Knutsen regarded this imbalance as so serious that he made himself the head of Marketing and Sales until an internationally experienced VP could be found. In this way he was able to discover facts that the company had long ignored for too long. "B&O thought communication was a one-way process and that its customers were dealers, not consumers. Of course, the dealers were passing on our arrogant treatment to the final customers." Anders Knutsen discovered that dealers used the B&O aura to upgrade the image of their dealerships, while putting most of their energies into selling rival products that were better suited to the market, including Philips, Daewoo, Sony, and Grundig. These appeared reasonably priced when compared to B&O's expensive, upmarket products. "There was a radical disconnection between the product and the market," Knutsen recalled. "It was as if we communicated to the product and not with the people."[1]
B&O's museum-type exhibits and System 6000, which was built without anything to play on it, are symptomatic of an excessive emphasis upon the vertical axis at the expense of the horizontal. The Break-point plan, point "X," is the culmination of this chronic imbalance, as B&O faced a cash-flow crisis.
Knutsen realized that he must move towards the marketing "horn" of the dilemma, that is the horizontal axis. As we've seen, he appointed himself marketing director pro tem, at which point he discovered that distributors were using B&O's reputation for quality as a backdrop window dressing for selling rival products. His solution was the butterfly model, with products and marketing to the final consumer as two coordinated "wings" of the same operation. Fewer, but more dedicated, distributors facilitated dialogue with consumers and the company. Consumers could order direct from retail outlets and build up a modular system over time, allowing them to spread the cost.
A form in which this dilemma can manifest itself comes from the tension between a focus on a limited number of products or an extension of the range or portfolio. The advantage of focus is depth. The disadvantage is that many opportunities can be missed with existing customers. The advantage of extending a range is that the producer can exploit existing brand reputation and distribution channels. For the customer, however, it becomes messy ... look at the confusion between Classic Coke, Coke Light, Caffeine-free Coke, Cherry Coke, and Vanilla Coke - especially if they stand side-by-side on a single shelf.
There is also a related strategic marketing dilemma between product and concept. We think that Ries and Trout are going a bit too far in concluding that advertising is going into a dead end street if it focuses on the specific characteristics of a product. Marketing must be a "war of concepts," in which the whole system of values needs to be addressed. We believe that, if an organization wants to be internationally successful, it needs to choose a modular approach, in the same way that Bang & Olufsen and Lego have done. They have united the outstanding quality of their specific products with becoming growing systems or ways of life.
[1]Source: Trompenaars and Hampden-Turner (2001).
THE LATERAL TENSION BETWEEN DIFFERENT ALTERNATIVE ACTIVITIES
The third major area to consider concerns the relationships within the organization where marketing is situated. The main tensions here derive from the relationship between R&D and marketing/sales.
In spite of the many books and articles aimed at making their readers understand cultural differences, it is remarkable just how little attention is paid to the effects these cultural differences have within an organization. Talk at random to any employee of an innovative organization and you will receive confirmation that the relationship between its R&D and Marketing Departments is its Achilles heel. THT's extensive database of 65,000 respondents has captured such cultural constructs, and confirms that the orientation of both these functional groups differ significantly. The manifestations of this tense relationship are revealed in three main areas. Let's look at them.
Researchers often complain that Marketing rarely allows them enough time to deliver an adequate piece of work. In their view, Marketing gives them too little time to develop, test, and fine-tune a product, which often leads to discrepancies between client expectations and the delivered goods. When this happens, R&D see most of the profits as lost in upgrading the product to the originally expected standard. Marketeers, in their turn, often complain about a lack of flexibility and slow reaction speeds in R&D.
Our research into differences of time horizons between both functional groups shows that the time horizon of the marketers is significantly shorter than that of people working in R&D. Considering the exercise opposite and you can see the differences in scores between functions.
In addition, R&D employees are also much more universalistic than marketers and especially salespeople. This last group seems to move from one exceptional situation to the next in their belief that every sale is unique, which infuriates researchers.
A second source of misunderstanding seems to be in the area of communication style. Here also THT's research shows that R&D people often communicate in a direct, specialized, and specific tone. Their use of language is to the point but is only understood by their own small group because of the jargon they often use. Marketers tend to use more flowery language, which is often less to the point. Sometimes the easiest solution seems to be to cease communication completely. Inevitably this leads to significant problems, and in particular to the complaint of researchers that they are involved too little in the marketing process.
Exercise
Consider the relative significance of the past, present, and future. You will be asked to indicate your relative time horizons for the past, present, and future by giving a number.
7
=
Years
6
=
Months
5
=
Weeks
4
=
Days
3
=
Hours
2
=
Minutes
1
=
Seconds
My past started
□ ago, and ended
□ ago.
My present started
□ ago, and ends
□ from now.
My future will start
□ ago, and will end.
□ from now.
Finally the lack of understanding and empathy for each other's work and culture seems to be one of the ultimate reasons for the tension in their relationship. Researchers complain that marketers fail to discover the full possibilities of specific markets while, at the same time, exploring markets that don't actually exist. Marketers see researchers as living too much in their own world. This, of course, is another fundamental difference, between external and internal views.
Figure 9.3: Relative length of time horizon for a selected sample of functional disciplines
But what needs to be done to take better advantage of these different orientations? The Marketing Science Institute conducted interesting research, published in 1996, on how organizations can take advantage of this fundamental field of tension:
The Exploration of Cross-Functional Development Groups
These so-called "skunk" groups can achieve many successes when they integrate functions on-site and, further, when they are not hindered by existing bureaucratic processes. In these groups physical, linguistic, and cultural borders are very effectively overcome. Much attention, however, needs to be given to the quality of management in these groups.