scale and you are a cost leader you can win a price war because your manufacturing costs are the lowest. But by definition there is only one cost leader and if you’re not it you ain’t gonna win any price war. Starting one would be like Wile E Coyote sawing off the branch he’s sitting on. And the winners of price wars tend to put rivals out of business and then begin to attract the attentions of competition authorities. Not a good move.
So if it’s hard to differentiate yourself on distribution, product and price, what are you left with? What you say and how you say it, that’s what. Your brand personality is your business; it is your balance sheet.
This is why I believe that the research & development and product design departments should be “baking in” marketing right from the start. In other words, the attributes you think conform to your brand or product story should be included in the original product design. The product should be designed around the story, rather than the story having to be retro-fitted to a product that may not lend itself as well to the storytelling.
Say you wanted to appeal to environmentally-conscious buyers, but you make printers. Your intention would inform the design, integrating low energy usage, sustainably-sourced and recyclable materials, environmentally-friendly inks and so on. The marketing – the story you want to tell about this product – is baked into the design. This is preferable to coming up with a product and then scrabbling round looking for something interesting to say about it afterwards.
When you take this approach, the CMO becomes the CEO. Everything you do is in effect marketing communications. You are what you are telling the world.
