Based on our evidence, we argue that this dilemma for marketing is universal.
On the one hand...
Whilst on the other hand...
We need a strategy that gives us a long-term context and directions for our journey.
We need to be able to create different and unique ideas in our short-term needs to best serve our environment.
Graphically this dilemma can be presented as in Figure 9.1.
Figure 9.1: Top down versus bottom up
In the US Domino's Pizza has focused entirely on delivering pizzas within a thirty-minute radius of its outlets. Pizza Hut felt the competition and added a fast delivery service to its normal restaurant activities. Normally Pizza Hut, with its enormous market strength, could have crunched a number of Domino's. But this did not happen because Domino's had set up a network of establishments that had but one strategic concept: delivery within thirty minutes or your money back. For Pizza Hut this was an extra activity that lacked the focus to make life difficult for Domino's.
Of course it is too naive to assume that building a strategy from a tactic is the only effective means of doing marketing. Mintzberg had already identified this dilemma by speaking of grand top-down strategy and emergent bottom-up strategy (Mintzberg, 1998). We ourselves have seen enough organizations that thread the one tactic to the other but are not able to achieve strategic harmony.
Our research data confirms that in cultures that are more specifically oriented, the crafting strategy that links "up" and "down" detail, reconciled with the larger perspective, will more likely start with the tactical experiment from which a more holistic strategy is molded. In contrast, more diffuse cultures make a movement from the larger whole to specific market segments. In the end it is the relationship between the two that is the crucial aspect of international marketing success, not simply the starting point.
German cars
Germans seem to have more of a need to start from an overall, diffuse, holistic marketing strategy and to try out a number of tactics within this context.
In this way, Mercedes Benz, starting from a superior technical quality perspective, launched a diverse number of cars on the market from the very small and youthful Smart to the extravagantly large 600-series. Success speaks for itself.
Also, in recent years, Porsche launched the Boxster and the Cayenne from a strategic combination of engineering strength and speed with much success. Finally Volkswagen sold all its cars from the concept of high quality compact cars available to the masses.
Eventually any bottom-up marketing approach will also have to solve the dilemma between "aiming at champions" and "ensuring a broad consensus between inferior products and people representing them." The advantage of a more mundane approach is that personal agendas are pushed into the background by having such matters depersonalized. Conversely we need our gurus and champions - both in people and products - because each concept that gets maximum support will already be in use by competitors. The route to reconciling this dilemma is to have teams compete within a "champion system," such as that used in Goldman Sachs, 3M, and Intel over many years. This leads to cooperation in order to be able to act competitively. We should take them as exemplars; their marketing position needs no crown.
It is inherent in Ries and Trout's work that they believe that tactics in marketing will automatically lead to the soundest strategy. We disagree. Our evidence supports the assertion that both tactics and strategy feed into each other in a continuous crafting process. The starting point depends on your culture. Short-term cultures like to start with tactics. Conversely, long-term cultures might start with a strategy to contextualize their tactics. As always, the winners are those who can integrate the dilemma (reconcile). Which direction you start from is irrelevant.
THE INSIDE-OUT VERSUS THE OUTSIDE-IN DILEMMA
The second recurring strategic marketing dilemma is of the same nature but is nevertheless significantly different. It concerns the well-recognized tension between technology push and market pull. Do we make something we want and try to find a market to sell it in, or do we let the demands and wants of customers feedback into our product planning?
Both extreme approaches lack enough integrity once you go international. For many years, a pure push from technology worked successfully in internally controlled societies such as the UK, the Netherlands, and the US. Conversely, a focus solely on the customer worked well in externally oriented cultures such as Japan and other Asian societies. However, technology push was doomed to failure when the internationalization process accelerated in the 1960s. American-produced and conceived consumer electronics were wiped out by foreign competition and Japanese products took their place.
A push strategy can work, especially in situations of low competition. In cases where competition is strong, this push approach leads to selling your fantastic products into the ultimate niche market. As it happens, this market has no customers.
The Dutch company Philips is a splendid example of an organization that still struggles with the marketing of products such as the CD and the DVD. Philips invents and Sony sells, say the cynics. It is typically Japanese to be fully empathetic with customers. But this extreme "market pull" approach also has its restrictions as customers often have no idea what they want.
This dilemma often starts from the different ideologies of marketing and R&D. Mutual communication is very essential in making this relationship fruitful, and is a precondition for reconciling this dilemma. Bang & Olufsen are an excellent example here.
Through THT's WebCue, B&O framed this dilemmas in their own words as:
The disconnection of Sales and Marketing from Research, Development, and Production and the elevation of the latter functions to a dominant position, so that marketing commercial considerations were largely ignored.
In terms of our conceptual framework, this was a dilemma between inner-directed push and outer-directed pull.
B&O had all the classic symptoms of technology-push by innerdirected, individualistic genius entrepreneurs, who had built a company that celebrated their own notable strengths and (after the death of Olufsen, one of the founders) played down what they lacked. The market, sales, customers, service, and effective distribution were neglected: everything that lay outside the select criteria of "brilliant professionals" was in the wider community. From these B&O took little or no direction. The dilemma is shown in Figure 9.2.
Figure 9.2: Inner-directed push versus outer-directed pull
B&O
Bang & Olufsen faced the challenge to develop an understanding of the evolving market and patterns of demand, before aligning its own. products with this knowledge. "We had to teach people how to think in business terms, without sacrificing their pride in their creativity and their products," its CEO Anders Knutsen recalled. "Beauty, style, and technical superiority were everything. No one had been paying attention to development costs or commercial success." The product had actually taken the place of the people who were supposed to lead.