WHAT IS THE POWER OF MARKETING?

A Case Study about GE:

Believe it or not 10 years ago General Electric had no substantial marketing organization. For decades the company believed the products could market themselves. Therefore, people designated as ‘marketers’ were assigned to sales support (lead generation and trade shows, for example) or communications (advertising and promotional materials).

Internal skeptics did not see how marketing as a function could help GE grow its businesses. Take for example GE Aviation, the multibillion-dollar division that develops and manufactures jet engines for commercial and military aircraft.  There were only a handful of aircraft manufacturers, two GE competitors (Rolls-Royce and Pratt & Whitney), and about 300 airlines. You could put the entire industry in a conference room—it’s that compact.

But things were changing and GE was learning that it could not win simply by launching increasingly sophisticated technologies or by taking existing technologies to new markets. Some of its best-thought-out new offerings became commodities. Even executives within a business like Aviation were having trouble making sense of a rapidly changing industry. How could the business remain competitive and also prosper?

CEO Jeff Immelt issued a mandate that marketing should be a vital operating function in GE. Therefore, the solution was to focus on growth from within, across all businesses—a shift from the past, in which the top line was grown primarily by acquisition and the bottom line by seeking out efficiencies. This required a new strategy fueled by technology, innovation, global markets, and stronger customer ties. To succeed, GE would need a marketing engine that drove more-direct collaboration with customers and led to new markets.

Recognizing that marketing was vital to all GE units was one-thing, acting on that recognition was an entirely different matter. We had to define what success would look like and describe how we would measure results. At the time, GE had no ready or consistent way of calibrating marketing efforts across units, markets, or business models, and we couldn’t find one in any textbook. Perhaps most challenging, we had to identify and develop leadership capabilities in our team, whose track record was uneven at best. In the process of creating what we believed would be the definitive marketing function, we arrived at new ways of thinking about marketing and about how to compose a first-rate marketing team.

The result was a marketing framework for the entire company along three dimensions:

1- Principles (creating a common language and standards)

GE created standard procedures and central expertise for functions like finance and HR, but marketing practices varied by product line, unit, or region. From late 2008 through mid-2009 we had 30 of our best marketers to develop new standards for this function. We learned that regardless of industry or region, they were struggling with the same issues. So we assigned teams of like-minded experts to define the skills we needed to master. They organized eight disciplines into two groups: go-to-market activities (such as segmentation) and commercial essentials (such as branding and communications). To our knowledge, no other company had pulled these disciplines into one framework along with detailed definitions of success. We set out to make sure that at least one business could be considered an expert in each category.

2- People (getting the right leaders in place)

We found that successful marketers play four roles, some of them unusual in marketing: Instigators challenge the status quo and look for new and better ways of doing things. Innovators turn marketplace insights into untested products, services, or solutions. Integrators build bridges across silos and functions and between the company and the market. Implementers execute on ideas.

3- Process (including very specific measures for grading performance)

Once we knew what we wanted from marketing, we developed metrics for evaluating our teams on the skills defined by our principles. How would we know we were making progress and delivering results? That question led us to a process we call the Maturity Evaluation. Our framework centered on giving marketing a revenue-generating role in its own right. If GE could no longer rely solely on technology breakthroughs for hefty margins, we’d have to find both innovative ways of serving customers based on investments we’d already made and opportunities in new markets, new segments, and new products.

Today, marketers take their place alongside technologists and had a voice earlier in the process, to ensure that GE’s offerings were differentiated and aimed at the right customer segments. As Immelt saw it, marketing would have a “line” role instead of its historical “staff” role at GE, and would be held responsible for such as pricing and quantifying value for customers. GE’s global growth with “more products at more price points,” meant that GE must not only target high-end users but also apply “just what’s needed” technology to better meet customer needs.