26 June 2012

5 Myths about 5 Myths about Marketing: Where Inc. Magazine Goes Wrong

by Freddy Tran Nager, Founder of Atomic Tango LLC + Avid Inc. Reader

If you’re an entrepreneur or run a small company, you should read Inc. magazine. One issue contains more insightful, practical advice than some of the semester-long classes I endured in business school. And a subscription to Inc. will put you back a whopping $13 – or less than the price of a movie ticket. (Should you invest in advice from business experts or Abraham Lincoln: Vampire Hunter? You decide…)

But no one is infallible. Not even me. Really. And while Inc. is usually right, sometimes they get it wrong…

Case in point: “Top 5 Marketing Myths to Avoid” by Geoffrey James published June 26 at Inc.com. Besides the awkward headline (you don’t avoid myths, you disregard them), it perpetrates some delusions of its own.

To give Mr. James the benefit of the doubt, he’s probably worked with some inept marketers over his career. And as anyone who reads my blog knows, the marketspace teems with inept marketers (in the industry, we have a nickname for them: “Pepsi”). Work with enough Pepsi’s, and you’ll probably develop the same kind of prejudices and stereotypes that he expresses in this article. I will also say that if you do find yourself working with an inept marketer, then Mr. James offers some sound coping tactics.

The serious risk: If you actually find yourself working with a talented and adept marketer, Mr. James’ advice will not only alienate them, it will undermine their valuable contributions. So let’s address his 5 myths one by one so you know how to properly assess and manage your own marketing.

Myth One: “Marketing is Strategic”

Mr. James asserts that marketing is just a tactic to drive sales leads. With this statement, he proves that he doesn’t really understand what marketing means. A good marketer knows how to direct the company so that it’s properly positioned in the marketplace:

  • Should it be a luxury brand or a low-price leader?
  • Should it thrive on service or selection or both?
  • Should the products be high-risk/high-reward or low-risk commodities?
  • Should the company go head-to-head against the market leader, pull an end-around to serve a niche, or establish its own product category? (Think Red Bull.)
  • Should some products be sold nearly at cost in order to sell other higher-margin goods (Amazon), or should there be a two-tariff strategy with both membership fees and low-price products (Costco)?
  • Should the company politicize itself or stay “fair and balanced”?
  • Should the company attempt to serve everyone or just a few choice segments?
  • Should the company focus its efforts on social media when all its customers care about is price? (Think Best Buy.)

I could go on and on and on and on and on and on…

If Mr. James has never worked with anyone who had these big picture ideas, I feel sorry for him. His decision to relegate marketing to being a lead generating tactic is to throw 99% of possible business options out the window—especially if the company is not yet at the stage to make sales.

Yes, smart companies engage in marketing from the day they decide to pick a name and a product line, and they lay the groundwork long before they even have a product ready to buy. Leads? Leads?! We ain’t ready for no stinkin’ leads!

In addition, marketers target other stakeholders beyond customers, from suppliers/vendors to government regulators to investors to the media to potential collaborators. Marketing can be and should be strategic.

Myth Two: “Marketing Drives Sales”

Mr. James claims that “sales should drive marketing,” proving once again that he doesn’t have a clue what marketing means, or he’s worked with marketers who don’t know what marketing means. Sales is part of marketing, just as employee benefits are part of human resources, and accounting is part of finance.

The problem is that most business schools don’t teach sales (something I’ve tried to remedy in my classes), so those in the executive suite often can’t relate to the guys on the front lines.

But to deny that marketing triggers demand tells me that Mr. James needs to get out more. Has he never bought anything in his life?

When a killer movie trailer gets people to buy tickets on opening night (before word of mouth), that’s marketing driving sales. When a PR-generated buzz over a new smartphone gets people to line up for one before the store opens, that’s marketing driving sales. When a blogpost about marketing myths gets people to visit your site in enough numbers so that advertisers pony up, that’s marketing driving sales.

Yes, I agree with Mr. James that sales and the marketing execs should work closely together, and there should be no false claims of credit. But there are tools and tactics for tracking what drove the actual sales (Akin Arikan’s unreadable but informative book Multichannel Marketing offers several of them). Mr. James’ claim that this “myth” is driving a wedge between marketing and sales is true; but his solution, “sales drives marketing” does the exact same thing. It’s a massive wedgie contest.

All members of the marketing team—indeed, the entire company—should work closely together: PR, social media, advertising, pricing, product development, and sales. The ultimate sales are a shared success story.

Myth Three: “Marketing Should Focus On Selling”

Here Mr. James is essentially repeating his point from the first myth: marketing should focus on generating leads. He has a great line: “Asking a marketer how to sell is like asking a celibate priest for advice about your sex life.” Cute. But, uh, who’s driving wedges between sales and marketing now?

Actually, by analyzing the market, competent marketers can provide valuable advice on sales. For example, they can identify the key decision makers and influencers who might not be the end users.

Case in point: the textbook industry knows that you don’t pitch textbooks to students; you market them to professors who then assign them to students. Sometimes leads aren’t even involved! I’ve picked textbooks from reading reviews and then buying a copy for myself; no sales calls were involved, no leads were generated. And given the size of some of my classes, my decision generated thousands of dollars in sales.

When customers can make their own choices and complete the purchase without any need for a sales rep, then, yes, marketing should focus on selling. It depends on the product and the customer.

Once again, Mr. James’ blanket generalizations have more than few holes.

Myth Four: “Marketing Creates Brands”

This one really gets my goat and pokes it in the ribs. Here Mr. James perpetuates the incredibly narrow definition of “brand” as being “user experience.” He is partially correct when he notes that, “Your ‘brand’ consists of the emotions that customers feel when they think about your product,” but he ignores such valuable contributors to brand perception as product design and celebrity endorsements. He then wanders off into space when he adds, “And while those emotions can sometimes be triggered by logos and so forth, they originate in the product experience.”

And the goat says, “That’s the biggest bull I’ve ever seen.”

Yes, user experience is a primary influence on brands, but users have brand impressions based on things they’ve never experienced. I’ve never even sat on a Harley, but I sure know what that brand represents. I’ve never been to Tahiti, but their marketing sure makes me want to go there; conversely, I’ve never been to North Korea, and I hope to keep it that way. I’ve never read an Ann Coulter book, but I’m pretty certain I wouldn’t like it, but I quickly purchased the biography of Steve Jobs even though I never met him.

But enough about me. Millions of consumers have brand impressions pre-experience: Every year, thousands of kids dream of getting into Stanford or Harvard, and are very emotionally invested in the impending admissions envelope, even though they’ve never set foot on those campuses or taken a class there. Other kids salivated over some shoe that some guy named Michael Jordan endorsed without ever trying one on—and they still wanted their Air Jordans, even after their user experience proved it didn’t enable them to dunk over a 7-footer. Millions of people have recently switched to Apple products, without ever having used one before. And when Starbucks opens in a foreign country, people line up to try it even if they don’t like coffee!

Will their brand impression change after they try the product? Sure. My impression of every school I’ve ever attended was changed by the first class I ever took, but that didn’t mean I wasn’t emotionally inspired beforehand.

EVERYTHING a company does can shape its brand. What’s my personal experience with BP or Lindsay Lohan or the Supreme Court? None. But their brands have certainly been shaped by their actions that didn’t affect me directly.

In fact, a company’s brand can be shaped by its competitors: How many people think President Obama was born outside of the United States? Was that informed by personal experience? How many college football fans root against Notre Dame? Was that impression formed by a bad experience on that campus?

Speaking of college football, what is your reaction to seeing the Penn State name or logo now? Even if you have zero affiliation or experience with Penn State, you most likely have an impression that was not forged by marketing or experience, but by the football team. And over the next few years, Penn State will need to do some serious marketing to reshape its brand.

Mr. James is right: marketing isn’t solely responsible for shaping a brand, but neither is user experience.

So far, Mr. James is batting 0-for-4 in his analysis of marketing. Let’s see if he can get even one hit…

Myth Five: “Marketing Should Drive Future Products”

Mr. James argues that engineering should drive future products. This one’s almost reasonable.

I have friends who are engineers, and I love to see their invention and imagination. There’s an art to what top engineers do: they reach deep inside for inspiration untainted by focus groups and customer surveys. I value that, and hate the commoditization that’s happened to many products in a “me too” market. As I’ve stated before in my rant against customer-centricity, a company risks losing its most talented people if it forces them to abide by customer demands.

But that doesn’t mean marketing and engineering can’t have a chat over coffee and say, “Hey, lets make an amazing product that also sells.”

Here’s one word that proves engineering doesn’t always get it right: Segway.

I remember the hype leading up to the Segway. It was supposed to revolutionize public transportation, liberating our streets from gas-guzzling, exhaust-producing congestion, with millions of people abandoning their cars to scoot around on space-age two-wheelers.

Didn’t exactly happen, huh?

A little market research would have revealed a few salient points:

  1. The Segway was too expensive. Those who could afford one would rather drive their BMWs.
  2. The Segway would not work in places with bad weather or lots of hills. So forget Chicago, Boston, New York, San Francisco, i.e., places that could really use it. Oh, it’s great for L.A…. except driving a Segway down Santa Monica Boulevard would probably get you run over.
  3. Speaking of which, the Segway isn’t safe. That image of George W. Bush doing a faceplant off of one wasn’t great for sales. (But awesome for laughs.)
  4. The Segway is eco-friendly, but it doesn’t give you exercise, so the greens stuck with their bikes or walking.
  5. And lastly, driving a Segway makes you look like a dork. That’s why it’s the perfect vehicle for mall cops and guys in Silicon Valley who like to play Segway polo.

Beyond the Segway, just look at any product in the green/health market: electric cars, solar panels, organic broccoli. Those are all good for you and the environment, but their sales pale next to products that are unhealthy or even lethal.

I could easily list dozens of engineering feats that have failed. Even Apple, which has remarkable insights on customer preferences despite conducting zero customer research, has had more than a few engineering feats flop in the market. Remember the Newton?

And let’s not forget the granddaddy of all great products that failed because of bad marketing strategy: Betamax. It was a vastly superior and more compact alternative to VHS systems, but it didn’t have wide enough distribution, so it eventually went extinct. Now it’s actually a verb: good products do get Betamaxed out of existence by inferior products that were properly marketed.

So does marketing strategy matter? You bet your bottom line it does.

And that is no myth.

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Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches graduate-level marketing communication courses at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.

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