Marketing for Business Growth, Forty Years on

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The temperature in Washington, DC is steamy hot, and my dogs don’t bother lifting their heads when the UPS truck rolls up. Not even a tepid growl leaves their throats. That would take energy.

Every August, DC’s torrid pace abates, providing me an opportunity to reset. I dive into books and other reading I’ve arranged in wobbly stacks about my office. Some materials have been patiently awaiting my attention for months, if not longer. The slower tempo enables me to see things differently. I become a tad less skeptical, and more open-minded – though my family would strenuously disagree.

Lately, I’ve had an epiphany about change. I’m finally convinced that things are changing faster than ever. I’ve heard this proclamation for years, but I’ve persistently dismissed the idea. Faster-than-ever change seems like dogma, shouted by software providers and consultants who hawk their products and services for change management. All can be had for a fair price, of course. The subject line tells me so. Tiresome as the summer heat.

But today, by golly, I get it! In 2018 , inventors launched 3-D metal printing, artificial embryos, Babel-fish earbuds, and genetic fortune telling. And it’s only August! One hundred years ago in 1918, we got the grocery bag. Yawn. The same year also brought the superheterodyne receiver, the torque wrench, crystal oscillator, and hydraulic brake. Impressive, for sure, but when it comes to rapidest change ever, 2018 rocks. Don’t tell me otherwise.

With this passage, futurist Ray Kurzweil cemented my transformation:

“The Law of Accelerating Returns is the acceleration of technology, and the evolutionary growth of the products of an evolutionary process. And this really goes back to the roots of biological evolution.

Evolution works through indirection. You create something and then work through that to create the next stage. And for that reason, the next stage is more powerful, and happens more quickly. And that has been accelerating ever since the dawn of evolution on this planet.”

Ray, you had me at The Law . . .

Expectedly, my conversion elevated the urgency of existing concerns: Have marketers kept pace with the rate of change in technology, science, society, the environment, education, and health? Do our product and process innovations matter to customers? Are our sales methods congruent with how buyers buy? What has permanently changed in marketing and sales? (Or, expressing it in marketing parlance, what’s dead?) These questions traverse the boundary of humanity’s perennial quandary: are we relevant? Heavy introspection for a biz-dev blog, but curious minds want to know.

I have a confession. All this change-is-happening-faster-than-ever stuff causes me to hyperventilate. To calm myself, I must know the durable, steadfast, unchanging, rock-solid principles that marketing professionals latch onto. My picks: 1) trust between buyers and sellers is a crucial element for transactions 2) deceit notwithstanding, they share a common goal: the equitable exchange of value, and 3) there is a positive correlation between satisfying customer needs and revenue generation.

In biz-dev, what else has endured, and what has changed? My query led me to an illuminating time capsule. A seminal book that I read exactly forty years ago – in 1978:  Marketing for Business Growth, by Theodore Levitt (Levitt died in 2006, and his book was first published in 1969 under the title, The Marketing Mode).

Levitt, a Harvard professor, and editor of the Harvard Business Review argued that the greatest threat to companies comes not from outside forces, but from within the organization. The culprit?  Management complacency and ossified thinking. Levitt posited that the railroad industry declined because its executives saw their business as railroads – not transportation – myopia that stifled the industry’s innovation. Levitt wrote that in the early 1900’s, railroads could have integrated nascent trucking, aviation, and maritime services into their business operations. But they defined their product narrowly, and, well . . . the rest is history. We have a sickly railroad industry, and the one that thrives is called logistics.

As a 20-year-old undergraduate in 1978, I read Marketing for Business Growth, and it shaped my thinking. Back in ’78, I highlighted passages that provoked or inspired me – and there were a lot of them. So it was a blast to revisit what I culled from my first reading, and to compare it to today.

It was a man’s world. What struck me immediately was Levitt’s exclusive use of masculine pronouns. And the abstraction, “marketing man,” appears throughout. Admittedly, less tedious than he/she, or he or she. And more grammatically acceptable than they, but we’ve come a long way toward diversity and inclusion. And we have a long way to go.

The index. Marketing for Business Growth does not include entries for topics that are ubiquitous today:

Analytics

Big Data

CRM

Customer Experience

Data science

Data theft

Diversity

Fraud

Long-tail

Loyalty

Metrics

Megatrends

Micro-segmentation

Performance indicators

Privacy

Social Media

Viral marketing

But the index contained some curiosities. For example, Power lists these sub-entries:

  • Corporate
  • Of executives
  • In management styles
  • Of producers
  • Staying

. . . And nothing about consumer power, except oddly, just this:

Powerlessness of consumers

I flipped to that page:

“The consumer is an amateur; the producer is an expert. In the commercial arena, the individual consumer is an impotent midget. He is certainly not king. The producer is a powerful giant. It is an uneven matter. In this setting, the purifying power of competition helps the consumer very little – especially in the short run, when his money is spent and gone, gone from weak hands into strong hands.”

To say it was a different time seems an understatement. Stultifying for employees. Frustrating for consumers. And I’m guessing, not really a cake walk for managers, as well. There was no “work life balance.” No “virtual offices.” No maternity leave. No paternity leave, either. People smoked at their desks. And business lunch did not involve a “vegetarian option.” Oh. I forgot . . . side salad, but hold the bacon bits. Back then, was anyone truly happy?

“Information, discipline, planning, structure, and order – these are inescapable organizational requisites. The larger the organization, the more they are required,” Levitt wrote. But he countered this point with one remarkably prescient: “But the more they are required, the more their restrictive consequences must be offset by more emancipating styles at the apex.”

Moving through the index, I found Cost, which has only two entries:

  • Of advertising
  • Of computerized education

And Data gets equally spare treatment:

  • Information differentiated from
  • Proper use of

Wow. For data, that’s it? Kurzweil is bang-on right: things have changed faster than ever.

It would be easy to dismiss Marketing for Business Growth as a quaint anachronism. An artifact of a slower time. A tome overcome by events. But that would be a mistake.

Much of what Levitt wrote continues to ring true:

  • “Marketing operates decisively and inescapably in two quite different worlds – on the one hand, in the world of today’s products and today’s competitive environment, and on the other, in the uncertain world of tomorrow. It is in a powerful position to recommend and influence the company’s products and operating posture for tomorrow because a properly run marketing organization will look ahead with more perceptive detail and concreteness than other operating departments.”
  • “The most palpable fact of [marketing’s] existence is that it cannot easily control the events or conditions that produce efficiency. The major events or conditions of its operations are the actions of its competitors and the behavior of its customers. More than any other corporate functions, marketing constantly faces energetic adversaries against which it must struggle for success. Success is defined as customer patronage. What makes success especially hard to attain is the fact that the consumer seems constantly to change the conditions under which he will deal with one rather than another supplier.”
  • There is “extreme danger of high-level executives developing a trained incapacity for independent thought and analysis and, as a consequence, a trained capacity to make only routine bureaucratic choices. What passes for thinking is generally little more than rambling committee discussions of the ins and outs of issues carefully predigested, documented, resolved, and set forth by the staff. There is seldom a quiet moment of independent contemplation, rarely a staff document that is thoroughly studied and weighed by its recipient, rarely a decision of any consequence made on the basis of deductive reasoning at the upper level.”
  • “As machines get more complex, as equipment and business processes get more interdependent, and as competition for the customer’s favor gets more intense, the seller cannot depend simply on good engineering, aggressive selling, and low prices for his due. He must find new ways to serve those he seeks to convert to his custom . . . Modern marketing consists of orienting a company toward trying to find out what at any given time the customer will define betterness to mean. This requires the entire company to be more effectively organized and oriented toward fulfilling the customer-getting requirements implied by that definition.”
  • “A product is not just what the engineers say, but also what is implied by its design, its packaging, its channels of distribution, its price, and the quality and activities of its salesmen. A product is therefore a transaction between the seller and the buyer – a synthesis of what the seller intends and the buyer perceives.”

Looking back, it’s apparent that even the best ideas are as good as a company’s resolve to fulfill them. That’s a scarce resource.  In 1969, Levitt wrote that the greatest threat to an organization are the people who run them (though Levitt would have written men). Fast forward to August 2018, when Lawrence Burns wrote in a Wall Street Journal article, Late to the Driverless Revolution,

“But the deeper reason the auto companies were late to the revolution is that they mistakenly believed that their business was manufacturing and selling cars. They failed to see that their success had always been based on something more fundamental: helping people to get from one place to another. . . Auto executives initially dismissed self-driving cars in part because they didn’t understand the full potential of digital technology. But it was also because they were primarily focused on delivering attractive vehicles to dealer showrooms rather than on providing compelling transportation experiences to customers. Detroit was held captive by a century-old business model.”

The more things change, the more they stay the same.

2 COMMENTS

  1. Andy, thanks for the interesting article. What a blast from the past. I enjoyed the list of terms that were not even mentioned in Theodore Levitt’s 1969 book (e.g. CRM and big data). Also really like the Levitt quote: “A product is not just what the engineers say, but also what is implied by its design, its packaging, its channels of distribution, its price, and the quality and activities of its salesmen. A product is therefore a transaction between the seller and the buyer – a synthesis of what the seller intends and the buyer perceives.”

    One last point. The recent quote you referenced from Lawrence Burns about how auto companies dismissed the self-driving auto because it conflicted with their existing business paradigm underscores a serious problem for successful companies. Their past success freezes them from seeing where the disruption is coming from (think Blockbuster/Netflix and Uber/taxi companies). The best time to question your business model is the point when you are supposedly most on top of your game.

  2. Hi Christopher: thanks for your comment and for taking the time to read my article. I agree – despite the age of Levitt’s book, there are many observations and assertions that are as intelligent and relevant today as they were when The Marketing Mode was first published.

    At any time, I think questioning a company’s strategy or business model is vital for competitive survival. I listen for evidence of oxygen leaving the C-suite. Anecdotes: “Our strategy is spot on!” “We’re crushing it!” “We’re making all of our performance targets.” Sure, be happy and proud. But ongoing self-congratulatory talk paves the way for others to put an end to it.

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