Marketing and Sustainable Organisation Growth

Marketing_and_Sustainable_Organisation_Growth_Blog_omage_Aug19

Cranfield’s Professor Emeritus, Malcolm MacDonald and colleagues, writes in their book Marketing Due Diligence , that it is the responsibility of the Board to make sure the organisation is sustainable. In this context, sustainability doesn’t focus on the environmental impact of the organisation’s activities, rather the organisation’s ability to be commercially sustainable over the long term.

Market Orientation, arguably the foundational principle of Marketing, posits that a sustainable business continually evolves to meet the changing needs and wants of its customers. To be commercially viable over time, a firm needs to have a profound understanding of its market (customers, segments, competitors) and continually refresh its offer in response to changes in the market. Often that refreshing requires important changes in firm strategy, assets, capabilities and structure to implement that which customers will demand in the future. These changes need to be implemented effectively and efficiently, particularly in highly competitive markets.

Therefore, there is a strong link between marketing practice and sustaining the business. Specifically, Professor McDonald identifies three risks that Board must manage and for which marketing plays an essential component in so doing. I encapsulate these in three questions.

  1. Do we understood the market?

In a competitive market, customers have choices and are exposed to new competitive offers regularly. Do we understand the different needs of different customers, that is, how the market segments? Do we understand how attitudes and behaviours are changing in our markets? Can we predict what our competitors are likely to do and how customers may respond? Do we understand what new technologies will be commercially viable soon and how they might impact the market?

This manages the risk that we don’t understand our markets, our customers and that the “market moves away from us”.

  1. If we understand the market, is our strategy appropriate?

Understanding the market is necessary to be sustainable but not sufficient. It is equally important to respond to changes in the market. One might argue that Nokia, a company that prospered through the introduction of digital mobile telephony to overtake its analogue based competitors was similarly supplanted by the next technology shift to smartphones. I assume that it understood the technology and potential of smartphones very well. They did introduce several models but clearly their strategy was not coherent enough to combat new entrants to the telephone handset market. Perhaps they could not both defend their core feature phone business whilst being fully competitive in the new smartphone business?

This manages the risk that once we understand our markets, have we the right response – strategy?

  1. Once we have understood the market and the right strategy, have we implemented it well?

It seems obvious – but if you cannot implement the strategy well, then even the best strategy is not likely to work in a competitive market. In many mass consumer service markets such as telephony or banking, there are a few large competitors in the market with similar understanding of their environment and very similar consumer strategies. They compete on how well they manage the customer experience, every day, consistently across millions of customer contacts and how they recover from service failures. They compete on how well they manage their operations; e.g. the accuracy and cost of banking transactions and the reliability and coverage of the network. Marketing has traditionally captured this with the concept of the marketing mix; the famous 4Ps (product, price, promotion and place) or 7Ps (add people, process and physical evidence).

This manages the risk that we just don’t do what we say we will do.

In summary, leaders are responsible for the three risks of:

  1. Understanding the market environment
  2. Having the right strategy to respond to that environment
  3. And, executing that strategy well.

Marketing practice offers many of the tools and frameworks needed to assess and manage those risks.

Cranfield’s marketing executive programmes take experienced executives through the strategic management of marketing within your organisation. How you can ensure that as you transform digitally, being customer centric guides your policies and decisions. We explore the cycle of learning, responding, configuring solutions and implementation in a modern digitalised environment and the implications of creating a customer centric organisation.

[1] McDonald M, Smith B and Ward K.. (2007) Marketing Due Diligence, Butterworth-Heinemann, Oxford.

Blog produced by:  Professor Stan Maklan, Professor of Marketing and Technology and Programme Director of the Marketing Directors’, Marketing Strategy and Planning, and Customer Experience Strategy programmes at Cranfield School of Management.

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