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REAPPLYING WARFARE PRINCIPLES TO MARKETING STRATEGY PONOVNA UPORABA NAČEL VOJSKOVANJA PRI RAZVOJU TRŽENJSKI STRATEGIJ Tomaž Kolar Faculty of Economics University of Ljubljana Kardeljeva ploščad 17 1101 Ljubljana [email protected] Abstract Marketing often borrows strategic approaches from military field. Due to changed societal context and nature of encounters immense transformations are taking place in military warfare doctrine and strategy, yet they are not adequately reflected in marketing strategy development. In order to suggest possible implications of these transformations for marketing limitations of traditional marketing warfare are discussed first. Building on similarities with recent military transformations a new framework for marketing strategy development is proposed that encompass various aspects of strategy development. Possible applications of proposed framework for marketing strategy and future research agenda are also discussed. Keywords: Marketing strategy, Analogies, Marketing warfare, Effectiveness Povzetek Trženje pogosto uporablja vojaško terminologijo in enači trženjsko konkuriranje z vojskovanjem. Vsled spreminjajočega konteksta s katerem se odvija sodobno vojskovanje so zanj značilne pomembne spremembe vojaške doktrine in strategije, česar pa razvoj sodobnih trženjskih strategij ne upošteva v zadostni meri. Zato je najprej predstavljen kritičnen pogled na klasični pristop “trženjskega vojskovanja” Z namenom prikazati možne implikacije transformacij sodobnih vojaških strategij v trženju, je zatem prestavljen konceptualni okvir za razvoj trženjskih strategij, ki obsega različna področja razvoja trženjske strategije. Predstavitev okvirja dopolnjujejo predlogi glede njegove potencialne uporabe na različnih področjih trženja in razprava o možnih smereh nadaljnjega raziskovanja na tem področju. Ključne besede: Trženjska strategija, Analogije, Trženjsko vojskovanje, Uspešnost Introduction In past two decades a lot of efforts had been devoted to the marketing theory and practice enhancement at very fundamental level. Attempts to explore new ways of thinking about marketing at various levels and in various fields (Brownlie et al., 1999). Among them, some dramatic calls for saving marketing from premature death, or at least from growing inefficiency of prevailing marketing practice, were noticeable - especially from post-modern perspective (Brown, 1999). Less radical authors discussed issues like (new) role of marketing in the corporations (Moorman and Rust, 1999, Webster, 1992) and adequacy of basic marketing propositions (Sheth and Rajendra, 1999, Kumar et al., 2000). However comprehensive and interesting were these efforts, most of them stays inside marketing field, while according to the old wisdom “the way out of labyrinth can be fond only from the outside”. Similarly, rejuvenation of marketing would be probably most successful from the outside of marketing theory and profession. Today marketing seems lost in a labyrinth of its own galleries, from which it cannot found the way out. And the most needed way out is the way toward better effectiveness, based on development of marketing strategy, its more efficient execution and on assuring closer touch with surrounding social context. Here military approach can suggest some possible ways out of marketing labyrinth, serving as source of positive contamination and as a source of fresh ideas for development of marketing strategies. Analogies of military and marketing are not new per se, as they are used for a long time. Marketing seems to borrow its “warfare” terminology (campaigns, targeting, etc.) from military area since ever. In this paper I argue that such transfer could be very beneficial for marketing strategy developments when some weaknesses of traditional approach are transcended. In order to accomplish this aim prevailing warfare approach in marketing is first critically addressed, followed by proposal of new framework, which allows that military doctrine and strategy can be reapplied to marketing strategy development. Paper concludes with future research agenda that could further improve efficient knowledge transfer between the fields. Need to rethink warfare marketing Classical “attrition warfare” approach used in marketing for decades, is in my opinion one of the main causes of marketing fatigue that we are witnessing in past years. Such an approach is not only of questionable usefulness, but it can be misleading according to basic premises of marketing concept. A good example of such questionable proposition is for instance suggestion that marketing should abandon customer orientation (and put more emphasize on battle with competitors) (Ries and Trout, 1996). 2 Such “radical turnovers” namely turns focus away from changed nature of market interactions that actually takes place in today’s markets. Assumption that companies are operating in harmony with their customers and competitors is probably too idealistic at today’s markets, but this of course does not mean that mutual satisfaction is not desirable and worthwhile business goal. Still taking such idealistic assumptions as inputs for building strategy for effective market competition is probably unrealistic. Companies and marketers should confront themselves with fact, that they imposed “warfare” logic to the market, implying that customers are a battleground for war with competitors. Customers are aware of this market reality and this awareness can perhaps provide the best explanation, of growing customers cynicism, their declining trust and loyalty and consumer resistance (Brabbs, 2000, Kozinets and Handelman, 2004, Holt, 2002). This means, that instead of building on idealistic or extremist assumptions, marketing strategies should be largely based on principles of minimizing negative marketing impacts, conflict resolution, marketing diplomacy, compromise finding, trust recovering and similar “conflict acknowledgement” principles. According to framework for classification of marketing theories proposed by Saren (2000), theories that are not based solely on harmony principle but instead placed along harmonyconflict dimensions would be probably more useful for this purpose. The main problem with prevailing warfare logic in marketing is that authors from the marketing field build on “historical” view on military doctrine, principles and approaches. They builds on classical theorists of war like Von Clausewitz (Ries and Trout, 1996 Kotler and Singh, 1981), or ancient Asian war wisdoms (Pheng and Sirpal, 1995) – both being “centuries old”. Yet development of military doctrine and approaches in past years went through immense transformations, making classic military theories and approaches largely obsolete. Further decomposition of this problem shows that warfare marketing uses analogies with war as phenomena but neglecting structural similarities of efficient and effective strategy deployment. Analogies end on level of general goals (e.g. total annihilation) strategic taxonomies (e.g. offensive vs. defensive strategies) or highly abstract metaphors, not probing beneath the superficial similarities. Traditional marketing builds on warfare archetypes rather than on transfer of key strategic principles and factors and as a consequence even classical military strategy principles are often inappropriately interpreted and inconsistently applied to marketing field. In addition war and marketing are societal activities what suggests that strategy development should take into actual societal context where battle takes place, what also seems neglected in marketing strategy. Alike to military campaigns, marketing one also should take into account economic, political, societal and cultural factors of society at which they operate. This for instance extends domain of market strategy beyond socially responsible marketing activities, as we know them today – namely using them mainly as promotional tool. In order to overcome weaknesses of traditional marketing warfare approach discussed above I build on recent military transformation trends that are trying to abandon obsolete military doctrine. Possible implications for marketing strategy developments are discussed within proposed framework (presented in picture 1), consisting of four broad areas of marketing 3 strategy development. These areas are marketing doctrine (which addresses marketing purpose and strategic role inside and outside of the company), intelligence efficiency leverages (which address principles and weapons of market impact), soft resources deployment (particularly ideology and motivation on collective and individual level) and the process of marketing strategy development (which is considered according to content and procedural aspects). Picture 1: Framework for reapplying warfare principles to marketing strategy Marketing doctrine Process of strategy development proces Intelligence and Efficiency leverages Soft resources deployment Military and marketing doctrine Even brief look into historical development of military strategy shows how profound changes has taken place in warfare doctrine. Military strategy is a relatively new concept – the first treatise on military strategy was written in 1799 by von Buelow, who defined strategy as an art of conducting war not from a horse on the battlefield (a common practice at his time), but from a war-room with the help of a map and a few basic strategic axioms. The art of strategy for him and his more famous successor Antoine Henri Jomini who introduced some similar concepts, was basically reduced to geometry (Van Creveld, 2000). Both thinkers were therefore influenced by the enlightenment period emphasizing rational problem solving and behavior. But war is not a rational activity, since a preparedness to die, in fact, contradicts and negates rationality as such. What counts in the end is discipline and force of will; this at least was the point made by German military thinker Georg Heinrich von Berenhorst. Karl von Clausewitz’s united these opposing poles or “extremes” and thus conceptualized strategy as we know it today. For him war is a primordial act of violence. War’s natural tendency is 4 escalation of violence, making it dangerous and unpredictable. No amount of information, maneuvering and deterrence can win the war but brute force is the decisive factor. The most effective strategy according to classical war strategists is therefore to smash any opposing armed forces with brute force. This philosophy is today largely replaced by more astute thinking – which is also more applicable to marketing area. Recently various authors (Pech and Durden, 2003, Ho and Choi, 1997 and Clemons and Santamaria, 2002) demonstrated how more up-to date military approaches like maneuver warfare can provide important strategic implications for business decision making in uncertain and unpredictable market conditions - suggesting approaches that not aims only for maintaining of high efficiency in (in uncertainty and unpredictability) but utilizing these environmental conditions for gaining competitive advantage. Maneuver warfare as prime example of such approaches builds on paradigm shift in military thinking, which is characterized by move from positional (attritional) warfare to “rapid movement” warfare, where intelligence, economy of effort, elements of surprise and deception are basic principles (Pech and Durden, 2003). This shift is reflected on all key factors of military strategy as depicted in table 1. Table 1: Shift from attritional to maneuver warfare Concept Strategy Orientation Targets Planning Structure Orders Understanding Control Tactics Emphasis Attrition Direct Terrain Strengths Centralized Historical Rigid Detailed Explicit Centralized Dominant Firepower Attrition Discipline Mass Weight Blood Maneuver Indirect Enemy Weaknesses Decentralized Anticipatory Flexible Mission based Implicit Decentralized Guiding Movement Agility Trust Velocity Surprise Brains Source: Pech and Durden, 2003 Ho and Choi (1997) as such key factors that should be considered at strategy development suggest morality, environmental climate, terrain, generalship and doctrine. Lists of key 5 strategic factors therefore differs between the authors, yet all of them suggest that holistic view on marketing strategy should be taken, with multiple inside and outside factors considered. Today we can also see two opposing views of what the future of armed conflict is going to be. First one is the technological view of future warfare known as the Revolution in Military Affairs (RMA), supported by the US Army, emphasizing technological superiority with factors such as battlefield awareness, precision strikes and information dominance as the key to winning a conventional war. Enormous investments in new technology made US predominance in conventional warfare so obvious, that conventional forces facing their attack have only one strategic option – to disintegrate, blend into the civilian population and fight a protracted guerrilla war. Second one is Low Intensity Conflict warfare (LIC) (e.g. guerrilla war in Iraq, terrorist attacks), which emphasizes the fact that the social and political framework in which wars are fought has changed so drastically, that modern conflicts bear more similarity to medieval ones than battles fought in the 2nd world war (Van Creveld, 1991). The state is losing its power, so wars are not fought exclusively by states, but rather by religious groups, terrorist cells, drug cartels and different bands, giving rise to revolutionaries, freedom fighters and terrorists, thus emphasizing ideological, religious, political and cultural factors as decisive in winning a modern war. Conventional armies are trying to find a new solution for LIC types of conflict that are characterized by blurring boundaries between soldiers and civilians, overburdened sensors, information uncertainty, which are denying them ultimate victory (what seems appropriate metaphor for marketing too!). The changed nature of societal context of warfare and of conflict in general is therefore firstly characterized by the transition to a post-modern society and secondly, by the inherent friction between intelligence/technology and ideological/human factors as determinants of victors in the conflict. Marketing, like the military, operates in growing complexity, unpredictability, and blurred organizational borders, being more and more immersed with surrounding societal context. This puts prevailing marketing approaches to strategy development – which take into account only economic forces and vendors/customers dyad as only relevant players on clearly delineated markets rather than whole society - in question. Marketing needs to be aware of these trends and search for strategies and skills to cope with them. Here are some implications for such strategies. Marketing should consider its interaction with broader societal issues, developments and institutions, overcoming narrow “socially-responsible brand” horizon. Today consumers are interested in who stands behind the brand and how corporations act within broader societal context (Holt, 2002). This implies establishing closer relations with players from other fields of modern societies like governments, universities, political institutions, civil institutions and religion institutions. Furthermore marketing should consider strategic approaches which are more suitable for unclear inter-organizational and intra-organizational borders, known under the term the 6 borderless organization (Ashekenas et al., 1995) In today’s markets real borders are often borders between networks (alliances) rather than particular organizations, with a tendency to closely integrate suppliers, distributors, customers and other stakeholders. On the other hand some market players, previously considered as being independent allies, like retailers and information technology providers, are today becoming the most dangerous competitors, as they have conquered access to customers, forcing suppliers into inferior positions (Lambin, 2000). Efficient strategies for competing with competing networks or with “intermediary” types of powerful market players are therefore much needed. Also marketers should rethink role and impact of marketing function inside the organization. There has been some attempts to define new role of marketing, suggesting that marketing should play spanning role between organization and its customers, but also between organizational functions (Day, 1994). However, it seems that marketing has lacks mandate, informational competencies and power to enforce such strategic and organization-wide impact (Aaby and McGann, 1989, Harris, 2000). Marketing as business function should therefore consider approaches and strategies that are based on political and persuasive power. Today’s importance of “Machiavellian” approach to marketing discussed by Harris and Lock (1996) and Thomas (2000) is therefore highly relevant. Another strategic issue that should be re-thought is organizational structure, unit size and decision authority of marketing departments and business organizations as a whole. Big organizational departments and centrally controlled marketing operations are subject to similar (friction, uncertainty) weaknesses as in big military formations. Smaller, more independent units, with local knowledge and decentralized decision authority, linked in network structures should therefore be seriously taken into consideration, as they can be efficient for coping with uncertainty and disorder (Clemons and Santamaria, 2002). Here networking structures are not interesting just in terms of external networks, but predominantly in terms of internal networks of organizational units. Intelligence and efficiency leverages Traditional strategic wisdom suggests: “the best strategy is always to be very strong, first in general and then at the decisive point” (Clausewitz, 1989). But how to find a decisive point in a situation where our opponent is actively misleading us? Modern militaries who strive to achieve total battlefield awareness and information dominance by fighting a “war of sensory systems” (Cebrowsky, 2002) are thus experiencing new levels of friction and uncertainty. Friction is the difference between rehearsal and real performance, where small mistakes inevitably happen, possibly resulting in an unexpected combination of malfunctions leading to failure of the entire complex system (Perrow, 1999). Uncertainty on the other hand is related to battlefield awareness (knowing where friend and foe is). Soldiers face an enemy determined to kill them, trying to deceive them and increasing their uncertainty. In response, 7 the modern military increasingly relies on communications which allow senior commanders in headquarters to literary see the situation on the frontline (via real time image processing) and aid with their advice and professional judgment. Similar to military trends, the marketing function might need similar transformations in the area of intelligence. The need to provide market information to corporate headquarters is not a new idea per se, yet still not fully accepted in practice. Aaby and McGann (1989) state that marketing lacks navigational influence on corporate strategy. According to Cowan (1994), market research reports mainly down the organization to functional departments, disabling the use of consumer information for strategic purposes. It seems that in marketing there is a constant problem with bottom-up flow of information and that business generals (companies CEO’s) are simply not interested in information from the battlefield (e.g. competitive position in customers mind), but rather only in final outcome of the battle (profit). Companies therefore, instead of ad hoc, annually presented summaries of market research reports, need precise, real time sensor capabilities that will convey information from the frontline to the board level. Extensive discussion of what exactly encompasses the “frontline intelligence” in marketing is beyond the scope of this paper, but even considering this issue can be fruitful starting point for improvements in this area. It addresses the question on how precise information are readily available for top-managers on customer-company interactions across all elements of interface and competitive position of the company and its brands. Despite abundant knowledge produced in marketing on differentiation and positioning in their effective implementation is namely increasingly hard to achieve (Dolliver, 2001). In times when consumers’ decisions are increasingly impulsive and unplanned (Kacen, Lee, 2002) even understanding of their preferences can be immense problem (Cova, 1999). In light of such considerations the bottom up-flow of insightful market-related information to executive level is crucial, so more attention should be devoted to it, but also to more specific intelligence issues. In the future, marketing intelligence should for instance provide information about the market sensing capacities of competitors. In order to accomplish this function Walle (1999) suggests that competitive intelligence should be a “freestanding” discipline that will (among other activities) monitor competitive market research and strongly rely on qualitative research techniques. Another implication arising from related transformations in the military for marketing is that it should rethink the nature and leverages of its effectiveness. Marketing is facing declining effectiveness in classical marketing approaches and weapons, like massive “frontal” campaigns based on one-way mass media communications (Forrest and Mizerski, 1996). Although here, direct analogies with military weapons are questionable, we think that at least two military principles regarding the origin of efficient impact, are well worth consideration. The first is a shift to a low frequency - high amplitude principle (Leonhard, 2003). It suggests that instead of the prevailing emphasis on frequency of hits, marketing tools should be more focused on the effect (amplitude) of a particular hit. While some approaches like memetic 8 marketing (Williams, 2002) acknowledge this principle as paradigmatic shift in marketing, in terms of strategy this approach is still in its infancy. On the other hand there are some approaches known as Stealth (or Undercover) marketing (Kaikati and Kaikati, 2004) that effectively applies this principle in practice. Although “low frequency-high amplitude” principle has profound implications for marketing, many specific manifestations are yet to be discerned - they may be derived for advertising strategy, measuring marketing effectiveness, optimization of promotional budgets, customer relations’ management and other issues. The second effect-oriented military principle is the deter forward principle which emphasizes “activities before the first shot”, aiming to alter the initial conditions of the encounter (Cebrowski, 2002). Some concepts and approaches in marketing like expectations management (Pitt and Jeantrout, 1994) and permission marketing (Godin, 1999) seem to follow this principle, yet they are only vaguely integrated with marketing strategies. Shaping the market before launching a marketing campaign seems a good idea and it has important implications for establishing relations with allies and with the deterrence principle, both being under-exploited issues in formulating competitive marketing strategies. Deploying human and soft resources Next area of military transformations that is interesting for marketers is human resource (and organizational culture) management. Military is perhaps the best example of skillful, purpose based and performance-oriented profession regarding training of the “employees”. They provide many different skills (physical, psychological, moral, knowledge-based) that are necessary for successful human performance. Katzenbach and Santamaria (1999) shows how marines “mission-values-pride” path can lead to emotionally engaged, committed and highperforming workforce in business area too. While this notion is not particularly new and surprising, it is often overlooked, that contrary to prevailing view military is not immoral. Its coherence, discipline and performance are grounded on trust, pride and discipline. Without them soldiers become morally too vulnerable as none cannot survive moral dilemmas encountered at warfare without their ideological justification. The key problem of conventional armies with new breed of fighters (terrorists, civilian freedom fighters) is exactly their powerful moral, political and religious motivation, which fosters a deep commitment to the reference groups, country and ideological principles. Deep commitment to ideology is their key fighting leverage or center of gravity. In order to win, their enemies must kill their will to fight. Hearts and minds are therefore again the decisive factors of conflict. This notion is important for marketing, showing that customers’ and competitors’ socio-cultural background should be utilized, not ignored or treated as a (defeatable) obstacle. A good example of such utilization in the marketing field is the success of Mecca-Cola, a product that builds on religious and political symbolism and anti-American 9 attitudes (Johansson, 2004). In the area of “hearts and minds management”, possible implications for marketing strategy are: An increased need for information regarding ethically and politically driven consumption in today’s markets. Such research is largely qualitatively based, often using an ethno-methodology and interpretive research approach (Gummesson, 2004). However, we think that some alternative methodological approaches like meme’s analysis can also be very useful for these purposes as they aim at understanding the position of the product/brand in a network of shared meaning (Marsden, 2002) and as it provides important implications for “social infection strategies” (Williams, 2002). Military experiences with ideology, morality and motivational factors are useful for human resources management implications in marketing. Contrary to the prevailing view, the military is not immoral - its coherence, discipline and performance are grounded on trust, pride and discipline. Emotionally engaged, committed and high-performing workforce is key for high performance in the marketing area too and calls for redeployment of internal marketing approaches as we know them today. Military transformation also shows that contribution of the individual will count more in the future, because adapting to ever-changing complex situations require innovation and creativity at an individual level (Leonhard, 2003). The military approach to treatment and training of people confronts marketers with the question: can we expect high-performance results from “accidental”, poorly trained and solely economically motivated employees, whose individuality and morale is totally neglected? Human resource practices toward employees who are working in critical customer-encounter positions like those in Call-centres or tellers are specifically often described not just as poor, but as “sacrificial”, leading to high turnover and low morale (Wallace et al., 2000). Contrary to this, the US Marine motto Semper Fidelis (Always Faithful) (USMC, 2004) confirms that workforce effectiveness should be largely based on a respect for moral values. Process of marketing strategy development The military understands strategy development as a science and an art – taking both very seriously. Generals meet personally in war-rooms and seminars to combine analytical skills with personal intuition, using different methods for envisaging the most probable stream of future events and coping with complexity and unpredictability. They carefully plan each phase of the strategy – what seems one of the major weaknesses in marketing strategy preparation as they are often conceived as genial idea about superior product or its position on the market. In addition they adapt planning process to the goals and specifics of the task. Powerful offensive strikes and “military operations other than war” (Shalikashvili, 1995) are for instance two distinctively different phases of military operations. Both phases may specifically emphasize different factors of success and require different strategies. In the offensive phase informational dominance and high-tech weapons have proven immensely effective, implying that offensive marketing strategies should be proactive and intelligence 10 based, incorporating the “high amplitude effects” and “deter forward” principles, discussed in the second part of this paper. This also implies that in offensive attempts, marketing should rely more on driving the market instead of being responsive and utilizing a “market driven” approach (Kumar et al., 2000) On the other hand, stabilization phase should be more focused on the issues discussed in the third part of the paper, dealing with socio-cultural and individual factors. In this phase, the focus should be on “immersing with market”, implying efficient solving logistic and maintenance problems, simultaneously paying great attention to symbolic and human interaction between the company, its products and customers. Despite the fact that these elements are tactical by definition, they are of strategic importance in securing long-term survival in the market. Taken together the implications considered above and in previous sections show that marketing strategists should devote more attention to strategy craftsmanship. Pech and Durden (2003) noted that relying on linear planning, “firepower” tools and “attrition” strategies in today’s business landscape, which is characterized by uncertainty and unpredictability, is a mistake. In addition they draw some meaningful parallels between business and military failures that are of interest for marketing field too. Key of them are: Fundamental conservatism and adherence to outworn traditions A tendency to reject or ignore information that is “unpleasant” or that conflicts with preconceptions A tendency to underestimate the enemy and overestimate one’s own capability An obstinate persistence in a given task despite strong evidence against it Failure to exploit ground gained and a tendency to “pull punches rather than push home an attack” Inadequate reconnaissance A predilection for frontal assaults, often against the enemy’s strongest point A belief in brute force rather than the clever ruse Failure to make use of surprise and deception This list of common mistakes can be easily applied to process of marketing strategy development, while it is much less evident how to avoid them in practice. In general it might be suggested that instead of the prevailing marketing management model (fitting within a logical empiricist paradigm), which can be considered as rationalistic and mechanistic (Saren, 2000), marketers should therefore systematically deploy “new science” tools like visualization, mental models, scenario building and intuition (Sanders, 1998, Kaplan and Norton, 2000). Such approaches seem better suited to today’s business landscape, incorporating both - intelligence and ideology factors - ensuring their synergy not exclusiveness. 11 Future research agenda Analogies with regard to structural and content similarities between warfare and marketing strategy development were discussed in the paper. Despite useful and profound implications for marketing field many issues related to such an approach remains unexplored, hence can serve as starting point in future endeavors in this area – be they theoretical, methodological or practical by nature. Some of the most challenging are questions regarding: Further comparisons of key principles, factors and approaches (e.g. basic assumptions, mental models, goal hierarchies) in order to detect opportunities for additional knowledge transfer. Assessment of historical development phase on which is marketing strategy currently if we compare it with recent military transformations. Comparison of marketing and military practices in most promising domains like intelligence gathering, strategy development and personal training. Marketing implications of dialectics of opposing principles that can be often found in military strategy (e.g. terrain vs. enemy, light/fast vs. strong/stable and positional vs. maneuver focus) Justification and verification of relevance and validity of using warfare analogies and metaphors as a research method. Assessment of extent to which war metaphor is implicitly and explicitly present in marketing theory, strategy and practice. 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