An example of how ignorance of the Hierarchies of Marketing can corrode success.
There is a large company – one of the world’s top 500 companies – headed for hard times due to an absence of strategic acumen.
It is a business that owns, operates or manages thousands of holiday resorts across the world.
One of its divisions is an arm that distributes a derivative of of the timeshare concept. Instead of selling the same venue, at the same time, to a consumer, they offer “Vacation Credits”… effectively pooling timeshare ownership across a network of venues that accept a homogenised booking system trading in ownership leverage measured by “credits or points” that a “member or owner” possess.
A great deal, poorly marketed.
Lack of strategic marketing acumen
Management have high operational expertise: They seek out and pursue operationally driven means to squeeze productivity and sales performance. Its killing their business! Operational compliance. Professional conduct. Processes and procedures are impeccable. While overtly obedient to compliance, behind the scenes Sales Management push the envelope: Personnel are at the forefront of covert ethics… carnal. mercenary, desperate, stressed.
“Don’t talk to me about ‘marketing’… Just get out there and sell!” is the middle management response to those that dare voice their intuitive frustration at an approach that screams out inefficiency.
This company doesn’t invest in adequate market research. It doesn’t understand its prime target audience. It doesn’t understand market segmentation. It doesn’t monitor changes in the market place. It doesn’t respond to new, evolving segments.
“Marketing”, to them, is promotions: They even call their lead generating hawkers, “The Marketing Team”.
This company still uses methods developed in the 1970’s. They run a shotgun appeal sweepstake for lead generation, supported by gifts offered to prospects to attend a sales presentation. Imagine using the same (often weaker) marketing communications strategy for over 30 years!!!!
Their sales teams end up with very low conversion rates, are frustrated and suffer high turnover.
Their operational promotional team produce week, ineffective sales promotions collateral.
They spend huge amounts in HR training, but waste it paying immigrant labour minimal wages at the coalface.
They still grow – at 1,000 ‘members’ a year. If they were empowered with strategic marketing leadership, they’d grow at no less than 25,000 members a year.
Like so many companies, the bigger they are, the harder they fall….
“We’ve been doing this for 40 years… what do you know!”
“We’re a top 500 global company, how dare you suggest you know how to run our business better than we do!”
“Even if you were right, we couldn’t service growth of 25,000 members per year.”
I am reminded of the quote, “There is no reason anyone would want a computer in their home” by Ken Olson, president, chairman & founder-Digital Equipment Corp. in 1977. The point being that larger corporations suffer resistance to change with greater inertia than smaller ones. Part of this comes from what is cynically described as “Corporate Arrogance” but often simply a factor that results is Operationally-extraordinary executives being promoted into roles that need Strategically educated and oriented approaches to strategic decision making.
I’d be interested in response from any company that sees itself in a similar situation, and from executives who have experienced and overcome the transition from operational focus to strategic focus… and their results.
People wanting clarity on the Hierarchies of Marketing can go to…
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