Wednesday, May 23, 2007

Fundamentals and Marketing - Take 2

Yesterday, John posted on what marketing can and cannot do, pointing out that marketing cannot do, pointing out that if there are fundamental operational flaws, all the marketing in the world can't make up for it. He was writing about phone and cable companies, but it got me thinking about a situation I found myself in several years ago.

At one point when I led the product marketing team at Genuity, I was asked to brief the company president on the positioning for all of our services. (The late and lamented - at least by shareholders - Genuity provided Internet-related services: connectivity, web hosting, managed security, VoIP, etc.) My group put together a great snapshot of each of our services: what it was, who it was aimed at, price, competition, key features, and value proposition. I got to do the honors of going through the info with our then still relatively new president.

As it happened, while all of our services were pretty good, they tended to be grouped in two categories: already commoditized and about to become commoditized. For the latter services, one of the big problems was that we had high price points that had been justified when we were the best alternative out there. In order to maintain our established price points, we had added features to the services. Trouble was that no one wanted to pay for these new features, and we were feeling a lot of pressure to decrease prices.

In most cases, our services were pretty much undifferentiated (except when it came to features that no one really wanted). Our initial value propositions - developed when we were one of the only games in town when it came to Internet expertise - were eroding as new vendors emerged and as corporations built in-house expertise for themselves.

Oh, well.

In any case, I could see our president getting more and more discouraged that I was not making any claims about what our services could do.

"Marketing has to change these value propositions," Joe said. "These are weak."

"What do you have in mind?" I asked.

"Well, we should say...." and he launched into a list of claims about ROI (and other areas) that he wanted to make about our services.

I pointed out that we could not honestly change the value propositions without changing the services themselves - or the pricing. Sure, marketing could say anything, but if we wanted to be able to back up the claims we were making, the services we provided would actually have to be different.

No, all the marketing in the world cannot make up for operational weakness, for product flaws, for stratospheric prices. Marketing - no matter how strong - can only mask fundamental problems for just so long. Sometimes you have to change the way you do business.

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