MARKETING FOCUS: Follow the leader

The pioneers leading modern business triumphs know precisely where their companies are and where they are going - and they’re using marketing as a map, writes Laura Mazur

The pioneers leading modern business triumphs know precisely where their

companies are and where they are going - and they’re using marketing as

a map, writes Laura Mazur



What do Virgin’s Richard Branson, Bill Gates of Microsoft and Peter Wood

of Direct Line have in common? Apart from having amassed huge fortunes

from building successful empires, seemingly little.



Look a little deeper, however, and some common traits begin to emerge.

Regardless of background, all three are described using phrases such as

focused, commercially intuitive and innovative. Above all, they are

obsessed with customer satisfaction and service, and skillfully manage

powerful corporate brands.



That perception is reflected in the esteem in which their companies are

held. When the Marketing Council carried out research among UK marketing

professionals last autumn, these three companies topped the list of

companies rated as future marketing stars. They were joined by other

successful and well-regarded groups such as Tesco, Orange, Rover and

Marks & Spencer.



For Rod Street, a partner at Coopers & Lybrand and author of Marketing

at the Crossroads, successful executives operate to a very tightly

worked proposition, one that has been proven to succeed. ‘The Virgin

proposition is an extension of the media personality of Branson and his

philosophy. Direct Line came from a vision by Peter Wood about making it

easier and cheaper to buy insurance by cutting out the middleman.



‘If a business is going to retain its edge, it has to have a very clear

proposition that is relevant and can be adjusted through time. There has

to be a means of delivering that through almost a socialisation

process.’



Achieving this is easier for first generation companies, where the

founder is still in control. ‘Virgin, Direct Line, Body Shop and

Microsoft, for instance, are all first-generation,’ says Street. ‘But

companies like Marks & Spencer are several generations on. When a

business is relatively small, it is easier to stamp your personality on

it.’



That ability not just to survive but prosper is the yardstick for both

new-generation founders and chief executives such as Asda chief

executive Archie Norman, who came into a relatively moribund company

with a mission to rejuvenate it. Does the business retain its focus over

time? ‘There are things you can do to turn around businesses that are

about stopping the bleeding and strengthening productivity. But to

convert that into a long-run winning proposition can take a lot longer,’

says Street.



While focus and vision are essential qualities for the chief executives

of future star marketing companies, they will also have to be able to

communicate effectively. ‘One of the reasons we view branding as such an

important business process is that it gives you a visual badge and a

meaning that everyone in the company can buy into,’ Street points out.

‘Almost by osmosis it helps inform decision-making. You can financially

engineer a change but you must still have communicated that vision

effectively enough for people to be able to move the business forward

subsequently.’



A clarity of vision



John Stubbs, chief executive of the Marketing Council, believes that the

chief executives of a number of the top companies named in its research

share a broad perspective on customer satisfaction and how to drive the

business towards it.



In other words, regardless of background, these leaders are passionate

about their market in its widest sense. But they also give their

professional marketers a long leash, though maintaining a firm grip.



Sir Ian MacLaurin has developed a strong cadre of professional marketers

that have enabled Tesco to push past competitors such as Sainsbury’s,

which has only recently departed from normal practice by hiring in a

well-regarded marketer from outside.



Sometimes, having a chief executive who has come up through marketing

can be more of a curse than a blessing. Roy Doughty, chairman of CAB

Consulting, has been on both sides of the management fence, as marketing

director and then managing director at Duracell, followed by the senior

marketing post at Mercury One2One. ‘The trouble is that you can bring a

lot of baggage with you,’ he says. ‘It is the arrogance of saying ‘this

is my skill set so I will get involved in more of the discussions and

processes than I need to’.’



Archie Norman, management consultant turned retailer, has at times been

accused of an inability to delegate to his marketing directors and of

too much interference in marketing. The evidence cited is that Asda has

had three marketing directors in less than two years. But his admirers,

of which there are many in the business world, point to Asda’s

impressive record, not only financially but in terms of innovation, as

clear evidence that his hands-on approach works.



According to Stuart Bull, ex-chairman of KHBB, who has now set up

integrated marketing consultancy The Communications Unit, the acid test

of a rising star comes from their ability to tell you exactly what

advertising is running for their company.



‘Bill Gates could tell you exactly which commercials are running

worldwide. Peter Wood at Direct Line undoubtedly knows what the ads are

and will have originally approved the use of the little red telephone.

The same with Ian MacLaurin and the Tesco campaign,’ says Bull.



‘Don’t give them any warning. Turn the lights out, and ask them to

describe their current commercials. If they can’t, then the company

cannot be considered a marketing star of the future because a star by

definition will be customer-oriented and focused at the highest levels.

The chief executives of the rising star will know exactly what their

communications are.’



Marketers at the helm



Andrew Seth, former managing director at Lever Brothers and now non-

executive chairman of The Added Value Company, believes that leaders of

admired and successful companies derive their power from a clarity of

vision and purpose, displaying a strong sense of marketing literacy

whatever their business background.



‘To me the first key issue is that of competitive advantage. Does the

company have a clear idea of what it is, has that been recognised for

some time and at all levels, and is it embedded in the way it does

business? You don’t have competitive advantage if it is not marketing

based,’ says Seth.



He believes that companies such as Virgin, Microsoft, Direct Line, Asda

and the Body Shop all display an understanding of competitive advantage.

‘Then I would ask, are they winning? If they are, a buzz goes through

the business and people become confident and genuinely share the

strategy. It is understood and recognised and it doesn’t matter whether

you ask the brand manager, a financial manager or the board - you will

get comparable answers.’



Corporate consciousness



Developing a process that everybody feels part of is crucial, he

believes. ‘In that sense it is a tremendous advantage to have a

marketing-literate chief executive because he can then be an inspirer

and facilitator, a driver of a very strong team of people who know what

they are doing and are part of that process. Richard Branson, Bill

Gates, Archie Norman at Asda, and Sir Ian MacLaurin at Tesco have done

that.’



A vital factor common to the list of rising stars is that they have

shifted emphasis from product to corporate brands. The leveraging power

of the corporate identity is under-utilised by many companies,

concentrating instead on the individual strengths of brands within the

stable. Virgin has exploited the strength of its corporate brand to the

full.



In an era where strategic management of the corporate brand is key,

marketing literacy at the top has never been at such a premium.



Direct Line



It is said that one of the differences between a successful entrepreneur

and an unsuccessful one is that the former picks the right wave to surf.

When Peter Wood, founder and chief executive of Direct Line Insurance,

clambered onto his board in 1985 he blew apart an industry characterised

by complacency and high premiums.



He came up with the sort of simple solution that makes others wonder why

they didn’t think of it first: cut out the middleman, do mass-media

advertising and sell insurance over the phone, based on a well-developed

IT infrastructure. He attracted pounds 20m from the Royal Bank of

Scotland. What really put the company on the map in 1990 were the Wood-

inspired ads using the little red telephone.



His background is in data processing and management services at Levi-

Strauss and then the Alexander Howden group. Although he passes

responsibility for day-to-day product management to senior staff,

overall strategies for marketing, advertising and PR are approved by

him. However, he places great emphasis on coordination of ideas and

activity within the group to make sure the brand values are consistent.



Microsoft



Bill Gates has a simple CV. He is Microsoft, just as Richard Branson is

Virgin. The 19-year-old software company that sells over pounds 4bn

worth of products is his vision and his creation. And he certainly

understands marketing. The launch of Windows 95 last year cost around

pounds 98m and the commotion surrounding it helped Microsoft dominate

headlines around the world.



When Microsoft first began to move internationally, the different units

around the world had a lot of autonomy in deciding what products to

market and how to market them. But the past few years have seen Gates

and his team try to bring a more cohesive approach to the sprawling

empire with a stronger focus to the corporate brand and a more

coordinated marketing structure. His chief operating officer is a 26-

year Procter & Gamble veteran.



He is fallible, of course. His once markedly efficient public relations

operation, in the UK at least, is not what it was. More crucially, it is

said by his (increasingly vocal) competitors that Gates has missed a

step when it comes to the Internet because he underestimated its

potential and pace. But he has moved swiftly to remedy that.



Tesco



In a radio interview a few years back, Sir Ian MacLaurin said that, for

him, Tesco was more of a hobby than work. That hobby included spending

Saturdays going around the local Tesco. Such is his devotion that when

he isn’t on the golf course topping up his perma-tan he is walking the

aisles.



He is a retailer who truly considers his shop his brand. And it

highlights the passion of the man who, enticed by the founder Jack

Cohen, joined Tesco in 1959 and began by loading the vans in the

warehouse. Since he rose to the top, he has transformed Tesco’s

downmarket image by turning it from a buying and selling operation into

one characterised by marketing, research and innovation.



He has personally created a culture at Tesco that allows ideas to float

to the top just as much as they trickle down from above.



In his mission to become the UK’s leading food retailer he has been ably

aided by a strong marketing team.



In fact, he will be followed as chief executive when he retires in 1997

by the highly-regarded Terry Leahy who became deputy managing director

in 1995 following a three-year stint as marketing director.



Rover



John Towers is chief executive of the Rover Group, the UK’s largest car

manufacturer and vehicle exporter, and now part of BMW. His philosophy

sums up why his company is considered a rising star. A strong proponent

of engineering excellence as the price of entry for the luxury car

market, he believes the winners in the future will be those companies

who apply their engineering energy to the features that truly delight

the customer.



An engineer by training, he has been with Rover since 1988, joining as

manufacturing director and rising to group managing director in 1991.

Along with his predecessors, Sir Michael Edwards and Sir Graham Day, he

can be credited with making what was once the ailing BL into such a

creditable commercial force that BMW paid pounds 800m for it in 1994.



There remains a determination to be strongly customer-focused. A well-

organised marketing team is charged with translating that vision into

reality by making sure that not only is Rover perceived as a powerful

and distinct global brand, but that the individual brands are tightly

targeted to highly defined customers segments.



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