Why marketing is no less important than technology
While technology is the foundation, marketing is an important success factor. Marketing must be present before product design starts.
The stellar rise of big tech companies to the top of the global economy can mislead people into overstating the role of technology while underestimating the role of marketing. But it’s no coincidence that Apple, the largest publicly traded company in the world, has also been the winner of the CMO Survey Award for Marketing Excellence for thirteen consecutive years. Likewise, Amazon and Microsoft are both named industry-specific winners of the CMO Survey Award.
We see a similar pattern if we look at unicorn startup companies. While technology is a prerequisite, marketing is an important success factor. That’s certainly the case with Hamburg-founded About You. The fashion online retailer is led by Tarek Müller who was awarded CMO of the Year 2019. Technically, About You isn’t a unicorn anymore, since it went public in June 2021. Besides technology and fashion itself, marketing is the third pillar of the company, with employees distributed roughly equally across all three areas (as of 2017).
Let me restate that: roughly every third employee of About You is a marketeer. And what’s more: content people, like editors, are counted among the fashion personnel. Not marketing.
This three-pillar structure can perhaps serve as a blueprint for all kinds of tech- and marketing-driven organisations:
- one third tech
- one third marketing
- and, finally, one third subject matter experts.
This, of course, applies to the B2C or retail space. In B2B, your mileage may vary. But today, business customers also demand the convenience and ease of use they know from their private life.
The challenge of DTC marketing
What’s more: B2B enterprises are increasingly being squeezed out by direct to consumer (DTC) companies that combine product, marketing and retail with the foundation of technology (i.e. vertical integration). This trend sweeps through all kinds of consumer goods and services. Former B2B companies face the challenge of DTC marketing and sales, which is a whole different ball game. That’s why traditionally marketing-driven companies like Jägermeister now employ people like Felix Jahnen, who holds the fancy title of Digital Transformation Meister.
Jägermeister is a typically German, family-owned, medium-sized global business, located in the midsize town of Wolfenbüttel. Its success story is about global marketing and distribution. Its flagship product, a digestif made with 56 herbs and spices, has not changed since its creation in 1934 and continues to be served in its signature green glass bottle. Jägermeister’s marketing, however, has changed a lot over the decades.
Felix Jahnen grew up in a Hamburg-based agency, where he served as creative director, before he signed on with Jägermeister. His job is all about brand and marketing, but also about technology. It’s digital channels, marketing technology and consumer data. And about selling directly to the consumer as well as the business customer.
The only thing that probably distinguishes Jägermeister from other brands: its flagship product isn’t very likely to change in the foreseeable future. Their marketing doesn’t need to worry too much about the product. Its uniqueness is part of the brand, and the result of great marketing.
Two basic functions: marketing and innovation
Other brands are more about product innovation. Like Air Up, a refillable bottle that turns plain tap water into flavoured water through scent alone. It’s a start-up company founded upon an innovative physical product. Air Up sells through digital channels, but also via incumbent retailers like Rossmann. Investors include PepsiCo, which positions the company squarely in the soft drink consumer brand space.
Chief evangelist Lena Jüngst is a product designer by education. After finishing her studies and an internship at Philips in Amsterdam, she went on with co-founding what later became Air Up, together with a fellow student and some friends. In her role as chief evangelist, she now focuses on innovative and creative development, trend research and co-creation in design and marketing.
Again, we see a tight integration of marketing and innovation. These are, if we follow Peter Drucker, the only two basic functions of the business enterprise. If and when we reduce marketing to campaigns, if marketing doesn’t care about all four Ps (product, price, place, and promotion), it doesn’t fulfil its function.
Many companies have diminished or even completely abandoned the CMO role. In 2017, Coca-Cola appointed a chief growth officer and a chief innovation officer, scrapping the CMO with this move. In 2019, McDonald’s split the role into two SVP positions, for global marketing and for marketing technology. Of course, these titles are often little more than noise and smoke. But what does this mean for marketing? Is it getting stronger or weaker with these moves?
It’s all about strategy, innovation, and business models
Successful companies have abandoned the linear, inside-out waterfall logic of product design, development, and production, where marketing only comes to the table at the very end of the process. Marketing must be present even before product design starts. At this point, it’s all about strategy, innovation, value propositions, and business models. It’s about designing marketing into the product. It’s about user experience (UX) and user interfaces (UI), technology, data, and APIs.
Jägermeister may be an exception from the rule, but even they come up with new products, supplementing their core digestif. The company has held a stake in the Altona-based spirits manufacturer Gin Sul since 2018. It is the first strategic partnership with another spirits manufacturer in Jägermeister’s history. This approach is similar to PepsiCo’s investment in Air Up. Partnerships like these buy access to innovative products, new markets, and DTC know-how. For the consumer packaged goods (CPG) industry, this is where growth happens.