Marketing’s Fourth “P”: The Greatest Challenges for the CMO?

Every college student (or at least the ones paying attention in marketing 101) is familiar with marketing’s “four P’s”.   Promotion usually garners the most attention, because you usually get to do all the fun advertising folderol.   The more sophisticated CMO helps drive pricing strategy and product development.    In my experience, however, we’re usually less influential/successful in the “placement” or distribution. 

Yes, we design dealer programs, work with a direct sales force when they will allow us, cooperate with merchandising and store operations folks, and otherwise try to curry favor and influence over the direct/indirect modes of distribution.  To me, this is the biggest challenge in marketing:  getting other non-marketing people to cooperate in the path between brand and transaction. Here are some frustrations I’ve encountered:

·         Qualified prospects who never received a call from their local dealer during a promotion (discovered through a lead audit)

·         Store managers who “forgot” to post pricing and promotional material for a Memorial Day sale for a now-defunct big box home improvement chain.  We wound up hiring and outside company to make sure promotional materials were properly posted.

·         Professional services “professionals” who won’t/don’t follow up on responses from their own contact database after a marketing campaign  

Prophets of the dot.com era preached the notion of a perfect market, in which every brand was a click away, and distribution was unencumbered by poorly trained people at the retail point of sale.  Today, some successful companies employ the factory-direct model, which streamlines the distribution model, offers consumers presumably lower prices, and hoists the manufacturer’s margin.   CPG companies, offering the widest swath of brands vs. any other product category, are still beholden to brokers, grocery store buyers, and merchandising minions to make sure consumers have the chance to buy their product on the shelf of their local Safeway.

There’s a good (aren’t they all) Harvard Business Review study on how power tool company Stihl Incorporated withdrew its distribution from Lowe’s and Home Depot in favor of independent dealers:

http://hbr.org/product/stihl-incorporated-go-to-market-strategy-for-next-/an/KEL398-PDF-ENG

So after pulling out my hair (see photo above) over the years, I’ve come to these gems about managing the disaggregated distribution chains:

1.       Seek the “cooperation” leaders as much as the volume leaders.   In the first bullet point example above, rather than focusing primarily on the first volume quartile among our sixty dealers, we placed greater emphasis on the second and sometimes third quartiles—those who wanted to increase their volume of our product vs. other lines they carried.  Oftentimes there were mitigating circumstances that caused them to be second and third level dealers.  Many of them were treated as bastard step-children by the other brands, and appreciated the effort and attention that otherwise was not paid them.

2.       Publicize the hell out of successes, regardless of the magnitude.   Marketers are often viewed as eternal optimists and rare realists.   It is amazing what a few good case studies can do, especially if you can enlist the endorsement of those who benefited.  A few years ago we created a thought leadership program for one of our less….prominent practices which resulted in some mid-sized engagements that would not have otherwise come to be.   Some well-placed internal publicity and hall talk moved some complete non-believers into the fold.

3.       In the words of the famous marketing guy, Mies van der Rohe, God is in the details.   You can never assume that anything that’s supposed to be happening outside the four walls of your office is actually happening.  Maybe I’m now a product of my accounting environment, but a little bit of auditing goes a long way.  It is way too easy to move on to the next marketing fire rather than checking all the details of execution.  Don’t do it, otherwise all the hard work you’ve invested in a promotion, a dealer program, a marketing campaign, or whatever other major initiative that requires others in the distribution chain.    

Discussion Question:

What challenges in managing the “P” have you encountered, and how did you successfully manage through them?   Scroll down a bit to post your insighful comments.

P.S.  As I mentioned in an earlier posting, the average CMO lasts 24 months.  My two-year anniversary is on February 16^th, so wish me luck.