In an interesting article back in 2009 by
Kevin Keller and Frederick Webster, they wrote that “one of the realities of
modern brand marketing is that many of the decisions that marketers make with
respect to their brands are seemingly characterized by conflicting goals,
objectives and possible outcomes. Unfortunately, in our experience, too many
marketers define their problems in ‘either/or’ terms, creating situations where
one idea, one individual or one option wins out, (p.13).”
In this scenario opportunities are
potentially missed as the ‘organisation’ doesn’t look at optimizing the
branding options through synergies between the ideas or looking at completely
new ideas.
Keller and Webster also highlighted that
“conflict and trade-offs are inherent in marketing decision making, and are the
most fundamental challenges of marketing and brand management;” and highlight
four broad categories for these trade-offs, “strategic, tactical, financial
and/or organizational, (p.13).” But trade-offs are a key part of business, not
just marketing management.
Anyone who has been through a strategy
development process will know that trade-offs are being considered all the time
and what the best organisations do, is to look at the optimization of their
future growth and see ‘trade-offs’ as opportunities to optimize ‘all the
potential, positive, outcomes’ for their business; i.e. they turn the perceived
‘trade-off’ into a ‘new’ winning formula for success.
Where organisations miss potential
growth opportunities, is when their operational philosophy encourages their
employees to choose between potential trade-offs like, for example, setting
performance targets that look at quantity, but don’t consider quality.
Keller and Webster highlight how “to
understand the nature and extent of marketing trade-offs, some key questions
must be answered: How severe are they? Are they unavoidable, inherent in the
nature of the decision problem and situation? How have they been dealt with
before? And of particular importance is to recognize whether the trade-offs
result from internal organizational considerations or external structural
issues inherent in the marketing environment where management has less control,
(p.15).”
The key to dealing with trade-offs, not
just in the marketing function but throughout the organization, is how you
approach them and whether you see the process as ‘creating’ a win-lose or
compromise result; or if your organisation seeks to create the ‘best’ outcome
for the organisation.
At least Keller and Webster mention that
“one compelling way to resolve potential marketing strategy trade-offs is
through product or service innovations. For example, Miller Lite became the
first successful nationally marketed light beer through an innovative brewing
formulation that was able to retain more of the taste profile of a
full-strength beer, while still having a lower calorie count, (p.15).”
As another example, when BMW first made
a strong competitive push into the US market in the early 1980’s, it positioned
the brand as being the only automobile that offered both luxury and
performance. At that time, American luxury cars were seen by many as lacking
performance, and American performance cars were seen as lacking luxury. By
relying on the incomparable design of their car, and to some extent their
German heritage, BMW was able to simultaneously achieve (1) a point of
difference on performance and a point of parity on luxury with respect to
luxury cars and (2) a point of difference on luxury and a point of parity on
performance with respect to performance cars. The clever slogan, ‘The Ultimate
Driving Machine’ effectively captured the newly created umbrella category -
luxury performance cars.
Dealing with trade-offs is as much about
‘effective decision making’ as it is about the ‘culture’ of the business. If
employees are debating the pros and cons of a trade-off because they want to
‘win’ then the business is very likely going to miss out on some real
synergistic multi-dimensional solutions.
Keller and Webster conclude that
“achieving marketing balance requires penetrating insights, shrewd judgments
and a knack for arriving at solutions that go beyond the obvious. Creativity,
the combination of previously unrelated ideas into new forms, is often the
inspiration to achieve marketing balance,” (p.17).
What is clear is that effective
marketing is a key function of business success and organisations will always
be presented with ‘trade-offs’ if that is how they wish to view their marketing
opportunities. The ‘smart’ business will not see trade-offs but will see a set
of ‘factors’, where some are opportunities and some are ‘limitations’ and they
will work with these factors – not to choose one over and other – but to create
the most effective marketing-mix of solutions at the micro level, for their
range of products and/or services in their respective target markets, both for
‘today’ and the foreseeable future.
References:
Keller, K.L. and Webster, F.E. (2009).
The Branding Sweet Spot. Marketing Management, Vol. 18, Issue 4, p.12-17.
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