How do marketers drive change?

Last week's conversations made me reflect on how marketing is very much like Newton's first Law of Motion: Every object perseveres in its state of rest, or of uniform motion in a right line, unless it is compelled to change that state by forces impressed thereon. In business, it is hard to create change due to consumer, company, and environmental inertia. But once you do set your brand in motion, long-term benefits can be substantial, with positive customer word-of-mouth, retail penetration, and publicity feeding the flywheel. This also implies two distinct functions of marketing: (1) creating momentum, and (2) sustaining the momentum against friction (such as customer saturation or competitors catching up).

Sustaining momentum is a full-time job, often with little gratitude (who gets promoted for keeping up the sales baseline?). Instead, academics and most pundits focus on driving change, because it is the most specular (to get credit for) and the easiest to detect in the data (sales lift). As Peter Dickson put it in his 1992 Journal of Marketing paper:

Marketing is the art and science of creating change (disequilibrium) in markets in such a way that the change benefits the firm and thus comparatively disadvantages rivals. If a market is in equilibrium, marketers are not doing their job.

Inspiring, but a bit harsh, no? Is this one of the reasons CMO tenures are so short and why they are more often in need of new job:

It IS tough to drive substantial change in highly competitive markets with savvy and jaded customers. It IS tough to create and maintain meaningful differentiation. It is also tough to change your colleagues' minds - as Byron Sharp expressed in this 2017 interview with Kevin Gray:

"•Marketers, like consumers, are habitual, and hence change is difficult. That's not to say it doesn't happen. First, it requires exposure to the evidence, and then re-exposure and re-exposure accompanied by thinking and doing – then insight builds ('ah ha' moments) as well as evidence-based skills.

However, change DOES happen. A few examples of winning brands in my lifetime: Facebook vs MySpace, Zoom vs Skype, private labels vs national brands, hard discounters vs full-service retailers, Ehrenberg-Bass vs Brand Love, Apple vs Nokia, Amazon vs Barnes & Noble, Netflix vs Blockbuster. In the words of Kantar's Ignite 2023 presentation at Cannes Golden Lions:

How do marketers drive change? By ensuring their marketing mix works well together and gets consistently executed to promote distinctiveness and differentiation. Sure, the 'next big thing' in advertising is important to keep in mind, but it can not work in isolation. Price innovation is a typical component of an enduring sales boost. New distribution channels can open the brand to new audiences, or make it easier for existing customers to interact on their terms. Product innovation is often crucial, and includes services and experience:

As much of my research has shown, the potential for change typically depends on boundary conditions, such as:

1) Category involvement and market maturity

2) Brand size, age and product differentiation

When consumers are very involved in the category (e.g. phones vs cereal), you are more likely to catch their attention with a message promising something new and better. They will carefully evaluate it, and may switch to your solution for a long time (until the competition comes up with something even better). Such involvement is more common in emerging markets, where many products take a large part out of the consumer's budget and are often used to reflect status.

Likewise, young and small brands have more leeway to educate consumers about their solution, sometimes redefining what a customer expects from a product in the category. In the Journal of Marketing Research paper with prof. Rebecca Slotegraaf, we uncovered that permanent benefits of temporary price promotions were common for brands below 3% market share but above-average product differentiation.

In contrast, change is much harder for large brands in mature markets with low consumer involvement (think fast-moving consumer goods). Such brands often dominate the samples analyzed by marketing scientists, which may explain why differentiation does not come out as a key driver.

However, large brands still have opportunities to drive change: markets are dynamic because customer preferences are changing, and competitors are adapting. In research with strategy prof Richard D'Aveni (author of Hypercompetition), we designed and tested a dynamic differentiation theory of how the fair value line (what customers expect in the price-quality relationship) can be changed by company action. Sometimes, the fair value line steepens, with customers more willing to pay for the primary quality dimension. Sometimes, the primary quality dimension itself gets redefined, as happened for small cars in the 1990s:

How important is driving change in your job? How tough is it and how, and can we help? Hit me up in the Comments!