Do companies need CMOs

(chief marketing officers)?

Discuss and evaluate the
role and importance of
chief marketing officers and
the marketing function in
the boardroom.

IEM Report 2014

CID: 00895308
Edward Heywood

Word Count: 5,443

Table of Contents
Abstract ........................................................................................................................................... I
Introduction ..................................................................................................................................... 1
The Marketing Mix .......................................................................................................................... 3
Campaign Strategies ...................................................................................................................... 6
Managing the Product Lifecycle ...................................................................................................... 9
Entering New Markets ................................................................................................................... 11
Closing Arguments........................................................................................................................ 14
References ................................................................................................................................... 15

Table of Figures
Figure 1 Moore's Chasm (Moore, 1995).............................................................................................. 8
Figure 2 The Product Lifecycle (Rogers, 1995) .................................................................................. 9
Figure 3 Stage-Gate Management Process (Cooper, 2011) ............................................................ 10
Figure 4 CEOs rely increasingly on CMOs for strategic input (IBM, 2014) ...................................... 13
Figure 5 Ansoff Matrix (Ansoff, 1957) ................................................................................................ 13

Abstract
This report examines the role of the chief marketing officer and within the context of the board of a
company by following the evolution of marketing as a critical component of business growth and
continuity.

Marketing has always been about reaching the willing and able consumer but the practice has moved
from a creative position to a managerial one over recent decades. Managing executive and client
expectations has proven to be a difficult task as the distinction between marketing, development and
distribution has blurred. Globalized transportation and communication channels have transformed
the marketing function into a pervasive and necessary function within any business.

It is the responsibility of the board to issue guiding instructions that will smooth the interdepartmental
coordination of the chief marketing officer with the chief financial and executive officers as the role
of the CMO becomes ever-increasingly vital to a businesss success.

Introduction
This report examines the role of a businesss chief marketing officer and the role of marketing in a
businesss boardroom. It aims to evaluate the value of marketing as a critical function of product
development, business continuity and good corporate governance. The report reviews academic
marketing, management and innovation literature as well as case studies ranging from large
multinational corporations to small and medium sized businesses in order to provide a
comprehensive cross-subject analysis.
The role of marketing and the duties of a businesss chief marketing officer extended beyond mere
post-production promotion in the 1970s to the pricing and distribution of goods and services. This
moved the practice away from contractors and into the core of the product lifecycle (Utterback, 1996).
Marketing became a tool that would help shape products during the initial concept stagesproviding
insight into consumer expectations, as well as how best to segment, target and position (STP)
products (Kotler, 1994) in order to maximize market fit and profits.
Marketing, in the broader sense of the term, is defined as The management process responsible
for identifying, anticipating, and satisfying customer requirements profitably (Chartered Institute of
Marketing, 2001). The chief marketing officer is therefore responsible for the planning, analysis and
allocation of labour, physical resources and capital. Given the enormous responsibility these
decisions carry with themthe process of identifying, anticipating and responding to customer
requirementsit is suited to boardroom level discussions. The product lifecycle relies heavily on its
timely introduction into the market while appealing to the greatest number of potential customers.
The marketer has to work within the resource capabilities of the organization and
specifically work within the agreed budgets and performance targets set for the
marketing function (Brassington and Pettitt, 2013, pp. 4).
Although marketing has become essential to any businesss core functioning and overall
performance, it could and has been shown to diminish other core competencies such as
manufacturing productivity and innovations in technology. In 1990, Narver and Slater outlined the
three essential factors that help the marketing function achieve above average performance in the
Journal of Marketing: interfunctional, competitor and customer orientation. These orientations are
not unique to the marketing function, they are necessary practices in all of a businesss departments,
intended to create an insight-driven product strategy with an earmark for success.
These orientations are discussed in this reports primary case studies. Tinder for example, a
matchmaking mobile application out of Silicon Valley, turned to an interfunctional-orientated

marketing method by using exceptionally well crafted messages and branding materials to overcome
what is known as Metcalfes Lawthe value of a network is proportional to the square of the number
of connected users in the network (Shapiro, 1999, pp. 184)during the early stages of the
companys product deployment.
The report aims to demonstrate the marketing functions complementary role in an organizations
behavioural and organizational structure. As technology advances, so must the integration of the
marketing function: boardrooms are increasingly reliant on the knowledge and foresight of the chief
marketing officer to successfully direct the business, drive growth, and increase the firms return on
investmentwhether it be in terms of labour, resources or capital.
The responsibility of a firms marketing department and chief marketing officer is to understand,
create and sustain a competitive advantage over its industry. They are required to think strategically
about the current market conditions and the scope of operations so as to not be overwhelmed and
make the best possible use of the finite resources available.
The scope of a businesss marketing operations depends on whether a good or service is being
marketed and the type of customer being servedconsumer, business, or non-profit. The function
can be broken down into seven separate elements (STEEPLE analysis): the social, technological,
economic, environmental, political, legal, and ethical. Companies are moving away from
mathematically motivated strategies as consumers are demanding certain ethical and environmental
standards from their suppliers (Alderson, 1957)rules which are sometimes signed into law by
governments. This has contributed to companies seeking out to create a triple bottom line addressing
the needs of the people and the planet whilst still creating profit (Savitz & Weber, 2006). A pertinent
example being Starbucks and their use of Fairtrade coffee (Starbucks Corp, 2013).
There has been a significant shift over recent years in consumers and organizations
attitudes to what is acceptable and not acceptable in business [] These increasingly
ethical attitudes have a fundamental influence on everything, from the sourcing and
management of raw materials and components right through to the buying decisions that
consumers are making at the point of sale (Brassington and Pettitt, 2013. pp. 44).

The Marketing Mix

The globalization of markets have led to increased competition and pressures on international
marketing in line with the theory of time-space compression (Harvey, 1991). Although it would be
unrealistic to expect a firm to satisfy 100% of its applicable market, the provision of additional
incentives has become a standard and expected practice. Inherent in the 21st century marketing
function is the need to define and subsequently identify the criterion that make up a businesss target
consumer. When the most significante.g. in profitable termsgroup of customers has been
identified, a business can hone its marketing efforts to maximize its efficiency, appeal and eventual
returns on its investment.

Developed by Borden in the 1950s and later coined as the four Ps of marketingproduct, price,
promotion and placeby McCarthy in 1960, there are a number of major tools that make up the
marketing functions component parts. These four elements and their parts are shown in the list
below. When mixed together, in whole or in part, they form the basis for a successful marketing
strategy that takes advantage of the potentially unfulfilled needs in the market.

The product element covers the conceptualization, development and management of the
inventory or services. These extend beyond their dictionary definitions. It is the role of the
chief marketing officer to consult with the relevant departments at each stage in the process
to improve its unique selling pointsso as to distinguish itself from the competition and create
a compelling reason to buy. Consumer goods will focus on immediate and gratifying benefits
to influence purchasing decisions whereas other businesses will look at aftersales factors
like customer service to create a more compelling whole product strategy (Moore, 2006).

The price element has to reflect issues of buyer behaviour, because people judge 'value' in
terms of their perceptions of what they are getting for their money, what else they could have
had for that money and how much that money meant to them in the first place (Brassington
and Pettitt, 2013, pp. 28). These factors are key to successful marketing campaigns. They
require the chief technology officer to work in tandem with advertising and branding
contractorsor equivalent in-house departments. Pricing reflects the companys perception
of the customers' needs; extending well beyond the immediate purchase into their own daily
lives. A pertinent example being the premium price tag that Apples products command over
competitors because of the perceived value consumers are obtaining from the brand (Nair,
2014).

The place element deals with providing the product at a place which is convenient for
consumers to access. Various strategies such as intensive distribution, selective distribution,

exclusive distribution and franchising can be used by the marketer to complement the other
aspects of the marketing mix (Kerin, Hartley and Rudelius, 2001). It is the most dynamic and
fast moving area of marketing as it is usually outside of the companys immediate control. It
is the role of the board and that of the chief marketing officer to find, approve and ultimately
contract distributors (i.e. retailers) that will comply with issues such as branding and customer
experience.

The promotion element is the last and more aesthetic element of the function. It includes but
is not limited to advertising, promotions, personal selling, public relations and direct
marketing; including the use of electronic media (Brassington and Pettitt, 2013, pp. 29). For
example, Hyundai invested 25% of its annual marketing budget into social media during
FY2011. Social media strategies have proved very effectivethey allow marketing
personnel, including the chief marketing officer, to communicate directly with customers. This
continuous feedback process also generates viral interest for products and creates brand
equity at the product level (Weinberg & Mares, 2014).
The classic product level brand measurement example is to compare the price of a noname or private label product to an equivalent branded product. The difference in price,
assuming all things equal, is due to the brand (Aaker, 1996, pp. 102-120).

Booms and Bitner added an additional three elements to the marketing function in 1981: people,
processes and physical evidencewhich consolidated marketing as a management practice as well
as a creative one.

The people element refers to the actors responsible for the products delivery. It usually
applies to the services industryin that case, the people are customer service
representatives. The nature of relationships makes it harder for competitors to break into
established markets and ensures companies can log repeat-business. Desk.com a online
customer service portal and subsidiary of Salesforce - allows its business clients to adopt a
human centric approach to their customer service efforts allowing companies to gain greater
insight into their customers, achieve greater engagement and reduce churn (Smaby, 2011).

The processes element is easily controllable in traditional manufacturingany mistakes or

quality errors can be fixed before they reach the customer. However, the services industry
does manufacture and distribute its goods in real-time. It is the role of the marketer to ensure
a smooth delivery process. Services companies are expected to deliver an experience to
their customerse.g. a hairdressers or restaurant. Amazon the online e-retailer giant has
created a brand around speedy processes, reliable delivery, packaging and support to give

a holistic and standardised experience to its customer irrespective of whether or not the
actual seller is Amazon or a third party (Amazon Services LLC, 2014).

The physical evidence element is the premisesreal or virtualin which the good or service
is being sold. It ties in closely to the place and processes elements. A great example of how
a virtual presence has contributed to the success of a company lies in Net A Porter. This
trendy, online, a la mode website offers high end designer clothing and delivers each item as
if it were a gift. This combined virtual and physical experience contributed to its success over
high street brands (Wiseman, 2010).

These elements form the basis for the marketing mix. It is the responsibility of a chief marketing
officer to study and understand the target consumer well enough to help the product development
team coordinate with the sales teamcreating the best possible conditions to drive returns. No two
organizations will have the same exact strategy. Whilst its important to note that just because a
company conducted a certain strategy does not mean that it will be effective and drive returns for
another. Many companies choose to add value to their products through enhanced customer service
and customizability. The personalization of products has led to a relationship between goods and
their consumers.

Tindera mobile dating applicationhas seen explosive growth since its inception. Former chief
marketing officer Whitney Wolfe used a combination of dedicated community managers and careful
branding to create an emotional bond between users and the product itself. Using the people,
processes and promotion elements of the marketing mix, Tinder circumvented an established
academic principle known as Metcalfes law. If you never get a critical mass of early users, you
never snowball into a mammoth crowd; the party seems too dull for anyone to check in (Thompson,
2014). The network skyrocketed in value for its users because of the strategy employed by the
companys marketing team. Their managed marketing process involved migrating entire networks of
female and male users in such a way that the dating process itself acted as the physical evidence.
Individual marketing activities must be looked at within the context of a coherent and
consistent marketing mix, but achieving that mix has to be an outcome of a wider
framework of strategic marketing planning (Brassington and Pettitt, 2013, pp. 31).

The need for companies to innovate on their products and marketing strategies is essential in the
21st centuryCompanies that dont innovate die (Chesbrough, 2006). The responsibility of the
board of directors is to look into the future and develop plans that will drive growth and the companys
return on investment. As such, the chief marketing officer is responsible for the creation and
implementation of the strategyin consultation with the board and chief executive.

Levitt coined the term marketing myopia in 1960 when describing companies that define themselves
in terms of their product instead of the current market conditions. If an organization is blind to the
demands of its customers they could be missing out on significant opportunities. The alternative is
also true - that a company should craft its message in such a way that consumers will respond
favourably to their offering. GlaxoSmithKline, a leader in global healthcare services, turned away
from the term drug manufacturing to a message of good health and longevity. The product itself
was no different but the message conveyed was proactiveconsumers responded favourably. This
company shows us the value of perception when building and marketing a product. Similarly Alessi
created a radical innovation of meaning for kitchenware diving behind the use of the product to evoke
an emotive response in its customers of joy and delight e.g. the Juicy Salif (Haskett, 2005).

Campaign Strategies
Technological innovations have been at the forefront of every industry in this century. It is therefore
important to consider both the nature and the target of these innovations when devising marketing
campaigns and strategies. There are three common methods of marketing new products and
innovative solutions: advertising, promoting and publicizing.

Advertising helps businesses build awareness for their products among the public. Effectively
crafting the message in these adverts has become the focus in recent years; firms often attempt to
strike a balance between achieving an entertaining and memorable message versus providing a
significant quantity of informative content (Schilling, 2013, pp. 294). The abundance of new-media
distribution channels has turned advertising into a two-way window with consumers. Marketers can
now gain direct, first-hand insight into how their customers are behaving as well as what they are
saying allowing them to adapt accordingly (using their findings to refine their targeting and message).
As a result the chief marketing officer and the board of directors now have the ability to make rapid
decisions about the direction of a stratagem in order to maximize returns.

Promotions have also offered marketers a chance to increase the level of interactivity between
businesses and their consumers. One problem with looking at interactivity from the angle of
interpersonal communication is that it ignores the ability of a medium such as the Internet to break
the boundaries of traditional interpersonal communication (Stafford and Faber, 2005, pp. 104).
Promotions by their very nature demand closer contact between people and customers in the
marketing mix. Offering incentives to solicit the continuation or repetition of a customers business
often involves greater contact between the product and customer.

The Finnish company Farmos Group Limited successfully introduced a new drug called Domosedan
into the veterinary market by offering key experts in the field a chance to participate in the drugs
testing and trial phases. These promotions helped build trust between the drugs manufacturer and
the scientific communityexperts who then went on to become a source of viral advertising for the
new and innovative product. The companys chief marketing officer successfully coordinated the two
communities interests to reduce the firms costs and increase profitability; all by showing good will
promotions to key influencers in the field (Sandberg, 2002, pp. 184-196). To offer another example,
IDEO used the lead user method to decrease the turnaround time of hospital nurses by over 50%
leading to better patient care. By working closely with the Kaiser Permanente nursing team they
were able to identify and address real problems that could save lives. At the same time they were
able to get buy-ins from all the relevant actors which subsequently aided promotions (Brown, 2008).
This articulates the importance of getting user buy-ins during the customer development process
carried out by the marketing team and the chief marketing officer. It subsequently allows the business
to develop more targeted products that actually meet consumer needs (reducing overall resource
wastage) allowing for more effective board decisions.

Publicizingor commonly referred to as public relationsdeals with a firms use of the free press
as an agent of marketing. These strategies rely on the marketers ability to seed the right areas of a
market with the goal of generating viral, word of mouth interest in a particular product or service.
This method is heavily reliant on the companys understanding of their target market and its ability
to identify ways in which it can convince the innovators and early adopters to come on board. A
primary challenge in creating effective advertising is to ensure that the advertisement not only
attracts the target consumers attention, but also generates interest and educates the consumer
about the product benefits and positioning (Aaker, Batra, and Meyers, 1992). The use of personal
relationships in any promotional or advertising campaign is far more effective than traditional
methods such as billboards or side-bar adverts. As such the chief marketing officer needs to keep a
keen eye on the companys branding to ensure it is consistent and its message is attractive. This
includes the representation of the company by its employees and as a result requires organisation
wide coordination to create and maintain a clear image of the company. A strong brand, with good
public relations, impacts the bottom line of the firm which makes it a paramount concern for the chief
marketing officer at a marketing and board level.

Every marketing plan has to be tailored to the type of audience within the target market. This needs
to effectively coordinated by the chief marketing officer. Each group has a specific set of
demographic attributes and psychological profiles; which inevitably leads them to respond to different
marketing strategies. The innovator and early adopter audiences are very receptive to frontier
technologies and services and are therefore ideally suited to promotions. They are willing to take
risks and to pay high prices, and they will accept some incompleteness in the product but they may

also demand considerable customization and technical support (Mohr, 2001). In turn, they will move
the early majority towards the product or service. This phenomenon was generalized by Rogers in

Figure 1 Moore's Chasm (Moore, 1995).

1962 as shown in figure 1 (Moore, 1995). As a result the different consumer groups need to managed
carefully by the firm especially throughout the chasm period (between the early adopter and early
majority segments). Failure to effectively handle the transition to the mainstream market could spell
disaster for the firm leading to declining revenues and a faltering company which is why managing
this transition is a principle concern for the chief marketing officer and the board (Moore, 2006).

Businesses are often confronted with a dilemma at the point of early majority adoption. Innovators
and early adopters are willing to give feedback and participate in the innovative process whereas
the early majority often contributes to declining sales when faced with either incomplete or faulty
products. It is the development teams role to ensure the products robustness (as a whole product);
the marketing teams to attract new customers, adapt the marketing to each new segment and
ensure their retention; the managements to scale up the production in time for the spiking sales
caused by the late majority (Moore, 1995).

When a customer, business or supplier assesses the value of a particular innovation they are often
swayed by their perception of it. Marketing plays a big role in leveraging that notion. Advertising,
promotions and publicity can heavily influence purchasing decisions by influencing public
perceptions and opinions. Whether it be soliciting favourable reviews from key influencers, publicly
comparing competitors or signalling markets of the products impending availability.

Preannouncements and press releases are effective tools that can help sway the public opinion of
the products market adoption. Building on the future capabilities and innovations of a market,
advertisers can help put products into contextultimately swaying future opinions in their favour. If
other vendors beat the firm to market and the firm fears that customers may select a dominant design
before its offering is introduced, it can use this tactic to delay current purchases until the firms
product is available (Schilling, 2013, p. 298). This is a critical task for the chief marketing officer
because it gives the company more breathing room and helps to stave off competition until the
product is market ready. Thus allowing for a potentially higher market share as consumers wait to
see the finished product (and a board level potentially generating higher shareholder value).

Managing the Product Lifecycle

The product lifecycle (Utterback, 1996) depicts companies products and services as living entities
varying in performance and profitability over time. During a products life span, it will grow from a
pre-market concept into a source of revenue, until it is discontinued in favour of a better product or
pushed out of the market by a competing product. There are four main stages in the cycle:
introduction, growth, maturity and declinesee figure 2 (Roger, 1995).

Figure 2 The Product Lifecycle (Rogers, 1995).

The first stages in a products lifepre-launch and introductoryare critical planning and managerial
points for the chief marketing officer. The slow increase in sales and declining profits reflect the time
taken for the various marketing stratagems to take effect. These will face hurdles such as generating
primary demand if the product is entirely new or overcoming the competition by creating widespread
awareness for it. Planning and integrating unique selling points into the product and coherently
branding its features happens during the pre-launch stages.

The growth and maturity stages start with explosive sales growth from the introductory stage (as the
company begins or competes to become the de-facto or de-jure standard). They bring the marketer
and manufacturer back together to improve the product and succinctly adjust the offering to improve
sales and retention. This consolidates the firms hold on the market and furthers its understanding
of its target marketwhich allows it to expand into other segments and sustain its growth stage until
its maturity. While the company board oversees the product lifecycle the executive team manages
its implementation (e.g. stage-gate processing). Product lifecycle management is able to raise the
bar on productivity because it allows for the complete integration of everything related to a product
or serviceboth internal and externalinto the organization producing it (Grieves, 2005, p. 3).

Cooper introduced the stage-gate processes chart (see figure 3; Cooper, 2011) into modern
management literature. It uses a go / kill workflow that allows executives to spend the least amount
of resources on the most successful projects. Each stage involves making a decision based on
factual evidence presented by the relevant teamse.g. development, budgetary and marketing.
Each step going down the flowchart becomes costlier; they each represent increasing levels of
commitment towards the project under discussion. Although the decision making process is carried
out by the chief executive officer, the board is likely to step in during later stages when their approval
on budgetary matters is required.

Figure 3 Stage-Gate Management Process (Cooper, 2011).

10

Gates are designed to control the quality of the project and to ensure that the project is
being executed in an effective and efficient manner (Schilling, 2013, pp. 242).

The chief marketing officer has three roles to play: validation, management and review. As the
leading expert on the companys target market, the CMO is expected to be consulted during each
gates reviewal processhelping the chief executive determine its viability. The CMO also manages
the testing, validation and launch phases of the project before reviewing and further improving the
firms strategies.

Companies often adapt this process to suit their own requirements and internal processes. For
example, managers at Exxon augmented the five-stage process when they felt basic research was
a primary component in their innovative process. Before screening ideas at higher company levels
they added two directed research stagesA and B. The first stage deals with the fiscal and
competitive advantages a particular innovation would bring to the firm and the second establishes
the list of scientific deliverables and the methods by which they are to be achieved. The idea
screening involves the use of the (innovative) prototype (be it low or high fidelity) to discern its
workability (Coyeh, Kamienski and Espino, 1998, pp. 34-37).
Google and its X division is also famous for a very strict stage-gate model. It tests moonshot ideas
with the purpose of pursuing them until they fail. Failures include the hoverboard whilst a few
examples like Google Glass are scheduled to go into widespread mass production (McGonegal,
2014).

Entering New Markets

One of the key factors in any products successful launch is its timingwhen entering the market.
Consumers are always unsure of a technologys applications and relevance in their daily or
productive lives which leads companies to ask the question: is this the right time? The answer
depends on a number of items like the end-users demand certainty, the products immediate, longterm and real benefits, its price and comparative advantage over existing technologies and, on the
firms side, the potential returns on their investmentall of which are the chief marketing officers
responsibilities; in consult with chief financial and executive officers.

End-users are not always certain of their preferences, needs and willingness to improve their
lifestyles or productivity. The chief marketing officers role here is twofold: understanding and
reacting. Producers and manufacturers must respond to or initiate demand in the minds of their
target market; they must also seek out features which were previously part of the unique selling point
strategy but are becoming redundant. This brings into question is it better to be the first or second

11

mover in an industry (Suarez & Lanzolla, 2005)? Sonys introduction of the PlayStation 2 was a great
technological innovation in DVD playback. The firm decided to subsidize the console with the
intention of recouping losses through game royalties but later discovered consumers were using the
device to watch films. Microsofta competitor with their Xbox game systemdisabled their film
playback feature and offered upgrade kits in response to their competitors failed marketing strategy
(Shilling, 2013).

New products and innovative technologies must also consider the degree to which they improve
upon the competitions existing solutions. Whether it be incremental or disruptive innovation (Bower
& Christensen, 1995). The greater the difference the more likely the product can be guaranteed a
smooth entry into the market. The less ambiguous the change the more benevolent the end-user
(Min, Kalwani and Ronson, 2006, pp. 15-33). That being said, many disruptive technologies and
products must consider the likelihood of enabling technologies. If an end-user is purchasing a
product that requires a great overhaul of his own infrastructure, he or she will be more reluctant
during the purchasing processthereby swaying his perception of the product. Complementary
goods like Xboxs DVD upgrade kit should be avoided as they are often mistaken for enabling
technologiesi.e. a barrier to a successful market entry.

Although startups are more prone to this kind of oversight, the threat of a competitive and
simultaneous entry into a market affects companies large and small. This often happens in markets
where the barriers to entry are lowa precondition for increased competition (Suarez & Lanzolla,
2005). If entry barriers are low, the market could quickly become quite competitive, and entering a
market that has already become highly competitive can be much more challenging than entering an
emerging market (Shilling, 2013, p. 96). Chief marketing officers must then weigh their ability to
withstand early-stage losses during the first-mover period (and report back to the board how this will
effect bottom line profitability). Competitive analysis of the contributing factorse.g. cash reserves
are essential and could allow late entrants to outpace their competition. If that is the case,
promotional campaigns could help accelerate market acceptance and the firm leading that campaign
would improve its reputation among current and potential customers. Managing available resources
to balance reputation and traction is a critical function of the chief marketing officer.

CMOs have been increasingly involved with business strategy development (as seen in figure 4;
IBM, 2014). A firms prior reputation can help reduce the amount of uncertainty in the end-users
minds, ease the market transition (Shepherd and Shanley, 1998) and often contribute to the

12

perceived validity and significance of a particular innovation. Firms with established reputations are

Figure 4 CEOs rely increasingly on CMOs for strategic input (IBM, 2014).

more likely to attract suppliers, distributors and eventual end-users whilst also being more able to
enter and conquer adjacent market segments (Schilling, 2003).

Chief marketing officers have become increasingly central to management and product development
processes. There has been some concern over their mandates overshadowing other departments
leading some academics to call for role modifications. In an attempt to rectify this perceived problem,
many have suggested that marketing can redeem itself only through the performance of specific
tasks that to this point it has neglected to carry out. For instance, it has been suggested that one of
the biggest problems facing marketing is its inability to account for and justify its annual expenditures
(Moorman and Rust, 1999, pp. 180). Instituting proper boundaries between executive departments
helps to improve organization cohesion. Changing landscapes in the technology space are creating
competitive vacuums that can cause an internal conflict within marketing strategies.
In the progression of technologys adoption, the nature of competition changes
dramatically. These changes are so radical that, in a very real sense, one can say that
at more than one point in the cycle that one has no obvious competition (Moore, 2014).

The Ansoff Matrix helps marketers and

executives plan strategic growth for their firm
whether it be growing into new markets or
expanding their reach into existing ones. The
matrix (see figure 5; Ansoff, 1957) shows
market

development,

market

penetration,

product development and diversification.

Figure 5 Ansoff Matrix (Ansoff, 1957).

13

Facebook has grown into one of the largest internet businesses of the century and utilizes all four
elements of the Ansoff Matrix. It has identified its competitors strengths and repositioned its product;
it has acquired new applications to diversify its operations; it has created new products to compete
in new areas of the social media industry.
The acquisition supports Facebook and WhatsApps shared mission to bring more connectivity and
utility to the world by delivering core internet services efficiently and affordably. The combination
helps accelerate growth and user engagement across both companies (Facebook, 2014). This
critical decision to acquire WhatsAppa mobile messaging applicationhas helped Facebook
diversify into a new and growing market. The companys chief marketing and chief financial officers
are leveraging the businesss incredible resources to stay relevant in their existing market. Following
the acquisition of the messaging application, Facebook continued its diversification efforts into
ephemeral messaging with Slingshot; although the application has yet to gain significant traction
(Kuchler, 2014).

Closing Arguments
The literature shows a meaningful evolution in the marketing function from a creative practice to a
managerial one. It has been integrated into stage-gate management and the entirety of the product
lifecycle to ensure products are ready to meet the needs of the market. The demand-led
manufacturing of goods and services has been the driving force behind the greatest successes we
know today.

Shilling, Brassington and Pettit have written extensively on the creative and management practices
but all agree on the need for a case-by-case assessment of accepted academic models; which often
require individual attention at the project or organizational level. They do conclude that the
importance of a chief marketing officers insights into development processes is essential while he
or she is expected to continue refining the companys insight into its target market.

In order for 21st century companies to enter the highly competitive technology, manufacturing and
services markets they need, but must take great care in hiring, a chief marketing officer and other
C-suite level employees who understand the needs of the consumer. Boards must be inclined to
solicit the data driven insight of their executives while maintaining a strict separation of duties
between executives so as to not cloud the established hierarchy and make for more effective
managerial and C-suite decisions.

14

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Alderson, W. (1957) Marketing Behaviour and Executive Action: A Functionalist Approach to
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Amazon Services LLC (2014) Fulfillment by Amazon [online] Available at:
<http://services.amazon.com/fulfillment-by-amazon/how-it-works.htm> [Accessed 4 September
2014].
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