The Genius of Marketing: How Would Einstein and Picasso do Business Today?

From the vision of Apple to the insight of Zara, the passion of Nike and the customisation of Dell, today's leading brands think and act differently.

The 'genius' of business today lies in resolving a number of paradoxes. Connections must be made between: outside and inside; markets and business; customers and shareholders; creativity and analysis; promises and reality; today and tomorrow.

Today's business leaders have much to learn from both Einstein and Picasso, one who started with mathematical rigour and then thought creatively, the other who produced unconventional work, but still embraced the theory of his practice.

When we look at companies and leaders who are shaping, innovating and leading today's markets, their genius comes in many forms, as shown in Figure 1 above.

In recent years business has favoured a highly analytical, logical, measured approach. Indeed our obsession with left-brain precision has often led to forgetting our right-brain imagination, which is required to see the bigger picture, to make connections and instinctive judgements.

We need both sides of the brain – for wider vision and disciplined focus; radical creativity and rigorous metrics. Creating exceptional value for customers is the only sustainable way of delivering superior returns to shareholders.

SEEING THINGS DIFFERENTLY

The starting point is to see the world from where customers stand – to see products and services, business and sectors, the way real people see them. The obvious questions then no longer have simple answers.

Even the world's leading brand, Coca-Cola, has recognised that it must reframe its market context, and that juices and teas, rather than carbonated drinks, will more likely drive its future success (see Figure 2).

The magic, however, is not just in the insight but in the actions that can follow. A business leader who sees a new landscape, with appropriate direction and stimulus, develops the belief and conviction to act differently – to disrupt the industry conventions, to do what everyone else has avoided, to innovate the market rather than just a product.

Look at the leaders of Dell or Tesco, eBay or Zara – they are market-thinking people by background, who intuitively 'start with the customer and all else follows' (as Google defines its number one principle). They bring an outside-in approach, first considering the market rather than what they have to sell. These leaders are Market Leader obsessed with their customers and competitors, they champion the brand and innovation, and are constantly searching for new ways to stay ahead. Phil Knight of Nike is a good example (Figure 3).

It is no coincidence therefore that marketers are increasingly the best equipped to be future CEOs. Marketing is in the background of only 21% of FTSE CEOs, yet research shows that these companies on average generate 5.9% better shareholder returns than all others.

While many brands have blindly converged towards sameness, others have had the confidence to run a different race.

Here are some of my personal favourites, who like Einstein and Picasso before them, have embraced both their left- and right-brain to do things differently.

1 ALESSI

The Italian designers combine design and technology to create objects of household utility and desire. In 1921, Giovanna Alessi first struck his lathe in the Alpine village of Crusinallo, with the belief that no man should be forced to dine from a boring plate. From Anna G, the corkscrew, to a radio called Poe, the Alessi design family enjoys and celebrates the simplicity of everyday objects, while constantly pushing the boundaries of both function and form. They are guided by the creativity of designers such as Philippe Starck and Aldo Rossi rather than following the whims of the market, and the possibilities of materials, more recently embracing colourful plastics to complement their classic medium of stainless steel. Two-thirds of Alessi products are now exported to over 60 countries, helping them to build an intensely loyal customer base, who typically build up a collection over a lifetime.

Genetics: design and technology, boldness and imagination.

2 ENTERPRISE

Enterprise has quietly grown to become the largest car rental company in North America by rejecting the conventional wisdom of focusing on holiday and airport locations. Instead Enterprise and its 57,000 staff, who all share in the business success, have grown up in the inner cities, focusing on short-term and replacement rentals. Their people share an incredible entrepreneurial spirit more associated with a small company, working customer by customer, car by car, to be the best rather than the biggest. Their service culture and market focus enables them to charge a market premium and to rapidly enter new markets that to the conventional eye, would appear saturated. The company now generates over $7 billion from its 600,000 cars and has made many millionaires out of its people on the way. Previous leaders Hertz and Avis now need to try even harder. (see Figure 4)

Genetics: focus and differentiation, culture and service

3 GOOGLE

'Googol' is the mathematical term for a 1 followed by 100 zeros. In 1995 Larry Page and Sergey Brin created in their Stanford University bedroom what within five years would be dealing with 100 million internet searches every day, and make them multi-billionaires in less than a decade. Indeed its recent Nasdaq flotation was not without controversy, when Google claimed it should not be treated like a 'normal' company.

With over 80 million users, searching through 8 billion web pages, Google is now the world's leading search engine. It is known entirely through word of mouth, and its revenues are driven by enabling advertisers to target online users in highly sophisticated and efficient ways. It stays true to its '10 things' philosophy, ranging from 'focus on the user and all else will follow' and 'fast is better than slow', to 'you can be serious without a suit' and 'great just isn't good enough'. (see Figure 5)

Genetics: technology and vision, simplicity and leadership

4 IKEA

Ingvar Kamprad set out from his Elmtaryd farm in the village of Aggunnaryd – hence the letters forming IKEA – with a mission to 'create a better everyday life for the many people'[sic]. Since 1943 the company has focused on democratising design by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Its flat-pack approach gives it supply-chain efficiency and speed, even if it infuriates some consumers. Its 230 stores are typically in urban, isolated areas targeting young homeowners, and creating a distinctive experience (not least through its restaurants at the heart of the stores). With global roll-out, and strong loyalty, its success is likely to continue as long as it can convince people to discard the old and refurnish their lives.

Genetics: product and cost, design and experience.

5 JETBLUE

The revolutionary airline brought style to a price-discounting market, offering spacious leather seats each equipped with 36 channels of live satellite television, while most of its competitors crumbled around it. Launched by David Needleman, JetBlue now serves 30 carefully selected US and Caribbean destinations with a fleet of 68 new, environmentally friendly Airbus A320 aircraft. The airline succeeds competitively and financially by combining innovative, high-quality service with low fares to build a loyal following. Needleman followed his previous successes with Morris Air, which he sold to Southwest, and Open Skies, a simple yet powerful reservation system sold to Hewlett Packard. In 1999 he secured $130 million capital funding, rejected the thinking that no-frills was the only future, and judged that the time was right to bring 'humanity back to air travel'.

Genetics: innovation and timing, pricing and automation.

6 JONES SODA

'Run with the little guy, create some change,' urged Peter van Stolk as he launched his Canadian drinks company back in 1996. His drinks were irreverent – turkey and gravy soda was a top seller – and his distribution channels were different – placing his flame-design coolers in skate shops, tattoo parlours and music stores. Jones enhanced its cool credentials with the endorsement of leading BMX and MTV personalities, and a passion to do things differently. The company also embraced technology, enabling consumers to mix their own drinks and, most innovatively, to upload their personal photos at myjones.com, which then became the labels on the bottles. A nationwide craze ensued as folks searched through stores for the bottle with their picture on it. Jones Soda has created a cult following with consumers, staff and shareholders – a cult that soon intends to hit the UK.

Genetics: alternative and irreverent, personal and personality.

7 PANERA BREAD

Panera is the bread shop from St Louis that has driven an American obsession for speciality breads, and now has 700 bakery-cafes in 25 US states, with the highest level of retail brand loyalty in America. 'We are bakers of bread. We are a simple pleasure. We are a life story at dinner. We are a weekly morning ritual. We are the kindest gesture of neighbours.' The bakeries specialise in all-natural ingredients to bake the finest breads, showcasing the artisans and craft of bread-making, and becoming the centre of the local community. The story began in 1981 with the Au Bon Pain Co. which acquired a St Louis chain of 20 bakeries in 1993. Since changing its name to Panera in 1999 the share price has grown 13-fold, created over $1 billion of shareholder value and been named one of Business Week's 'Hot Growth Companies'. (see Figure 6)

Genetics: quality and range, network and community.

Ten challenges for a marketing genius

Leadership

Bring an outside-in mindset to business, driving focused decision-making and inspiring more enlightened action.

Strategy

Consider a broader context, focusing on the best few existing and emerging markets, and how to be positioned in them.

Brand

Define your brands by the benefits they offer customers rather than the functional description of your business or solution.

Customers

Engage more deeply with the right customers, observing and collaborating to discover emerging and unarticulated needs and wants.

Innovation

Reframe opportunities in ways that create new spaces in which to innovate products and business models, and their market applications.

Channels

Invert channels so that they become the trusted partners of customers, working together, creating solutions based on intimate knowledge.

Pricing

Actively manage perceived value, changing the frame of reference so that a premium price structure still offers 'value for money'.

Communications

Build dialogue with customers on their terms, in their time and place, rather than product-push, mass-market campaigns.

Relationships

Build loyalty between rather than with customers, through forming branded communities of people who want to come together.

Performance

Invest in markets, brands and innovations that create a virtuous circle of more value for customers and shareholders, short and long term.

8 SKY

Sky has changed our viewing habits, and our social behaviours too. With more than 17 million viewers in 7 million UK households, Sky now offers an unprecedented choice of movies, news, entertainment and sport. Not only that, but it has also been smart in signing up the content that is most in demand – not least Premiership football – in order to entice terrestrial viewers, and charge a premium for it. Now that it reaches 30% of homes, the focus has moved from land-grab to profitable delivery. Sky+ has brought personal choice and recording in a way that TiVo failed, while the licensing of its own channels – such as Sky News and Sky Sports – to cable and digital networks has extended its reach. James Murdoch now has the challenge of sustaining the relentless growth demanded by his father.

Genetics: vision and innovation, content and pricing.

9 SONY

'Sony' is derived from 'sonus' meaning sound and 'sonny boy', by which the Japanese mean a young person with a free spirit. Sony is therefore 'a group of young people who have the energy and passion toward unlimited creation'. This could define Sony, and its target customers. Indeed there are few companies that have achieved such success through steady, organic growth with a devotion to technological innovation, and a Zen-like ability to shrug off defeats. While there have been many successes, from the Walkman to the PlayStation, there has been failure too, including losing the battle for video and DVD format supremacy. However, the focus on sleek, attractive design that wins over customers, often at a 20–30% price premium, has served Sony well. As technologies converge, the focus is also about creating solutions rather than products – the Sony experience – and in staying one step ahead of the consumer.

Genetics: innovation and design, leadership and passion.

10 ZARA

In 1963, Amancio Ortega started out as a small lingerie business, producing low-priced imitations of upmarket fashion. However, Ortega thought consumers could regard clothes as a perishable commodity, like food and drinks, rather than something to be stored over years. Ortega pursued his vision of 'ready-baked' clothes, to create a global fashion phenomenon, translating the latest ideas from the catwalk and trends on the street into new ranges faster than anyone else. Zara's 'sense and respond' approach, enables it to occupy the leading edge of the fashion cycle, when demand and prices are highest and, coupled with its highly efficient supply chain, margins are greatest. With over 600 stores in 50 countries, Zara positions its brand differently by market – in Spain it is at the cheaper end of the market, while in the US and Mexico it competes with luxury stores.

Genetics: insight and design, speed and efficiency.

The Genius of Marketing

Most significantly of all, marketers are the people who can most naturally achieve this new balance – to connect customers and business, to embrace creativity and analysis, to see the future and act on it today. They have the natural 'outside-in' perspective and talents to lead the business.

Marketers should be the most important, influential and inspiring professionals within the business community. Yet for too long, their capabilities have been organisationally isolated, focused on marketing as a function with tactical deliverables, making a marginal contribution. Businesses cannot survive in today's markets like this.

Businesses need marketers and marketing more than ever, to step up to the challenges of market complexity and intense competition, to be the creative and commercial driving force, and to embrace customers and innovation across the whole organisation. Marketing is the engine of growth and value creation.

Marketing must drive strategic direction and aligned delivery, both a stronger function and an essential mindset for business. However, this requires marketers willing to change, to step up to the challenge. While there are good examples of those who are already there, others must become more strategic, innovative and commercial. There has never been a more exciting time for marketing, or to be a marketer.

It's time for marketing to take centre stage.

This article featured in Market Leader, Spring 2006.

NOTES & EXHIBITS

FIGURE 1

FIGURE 2: GLOBAL BEVERAGE PROFITS

FIGURE 3: GROWTH OF NIKE

FIGURE 4: LARRY PAGE AND SERGEY BRIN, CO-FOUNDERS AND PRESIDENTS OF GOOGLE.

FIGURE 5: RIGHT: ONE OF IKEA'S 230 STORES.

FIGURE 6: BELOW: DISTINCTIVE JONES SODA BOTTLES. BOTTOM: A PANERA BAKERY-CAFE IN ROSEVILLE, MICHIGAN.