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:
- 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
- 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