The CEO's marketing problems: part 1

When marketing becomes disconnected from the business, the CEO has a major problem on his hands. What does this mean in practice?

It is often said that companies that invest in marketing/branding do better on average than others. Or that investment in marketing is necessary for growth. However, this is not true if marketing is disconnected from the business. You can burn money without delivering benefits to the business.

Decoupling is primarily about marketing not understanding a) what customers are willing to pay for b) how the business actually makes its profits c) what the key laws of the industry are, d) how the value chain in the industry works and e) how profitable (short and long term) marketing is actually done.

Understanding these issues usually requires marketing competencies of someone who has experience either in activities other than marketing OR in companies where marketing is at the core of the whole business.

If marketing is disconnected from the business, burning money on secondary things is still possible. This is what I mean when I say that investment in marketing is not an end in itself, but must be based on the above understanding.

The role of the CEO/CFO/Sales Director
is not to take the above understanding of consumers, customers, industry or value chain into marketing activities, but marketing must have this understanding within it. Otherwise, the company becomes disconnected from its business and turns into a cut/glue/draw department.

Traditionally, marketing has not been considered a strategic function in companies, at least not in a large number of Finnish companies. I think this is partly related to this disengagement. I have seen too many marketing functions that have done this and in the process built themselves into a largely useless function.

Of course, preventing this disengagement is first and foremost the role of the marketing manager. Once the marketing director understands the above points and is able to translate them into practice well enough, the problem will go away.

CEO: so prevent marketing from disengaging from the business and hire a marketing director who has the above understanding or has the potential to take it on board.