At the outset I would like to apologize for a prolonged interval during which I have not updated my blog. I am back in action and will strive to be regular with my views and perspectives.
At the end of my previous blogpost, I had asked a question What is meant by Marketing ROA? I found some interesting replies – some predictable like Return On Assets, some innovative ones like Return on Analytics, Return on Awareness etc.
Defining Marketing ROA
I would like to define Marketing ROA as Return on Anticipation. I have believed that as a function, marketing needs to go significantly beyond promotion. One key function marketing should perform is to follow the happenings in the market place- technological, demographic, economic etc. and interpret the big picture which emerges for the organization. This is what I would like to define as Anticipation. Crucial inputs that should emerge from this process should be able to answer questions like:
- How is the demographic and psychographic profile of customers changing?
- What are the developments that are likely to influence customer choices?
- What is competition upto? What products are likely to emerge that could affect the business scenario of the organization?
- How is global access to products by a greater number of customers than ever before going to tilt the situation?
Why Anticipate
One might feel these are obviously important and an organization will track them in order to thrive. Well, obvious as it might sound, notable failures have happened by the organization which point to the fact that companies might not be as adept at doing this. Let us look at some of these failures:
- Indian Telephones Industries (ITI), a large public sector company dealing with manufacture of telecom companies dominated the market manufacturing landline telephones and telecom equipment for several decades. It never produced a single pager (the next development in the telecom market after landline phones) and a mobile phone (the next one)
- Hindustan Machine Tools (HMT) was a leading manufacturer of hand-wound wrist watches with an impressive range of products. Faced with competition from Titan and several spurious brands, the company closed down in 10 years
- Sony, the leading music system company and pioneer of innovations like the Walkman, could never see music being consumed in a format like an iPad or a computer (desktop, laptop or a tablet)
- The mobile phone has replaced several industries such as landline, wireless phone, internet browser, music player, alarm clock and maybe even the laptop industry. Many organizations which had bet their strategies on these products suddenly found themselves helplessly trying to salvage the situation
How to Anticipate
A systematic and broad-based approach needs to Anticipate. It takes a body of knowledge to be able to anticipate and paint a picture of the future. Here are a few ways one could use to anticipate:
- Carefully interpret technological trends and developments. Try and predict the direction that things are headed towards
- Study the macroeconomic cycles, focus and reasons of investments
- See how these trends are likely to affect business models, customer choices
- Follow key executive statements by competitors and adjacent industries
- Can you predict the future revenue streams of the industry in light of new changes? Better still can you predict the balance sheets of your organizations and other players given these trends?
- Is your industry likely to implode?
- What regulations are likely to play a determining role in the industry?
Putting all these trends and predictions into a collage will bring a probable picture of the future that awaits you. This should be actively communicated and used to precipitate actions by the company to look at new products, services, geographies and strategic segments and ready the company for the next phase of growth. As they say What got you here will not get you thereĀ. Nobody can understand this better than Nokia which was bought this week by Microsoft.
Anticipation is a strategic function and requires tremendous amount of mental firepower to be able to collate information and then plot trends. It requires an appetite for consumption of information from many unfamiliar sources. And then there is the uncertainty involved in making any forecast. But even a partially complete and accurate picture can be of great value to the organization. I opine that marketing is well placed to perform the crucial Anticipation function.
My new blogpost will be on the 10th September 2013.
