The Role and Value of the Marketing Function

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 Sort by date Sort 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 t... Sign up

		2 Giovanni Simeone CEO, Italy
	Value for the Customer Brilliant contribution. However, according to my experience, I would slightly modify the Marketing ... Sign up

		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 c... Sign up

		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 a... Sign up

		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 ... Sign up