High levels of growth can only be achieved by a business that not only has a good industry offering and a viable strategy, but that also delivers great marketing.
How do we deliver great marketing?
Let’s look at the bigger picture for a moment.
When developing a business strategy, many recognised management thinkers have settled on a resources and capabilities approach. Leading business strategist Robert Grant; suggests that competitive advantage comes from the resources a business owns and has access to, and the capabilities it has or can develop.
Resources can be tangible or intangible:
- Tangible resources – things like access to materials, machinery, processes, location, land and capital.
- Intangible resources – things like expertise, knowledge, intellectual property, brand image and reputation.
Capabilities from resources
Capabilities are developed from the resources that a company has or has access to.
Thus different companies have different capabilities as they will have different resources to draw on.
This then determines strategy – if you don’t have access to cheap raw materials and your competitors do, for example, you cannot hope to compete on price.
Competitive advantage, which drives growth and profitability, is derived from unique capabilities, which in turn are the combination of unique resources.
If your company alone has particular knowledge, which then produces a unique process, that is a resource that creates a unique capability. That uniqueness leads to competitive advantage.
If follows then that a company ideally needs resources that are unique to them in order to beat the competition. This is essentially the idea behind the VRIN Model put forward by Barney and later amended to the VRIO model.
VRIO analysis asks four questions of a resource. Is it:
- Is it Valuable?
- Is it Rare?
- Is it costly to Imitate?
- And is a firm Organized to capture the value of the resources?
A resource or capability that meets all four requirements can deliver sustained competitive advantage and high growth to a company.
But what has all this to do with marketing? Well, we can use the same resources and capabilities ideas to develop effective marketing for growth.
Marketing resources for growth
In order to rise above the competition, look for resources that can develop strong, and ideally, unique capabilities. Marketing is a well-understood discipline that many companies do well, so developing unique capabilities is a challenge. And ideally, those capabilities need to be sustainable too – not something that a competitor can easily replicate.
Let’s look at some of the key resources and their significance to business growth. These fall into two categories, tangible and intangible:
- Marketing budget
- Marketing expertise
- Knowledge of a market
- Knowledge of customers
- Knowledge of company’s products or services
Taking tangible resources first, it is clear that most of these could be easily replicated or matched. The resources that really differentiate your marketing are going to be your personnel and content. Both of these are intrinsically linked to the list of intangible resources – knowledge, organisation and culture – and they all rely on people.
So the quality and accumulated knowledge of your marketing team are vitally important to growth. The real competitive advantages here are all related to how well you know your market, your customers and how your own products or services can solve their problems.
One tangible resource you might overlook is systems. There are many complex strands to effective marketing which need monitoring, controlling and responding to.
You need a system to store customer information and interactions. You need to monitor the market. You need to respond appropriately to both interactions and the market. You need to run campaigns and create content. And you need to gauge and measure the effectiveness of your marketing efforts.
There are few marketing management systems that can offer all those capabilities and even fewer that are easy to use and do it well.
A marketing team that uses a modern, well-developed software system to manage their marketing will have a distinct advantage over competitors who do not. So whilst efficient marketing systems are not a unique resource, they are still fairly rare.
Another resource we have listed in the tangible section is content. Here I’m referring to the body of existing content that a marketing department has built up.
Whilst this could be replicated, good, effective content that meets the needs of its audience will be a strong, potentially ‘evergreen’ resource that will help to differentiate your marketing efforts.
This content is again directly linked to the skills and knowledge of the members of the marketing team.
From these resources a number of strong capabilities can be developed:
- Content creation
- Targeted marketing
- Effective marketing
- Efficient, reactive marketing
(There are a range of other capabilities a marketing team will naturally require and develop, but these are the ones that are key to differentiation and growth).
Today’s marketing is all about being found, providing support and information during the buyers research process, and providing support after the purchase.
This all relies on high volumes of quality content. So having a content creation powerhouse at the heart of your marketing team is vitally important to meet the needs of the buyer.
Understanding the market is vital to being relevant to that market. So is understanding the buyer. In order to create targeted marketing, this understanding has to come from research, industry knowledge and monitoring.
So this capability relies on experienced, knowledgeable people, and market research of one form or another, including deep analysis of the buyer, their habits, and the buyer’s journey.
Having easy-to-use, marketing systems that allow for monitoring and precise targeting of interactions, messages and campaigns is equally important.
These systems are also vital for effective marketing that produces results. A good marketing management system will also facilitate efficient, reactive marketing by allowing instant analysis of data and enabling an instant, appropriate response.
We have yet to mention organisation and culture – but the impact of these resources should not be underestimated.
The VRIO model we mentioned earlier specifically asks: is a firm organised to capture the value of the resources?
Clearly, if you have all the necessary resources but your team are not well-organised, it is unlikely you will be able to make the most of these advantages.
And culture is important too. In today’s competitive landscape you need to be able to move fast, to react quickly – hence the agile marketing trend we see today. You can only do this if you have a tight-knit team that is motivated and all on the same page.
Great marketing is a key ingredient for high growth. Its contribution cannot be ignored or undervalued. Making sure you have the right resources in place, and then developing strong capabilities that can differentiate your industry offering will provide a solid foundation for sustainable growth.