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marketing insights

Marketing: Roinantic or Realistic?


Setting unrealistic goals gives marketing a bad rap.
By Andrew Ekrenberg

Many goals commonly set in marketing are unrealistic. They are


therefore doomed to failure from the start. Such romantic marketing dreams include sustained growth, brand differentiation,
persuasive advertising, profit maximization, and knowledge
management. When marketers fail to reach any of these
unreachabie goals, it gives marketing a bad name.

arketing is under pressure. People increasingly want to


know if it delivers on its promises. Everyone asks how
advertising can be evaluated. Some think that brands
themselves are dead. In 1993. the McKiHsey Quarterly was already
worried about marketing's midlife crisis. Today we wonder: Is
marketing needed?

These doubts arise largely because marketing is judged


by goals such as growth. If brands don't grow, then marketing
must be failing. Marketing goals are. in a word, romantic, which
the dictionary defines as "imaginative, visionary, and remote
from experience."
Marketing often lives in a pretend world where anything
goes If they crave loyalty, marketers promote a loyalty program.
To appear proactive, they intone "added values." To reposition
the brand, they throw in the phrase "for young people," Who sets
these improbable objectives? Marketers do. For instance, is there
a marketing strategy that does not supinely aim at increasing
shareholder value?
1 believe marketing is necessary because it aims to impose
customer orientation on our more naturally self-focused production mindset. However, it does not work if romantic and pretentious goals are set. What follows is a brief explication of five
romantic marketing goals and their realistic alternatives.
FIVE MARKETING GOALS
Goal
1. Growth

"^

Romantic

Realist

Universal

Rare

Sustainable

Eptiemeral

Persuasive

Publicizing

4. Profits

Maximizing

Satislicing

5, Knowledge

Instant

Accumulative

'"

2. Differeniiation
3. Advertising

40

, ,

Sunuiier 2 0 0 1

GOAL 1 : GROWTH
when marketers are asked about their goals, they usually
talk about growth. However, most brands and most companies
do not grow much most of the time, as the usual year-by-year
league tables indicate. Marketing usually falls short of this target, with nothing dramatic to shout about. This leads the world
at large to claim that marketing has failed lagain). If so, however,
it is only because marketers set unachievable goals of big sustained organic growthand people believed them.
The April 2 and 9. 2001, issues of Adufrlisint? A^f reported on a
giant marketing turnaround at McDonald's, After spending more
than Si billion to bring more variety to its menu, the company's
new mantra is to simplify the core offerings. The recipe now is to
refocus, expand the delivery concepts, create new retail opportunities, and improve customer service and satisfaction. It plans to
pursue this Kotlerish blueprint of initiatives simply by doing
each better. This should, a spokesperson confirmed, "double the
U,S, business,"
We can all hope for some growth, but realistically we
should not expect much. The outcome usually will not be
growth anymore than it was last year when we did much
the same things. Typically, a recent company report stated,
"The mission of this company is growth. Unfortunately. ,,, "- In
fact, big and sustained growth is usually gained only through
mergers and acquisitions.
The inhibiting factor is competition. If you have a 20% brand
and are therefore quite big. you still have 80% of the market
against you. About 80% of the retail distribution, advertising, and
most of what your customers actually buy and use is other
brands. Survival is the name of the gameyou still want to have
20% next year and you usually will, if you work at it. If you "run
hard to stand still." you will survive. Anything more, like gaining
from a competitor error, is an occasional bonus.

seldom the reason for first choosing a brand. We normally


don't even know about such differences before trying the
brand. They generally are not deemed important enough to be
described on the packaging, mentioned in the advertisements,
or copied by the competition. So consumers are left to choose
between what seem like largely substitutable, similar offerings. As leremy Bullmore's focus-group lady famously said, "I
know all these brands are the same, I just have to decide
which is best,"
It's not that serious product differentiation is difficult to
achieve. In fact, there is much of it around (e.g,, large vs, small
packages, tomato vs. tamarind flavors, 2-, 3-, 4- or 5-door car
GOAL 2 : BRAND DIFFERENTIATION
models, a guaranteed money-back investment bond vs. a fixed
For most marketers it goes without saying that, if your brand interest one). However, most competitive brands have these key
is to be bought, it needs to be at least a bit different, lohn product variants. The realist view of branding is that nearly idenMurphy, founder of Interbrand, the world's leading brand consul- tical goods are made distinctive by being branded with a name,
tancy, said as much in a recent issue of Market Leader. "You must symbol, logo, distinctive packaging, advertising, and memory
ensure, most importantly, that your brand is differentiated in a associations. However, for the most part, they do not necessarily
meaningful though not necessarily a massive way . . . Give the function differently.
consumer a reason to buy your brand rather than a competitor."
But this romantic, if ubiquitous, make-believe approach still GOAL 3: ADVERTISING THAT PERSUADES
remains "remote from experience." What "reason" does anyone
The romantic view is that advertising is powerful. It is suphave for choosing Pepsi vs. Coke, American Airlines vs. United posed to persuade people to change what they feel, think, or do.
Airlines. Hertz vs. Avis, or Bingo vs, Bango? Why should a Otherwise why would companies spend millions on it? Yet in
lightweight reason change anyone's behavior, or even a mam- practice this isn't the case. Literature sports no generalizable evimoth one like changing black chocolate into white?
dence on many or any lasting persuasive effects of advertising
In practice, markets continue to show that competitive at least not enough to justify a global spend of billions. Although
brands are in fact very similar Michael Porter's sustainable com- people see or hear hundreds or thousands of ads a day, mostly
petitive advantage suffers two disadvantages: an advantage sel- they do nothing in response, and sales and images seldom
dom exists, and if it does, it is rareiy sustainable. Almost any dif- change. Why else the unceasing chest beating about advertisference between brands that is important to sales gets copied ing's lack of accountability?
very quickly. Instead, competition consists of not letting your
The notion that advertising is strongly persuasive has
competitors be effectively different or better, thus preventing become pervasive only recently (after the collapse of P&G's Daythem from getting or staying ahead.
After-Recall as the much simpler sine qua non). In fact, dictionarThe lastingly better mousetrap is a purely romantic idea, and ies still mostly definite advertising as publicity or merely "bringthe advantages of being an early mover are not guaranteed. ing to pubiic notice."
Realistically, the competition will soon have a better better
If advertising s chosen goal really is to persuade and change
mousetrap (e.g., three air bags), at least briefly. They will also what consumers feel and believe, then well over the proverbial
learn from the innovator's mistakes, and try harder anyway.
half of advertising is failing. That, however, is just not so.
Luckily, brands do not have to appear different to the con- Competent brand advertising generally does not fall, but peosumer In order to be chosen. The consumer wants the product (e.g., ple's exotic expectations of its outcome do.
he or she is nearly out of gas, coffee, or condoms, or needs a hotel
Advertising lacks consistently dynamic effects, once again,
room for the night). In our free economy, the consumer then has because of competition. Your competitors' omnipresent retail
to choose a brandbut only if he or she wants the product.
availability, their quality control, category management, CRM,
The consumer could then choose any reasonable brand by promotion, and advertising all interfere. Left to itself, of course,
simply tossing a penny because brands, being competitive, are advertising your brand would work wonders.
more or less substitutable. The experienced consumer knows
Realistically, advertising works as paid creative publicity. As
this. If A were truly much better than B, whether it be sweeter, we will argue elsewhere, a competent ad automatically publicizes
cheaper or whatever at about the same price, there would hardly its brand and the brand name. Ads can create and refresh membe a choice problem, or at least not for long. Nearly everyone ory traces and associations. Publicity can affect whether a conwould go for the better product.
sumer finds the brand salient, familiar, and reputablein short,
a
brand they want to buy. Indeed, the more alike two brands are,
But rather than tossing pennies between look-alikes, the
the
more effectively creative publicity can work as virtually the
experienced consumer keeps some personal control by already
only
thing to separate them in the short and longer term.
having developed convenient choice habits (loyalty). Vast evidence suggests that consumers choose mostly from their reperA more realistic task for advertising is not to change what
toires of habitual brands.
people think about your brand, which is hard to achieve, but to
There are of course minor differences between brands have them think about your brand at all. As Samuel lohnson said
(e.g., Pepsi being slightly sweeter than Coke, or the amount of almost three hundred years ago, "Man does not need to be
raisins in a particular Muesli), but these small differences are informed, but he has to be reminded,"
But can a "no growth except sometimes" strategy be accept<^ble? Can it motivate? I believe so. Colleagues in other parts of
the company do not set growth as their realistic target. Finance,
iccounting. production, quality control, human resources, or
new product development do not have to hype themselves up by
>.onstantly chasing rainbows. Even sales and top management
iio not set themselves a 5% growth target, which they almost
never achieve year after year Few companies in fact invest [or
risk) sufficiently to deserve ongoing growth. Avis, I guess, has
never done anything big enough to create realistic dreams of
catching up with Hertz.

maritf ting research 41

GOAL 4: PROFIT MAXIMIZING


develop generalized knowledge, nor is this ever even claimed!
Maximizing shareholder value has become the ubiquitous Open a textbook or any modeling report, and you will find analgoal in the western world. This sounds imaginative, visionary, ysis procedures applied to iust a single set of data (SSoD), The
and even businesslike, but it is strictiy impossible and remote romantic delusion is that this new and isolated result is then
from reality. Faced with a theoretical profit curve, it's easy to pick the best.
the highest point. But in the real world you could not literally
The realist alternative is to build on many sets of data
maximize your profit because you wouldn't know when you've (MSoD). Success then Is a result known to hold across many
achieved it. You could surely always make more profit.
very different brands, products or services, years, countries, and
Seeking to maximize profits also has some drawbacks. Being other varying conditions, within known limits and with known
uncommonly profitable would gain the attention of both regula- exceptions. This is called science. It provides marketers with
tors and/or competitors who could then easily undercut you. generalizable and reusable knowledge to manage, such as the
Maximizing iust one thing means potentially sacrificing every- idea that loyalty does not vary from brand to brand except
thing else (e.g., quality time or employees' health, as Charles with market share, or that price promotions appeal only to your
Handy reportedl.
existing customers.
Technically, maximizing or optimizing is a bad taskmaster
and leads to the wrong conclusions. For example, many BACK TO REALITY
economists would have us believe consumers choose between
Marketing is not taken as seriously by our colleagues and
brands by "maximizing their utilities." Logit modeling and Daniel the public as we would like, but we have only ourselves to
McFadden's recent Nobel prize-winning Discrete Choice Theory operblame. We tend to set goals that cannot be fulfilled, such as susate on this premise. But in the near-steady-state markets that are tained growth, brand differentiation, persuasive advertising,
typical most of the time, each rationally optimizing consumer added values (e.g., David Hearn's, "putting a gold stripe on the
would always choose the same "best" brand. However, all the evi- pack and charging more"), maximum profits or shareholder
dence shows otherwise.
value, and instant new knowledge based on iust a single IsoThe realist alternative is to satisfice. as the late and great lated set of data.
Nobel laureate Herbert Simon opined some forty years ago. Both
When these romantic goals fail to materialize, marketing
managers and consumers choose what is "good enough," not gets blamed. To combat this, we need to set and work toward
what is supposedly "best." They strive to make a good profit, to more realistic goals so marketing can be appreciated for what it
reach suboptimal multiple goals, and to choose an adequate can and cannot do.
product (since nothing better can usually be found). Darwin got it
wrong; It's not survival of the fittest, but survival of the fit enough. Author's note: This article is derived from an invited paper to the
MRSA Conference in Melbourne and ispart of theRS'D Initiative at
South Bank, London, and the Marketing Science Centre. Adelaide.
GOAL 5: KNOWLEDGE MANAGEMENT
Knowledge management is the latest marketing mantra, but
this is unrealistic when we are drowning in catadupes of undi- ADDITIONAL READING
gested data. Marketing managers to date have little or no sys- Bul I more, leremy (1998), Sefiind the Scenes in Advertising. Henley on
tematic knowledge to manage. As their life raft, analysts and
Thames: Admap Publications.
their clients cling to the Scientification of Non-Knowledge
Ehrenberg, Andrew, Neil Barnard, and lohn Scriven 11997),
(SONKINGi, which espouses "I know nothing, but have tech"Differentiation or Salience?" journal of Advertising Research.
niques." These promise immediate success in the form of a best(37), 7-14.
fit model from just a single set of data.
and lohn Bound (20001, "Turning Data into Knowledge," in
For example, one minute the analyst does not know how
Advertising (A) causes Sales (S); the next minute his computer
Marketing Research: State-of-the-Ari Perspectives. Chuck Chakrapani,
hasS = ^.39A-(- 14.56 as the "best" answer The label on the leasted. Chicago, IL. American Marketing Association, 23-46.
squares SPSS/SAS regression bottie says so, which any reader
can check. (The great Henry Mintzberg has said that "a technique Handy, Charles B. (1994), The Empty Raincoat. Making Sense of the
future. London: Hutchinson,
is something you can use instead of a brain.")
Accepting our academic colleagues' regressions would, how- Simon, Herbert (1947), Administrative Behavior. New York:
Macmillan.
ever, require a romantic act of faith. No statistically derived
"best" cluster, market segment, price elasticity, or econometric
model (e.g., S = 'i39A + 14,56) has ever passed into lasting marketing know-how or textbooks. Where is the "best-fitting" cluster Andrew Ehrenberg is director of South Bank University's
R(S^D [niliative. a program of basic research
or model from 10 years ago? With the PGinduced spate of multiinto marketing issues supported by some
variate regressions, there should of course be not just one or two
90 North American and European companies.
such success stories, but hundreds and thousands.
He may be reached at ehrenba@sbu,ac,uk.
Generalizabie knowledge of marketing is mostly prominent
only by its absence. This is because the fashionable econometric and other such statistical techniques were never designed to
42 Summer 2001

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