One of the profound things I learned after 13 years studying “Marketing” at Uni, from tutoring & lecturing in “Marketing” to MBA students and debating “Marketing” with my peers, is the commercial advantage of using academic knowledge that has meaning and relevance in the commercial environment.

FOR MARKETING CONSULTANTS

One of the things taught in higher Economics is that “super-normal” profits only comes to businesses that fall into the economic industry-classification of “Monopolies” or “Monopolistic Competition” (e.g. Oligopolies), while industries where competitors, existing in “Perfect Competition”, inevitably will not maintain long-term “super-normal” profits.

Likewise, in Strategic Marketing Industry Life Cycle Analysis, we KNOW that high margins and premium pricing is much more difficult in “Market Maturity” than in “Growth” and that all industries are likely to enter “Industry Shakeout” at early Maturity stage, primarily because it is more profitable to merge, than it is to grow organically.

Experts among us might shout “in professional services, price is a yardstick of quality” and “Price is in-elastic” but only when the service is heterogeneous in the mind of the buyer.

Product Management “Product Analysis” theory tells us that augmented product metamorphosises into actual product over time – in the case of Marketing Consulting this means clients expect Marketing Consultants to know more, deliver more, contribute more, be more…

History shows formidable marketing successes over the past 40 years have routinely originated by applying higher-level strategic marketing models, so are we NOT  being negligent in ignoring these rules in any marketing consulting business, and industry?

There is a saying, “Only a fool knows everything” that might convert to, “Everybody has something uniquely special they can contribute”… Even Philip Kotler said, “Marketing takes a day to learn and a lifetime to master”, although I’d debate this… I believe Marketing takes a lifetime to learn and is impossible for a single individual to “master”.

Why No Single Marketing Consultant Has ALL the Answers

Think about it… There are 8 “P’s” of Marketing… The 4 “P’s” that everyone (who does a basic business course) learns: Price, Product, Place & Promotion…. are the simplest, but even these  simple topics are complex and extensive.

For instance, JUST “Promotion” breaks down to:
1. Advertising,
2. Public Relations,
3. Sales Promotions, and
4. Personal Selling

… AND, that small subset called “ADVERTISING”, requires professional training in Mass media (Digital, TV, Radio, Print to name a few), direct marketing (CRO online, post, off-the-page, and others), web (YouTube, SEO, PPC, SEM, SMM, CRO, content)… each requiring creative, production, media buying and implementation skills…. coordinated with position, targeting, segmentation, buyer behaviour, buyer adoption stage… and 1001 other professional specializations.
… BUT PROMOTION ALSO INCLUDES Public Relations, Sales Promotions, and Personal Selling… which are all (if not more) as complex and arduous as advertising.

How can an Advertising Expert be a Marketing Expert?

Look at “PRODUCT”… there’s branding, portfolio management, new product development, market research management, packaging, product typing, product differentiation, product management… and on… There’s Boston Matrix, Ansoff Matrix, Brand Equity Management, the Product-Service continuum, levels of involvement, etc, etc and all these vary across 2-5 segments!!!

How can a Product Management Expert be a Marketing Expert?

“PLACE (Distribution)” and “PRICING” are even more complex and divergent… and that is before we move into PEOPLE, PROCESSES and so on…

… and then the synergy can be lost by silos that divide (and cannabalise) marketing efficiencies…

What Would Marketing Consultants Do (in Theory) to Maximise Their Value, their Efficiency & Their Profits?

The business world NEEDS to understand & adopt adopt the “Hierarchies of Marketing” – or some model like it – because, right now, the profession nurtures those who “don’t know how much they don’t know” as employers, naive of the depth and breadth of the discipline of “Marketing”, hire one person to be a jack of all trades instead of many that they should really recruit. (Feel free to request a copy of my [free] e-book, “The Four Faces of Marketing”.)

There is opportunity businesses to make HUGE bounds forward by NOT hiring a ‘gun’ Marketing Manager, for say $170,000 pa, but appointing a Marketing Consultancy for the same money and getting a team of leading experts who collaborate and delegate work to team member/s best qualified to deliver exceptionally good output.

There is a HUGE win/win here… the customer gets BETTER STRATEGIC MARKETING input, and generates better marketing OUTPUT, makes more money, re-invests more… and the marketing firm shares success accordingly.

The only ‘catch’ is the marketing consultancy HAS to deliver exceptional, extraordinary marketing… which no individual can possibly do.

My colleagues and I incorporated Launch Engineering 10 years ago and brought in the best possible minds we knew – in the key areas of Market Research, Information Management, Digital Implementation, and so on, but a small, boutique firm will always reach a flattened sales curve: The world isn’t quite beating a path to our firm’s door as much as we’d like. Why? Well there’s a host reasons that go beyond this post, albeit great strategists cannot yet be 100% brilliant in all operational marketing disciplines.

Should boutique marketing consultancies merge, or compete, and why?

If other marketing consultancies, reading this, see some merit to the points I’ve made, perhaps they would care to offer some feedback and comment… … and tell me, “Should boutique marketing consultancies merge or compete, and why?”

If you’ve read this far and want to delve deeper into Marketing “science”, PLEASE read (for free) about the Hierarchies of Marketing, and other marketing issues, in this e-book by downloading from this address…
http://bookboon.com/en/the-four-faces-of-marketing-ebook

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Have you heard the expression, “Assumptions are the mother of all f—ups”? When observers say, “challenges that corporations face in managing and adopting innovation” are we assuming management skills are a constant – ’cause they ain’t!

The managerial errors of Strategic Myopia, Structural Inertia & Reactivity have been denounced for so long, you think rubbish management would be long gone…

However, the politics of selling consultancy means 99% of management consultants skip over findings in the problem identification stage, hiding rather than revealing, sub-standard management lacking in understanding of rudimentary concepts such as the Ansoff Matrix, the Resource based approach to the marketing concept, product portfolio management and other strategic marketing management concepts.

I see so much waste is the ‘selling of emperor’s clothes’ to big business. SingTel just boasted 0.8% increase in profits due to their clever Six-Sigma approach – BIG DEAL!!!

One of OUR banking clients just increased generated 22% profit growth using our proprietary Customer Value Management models – and our fees were insignificant to the ones paid by SingTel!

Poor shareholders… the world of imperfect information hides how woefully mismanaged their investments are

Improper choices by underskilled management seem to be much more the problem with innovation, chnage and profit challenges being more of a symptom.

All decent marketing consultancies contain a majority of tertiary qualified principal consultants, who pass on and apply their academic knowledge in relevant and appropriate ways to the advantage of their clients.

Yet a great number of these marketing firms fail to apply the same science and knowledge when it comes to their own busineses.

You would have had to skip a lot of classes and a few key subjects at Uni to avoid learning about perfect competition vs. monopolies: How an industry in perfect competition has many small players who squabble among themselves for small market share and “nominal profits”, while an industry in monopoly or oligopoly commands “super-normal;” profits and “economies of scale”.

But further than this, skilled marketing consultants SHOULD have an intimate grasp and understanding of industry life cycle theory. They KNOW that an industry in maturity should be including merger and acquisition as a strategy and that small payers in a maturing industry are mandatorily destined for premature extinction.

Certainly, merger and acquisition is an active strategy of our own firm, but curiously, there is an aloof reluctance with the management and marketing consulting industry to bend to the inevitability of the Immutable Laws of Marketing and build growth through M&A.

The question as to why? The answer must be lack of confidence in the science they purport to embrace, lack of knowledge they purport to possess, or businesses performing well below the level they purport to generate.

Curiously, the professional services industry relies HEAVILY on a firms’ rainmaker – the salesperson, or new business development executive/s.

M& A is perfect for these firms because rainmakers can work in harmony, and the quality control of support and deliverables can be significantly embellished.

Additionally, overheads are reduced and kudos expanded, increasing perceived value by clients. Other benefits include recued reliance of key executives to hold the business together and greater security in a broader portfolio of clients. Advertising, of course, is cumulative, and inevitably, value to clients takes a great leap forward.

In fact, the payback has minimal downside, requiring only like minded, aligned and engaged principals who simply need consensus on the amalgamated firms’ mission, vision and purpose for being.

Reflectively, management and marketing consultancies, even those in niche spaces, are probably to be avoided if they consist of only one person with support staff. This is usually indicative of lack of core grounding and business training, an inability to change, aging (and probably less appropriate) deliverables, and unusual (if not eccentric) approach to business.

To readers who appoint marketing consultants are best advised to welcome M&A in their service providers as the outcome should be advantageous from any business orientated and commencement consultancy.