Technology has put the consumer in control, powered a vast array of new-media alternatives, changed how brands are managed and built and completely altered the measurement platform.
These changes are forcing chief marketing officers to make tough choices about how their marketing dollars are spent. Coupled with tighter corporate governance and transparency requirements and a much shorter window of time to prove success to top management and shareholders, it's no wonder that the average CMO's tenure is just 23 months. Without a doubt, the corporate scrutiny that has been focused on every other function within the enterprise is now at marketing's doorstep.
As technology has cut a wide swath into the marketing discipline, it must be continuously reinvented as a business process, as an organizational function and as a professional career. "Continuous marketing reinvention" is an absolute requirement in the challenging environment that marketers face today. They must become more flexible, more adaptive and more astute at decision-making to meet the higher revenue and profit expectations of the CEO. The biggest sea change is that CEOs have begun to understand that the cornerstone of franchise and financial growth-as well as greater shareholder value-is strong and enduring brands.
In line with this perspective, CEOs are holding their CMOs responsible for building stronger brands marked by healthy, expanding business franchises that achieve long-term growth in market capitalization. It's an expectation made even more difficult by the high-anxiety circumstances in which CMOs operate: the increasingly complex, constantly changing marketing landscape where every decision is mission critical.
That leaves marketers challenged to continuously reinvent the total marketing-communications process. An entirely new kind of strategic platform is necessary- one built on brand building.
One of four major pillars of reinvention (see sidebar), brand building has long been the mantra of marketers. But its fundamental meaning has radically changed. No longer are soft indicators like "brand awareness," "brand preference" and "intention to buy" acceptable. Brand building from the CEO's perspective is about business building and generating higher revenues and profits, leading to greater shareholder value. To achieve these goals, brands not only need to be built; they must also be continuously reinvented to remain relevant to consumers' ever-changing needs and desires. Brand reinvention starts with innovation and is continuously refreshed in ways that speak to consumers one-on-one, thereby building long-term appeal and trust.
Apple's iPod is a prime example. The device has totally altered the way consumers acquire, play and enjoy music. In fact, industry analysts now talk about the "halo effect" of the iPod, predicting that continued sales of iPods to Windows PC owners will eventually translate into increased Mac sales. Apple is already seeing a steady stream of first-time Mac buyers at its retail stores.
Of course, innovation not only drives new brand introductions but also influences the reinvention of existing brands. A great example is Motorola, which engineered a remarkable business turnaround with a fresh marketing approach. In the early 1990s, Motorola owned 46% of the mobile-handset market, but that leadership dramatically eroded against strong competitors like Nokia. By 2001, the company's market share had plummeted to just 14.5%.
CEO Ed Zander and CMO Geoffrey Frost led a remarkable reinvention of the Motorola brand by positioning it as "wickedly cool and compelling." Their team executed a public-relations and word-of-mouth campaign that permeated the micro-culture of trendsetting Hollywood. By establishing a Motorola office in Hollywood, they shrewdly courted the "alpha techno-geeks" with their handsets.
Motorola products subsequently began appearing in films and TV shows-not as the result of paid product placements-but because the brand had penetrated the celebrity-community culture. Marketing sleek handsets-like the Razr-was the foundation of the strategy, and the buzz built fast. Today, the Razr is a top-selling phone worldwide, and in line with Mr. Zander's priorities, the company recently saw its stock climb to a 52-week high.
This kind of innovation can also apply to everyday package goods. Year after year, Procter & Gamble continues to re-energize its mature portfolio and reinvent the way successful brands are built. Global Marketing Officer Jim Stengel and his marketing team wanted to connect the Pampers brand more effectively with moms. To do so, they shifted the brand's positioning from diapers and dryness to a concentration on baby development. Then, via the Pampers Web site, the brand offered expert advice tailored to each stage of baby development with helpful tips, tools and activities. This type of innovation drove exceptional results. Traffic to pampers.com skyrocketed to 400,000 unique visitors a month, and the $6 billion brand experienced double-digit growth.
But reinvention isn't limited to just consumer products. It's also an imperative for business-to-business brands. GE, for example, markets consumer products such as light bulbs and home appliances, but the lion's share of its revenue comes from business products and services like jet engines, plastics, power generation and medical equipment.
In 2004 CEO Jeffrey Immelt and then-Chief Marketing Officer Beth Comstock recognized that the GE brand needed to be reinvented for the future. Specifically, they sought to interweave marketing and business strategies, with the goal of optimizing synergy and productivity throughout the company. They achieved just that with the spectacularly successful platform of "Imagination at Work," unveiled in 2004.
More than just a tagline, "Imagination at Work" is an internal and external commitment to drive organic growth through innovation. In typical GE style, the company supported its new theme with rigorous training programs and an enterprise-wide process that challenged managers to develop five new ideas, each with the potential to grow revenue by $50 million to $100 million.
Today, 80 growth projects are "in plan" and being funded. These efforts encompass technology innovation, product commercialization, growth expansion and value creation.
To be successful in this challenging environment, marketers must employ new brand-building strategies, coupled with a reinvented approach to integrated marketing communications, measurement and accountability, and the marketing organization itself. Only then will they achieve brand relevancy and consumer loyalty and meet the revenue and profit expectations of demanding CEOs.