The Role and Value of the Marketing Function

Rating

The Role and Value of the Marketing Function

No doubt, marketing capabilities are strong drivers of firm performance. But HOW can marketing as a function contribute to company growth and success? And what FORMS OF VALUE does it actually generate?
These questions seem simple, but they have many aspects. Rodriquez-Vila et al. recently came up with a nice, practical framework to help address these questions in a structured way and to guide the discussion on the role marketing plays now and should be playing in the future.
They suggest to split up the value proposition / contribution of marketing in the following way:

1. VALUE FOR THE CUSTOMER
   In the effort to attract, acquire, and retain customers, a marketing organization creates value for them in three areas:
   
   • ENGAGEMENT VALUE
     This results from broadening the brand meaning and strengthening customer relationships.
     Facilitates expansion by:
     
     • building purpose and communities
     • optimizing connections
     • designing stories
   • EXPERIENCE VALUE
     This results from increasing convenience and enjoyment across the customer journey.
     Facilitates retention by:
     
     • augmenting value
     • improving journey orchestration
     • enhancing offering design
   • EXCHANGE VALUE
     This results from matching offerings to individual customer needs and context.
     Facilitates transactions by:
     
     • boosting conversion
     • increasing personalization
     • improving production
2. VALUE FOR THE COMPANY
   The marketing function contributes to company growth and success by generating internal value for a company in three areas:
   • STRATEGIC VALUE
     This results from leveraging data and analytics to generate customer and market insights.
     Helps optimize marketing decisions by:
     
     • enhancing data creation and management
     • leveraging market and customer intelligence
     • advancing marketing analytics
   • OPERATIONAL VALUE
     This results from identifying growth opportunities that can be connected to current offerings.
     Helps develop new offerings and business models by:
     
     • discovering growth opportunites
     • building platforms
     • leveraging assets
   • KNOWLEDGE VALUE
     This results from improving organizational agility, collaboration, and talent development.
     Helps strengthen operating effectiveness by:
     
     • improving talent management
     • enhancing organizational links
     • strengthening execution methods and technology

The elegant and thoughtful framework is worked out even further into an astounding 18 x 4 = 72 marketing capabilities. It can be applied to analyze and take action on the gap between the existing (current) capabilities and desired (future) capabilities of any major marketing organization. The authors also provide a digital marketing capabilities benchmark tool to get started.

Source: Omar Rodriguez-Vilá, Sundar Bharadwaj, Neil A. Morgan and Shubu Mitra. "Is your Marketing Organization Ready for What's Next?", HBR Nov-Dec 2020, pp. 104-113

		Comments by date▼ Comments by rating Rating
		6 Gautam Mahajan CEO, India
	What is Value Some thoughts about value of marketing or value in general really. The definition of value in the Journal of Creating Value is: "Improving the well being of, or doing good for or improving the worth of a person or a product or a service". Worth here means Benefits minus Cost. Benefits are the product or the service, the brand, the relationship, the company's people, etc. Cost consists of the price and non-price elements (effort, time, recurring costs etc.) You must create value for the customer before you can extract value from him (for your company). The value you create must be better than your competition's for people to buy from you. You want the extraction of value to be greater than the value you use to create your products to make a profit.

		2 Giovanni Simeone CEO, Italy
	Value for the Customer Brilliant contribution. However, according to my experience, I would slightly modify the Marketing Value for the Customer as follows. ENGAGEMENT Strengthening customer relationship. - Identifying new audiences - Defining new content (e.g., exploiting storytelling) - Generating new mechanisms to infuse interest (e.g., by gamification or disseminating curiosity) EXPERIENCE Enriching customer involvement by using personalisation. - Building user identity or personas - Keeping personas continuously updated - Using personas to differentiate experience and generating enthusiasm. ENTERTAINMENT Developing customer satisfaction with leisure. - Participating in new games - Generating healthy competition - Involving new friends and fans in a virtuous cycle over social network. Of course, I am open to your comments and suggestions.

		2 Jaap de Jonge Editor, Netherlands
	Exchange Value is Missing @Giovanni Simeone: Thank you for your interesting comment. - What made you decide to not keep the category "EXCHANGE VALUE" with the customers? Even if it's perhaps not the most exiting category and rather operational in nature, in my opinion it is still a solid value marketing is generating for the customers. - The one you suggest to add (ENTERTAINMENT VALUE) as a replacement is in my opinion already covered in ENGAGEMENT AND EXPERIENCE VALUE. Agree?

		2 Naila Hameed Financial Consultant, Pakistan
	Goodwill, Reputation and Steady Cash Flows Importantly, the marketing function also creates a strong and positive perception, goodwill, image and reputation of the company. Companies with better marketing practices and branding usually have steady cash flows (sales) over a long period of time and in terms of financing decisions this reduces uncertainty and increases predictability.

		1 Helen Strong Business Consultant, South Africa
	Essential to Have Alignment and Integration For me the value of marketing lies in the way in which it ensures alignment of corporate activities to best solve consumer problems and maximize customer satisfaction. If this galvanizing marketing f...