7 Big Problems in the Marketing Industry

Marketing has problems.

This spring, we unveiled the AMA’s first ever intellectual agenda in our almost 80-year history that features what we believe are the “seven big problems” confronting marketing. The seven big problems will drive content for the entire AMA community: a multi-faceted and diverse group of professionals in marketing and sales, academic researchers and educators, and collegiate marketing hopefuls.

The AMA’s intellectual agenda seeks to serve as a big tent source of guidance and inspiration that includes both theoretical and applied knowledge that will ultimately provide actionable insights, frameworks, tools and resources for the AMA community. We’ve created a living document that can evolve along with the AMA community, the AMA’s scholarly outlets, and the field of marketing itself. This agenda fuels new initiatives and encourages conversations between industry and academe.

A devout belief that “thinking” is what defines the human experience drives our intellectual agenda. In that vein, part of what you value is the ability to actually stay above and apart from the din and the fray that might influence your ability to be actionable. And that’s what the seven big problems aim to address—how you can best be both objective and action-oriented.

You have a life pulling you in different directions in what is arguably the most distracted and distracting society in history. You want to see your work come to life in the marketplace. Because knowledge is not power. Power is knowledge applied. The seven big problems provide all of us with critical context. Context matters. Context is the last frontier for marketers who know that mobile ubiquity and wearables powered by the Internet of Things are closing in on the holy grail of contextual understanding.

Will the seven big problems be an overnight inflection point in terms of the content and research that is generated by the collective AMA community? No. But what it will do is put a stake in the ground on the belief that context and managerial relevance matters to us, because it matters to marketers.

–Russ Klein, AMA CEO

Bernard Jaworski discusses the 7 Big Problems in Marketing

Effectively Targeting High Value Sources of Growth.

With all the fascination with new marketing concepts, digital technologies and new tactics, there continues to be one foundational issue that is proven and reproven to have a disproportionate impact on the value you create for your business: identifying the highest value source or sources of growth for your brand, product or service. Choosing the wrong target, or one of less value, will certainly lower your growth and return-on-investment potential. It might even fail completely. Traditionally we called this market segmentation but lately many of the most successful marketers refer to it as “demand landscape mapping.”

There are two critical questions to understand about this subject: Why is this so critical, and how can I do it much better? There are five questions that dive much deeper in to the “why?” as we leave the door open on the “how?”

Can one product please everyone?

This is a simple enough concept: How do you find the market that is most interested or in need of what you have to offer? Or if you are a new brand, find a need that is not adequately filled and create a better “mousetrap.” The key is to recognize that some people won’t be interested in you no matter what, and that’s OK. Find the ones that are.

What segments provide the most value potential for your company?

This plays into today’s data-rich marketplace. Analyze the options and look for the one that has the most value to you, meaning it’s large and profitable enough for you to realize your financial goals, it’s reasonable from a competitive intensity standpoint and has a bright future.

Which segments are cost effective and easy to reach?

This one is not so obvious to most marketers. Even if you’ve found a larger and profitable segment that your product fits in perfectly, it may be very fragmented or very expensive to reach or serve.​

How can you create a clear target that focuses on the motivations that affect customers’ decisions, upon which you’ll build your marketing program?

Understand the drivers of purchase so you can begin to select the tactics most likely to effect the behavior you desire. 

How can you position your product or service against something or someone?

When it comes down to developing your behavior, influencing tactics positioning is key. You have to know who you are aiming at to position it successfully. Usually you will be replacing something already in that person’s repertoire.

The role of marketing in the firm and the c-suite.

There is a long history of debate between how academic researchers conceptualize “marketing” and how that is reflected in the activities firms may engage in and how they organize to accomplish these activities. Thus, academic views and corporate practice concerning the role of marketing within the firm have often been out of alignment. However, as the world has become flatter, governments have increasingly shaped policy, supply chains have globalized and “customer demand” (not supply) is the limiting factor on corporate growth, it’s clear that from both perspectives the role of marketing within the firm needs to be carefully reexamined. 

We need to explore what is possible, as well as what is already happening in some firms. For example, in some firms, marketing has lost power within the firm even though one of its fundamental roles is to represent the voice of the marketplace in firm discussions. In others, marketers have grown in stature and been given new responsibilities for a wider array of insight- and demand-generating activities.

Relevant questions include:

What are marketing vs. non-marketing issues and tasks?

Has the scope of marketing activities and tasks expanded or has it contracted? Recent evidence suggests that most information is no longer controlled by the marketing function, but is now controlled as an organizational asset under the responsibilities of the analytics or IT group, and that has shifted the balance of power within the organization. Is this the case, or is the evidence to the contrary?

How should marketing tasks be organized within the firm?

When should organizations centralize marketing activities, and when should they decentralize them and push marketing activities into the businesses? Is there an optimum balance? And if there is, what determines what is optimal vs. non-optimal? Firms such as Cargill have “atomized” its core platforms to over 80 business units and pushed marketing to the front lines. Other organizations have increasingly centralized marketing to share cost and services. What is the right model? Does it depend on industry and customer context?

What does a “world-class” marketing organization look like?

Popeyes chain of chicken restaurants has recently reorganized with the most senior “marketer” the chief brand officer. In turn, the CMO, guest experience and PR areas report to the chief brand officer. Some organizations do not even have a CMO, assuming that the growth function can be done with other organization-wide resources. What is the best structure? Or does it depending on the competitive context or other factors?

Some CMO’s are being given responsibility for building the organization’s marketing capabilities.

How do I build my company’s marketing capabilities? Is it more about finding and keeping the right people, or more about building a standard tool-kit? In either case, should I build or buy? If I decide to build what is the right “roadmap for change?” Do I invest in training? If yes, what is the right form and design of these initiatives?

How do I attract the best marketing talent?

What does it take to keep the best marketing talent? How do I stop people getting “stale in the saddle” but keep them engaged in the same area long enough to benefit from their experience?

Who is/should be representing marketing in C-Suite conversations?

Does it have to be a CMO? What are viable alternatives, if any?

What is/should be the role of the CMO?

Voice of the marketplace? Demand generation? Growth champion? Innovation-driver? Capability-builder? All of the above? What are the costs and benefits of different CMO roles under different conditions?

What is the impact of the changing role of marketing within the corporation?

The digital transformation of the modern corporation. 

Digital issues focus on pressing managerial problems at multiple levels of analysis. Our belief is that marketers have taken a very narrow view—examining social media, Big Data and the transformation of marketing communications. However, at the C-suite level, corporate executives are focused on much larger issues of business model change, survival and future competitive advantage. This is very evident in the world of banking and retail. However, even traditional industrial firms such as GE are transforming themselves from “dumb” to “smart” within the Internet of Things.

Key questions include:

How will winning firms compete in the future?

In almost every industry, firms are moving from products to information and service businesses. It does not mean “products” disappear. Rather, they become the vehicles and platforms for information-based businesses. Nowhere is this more evident than in health care. We are seeing the migration of patients from hospitals to homes, with attendant monitoring and care through information-rich technologies.

How do the firm’s interfaces with marketplace (e.g., communications, salesforce) and within the organization itself (e.g., internal crowd-source innovation, gamification of learning and development, flattening of the organizational hierarchy) change as a result of digitization?

Our key point here is that the entire organization is changing, not just the interfaces with customers. Structures, processes, workflow and decision right are being transformed due to digitization.

How will it/could it affect my business model?

What are the types of new business models that are emerging? Is one type of business model superior, or does it depend on context?

What should impact the way I communicate and interact with customers?

Formerly this was largely a one-way communication; now customers are taking control of the products, services, interfaces and communications. It is shared communication, not only between the firm and customers but between actors in the marketplace (e.g., customer to customer).

How do I use social and other digital media to both generate new insights about my customers and competitors?

Can I also use it to track my marketing performance?

How do I figure out the scale and scope of what is possible for my company as a result of existing and emerging digital technologies?

Generating and using insight to shape marketing practice.

There is a fundamental debate that is unfolding concerning the role of Big Data and analytics within firms. However, this data orientation (or obsession) may obscure the differences between data, knowledge and insight. An argument could be made that while our data and knowledge are rapidly growing, our actual insight is not. What does it mean to have a customer insight that can be leveraged in the marketplace? This problem could be addressed by new methods, but we are more concerned with unique, different information that leads to competitive advantage. How do organizations collect, share, store, transmit and “use” this insight? More broadly, in our knowledge-based economy that leads to competitive advantage rather than a traditional view of products, routines, capabilities and assets. At an even higher level, how do we know we know?

How can we generate new and better customer insights?

This is not just about methods and techniques, but it’s also about looking around the corner and visualizing the future.

How can I best capture my customers’ experience?

We have all learned the tools of end-to-end mapping of customers’ journeys. What is unique about these journeys? Is it only about pain points, or about surprise points? What is more important?

Can we also identify competitor insights?

Almost all of the focus to date has been on customer or consumer insights, but channel-partner insights? Supplier insights? When are different types of insights more or less valuable, and why? 

Who should be doing this in our organization?

Folks have argued that market-driven companies are not marketing driving companies. If this is the case, what is the role of marketing in gaining new insights? Does it drive the process? Simply aggregate views from other areas? Is it a catalyst function?

How do we ingrain insight-driven approaches into all of our business processes?

Most of the focus to date has been on generating insights, and it’s clearly not an easy thing to do. How do we make sure that we fully and quickly exploit the insights we do manage to generate? 

Who has cracked the “insights code” and how did they do it?

What are the best insights tools and frameworks for us to use?

What firms have developed a “great machine” to take insights and deploy them quickly for revenue growth?

Dealing with an omni-channel world. 

The 1990s were marked by a back-office revolution in efficiency, systems and re-engineering. As we transition into the 21st century, the key revolution is the front-office interface with customers. It is no longer a simple mix of brick and mortar integration, or even “bricks and clicks” integration. Rather, with the advance of social media, mobile media, always-on communications, the Internet of Things and multi-channel markets, the new catchphrase is “omni-channel.” What do we know about this world? Is it truly different than multi-channel? How might solving the “last mile” problem change the game in traditional industries such as consumer packaged goods—and who is going to do this? Amazon? Do the traditional theories and approaches work in such an omni-channel world? What new capabilities do firms need to put in place to take advantage of this world?

How do I figure out how and where my customers and prospective customers want to buy from me?

The fundamental problem is not the maximization of a particular channel, but the interfaces that link between channels. Think of these as drop offs and hand-offs between channels. Where do we see the drop off occur? Is there a standard pattern across industries?

What is the right mix of customer interfaces?

Keep in mind that many of the interfaces are no longer under the firm’s control (e.g., Yelp), so how can we stay in front of these messages. Can we shape the debate?

How does this work across countries?

In many cases, the technology in developing countries, or the political infrastructure, are at odds with integration in a world economy. How does the political, economic and social context shape the ability to integrate a global company?

How do I organize to coordinate across channels?

The fundamental problem in most cases is the way the company organizes, rewards and manages profit and loss groups. A particular activity may be in the best interest of the overall firm, but not in the best interest of a particular business unit or group. How does the firm reward the unit that appears to be losing out?

What are the implications for in-store sales personnel?

How enabled and accountable do they need to be in terms of awareness, knowledge and access across channels? Put simply, do in-store personnel need to be experts on mobile, websites, call centers and other touchpoints that the firm is using to reach out to customers?

How do I develop an omni-channel strategy for my brand?

Are there general rules of thumb, or is every firm different? What is best practice, what is worst practice and what is next practice? What are the implications of omni-channel for selecting channel partners?

How is omni-channel changing B-to-B markets?

Are there unique challenges in the B-to-B world that we do not see in the B-to-C world?

Competing in dynamic, global markets.

While terms such as “hyper competitive” or “fast moving” have been around for a number of years, the speed of change—at the customer and competitor level—is accelerating at unprecedented levels. At the customer level, this is reflected in “location-based” marketing based on mobile apps, real-time tracking of customer behavior, and continual advancement of new, nimbler competition. For many industries, at the heart of this change are smart products, smart applications and interconnected devices as well as an increasing willingness of firms to develop ecosystems of partners rather than go it alone. 

In many industries, the new and nimbler competition may be from firms based in second-world or even emerging economies. What are the implications of dealing with such non-traditional competitors? Conversely, the biggest growth opportunities for many firms are in emerging marketplaces, with unfamiliar customer needs, channel structures and even institutional set-ups and political systems. What does dealing with such new and dynamic markets mean for the marketing function? Does marketing continue to be the key interface for the inflow of marketplace information and the outflow of market-informed products and solutions?

How can I compete with eco-systems vs. individual rivals?

There has been a great deal written on the shift from “go it alone” competitive dynamics to an increasingly networked world, where platforms compete against platforms. We see this most readily in the technology sector, but it is also apparent in most other sectors. What does a good ecosystem of players look like?

How can we better predict competitive shifts in our marketplaces?

To paraphrase Peter Drucker, the best way to predict the future is to create the future. How do firms shape the future? Do they do it alone, or in concert with others? What can we learn from this process?

How can I compete with global rivals I have never even heard of?

This is one of the most significant concerns of big global players: Who are the new-to-the-world players that will emerge? How do I spot them early? Do I acquire them, or attack head to head? What does it take to make such foreign-market acquisitions work? How can I make sure that I fully exploit them?

If my firm is mid-sized (or even small), how do I globalize quickly?

What country marketplace characteristics provide the best guide for growth potential that I can tap (vs. just size)? How can I access such markets both in front-end customer acquisition and back-end logistics and delivery? How do I organize to make that happen? Trend analysis has been around for a while. Is it keeping pace with marketplace dynamics? When and why is it not? What can be done to bridge such gaps? For example, how can I better predict where and when new technologies may take off?

How do I organize to monitor and predict changes in my marketplace?

Is this marketing’s job or someone else’s? If so, who? What are the costs and benefits of different approaches to doing so? Is simply trying to become more agile and respond quicker when changes occur a viable alternative to trying to better predict marketplace dynamics and change?

Balancing incremental and radical innovation. 

Firms need to compete in two time periods: the present and the future. How does one balance this dual, or ambidextrous, orientation? How do we fuel necessary innovation in the present, while investing in disruptive technologies, business models, partnerships, and customer experiences that set the course for the future? How do we foster innovation beyond the product—to the organization, networks, financial models, distribution channels and other forms of innovation—that can accelerate competing for the future? Can we and should we balance over time by sequentially switching our focus from radical to incremental (e.g., behave like a tech business and build new “platforms,” then add “modules”) rather than trying to do both at once?

How do I successfully incorporate design principles into my organization?

Pepsi and other firms have done a wonderful job of incorporating design principles into their organization, not just to redesign products but also to look at systems, processes and workflow. What can we learn from Pepsi and other firms that have successfully deployed design thinking? What is the dark side of design thinking? What does it create in terms of unintended problems for the firm?

How should we think about creating “platform” products?

It is not enough to have successful products. Successful firms think in terms of platforms, franchises and ecosystems. Think about American Girl. They are not simply products, but an entire ecosystem of products, information, brands and retail experiences. What are the lessons learned?

What are good ways to build prototypes and “fail fast”?

What do great firms do in this area? Can large firms like GE practice lean-start up models, or is it almost impossible for large firms to implement? Do large firms need to implement things differently?

How do I make sure we learn the right lessons from market tests?

How can I conduct such tests in a “fail-fast” way and still keep my intentions below the rivals’ radar?

What are good innovation metrics and how do I integrate them?

How do you differentiate between number and quality of innovations? Which, if any, innovation metrics should I build into reward and evaluation systems? For whom? Which innovation metrics may have unintended consequences? What are they? How can such negative outcomes best be avoided?

How should I organize to enhance innovation outcomes in my firm?

What determines when I should make vs. buy? Is there a viable business model in which I can effectively outsource innovation and just buy the ones I see as successful? Can I still “win” financially by making such purchases and acquisitions? If so, how?

Firms like Netflix, or even personal brands such as Madonna and Justin Timberlake, have successfully managed across two time periods

In effect, they have re-invented themselves to “fit” into a new competitive space. What can we learn from these firms or brands?