CHAPTER | TWENTY-TWO
Can Marketing and Selling Be Adversarial?
Pick up any marketing textbook, and you'll find “tactical marketing variables” described variously, either using that name or described as “strategic marketing variables,” “the controllable factors,” “the marketing mix,” “the 4 Ps,” and the like. Let's go with the 4 Ps.
The 4 Ps is a term proposed by Professor E. Jerome McCarthy, of Michigan State University, based on his categorization of marketing issues and disseminated worldwide through his book Basic Marketing. As Jerry McCarthy told me more than thirty years ago, prior to his creation of this categorization there were so many different known marketing factors, all completely unorganized, that one didn't know how to proceed.1 McCarthy named these four main factors Product, Price, Promotion, and Place. Product and Price are self-explanatory; Place has to do with physical distribution and distribution structure. However, it's Promotion that has buried within itself what we call “selling.”
Marketing encompasses all of these variables because, while each is tactical, marketing is strategic. So the 4 Ps and their subsets all support marketing. Now you'll be able to see the monumental problem that Drucker created when he asserted that there was an unusual relationship between marketing and selling.
“Marketing and selling are not complementary and may be adversarial.” This is one of his most astonishing statements and I imagine many marketing professors might have been ready to take him on about it. Yet, although I certainly had my doubts when I first heard him say it, he was right. Selling may be a subset of marketing, but it can still be adversarial to marketing because marketing is strategic and selling is tactical.
Example: “My Son, the Musician”
Some years ago, my old friend and wizard marketer Joe Cossman (the man who created the “ant farm” described in Chapter 31 and sold more than a million of them to children worldwide) was telling me about the time he had such high sales that it almost put him out of business. With sudden insight upon hearing his story, I finally grasped what Drucker had meant.
Cossman had gotten control of an unusual product, called “My Son, the Musician.” The inventor told Cossman that it was guaranteed to end parental problems in training very young children to use the toilet bowl properly. The device consisted of a plastic bowl with a sensing device embedded in the inside that connected to a music box on the outside. When the bowl sensed liquid, it would immediately begin to play a popular nursery tune.
Cossman wrote the advertising copy and rushed “My Son, the Musician” into production. He engaged salespeople and began to promote the product through direct mail and through distributors. The potty trainer was well received; in fact, the number of items ordered through retailers prior to actual production was one of the highest of any of Cossman's many products. He thought he had hit the jackpot!
His enthusiasm ended when a child psychologist called to tell him that he was looking at future legal problems. “My Son, the Musician” worked all right. The problem was that it worked too well. It would absolutely potty-train the child; the problem was that using the potty would become permanently associated with music, not with the device. It doesn't take much imagination to grasp the consequences: Years later, that potty-trained youngster would grow up and urinate whenever he heard that music.
Cossman's distributors and salesmen had done a wonderful job, but if Cossman had continued to allow these spectacular sales, the lawsuits from former users would have put him out of business years later. The more product he sold, the greater the danger. So, sometimes high sales are adversarial to overall marketing strategy. Cossman may have found a way around this problem, but instead he chose to withdraw the product from the market.
Strategy Is More Important Than Tactics
Marketing strategy is employed at a higher level and is more important than selling tactics. Cossman's strategy was based on a flawed concept—flawed not because the idea was bad in itself but because of its unintended consequences. Robert E. Wood, who was chief executive officer of Sears, Roebuck, and Company during its years of greatest growth (and also a retired Army general with combat experience from WWI), stated: “Business is like war in one respect—if its grand strategy is correct, any number of tactical errors can be made, and yet the enterprise proves successful.”2 Unfortunately, the reverse is not true: One cannot overcome strategic errors by correct tactical implementation. If the strategy is wrong, competent tactical operations can only temporarily conceal the strategic blunder. And the wrongful employment of good tactical resources is a waste.
Good Selling Cannot Overcome Poor Marketing
Without sales there is no business, and thus the importance of sales is undeniable. That is why some people have the simplistic notion that effective selling automatically overcomes poor marketing strategy.
I recall some years ago that a professor at one of our leading universities expressed that idea in a journal article. He wrote that if the selling is good enough, it can overcome a bad strategy and result in high sales. However, this is misleading. The initial high sales may conceal a major problem that could result in disaster (as was the case with Cossman's potty product). Or it could cause the marketer to misallocate resources to a strategy that is far less efficient in creating customers or else allocate them to a business that should never have been entered in the first place.
Drucker wrote, “First decide what business you are in.” And then he went on to say that the purpose of any business is to create a customer. This was Drucker's rationale for stating that marketing is the distinguishing basic function of business. In this sense, strategy or marketing is the means to create a customer. But strategy and tactics are not the same thing. A marketer whose strategy is actually a tactic is at great risk. Should that tactic fail, he will soon find himself in trouble. This is what happened to the company that has become a poster child for wrong government investment.
Example: A Strategic Misstep Embarrasses the U.S. Government
In 2005, a company called Solyndra was founded to design, manufacture, and sell solar photovoltaic (PV) systems—you know, solar cells. However, Solyndra's solar cells were not the conventional flat solar panels we sometimes see. Instead, they were cylindrical. Solyndra claimed that because of their unusual shape, these panels could capture more solar power than conventional panels, and they could do so without moving one millimeter. Also, because they could cover more of the typically available roof area, they produced more electricity on each rooftop where they were used.
The company was attractive to many, including the U.S. government, for a number of other reasons as well. First, there was the environmentally friendly aspect of the electricity produced. Then there was the hiring of over 1,000 employees at a time when jobs were beginning to get scarce. However, the strategy was a tactic: low pricing due to the materials used, design, and the new design. Of course, materials technology didn't stand still during this period. As a result, the formerly higher price of regular solar panels came down significantly as solar energy caught on and more conventional solar panels were produced and sold. Solyndra's panels became far more expensive than the traditional flat panels, and the total system became more expensive as well. Solyndra panels were still novel and technically more elegant and sophisticated, but there was no competitive advantage and hence the company failed.3
Solyndra's marketing was a tactic based on price. A closer look would have exposed the company's vulnerability. If the price of the standard solar panel came down—a virtual certainty as worldwide sales increased—it should have been obvious that Solyndra could not succeed despite its appearance of technological superiority.
Tactics Must Be Determined by Strategy
A marketer must first have a strategy firmly in mind. Then, he is in a position to develop the tactics to support that strategy. During the Great Depression, Procter & Gamble's president, Richard Deupree, realized that consumers were still buying essential household products. Moreover, the competitors were cutting back on their advertising. So, his strategy was to introduce a host of new, innovative products and to significantly increase advertising as competitors reduced theirs. This was a strategy he initiated in the face of significant pressure from P&G associates. But, at a time when his shareholders were demanding that he cut advertising budgets and reduce other expenses to avoid losses, Deupree did the opposite—but he did even more.
Just as candidate Barack Obama took advantage of new technology in the 2008 election to get his messages out to millions of potential voters, P&G used the radio as its breakthrough vehicle of advertising. It didn't sink all its money into print advertising, as did competitors. In 1933, P&G began advertising Oxydol, a laundry soap it had acquired several years earlier. It sponsored a new radio show called “Ma Perkins.” Like the reality TV shows of today, the first program was launched at some risk. But fortunately for P&G, it was a gamble that paid off. Soon the radio introduction for the show was expanded to “Oxydol's Own Ma Perkins.” The sponsorship was so successful that only a few years later P&G was sponsoring twenty-one other radio shows, all associated with specific products. P&G not only significantly increased its sales and market share, it doubled its radio advertising budget every two years during the Depression, and it virtually built the daytime radio industry single-handedly. P&G's advertising and sponsorships even gave a new term to the English language, “the soap opera.”4,5,6
Synergistic, Not Complementary
Selling and marketing may not be complementary, but tactics should be complementary as well as synergistic. Synergistic means that the whole should be greater than the sum of the individual parts or tactics. During the Great Depression, P&G emphasized product and advertising. Both worked together; Oxydol actually was better than competitive products at the time. It really did make clothes come out four or five times whiter. They tested it and it did save the poor housewife twenty-five minutes of pounding wet clothes against washing boards with some slight assistance from suds, as necessary with other brands.
Drucker was right again! A marketer needs to ensure that selling is complementary, synergistic, and not adversarial and that strategy is considered primary even with the most brilliant tactics. Moreover, a tactic cannot be allowed to become a strategy.