Mahesh Enjeti is the “Thinkerer” at Auracle World, Co-Founder at BrandRead.i.y® and Managing Director at S A I Marketing Counsel. On his return visit to Managing Marketing, we discuss the role of strategy in marketing and why strategy is more important for marketers than ever before.
If you listen to industry conversations, strategy is essential in marketing. Most marketing organisations will either develop their marketing strategy, review it, update it, or finesse it. So, if strategy is essential, why is there also much talk of the role of tactics over strategy?
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It’s good to know about what the brand is doing for the consumer, but equally, think in terms of what is the brand doing to the business, what’s the value-add to the business, not just to the consumer.
Transcription:
Darren:
Hi, I’m Darren Woolley, Founder and CEO of TrinityP3 Marketing Management Consultancy, and welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.
Now, if you listen to the industry conversation, strategy plays an important part in marketing. Most marketing organizations will either be developing their marketing strategy, reviewing their strategy, updating their strategy, or finessing their strategy. So, if strategy is so essential, why is there so much talk of the role of tactics over strategy?
Now, my guest today is a return visitor who first joined us on Managing Marketing back in March, 2017. But today, is joining me to discuss the role of strategy and marketing, and why strategy is more important for marketers than ever before.
Please welcome to Managing Marketing yet again, Mahesh Enjeti, Thinkerer at Auracle World, Co-Founder at BrandRead.i.y, and Managing Director of SAI Marketing Counsel. Welcome, Mahesh.
Mahesh:
Thanks, Darren, nice to be back.
Darren:
Well, six years is a long time. I think we’ll have to make it a bit more regular than that because I always enjoy these conversations. I find your view on marketing is clear and refreshing which is in short supply sometimes if you get caught up listening to the trade media and the trade conversations.
Mahesh:
Yeah, I know what you’re talking about.
Darren:
Well, look, and the reason is — and where I’d love to start this conversation is trying to get an easy definition of strategy. And the reason I say that is I often find people will do things like confuse objectives with strategy.
You’ll ask someone what their strategy is and they’ll say to be market leader. And I go, “No, no, that’s the objective. How are you going to become …” Do you have a sort of short and/or easy way of helping marketers and even the students you work with get a sense of strategy?
Mahesh:
That’s a really tough question Darren, because there is no easy or simple definition of what strategy is. And to be honest, my own view of strategy has changed over the years.
When I first joined business school, that was at the ripe old age of 20, back in 1973, I was told strategy is the pathway – where you are and how to get to where you want to be. And that was a very simple definition of strategy.
Then over the years, I became more aligned with Henry Mintzberg’s view of emergent strategy, where you actually don’t have a deliberate strategy but your strategy actually evolves over time. And then I got exposed to Richard Rumelt. Are you familiar with Richard Rumelt?
Darren:
Yeah.
Mahesh:
And he’s called the strategist for a reason. And I looked at how strategy is more about addressing a key challenge. And then in between, we had scenario planning becoming more and more popular. People said it’s not about going from point A to point B, your point B could be B1, B2, B3, or B4, and you’ve got to envision these alternate scenarios and then have strategies to address each of those.
So, strategy is not such a simple concept to define, and which is why I think people struggle with it. Tactics are so much easier because they’re more tangible and this is quite intangible.
So, today, if you ask me what is strategy, I would say it’s about understanding and appreciating the challenges and opportunities that you are faced with and try and work out a way of overcoming these which is leveraging the opportunities and combating the threats. So, that would be a very simple definition of strategy.
Darren:
And that’s fairly simple. I mean, it’s fairly clear as well which is what I’ve come to expect from you Mahesh, is always being able to find a way of distilling the complex down into some usable form. And like you, I used to and I still would say to people, it’s solving complex problems or challenges. Taking into consideration all aspects that work with you or against you in coming up with a solution.
Mahesh:
Exactly.
Darren:
But it’s interesting because obviously, marketing and marketing strategy is a discussion that happens a lot in the industry, and we’ve got people like Professor Byron Sharp and Mark Ritson are often talking about the various strategies that are available in marketing.
And yet, there’s also a conversation about how often tactics seem to get in the way of strategy, where people focus more on doing things rather than doing the right things.
Mahesh:
I think one of the first things I would do is probably not separate the marketing strategy from the strategy for the business. And that’s probably one of the things that marketers — one of the flaws in marketing. We tend to be more focused on what the marketing strategy is rather than taking a step backwards and looking at the big picture and saying, “What is the strategy for the business?”
If we understand the strategy for the business, then I think marketers would be better able to devise what the marketing strategy is, and our extreme focus on marketing and more so marketing as a discipline like … advertising or promotion or social media marketing, influencer marketing.
So, we tend to focus more on those tactics of marketing rather than look at the big picture of what does this business need to do in order to be able to cope with those challenges or leverage those opportunities? And that’s the first thing I would say. Sorry, you’re smiling there.
Darren:
I’m smiling a lot because one of my bugbears is the number of different types of strategists you find around the marketing space. And I say to people, I’m not sure anyone that has the word, something strategist, like social media strategist, is actually necessarily a strategist.
And the reason I say that is I’ve never met a social media strategist who wasn’t recommending social media. I’ve never met a media strategist who wasn’t recommending a media solution.
In that I feel sometimes that strategists could easily be exchanged in those particular cases for salesperson, social media salesperson because invariably, they’re purely there to tell you how to implement a particular part of your overall strategy into a very specific channel or discipline, aren’t they?
Mahesh:
Yeah, I mean, one of the things why people — I think we tend to get obsessed with two things, two extremes, actually. One is the goal, and the goal tends to almost take over our entire thinking. Other thing is the tactics which is at the other end of the spectrum.
And oftentimes, I see strategy and tactics being looked at independently. Imagine any company, the C-suite goes away to a resort and has a three-day strategy planning session and they come back to the office and say, “Look, this is our strategy, now go and implement it.” And that’s a very disjointed way of looking at strategy.
I tend to look at strategy and tactics as working in tandem. When you are developing a strategy, you need to be conscious of how is this actually going to play out in the field? If it’s not going to be able to be implemented then I don’t think that strategy is worth the paper on which it is written on or the screen, on which it is typed.(?)
On the flip side, marketers tend to get constantly pulled in different directions: “Oh, we got to do this because our competitor is doing it. If we don’t do that, oh we are going to be decimated in the marketplace.”
So, we are being pulled in different directions. But every time you think of a new tactic, ask yourself this question first, “Is this on strategy or not?” And if it is not on strategy, have a good enough reason why you’re doing that. If it did have that kind of discipline, I don’t think we’ll have a problem between strategy and tactics.
And strategy needs to be developed from the top down as well as the bottom up. And oftentimes, the problem is it’s developed top down which is why most strategies fail in implementation. Why is there such a high failure rate in execution? People say, “Oh, that was a fantastic strategy,” but it didn’t work because the strategy was created only top down, and not simultaneously looked at from the bottom up. When the two meet, then that’ll be a good strategy.
Darren:
Well, two things that you said there, and the first has triggered my favorite quote about strategy. And that is, “Good strategy doesn’t just inform what you should do, it also informs what you shouldn’t do.” And I think that in a world where there are so many things that can be done, knowing what not to do is more important sometimes than knowing what to do.
Mahesh:
Absolutely. I give this example to my students, I say, “Look, when you’re playing chess, if you are so focused on the number of pieces you need to keep on the board, you will get checkmated eventually. It’s not the number of pieces that remain on the board, it’s how good your strategy is in terms of checkmating your opponent, otherwise you will get checkmated by your opponent’s queen or whatever.
So, I think we tend to get so obsessed with those little milestones or whatever or we want to tick off all these boxes saying we’ve done this so many campaigns, awareness, so many social media likes and things like that, rather than saying, “Okay what are we achieving? Are we achieving what we set out to do?” And that’s where I think the challenge is.
And in terms of that fixation with the vision, your vision actually is also not cast in stone, it’s a moving target in a way. So, by being so fixated on the end goal, I think we sometimes forget the realities of the challenges and the opportunities.
As long as you are focused on how to address those challenges, how to leverage those opportunities that are there in the marketplace because they’re continually changing and you’ve got new competition coming, consumer tastes are changing, the environment is changing, the technology is changing.
And I think if you’re not really monitoring those, then I think you are in danger of having a strategy that’s dead.
Darren:
Yeah, absolutely. And that’s one of the things, is that good strategy though allows you to pivot within the changing circumstances. The second part of what you said a moment ago that really got my brain buzzing was often people talk about strategy and planning.
And when I’ve asked strategists, “Well, what’s the difference between the two?” Many of them infer that they’re interchangeable, that they’re almost synonyms of each other, but actually, have evolved this thought that in some ways, it goes to the point you are making which is it’s not enough to just have a strategy or a strategy document or an articulated solution. That you then need to plan how that’s actually going to change the way you operate in the real world on a day-to-day basis.
That you can come up with a solution but the planning part is, okay, so what does that mean for sales? What does that mean for our call center? What does that mean for our distribution? That’s the planning that takes the strategy into the various parts of the business and particularly, where the opportunity is.
And another point that you made, to engage people within the organization to actually think about, “Well, what does that strategy mean for me? And what is the best way of implementing that in the area that I operate?”
Mahesh:
In fact, one of the things I would say, probably this may be somewhat challenging for a lot of people, I think it’s important to, in some way to separate the strategy formulation exercise from the business planning exercise.
The reason why that is important is because when you get into the planning session, most people call it planning. It’s more about budgeting, it’s more about allocating resources to various activities. And I think you should get to that state after you have formulated a very robust strategy.
When you try to combine the two and this is what happens in a lot of companies — they try to combine the strategy session with the planning session. As a result, the strategy tends to be almost overridden by the tactics because — and when you’re talking about budgets, it’s more about who has a better bargaining power?
Like when we say we don’t have a budget for something, it means we don’t have sufficient priority for it. If you have priority, you’ll find the budget, but then it becomes frustrating in terms of who gets which activity or which part of marketing gets a bigger budget and why, and not about the strategy.
So, it’s probably not a bad idea to have the strategy session, develop the strategy in consultation with the team down the line, and then have the annual planning session separate from that. Which makes a lot of sense because then it’s not driven by tactics, it’s more driven by your overarching strategy.
Darren:
Yeah, I agree. The danger is that if planning is part of strategy, it can start driving the strategy. It’s almost like what can we do? What can we afford? What are the resources available to us? So, that you can’t then actually think of a solution, think of the strategy almost as well, what is the possible solution? Now, let’s look at what we need to then be able to implement it. It’s putting the proverbial cart before the horse, isn’t it?
Mahesh:
Yeah, and you’re right, you’ve got to make sacrifices because it’s a question of not only knowing what to do but choosing what not to do. And you’re right about that because — and a lot of people find it very difficult to say, “We don’t want to do that” so (?) we just submit a budget proposal which is basically what we’ve done in the previous year, 10% here and there.
There’ll be a lot of new activities perhaps but no activity that’s taken away. Now, I tell my wife that if you want to buy something new for our home, you’ve got to tell me what you’re going to get rid of.
Darren:
Don’t tell me you’re asking her to write a business case for every purchase.
Mahesh:
No not a business case but the thing is, we don’t have the discipline in companies to be able to say, “No, we will not do this activity, instead we are going to do this.” And you may have to sometimes experiment with a number of activities. Again, we feel shy of doing experiments, let’s try it out and see if it works, if it works, then yes.
Darren:
It’s so true because one of the things that we do a lot of Mahesh when we’re working with big organizations is help them build what we call a prioritization decision matrix. Because we’ll find that there are so many requests coming from the business on marketing. We need support for this, we need to do this, the sales numbers are down, we need to do some more activity to drive sales.
And so, we find marketing teams inundated with all these requests and not being in a position to be able to push back. And one of the starting points is how strategically important is this to the business. And what is the financial return become the base parameters of that decision-making matrix.
Because there’s something that can be strategically important, like a new product launching to a competitive category or financial because it’s supporting a major top line growth, and if it’s both, then it’s essential.
But then there are things that are neither strategically important or necessarily going to have a big financial return on investment that then can be considered secondary or even be dropped from the consideration. And something as simple as that seems to be missing because the marketers have got so used to just being at the end of the demand chain for activity.
Mahesh:
True, earlier you mentioned a lot of these roles and positions having the prefix of strategy or strategic whatever, manager. I think we need to ask those who are called strategists if they can prioritize. “Tell me the top three activities you want to do” — they’ll struggle to get to those top three. And if they do (struggle), then I think you should remove the word strategy from their titles.
Darren:
Yeah, what are the three things that I need to do? Mission critical they used to call it.
Mahesh:
Exactly. So, anyway it’s a challenge and marketing as a function is under lot of stress. I mean, there’s so many things that are happening. Apart from technology, the market itself is so dynamic. We call it the VUCA world, the volatile, uncertain, complex, and ambiguous.
But more than uncertain, I think it’s become an unknown world. When it’s uncertain, at least you know that there is a certain probability of something happening. But when it’s unknown, you can’t even put a probability on it.
So, we live in a very, very challenging world, so we need to be all the more strategic. In fact, people tell me — like some of my students actually ask me what’s the point in having a strategy? Because the world is changing so fast. If you have a strategy, it’s sort of outdated by the time you even decide to implement it.
And I keep telling them, saying, if you think of strategy as a goal and how to achieve it, you’re probably right. But if you think of strategy as understanding, really probing into what are those challenges, and opportunities, and go about addressing those, your strategy will never be out of place because you’re constantly addressing those challenges and those opportunities.
And that’s the difference, I think sometimes we get so obsessed with even say climate change, we talk about net zero. The objective is great, I think you need to have a vision but we get so obsessed with reaching the target that we perhaps are not paying enough attention to the real problems that we face and the real opportunities that are presented to us.
Darren:
Well, see, you’re making me question my own definition of that, because I’ve always used it as the metaphor of going on a journey. I recently did a long weekend up in the national park at Barrington Tops in north of New South Wales.
Now, I think of the objective is, well, I wanted to go to Barrington Tops, that’s the objective. The strategy is, well, how am I going to get there? What route am I going to take? And then I plan that out.
But the good thing about a strategy is along the way, opportunities will present themselves, obstacles will present themselves, but having a strategy planned out to the objective, the destination that I’m trying to get to means that I can pivot or change direction.
I might have to take a detour or I may find out that there’s some scenic drive that I hadn’t allowed for that I can take, but that I’m always judging that in reference to my strategy originally planned, and the destination of where I’m trying to get to. Because otherwise, if you just do tactics alone, if you’re just constantly zigging and zagging all over the place, you could find yourself completely off course.
Mahesh:
And that’s what I’m saying, you have that objective … like Barrington Tops, what if suddenly there’s a weather change there, and you can’t get to wherever you want to go. So, you have an alternative but the problem is not having that goal. I mean, the goal is okay, as long as you know that that could potentially change because of what’s happening in the environment.
And we cannot rule it out because today, the world is so uncertain that we cannot rule out any changes. Keep that vision in perspective but focus on the challenges and the opportunities. That’s the balance you need between perspective and focus.
Darren:
Now, Mahesh, I was recently reminded of Sun Tzu’s Art of War, and I don’t know, it was interesting for me because that’s thousands of years old. And yet, late last century, I think it was late eighties, early nineties, it became the hot book for every business person to read, the Art of War.
But there’s this quote about strategy, Sun Tzu said, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Now, I just thought that was such a classic way of encapsulating the challenge that so many people find themselves.
In that if you don’t have a clearly articulated, well-embedded strategy within your organization, you find yourself at the vagaries, to your students point, the world’s always changing. But if you are always just responding to the marketplace, you’re never, ever going to get ahead, are you?
I mean, one of the things about strategy is that it should give you an advantage over the competition.
Mahesh:
Yeah, and I think sometimes we probably make these arguments and some of them are hyperbole in the sense that we tend to exaggerate an argument to be able to make a point.
The reality is that everything is fuzzy in this world. I don’t think there’s the right way of doing something, the wrong way of doing something. It needs to be what people like Barry Johnson talk about, it’s a both and world, it’s not either or.
Now, if you only focus on the vision and not on what you need to do you, you could go wrong. If you only focus on what you need to do and without any perspective of where you want to be, you could go wrong. There’s a question how do we actually balance the two, and that’s why the decision. Becomes so interesting, so challenging.
And it’s so difficult to understand for a lot of people because people think, “Oh, strategy, oh, that’s all pie in the sky thing.” Because you are constantly juggling these two things, you cannot lose sight of your ultimate goal. At the same time you can’t lose sight of what’s on the ground. So, I think it’s the balance between the two makes it good strategy
Darren:
Do you think the rise of the amount of data now available to us in marketing and business means that people find themselves responding to the changes in the data, rather than using it as a way of measuring their progress of a particular strategy?
Mahesh:
I have some very strong views about data; it might again be a little contrarian. I think we tend to focus more on the data than on the insights we can draw from the data. And I think data has overtaken again the purpose of why data is necessary in the first place.
I keep telling people that it’s important to read between the numbers of your quant data just as you have to read between the lines of your qual reports. If you don’t read between the lines, I don’t think you are making the best use of any qualitative research. And if you don’t read between the numbers, what are these numbers actually telling us? And I think more data just definitely does not mean better decisions.
And that’s again, something we seem to have got into that trap of saying, “The more we know, the better our decisions are,” not necessarily. I think sometimes that unknown is actually what drives some of those decisions, especially creative, strategic marketing.
And again, people look at strategy as a very clinical discipline. But my view of life is that if a strategy is not creative, it’s not going to create a differentiation in the marketplace because everybody has access to the same data, everybody analyzes it the same way, everybody draws the same conclusions, everybody has the same strategy, everybody will have the same share of profits.
On the other hand, if your creative or marketing is not strategic, it’s not going to create a lasting impact. If it’s very creative, it’ll create a short-term impact but it cannot create a durable long term impact.
So, just as strategy needs to be creative, your use of data needs to be creative. And I think people have forgotten that, and we have gotten to be dependent more and more on artificial intelligence and what it can do to us in terms of providing us with insight.
And I think that human element in terms of being creative, lateral in our thinking, we might lose that more and more. And equally, there is probably a pushback now in boards, I think people are saying, “Let’s not have more data than we need to have because potentially, it could lead to cyber-attacks, ransom demands and therefore, have less data rather than more data.”
Two years, three years ago, big data was the big buzzword. Today, it’s AI tomorrow, it could be something else. But the thing is, we have to be therefore, balanced in terms of what we do. Don’t have more data than you need, but use the data you already have more efficiently.
Darren:
Yeah, I think it’s when people think about AI as our future overlords, I worry that it is after all the tool, the thing we need to do is to actually define how we want those tools used. One of the great things it could be doing is turning all that data into usable and addressable pieces of information.
That sort of hierarchy of data, information, knowledge, wisdom to actually get to that human level of turning knowledge into wisdom, we can all be incredibly knowledgeable. But what does it take to actually turn knowledge into creating, as you say, a vision that’s never been seen before?
Mahesh:
And this view of AI being the juggernaut, I mean, sometimes I think we’re forgetting that the human brain has created AI. I think we seem to have lost sight of that.
Darren:
Well, and that’s one of the concerns people are saying, the human mind could easily have built biases into the algorithm, but that’s a totally separate …
Mahesh:
A topic for another day.
Darren:
But I’m interested because if I remember rightly, you are a big fan of Blue Ocean Strategy when that came out, and that’s a number of years ago. But which in essence was about not going where everyone else is, but actually, working hard to find that blue ocean.
Don’t go into the red ocean where there’s blood in the water because you’ll end up competing with everyone else. In a way, what I heard when you were saying that, is creativity, being creative, being innovative, thinking differently from the marketplace, is that opportunity to open those blue ocean opportunities.
Mahesh:
I think it is. I mean, my view of the blue ocean is probably in hindsight to talk about the blue ocean, of something somebody has done is easy, but to come up with it is not as easy; it’s probably a lot more difficult.
But at one level, there is a lot of similarity between products and services nowadays, there’s not much to choose even between an iPhone and a Samsung. There’s really not much to choose between in terms of the actual benefits and features of the product.
I think on the flip side (and this may again be a slightly unpopular view), we as marketers seem to be more obsessed with differentiation than with relevance. As a result, we are creating differentiators that really don’t mean much to the consumer. We want to add that one extra bell and whistle to our product or say something which really doesn’t do much to the product’s functionality or the product’s benefits.
And we’ve forgotten about relevance. And even if something is not relevant, we try to latch it all to our products and services and present to the consumer saying, “Oh, this is a brand new or whatever.” It’s not because at the end of the day, consumer is looking for how does this product perform? Is it doing the job that it’s meant to do for me? If it doesn’t, then it’s of no use. I mean, you might think that that’s the latest and the best feature that you can put on your product.
So, I think somewhere differentiation for the sake of being different is not going to work. But if you’re truly differentiated which is not going to be easy in today’s world because everybody has access to all the technology, all the resources. But don’t lose your relevance in terms of why people buy your product or service.
And the bottom line of marketing is people should perceive enough value in a product or service that’s more than the value they attach to the money they’re willing to part with. And that is something, again, we seem to be overlooking …. what’s the value of that?
That’s why I keep telling my students the best form of marketing ever. And they ask me, “What is your example, best form of marketing?” And I tell them it’s barter. And they say, “Why barter?” I say, look, the seller and the buyer both realize the value of what they’re parting with and what they’re getting.
Whereas today, I think the seller wants to drop the price and get the consumer whatever. And marketers also seem to think that dropping the price is probably the best route to increase revenue but it’s not to increase profits. So, some of these are — we can talk about it forever.
Darren:
No, no, it’s interesting because recently, I shared on LinkedIn were talking about tactics and strategy, and someone was talking about how the problem for marketers is that so many tactics actually are things like price off.
I don’t know if you’ve noticed, if you’ve even seen an online display ad, but you’ll suddenly get some brand offering a product that you’ve never heard of the brand, but the product is already 50% off. And I find myself saying, “Yes, 50% off what?” As a salesperson that’s really poor sales.
And what I differentiated on LinkedIn was this idea that the role of marketing is actually to drive margin. But the role of sales is to then capitalize on volume, and that way, you’re profitable. But when the two have become so closely intertwined to each other, what we are seeing is marketing will often end up resorting on some price off to drive volume which is just sacrificing margin and profit.
And that we need to keep those two very clearly differentiated. I’m not saying that it means they have to operate physically separately, which they often still do. But that you need to have both, you need to be able to have a strategy that maintains the value of that in the consumer’s mind, and sales to then create opportunities for the consumer to buy.
Mahesh:
And I actually give my students a very simple example in class. I tell them, “Okay, this product costs a $100 to the consumer and it costs $70 for you to produce. So, you’ve got a $30 profit.”
Darren:
Too small. It’s too small, that margin’s way too small.
Mahesh:
Way too small. So, then I tell them, okay, you dropped the price by $10, so it becomes $90 and now, your profit is $20. Now, marketers often tend to be very happy, okay, we drop the price by 10% and we got a 15% increase in the number of units, so increase in revenue and we pat ourselves on the back.
But we don’t realize that the profit has dropped from $30 to $20, which is a one-third drop in your profits. So, you need to have at least a one-third increase in sales for you to be able to make the same amount of profit that you were making before. And okay, fine, with increased volume, you might have some savings in cost economies of scale, and you drop that, you might have a slightly lower cost, maybe instead of $70, $68.
And once you get that concept, then I think salespeople and marketing people will both realize that ultimately you can’t bank your revenue, you can only bank your profit because that’s the money left after you’ve met all your costs. Once they understand that, I think they will be less inclined to offer price off deals.
But we seem to be so fixated on growing our revenue, the top line that we completely forget the effect of it on the bottom line. And you’ve got to manage your costs, yes, you’ve got to grow your revenue yes. But you’ve got to sort of maintain the profit. Otherwise, why are you a marketer if you can’t sustainably, profitably grow the business.
Darren:
And then there’s marketers will say, “Well, we are only offering the discount to grow market share.” The trouble is you’re doing it but you’re also training the customer that the new price is 10% down.
Mahesh:
Yeah.
Darren:
Yeah, and that’s the other thing, because consumers they’re a lot smarter than a lot of people think because after all, we’re all consumers, we’re all buying things. And if you start seeing a brand offering discounts, even if it’s not always, but if it’s not a purchase that has to be time-sensitive, you’ll wait until it’s on sale.
Mahesh:
Exactly and then you’ll have to blame-
Darren:
Yeah, and you’ll buy it at that price. That was one of the things that you had to admire about AESOP that’s just been sold, the skincare and product out of Melbourne that was sold to L’Oreal.
Mahesh:
Yeah, L’Oreal,
Darren:
Is that they were never on special, they were never discounted, that the price was the price. So, it meant that no consumer was sitting there waiting for it to come on special so that they’d then stock up for the whole year.
Mahesh:
Yeah, that’s right.
Darren:
That’s marketing that actually is built a premium margin and then maintained it which is why the business is so desirable, and why it’s been sold twice now since foundation, and each time at bigger and bigger multiples.
Mahesh:
I know we digressed into a lot of things, starting with strategy, but I often ask marketers in terms of the … we tend to talk in terms of brand awareness, brand preference, all these metrics, which is good but we’ve got to talk about what does it do to the business? What is your brand delivering to the business?
And it’s either your brand has to deliver increased volume at the same price or it has to deliver the same volume at an increased price. If your brand power is not helping you to do either, then I don’t think you really have a brand.
Darren:
Yeah, that’s right.
Mahesh:
And people find that challenging. “What do you mean by that?” I said, “Yeah, you can prove that this is the premium that your product is attracting as a result of your brand building that you’ve done over the years. And if you can’t demonstrate that, then don’t talk about branding.”
Darren:
Exactly, they do talk about brand preference but rarely in the concept of margin or price maintenance.
Mahesh:
Oh, yeah, what’s it doing to your business? And it’s good to know about what the brand is doing for the consumer but equally, think in terms of what is the brand doing to the business, what’s the value add to the business, not just to the consumer.
Darren:
Mahesh, unfortunately, we’ve run out of time.
Mahesh:
Sorry.
Darren:
It’s been a terrific conversation, as it always is. I mean, you and I have spoken since the last podcast that we did together. Every conversation I have with you, I find thought-provoking and refreshing in many ways because of that ability to bring us back to, in some ways, to first principles and then show how to build out on that actually to achieve the results that people want to achieve. So, thank you for taking the time.
Mahesh:
Thank you, Darren. I enjoyed it too, it’s good to always chat to you.
Darren:
Look, before you go, I do have a final question, and that is, where do you think we went wrong perhaps in training marketers where there are so many struggles these days around strategy?
