Reinventing Marketing Strategy

A seminal article by Niraj Dawar for Harvard Business Review got me thinking about how we need to reinvent marketing strategy. The Question that drives today’s business is not “What else can we make?” but “What more can we do for the customers?”

Dawar argues that companies’ upstream activities – such as sourcing, production, and logistics – are being commoditized or outsourced, while downstream activities aimed at shaping consumers’ perceptions and reducing their costs and risks are emerging as the main sources of competitive advantage. The rules of the game are changing and the competitive advantage is now shifting from within the firm to outside it-mostly in the external linkages with customers and channel partners. Competitive advantage instead of eroding over time is now accumulating and growing with experience.


The pace of the market is now dictated by what Dawar calls shifting “purchase criteria” rather than improvements in products or technology. Market leaders today are those that define what performance means in their respective categories: Volvo sets the bar on safety, shaping customers’ expectations for features from seat belts to airbags to side-impact protection systems and active pedestrian detection; Coca-Cola redefined the way customers perceive celebration and happiness.

Customers’ mind space is increasingly becoming scarce and valuable as brands proliferate in every category and existing ones are sliced wafer-thin. Companies compete ferociously against one another not to prove superiority but to establish uniqueness. Volvo does not claim to make a better car than BMW does, nor the other way around—just a different one. In customers’ minds, Volvo is associated with safety, while BMW emphasizes the joy and excitement of driving. Because the two automakers emphasize different criteria of purchase, they appeal to very different customers.

The persistent belief that innovation is primarily about building better products and technologies leads managers to an overreliance on upstream activities and tools. But downstream reasoning suggests that managers should focus on marketplace activities and tools. Competitive battles are won by offering innovations that reduce customers’ costs and risks over the entire purchase, consumption, and disposal cycle. He gives the example of Hyundai’s unique risk reduction guarantee during the recent recession of “if you lose your job or income within a year, you can return it (the car) with no penalty to your credit rating.” Hyundai didn’t innovate to sell better cars – it innovated by selling cars better.

Marketers are increasingly aware of the profound changes in the way consumers’ research and buy products – for instance, the shift away from one-way communication (from marketer to consumer) toward a two-way conversation. Yet failure to change the focus of marketing toward integrating all consumer-facing activities across the firm’s dynamic value chain can undermine the core goal of reaching customers at the moments that most influence their purchases.

Marketing Strategy needs to be reinvented since consumer consideration sets are gradually changing and the market dynamics are not only evolutionary in nature but generational and revolutionary. The example of evolutionary change would be demand for more fuel-efficient cars or electronic devices with better features, case in point being newer models of mobile phones being launched every year with better specifications. Generational changes would be those that create a new category for themselves and compete with existing consideration sets, examples of generational changes would be Automatic Vehicles and sugar-free soft drinks that create a new market for them within the existing market. The old notions are slowly becoming obsolete, for example, feature phones are being replaced by touch screen mobile devices which are a very good example of revolutionary changes. Market changes can and cannot be anticipated: Steve Jobs was against Market Research since he felt that “It’s not the Consumers job to know what he wants”. Although, if you think about it, he has a valid point and that explains the revolutionary change in market dynamics but generational changes are a product of when market research is done right. For example, we would not have sugar-free soft drinks unless market research would have identified the health-conscious consumers.

In conclusion, Technology is a necessary but insufficient condition in the evolution of markets. Innovation is necessary but it is not the solution for having a sustainable competitive advantage. Marketeers need not sell better products but sell products in a better way just like Davar mentions the example of Hyundai, Cialis & Viagra and many others in his paper. All the mentioned examples prove that those who learn to “sell in a better way” rather than “selling better products” have mastered the game of achieving an early competitive advantage.

At Fractional Column, we believe in the same and have devised a unified approach to define unique GTM strategies for our clients. Typically, as a first step, our research associates run a research program to identify and define the target market for a particular product or service. Next, our experienced business analysts would sit with you and discuss the product or service to be offered and its particular business benefit for the intended customers. With the value proposition defined, we help you determine a pricing strategy. In addition, Fractional Column helps you address marketing and promotion. In a nutshell, we at Fractional Column help you devise an effective GTM strategy that typically sketches out what distribution and marketing channels will be used to reach your target market.

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