|
PSB Publications
THE EMERGING CIVIL WAR IN MARKETING
UNRESOLVED: The Julie Roehm/Wal-Mart drama is symptomatic of a deeper conflict
March 12, 2007
ALLEGATIONS OF SEX, insinuations of corruption, David vs. Goliath battles, compensation, huge egos, expensive sports cars, flashy parties, lawsuits and plenty of hurt feelings - these all make for one heck of a story. But in many ways the drama of Julie Roehm vs. Wal-Mart is blinding us to the larger issues at play.
What really started all this? Is Ms. Roehm an evil person? That's highly unlikely. Is the Wal-Mart management team fundamentally evil? That is highly unlikely too regardless of what some would contend. In fact, at one point, they both decided that they would be a pretty good team. So what is the source of this conflict? How did they get to this point?
Much of what has been reported are the symptoms of a much deeper and profound conflict - a conflict faced by virtually all marketers and their organizations everyday: the battle between the traditional and increasingly less effective mass media approach to marketing vs. the alternatives that are starting to emerge.
Wal-Mart, like almost all major brands, depends on a highly standardized offer communicated through the mass media. The problem is, consumers no longer rely on mass media the way they once did. Instead, they go along snacking on various media sources throughout the day and increasingly demand more personalized information, products and services. As a result, these traditional mass brands show little growth or even decline. The hot, growing brands, such as like iPod, offer products that are customizable (not standardized) and communicate their messages through far more targeted and higher-impact marketing efforts.
LACK OF SUPPORT
Ms. Roehm knows this and Wal-Mart knows this. Wal-Mart recently has been allowing more variation of its product assortment in its stores to take a small step toward customizing the brand. Ms. Roehm understood the need for more targeted marketing when she hired, if temporarily, DraftFCB for its direct marketing expertise. So given this common view what happened next?
Now, I don't know for sure but based on a somewhat similar experience I have a pretty good guess. I was head of marketing and R&D for a niche consumer products company. I figured out a way of unlocking the full power of their intellectual property through tweaking the offer and changing the marketing. Based upon qualitative and quantitative consumer research, some of the most positive numbers I have seen in 15 years of doing this sort of work, I was very confident that I could easily take them to a 20% to 30% market share from a 2%. So I started pushing - in retrospect too hard - because I did not want them to miss what I felt was a once-in-a-lifetime opportunity.
I knew that most of the executives did not support what I saw but I thought there were enough who did. So I pushed some more. Ultimately when it came time to sign the contracts with the agencies to develop this new marketing approach and offer, the entire leadership team, as well as the traditional marketers in the organization, balked. They lacked the confidence I had to move forward and instead did the next logical thing, proceeding to make much cheaper, less difficult and less risky incremental changes rather than the more transformative ones - new messaging, expanded assortment, new pricing, greatly expanded marketing communications - that I was advocating. We were all very frustrated and, at times, our debate and decisions became emotional and irrational, though we all were trying to do the right thing.
HIGH STAKES
My guess is that a similar process unfolded at Wal-Mart. Ms. Roehm started pushing a different business model and approach to marketing. When Wal-Mart signed the contract with DraftFCB, the inevitable conflict between trying new ways to marketing vs. the traditional approach came to a head. And in their case it became extremely emotional and seemingly irrational - similar to mine but much more severe.
Put yourself in Ms. Roehm's shoes for a second. You know that the old marketing and business model is not working very well - that's why Wal-Mart hired you in the first place. You believe that a direct marketing approach will work better. There is one big problem however: no one, at this stage across the marketing community, really knows what model will replace the one we have today for big brands. It might be micro-targeting, cut-through marketing, or mini-marketing. Or it could be engagement marketing. It might be some combination of these, with or without some mass marketing thrown in. No one really knows. So what Ms. Roehm was offering was a risky alternative.
Now put yourself in Wal-Mart's shoes. It's an organization that is struggling at almost all levels from corporate reputation to store operations to financial results. Everyone there, including most of the marketing team, has either grown up within the company or come from companies that embraced the old approach to marketing and building mass brands. They fear for the future of their company, their colleagues and their jobs. They fear they are becoming dinosaurs and therefore logically fight to preserve what they can and try not to make even more mistakes. Meanwhile someone comes in with an unproven model and starts pushing it very hard. It's no surprise that things didn't work out.
And in that fight with the stakes so high - the future of Wal-Mart and of individual careers - it quickly becomes emotional, with people grasping for reasons to support decisions based on gut instincts and fears.
There are two main tragedies in this story. One is that Ms. Roehm and Wal-Mart had a falling out that became personal. I would contend that they still need each other badly, if only they could figure out a way to work together. The second is that the drama has stopped us in the marketing community from discussing the bigger and far more important issue of finding a solution to an increasingly tired and ineffective business and marketing model - a challenge that has the potential, as shown by Ms. Roehm and Wal-Mart, to become a nasty, brutish civil war if we are not careful.
Tom Agan is Managing Director of the New York Office of Penn, Schoen and Berland, a marketing consulting and research firm that is part of WPP Group. He has worked closely with senior marketers at global companies. He can be reached at tagan@ps-b.com
Penn, Schoen & Berland Associates
245 E. 92nd Street
New York, NY 10128
Tel: (212) 534-4000
Fax: (212) 360 7423 | top |
