Mad Dash to 'Purpose' Is Marketers' Attempt to Foil the Price Cutters

Why The Practice Is All the Rage

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Why are the drums beating so loudly and insistently for marketers to embrace purposeful marketing?

At the Association of National Advertisers conference in Phoenix last fall, I got the impression that there was a massive PR campaign in full swing to promote purposeful marketing as a way to gain leverage for marketers within their companies.

Indeed, Bob Liodice, president-CEO of the ANA, wrote in these pages a month or so ago that purposeful marketing "is the future of the industry."

That's quite a statement.

Why are marketers so eager to forsake good old-fashioned selling -- persuading prospects that your product is better than the next guy's -- in favor of linking their brands to the good deeds they are performing to the betterment of society and the world?

Bob says in his article that "simply selling is not enough."

And Marc Pritchard of P&G embraces another "S" word -- marketing is all about "serving" not selling.

Yes, I know I have talked in the past about the possible negative effects of purposeful marketing. One of my concerns is that marketers will manufacture purpose to suit their needs. And to be fair, Bob emphasizes that "brand purpose will not work unless it is authentic and seeded throughout the organization, right down to the show floor or grocery aisle."

But my objective here is not to argue against the reasons for purposeful marketing. Rather, I'm trying to figure out why the mad rush to purpose against all else. (I get the feeling that marketers are not taking the product-advantage route because the advantages can be too easily displaced.)

One reason for espousing purpose is that such a broad calling allows the marketing function to control the agenda throughout the company -- at a time when marketing personnel are in some jeopardy.

"The challenges of purposeful marketing stem primarily from organizational issues," Bob noted, adding that "the role of the CMO in this evolution cannot be overstated." What's needed for purposeful marketing to succeed is that parochial silos must come crashing down (that's what the digital guys say, too) and the CMO must be the centerpiece of the entire purpose movement.

As we reported in an article on marketing-personnel cutbacks at Unilever and other companies, bottom-line pressure or efforts to ward off activist investors is helping to fuel cuts. And private-equity investors such as 3G Capital at Anheuser-Busch InBev and Heinz have cut marketing (and other) costs severely.

I also think corporations are seriously rattled by Congress' threat to limit advertising-tax deductions. We said that a proposal to require companies to amortize 50% of their ad spending over 10 years won't matter much to big companies because the deductions won't be prohibited, only delayed. But if you can reduce taxes by taking a 100% deduction now, wouldn't you opt for that? There are always choices on where companies can allocate their resources, and items that are completely tax deductible will get priority.

What's driving all of this is the conviction among global corporations that they have lost the power to protect product innovation. So, they figure, it's more efficient to play up non-product attributes to boost sales.

Marc de Swaan Arons, founder of consultant Effective Brands and leader of ANA's ambitious initiative, Marketing 2020, pointed out at the ANA conference that product innovation was no longer innovative if a competitor somewhere in the world was able to introduce a product that was almost as good at half the price.

Consumers these days, Mr. Arons said, have "near-perfect information" about the suppliers they deal with and what they stand for. If the functional benefits of competing products are the same, "and in many categories we found that the functional benefits are the same, it's going to be the emotional, but also the societal benefits where people will say, 'If everything else is the same, I'm going to go for you because you stand for what I care about."

He went on: "If you ... are cutting down trees for palm oil so that you can sell body lotion here, people know. And they will know very quickly."

Many of the big players, who Mr. Arons said "try to do business well," latch on to these tactics and say, "We can show that we're doing this responsibly where some of our price-cutting competitors are getting away with murder and cutting our prices."

The marketing world is giving up too easily on product innovation, in spite of the price cutters. In addition to working more closely with the HR and IT and finance people, I'd like to see marketers spend a little more time with the R&D folks.

If everybody wants to build a better planet, is there still room for companies that just want to build a better product?

Correction: In my last column I wrote that the "Wassup" campaign was for Bud Light. It was, of course, for Budweiser. I regret the error.

You can reach Rance at rcrain@crain.com

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