Coloring the Whole Egg: Fixing Integrated Marketing

by Venkat on October 20, 2010

Three kids are selling lemonade in their neighborhoods one hot day, to passers-by.

Kid Red yells things like “The best lemonade in town!”

Kid Green yells things like “Hey Joe, how ’bout some lemonade?”

Kid Blue yells things like “It’s hot today! Get your lemonade before you head to the beach!”

Can you identify the future marketer, salesperson and PR guy? It turns out there is a systematic way of guessing. On this important question hinge many things: business vision, market positioning and corporate culture. The answer also drives a mutually-exclusive 3-way choice that sorts companies into marketing, sales, and PR-driven kinds. And perhaps most important, the mutual exclusivity means that the most seductive idea in selling, a 1972 idea known as the “Whole Egg,” (an integrated sales+PR+marketing model) originated by Ed Nay, then president of Young & Rubicam needs an update. The Whole Egg is not a white egg. One primary color will dominate. One of the three functions will always lead. Looking for balance is a recipe for failure. To get to a whole egg, you must first pick a color to paint it.

Telling Marketing, PR and Sales Apart

By 1991, the Whole Egg idea had evolved into an academic theory, proposed by Clarke Caywood and Donald Schultz of Northwestern University (curiously, they were from the journalism department, not the business school)  with the impressive name “Integrated Marketing Communications.” I admit I’ve not read the original IMC work, but only second-hand summaries.

But here’s the gist. There is a lot of overlap among the three functions. So much so that it is hard to tell them apart, and a good deal of potential value to integrating them. Each is a customer-facing function. Each is about crafting messages designed to sell things. Each is about managing a portfolio of channels. Each listens and talks to the market.

This procedural similarity is what confuses people and leads them to misguided partitioning based on channel: marketing is about advertising, sales is about face-to-face pitching, and PR is about getting journalists interested. No, no and no. You can put a sales pitch in an advertisement, a marketing positioning idea into a news story, and a newsy idea into a sales pitch or advertisement. You can market face-to-face and sell en masse. You can sell with a news story, and turn an advertisement into a newsworthy event in its own right.

With old media you could at least make a medium-is-the-message argument. Yes, in traditional media, advertising is friendlier to marketing. Face-to-face is friendlier to sales. The news is friendlier to PR. In new media though, these distinctions fall apart immediately. Every new medium (blogs, Twitter, Facebook) can be personalized, customized, made as one-way or two-way as you like, and customized for word-of-mouth or broadcast. These media have no message. Or every message, if you like.

But the three are different. You see, the distinction lies in the type of message. Especially with new media. They can work together to form a whole egg, but never confuse them.

In the example I started with, Kid Red is a marketer, Kid Green is a salesperson and Kid Blue is a PR prodigy. Marketers like themselves, salespeople like other people, and PR people like ideas. Each turns his or her personality into a selling strength.

Smart people who like themselves soon realize that other people like themselves too. They understand self-indulgence. They understand what it means to always be conscious of, and care about, how you are perceived. All marketing messaging is based on self-perception, whether it appears as an ad, a lifestyle-section trend story, or a sales strategy that relies on your salespeople wearing hipster clothes. Kid Red knows this unconsciously. He knows some people have a self-perception based on elitism. They like the best lemonade (as opposed to say the cheapest lemonade or the weirdest-colored lemonade). He probably likes the best lemonade himself. His elitism translates into an marketing strategy that focuses on hooking elitist self-perceptions.

Now Kid Green likes others. And she realizes that others like others too. They like their friends, enjoy interpersonal interactions, and buy from friends if possible. So she personalizes the interaction as much as she can. Trust matters more than product attributes. Kid Green and her customers would both rather buy from someone they know than someone who claims to have the best lemonade. Even if they do have elitist tastes, they are likely to go to a friend.  Even if the stranger’s lemonade booth has a queue of a dozen people and the friend’s stand has no queue.

And finally PR, the latest kid on the block (I’ll explain why in a minute). Kid Blue has a message that isn’t about people at all, but about an idea: the role of lemonade in a hot-day story. You can see why this so easily segues into the news: you could pay the local radio station host to talk about beaches and lemonade as part of the weather report on hot days.

Note that there is a subtlety here. Given the same power to tweak an offering, marketers naturally customize, salespeople naturally personalize, and PR people naturally contextualize. All three lead to differentiation. Like many Indians I like a dash of salt in my lemonade. If the kid in my neighborhood notices and greets me every time with a “the usual? with a pinch of salt?” he is personalizing. But if he reacts by making up a menu with “Regular” and “Salty” options, he’s a marketer. Marketers don’t care to know you, they only care about how you know yourself. And finally, if he runs a promotion on Diwali selling “Indian” salty lemonade, well, he’s pulling off a PR stunt.

And with new media, all three can scale. To use the example closest to traditional media, you can use variable print technology in paper direct mail to personalize (put people’s names and their kid’s picture into a message), customize (use revealed preferences to include a beer picture in some messages, and a wine picture in another), or contextualize (insert excerpts of your product’s reviews from media you know your prospect consumes).

If you have trouble remembering these subtle distinctions, here is a mnemonic: you personalize to people’s identities, customize to people’s tastes, and contextualize to people’s environments. identities, tastes, environments.

But enough about lemonade. Let’s talk grown-ups and grown-up companies.

Microsoft, Apple and Google

In my previous post, The Seven Dimensions of Positioning, I made a remark about Google:

…the classic reading of the Google origin myth gets it wrong. The story goes that Brin and Page, when told they had to “choose” between a marketing or a sales culture,  (and this is engineering braggadocio pure and simple)  “chose” to create an “engineering” culture instead. This is wrong on two levels. First, it is a three-way fork today, not two way, and Google is a company built on effective PR. “Don’t be Evil” and stories about great buffets (and ironically, the story of Brin and Page “choosing” an engineering culture) are basically the core of a PR socialization narrative…

The reason people haven’t thought about a three-way choice is that until recently PR was just too uncontrolled a variable. In the age of broadcast media, journalists were just too few and too powerful to be managed well enough to drive a selling strategy. This is no longer true. The breadth, depth and diversity of new media channels means that PR is a function with vastly increased leverage today. Enough that it can sit at the big boys table with marketing and sales. The original PR guy, P. T. Barnum only succeeded because he was in the circus business, a business that naturally lends itself to spectacle and buzz-creation. But today, anyone can choose to lead with PR.

So, with that detour out of the way, how does the 3-way play out? The computing industry offers a near perfect case study. Apple is as pure a marketing-led company as you can hope to find. Microsoft breathes sales. And Google is entirely a PR-constructed narrative.

Do the three selling strategies support my basic psychological claims? Absolutely.

Apple is led by a guy who likes himself to the point that he doesn’t care at all what others think about him. And his customers are all people who like themselves too. The best piece of evidence is probably the Mac vs. PC ads. The entire campaign was about self-perceptions. The product-focused ads?  They sell to self-perceptions and personal identities as well. Their effectiveness relies on people knowing that they strongly prefer highly visual and tactile interfaces. The archetypical Apple customer is so well-defined that he or she is practically a caricature: a dancing hipster with eclectic musical tastes who drives certain types of cars.

Which is why Microsoft’s response was so effective in turn. Rather than accept the self-perception/identity based framing, they reframed the contest. The entire “I am a PC” was highly personal. You get faux-real people with names and faces. Not actors modeling abstract Claritas PRIZM psychographic personas. And Microsoft’s entire selling strategy is sales-driven: OEM partnerships, large enterprise sales, institutional channel partnerships and the like; it’s all 1:1 work. We all know you can only buy Macs at certain prices from a few places. Microsoft software? You are a complete sucker if you routinely pay sticker price. If you can’t find a deal through your company or school, you are subsidizing the rest of us. The “likes other people” bit is also at work. Most Microsoft people I’ve met tend to be friendly, down-to-earth and dressed-down (one sales guy I met wore a suit but carried a backpack; a bit of gaucherie that would probably invite a death sentence in an Apple store). Spend five minutes talking to any Microsoft rep, and they will have ruefully, but confidently acknowledged and laughed at Microsoft’s brand image issues, and made sure you like them even if you don’t like Microsoft. Interacting with Apple people in an Apple store on the other hand, is a slightly intimidating experience, like shopping at an upscale clothing store.

And what about Google? They don’t advertise. They know your name and everything about you but they don’t even attempt to personalize or customize your experience. Instead they spread stories about great buffets, whiteboards with “Don’t Be Evil” scribbled on them, and how Brin and Page insist on less than 7 +/- 2 items on the Google home page. They make sure that every geek knows that in PageRank, it is Page as in Larry, not as in Web. Every marketer recoils in horror at a brand name being commoditized into the category name (Asprin, Kleenex, Xerox). But Google doesn’t care that Google has become a generic verb. Unlike marketing and sales brand equity, PR brand equity is amplified when a brand becomes the category generic name.  And perhaps the most compelling evidence of Google’s PR-driven culture? They mangle their logo every chance they get (know any other major brand that allows this?), to reflect PR opportunities. Remember our hypothetical kid selling salty lemonade on Diwali? Google offered this Diwali logo to Indian users in 2008:

I rest my case.

But let’s get back to my colored egg argument. Why can’t you do all three? Why can’t the marketing department focus on identity and personalization, sales on tastes and personalization, and PR on ideas in the environment and contextualization?

There are two reasons: people and product. But first let’s marshal the evidence that you cannot do all three. It is only a weak proof-by-non-existence, but strong enough for me.

And One Function Shall Rule Them All

The IMC/Whole Egg idea is largely viewed as a failed vision today. Some are resurrecting the idea based on the convergence of media, but unconverged media was never what held the Whole Egg idea back in the first place. It was the mutual-exclusivity among messaging styles. A personalized, customized and contextualized message is a complicated and schizophrenic message: “Hey Joe, how about taking some of the best lemonade in town to the beach today?” The passer-by has walked past by the time you can get that sentence out. Effective messaging is about making choices.

Today, most companies clearly reveal their selling colors. Integrated or not, there are no white eggs to be seen. It’s all red, green, or blue dominated.

In our computer industry example, I pointed out how the dominant function colors (or contaminates, depending on your point of view) the subservient functions. Another place you can find evidence of “One Must Rule” dynamics is in post-sales. This is the fourth major customer-facing function that usually goes unnoticed in discussions like this one. But it is a selling function all the same: retention is cheaper than acquisition in general, and customer service is the major retention (and upselling) touchpoint. When a company has its act together and doing post-sales well, you can ask: what differentiates a given high-quality customer-service department?

Does the service optimize on customization attributes?  Lots of ability to tweak or change your relationship? Speed for the impatient, simplicity for the easily confused? That’s marketing-driven post-sales. Does the rep know you by name, and does your call get routed to the same rep everytime? Sales is in the driving seat. Receiving a lot of contextualized offers like relevant holiday specials? That’s a PR post-sales show (this is as yet quite rare, but Amazon, another PR-driven idea company, is a good example: look at their rare advertising, it is about ideas. They fought back against the me-me-me iPad ads with “read on the beach in sunlight” idea).

Initial Conditions and Egg Color

So why does this happen?

First people drive the equation. The founder vision is based on the foundational selling personality. Jobs is a marketer; we know a lot about him because he likes himself (all those black shirt stories).  Ballmer is a high-energy salesman, and Gates is down-to-earth. Where Jobs appears on a stage alone, holding an audience in thrall, Gates shared the screen with Jerry Seinfeld, an entertainer who might have overshadowed him, and the focus was on the banter between them. You see him in conversation (with Warren Buffet for instance) more often than you see him speaking from a stage.

Brin and Page clearly like their personalities to fuel the news, rather than cultivating either a personal brand or an interpersonal style. I know nothing about either of them. I’ve only once seen a video of Brin addressing a classroom. Both have been reduced to the ideas they represent. Heck, Page is part of their main idea, PageRank. They’ve even ceded the people stuff to Schmidt, and made it hard to even tell them apart (compared to how clearly you can tell the two Apple Steves apart, or Gates, Allen and Ballmer apart).

Why does this matter? Like attracts like and you get massive initial condition effects, both in terms of customer base and employee base (and remember, many of the best employees start as passionate customers). People who like people join Microsoft. People who like themselves join Apple. People who like ideas join Google.

Second, product drives the equation, also indirectly via people. People who like themselves build what they want, and then sell it to others through the force of their personalities. People who like others do customer-driven product development. It is blindingly obvious that Jobs has designed every major Apple product to his tastes, and sold them to people who share those tastes. Microsoft? Well, apparently Windows 7 was your idea. Even before Windows 7, you could always personalize PCs more than you could Macs. And Google of course, is the quintessential “idea” product (the core ideas for both Apple and Microsoft, by contrast, came from various outside sources, which included my mothership Xerox).

Curiously, Facebook is apparently “none of the above” and a true engineering culture. Zuckerberg reportedly tries to hire engineers even for non-engineering functions. Perhaps that explains why Facebook appears to suck at all three: their brand image is weak (poor marketing), and they’ve ceded control of their PR to an unfriendly Aaron Sorkin (their sales face is an unknown quantity to me, but I am betting it is weak as well).

But engineering cannot sell products. A customer-facing function must lead. Facebook has bought time by being miles ahead on engineering, and getting mileage out of selling to engineers (by pioneering the open API/developer relationships strategy), but at some point, I think they’ll be forced to choose. Unless they end up as a true monopoly, in which case they’ll be able to get away with it.

What is Corporate Culture?

In my review of Tony Hsieh’s book about Zappo’s, I voiced my deep ambivalence towards the very idea of corporate culture. Besides the obvious problems of fostering groupthink and hiring of clones, which I pointed out, the very idea of identifying culture through a bottom-up-plus-top-down shared values exercise deeply bothers me. In the seven dimensions post, I went further and argued that culture is an outcome of other variables, especially the customer-facing functions, and that attempting to control it directly or indirectly was a dangerous thing.

On the face of it, the “shared values” model of corporate culture is clearly ridiculous. For most people religious values (including the choice to be non-religious) are at the core of their value system. If you truly wanted to base corporate culture on shared values, you’d be dead before you started. In fact it would be illegal in most democracies.

So apparently we only look for shared values in some areas. And non-core areas at that.

Which brings me to my final conclusion on the subject of corporate culture: you don’t need to share core values (impossible) or all values (idiotic and impossible). You just need to share your selling values.

This means, when you are wondering whether or not to join a particular company based on cultural fit, you should ask: what’s your preferred selling style (and everybody’s got one, whether or not they are in a selling profession). Do you like selling based on self-perceptions, starting with your own self-perception (sign: you can sell best to people like yourself)? Join a marketing-driven company. Do you like getting to know people and selling in personalized ways (sign: you can sell to anybody)? Join a sales-driven company. And finally, do you like selling ideas (sign: you can sell to anyone who “gets” it; they don’t have to like you or be like you)? Join a PR-driven company.

As companies mature, the original culture remains, but weakens and diversifies.  If your selling style is strongly defined, join an early stage company with a very strong culture. A primary-colored egg. If you don’t lean strongly one way or the other, join a mature company with a weakened founding culture, and lots of local silo flavors. A more colorful egg, but still with a dominant primary hue.

The Story of this Post

Besides my previous posts logically leading up to this one, some interesting recent events led me to this conclusion. In the last month or so, I met three people who seemed to be strongly influenced by my ideas, but disagreed with me in very specific and puzzling ways. Thinking about it led to a personal realization: I am an idea-driven-sales guy, and PR is my medium. I almost never personalize or customize, but I often contextualize (though I don’t lean towards PR in an extremist way, which explains why I am comfortable in a more mature sales-first company like Xerox). But of the three people I met, two have been sales-first people, and one has been marketing first (the three of you know who you are!).

So that explains that mystery. It also explains why, looking back on my personal history of selling or hiring people to sell, I’ve pretty much always gone with a PR-first decision. When I haven’t, the decision has backfired badly. I can now read a new meaning into a really old (2007) post of mine, How to be an Idea Person. All my lemonade stand experiences that I described there were PR-driven.

By the way, the solution to problem posed in the title: to fix your IMC strategy, you need to paint your whole egg (or rather, stop being in denial about the fact that it is colored).

Rick October 20, 2010 at 10:11 pm

I’ll have to read this again (as I always have to read your articles at least twice), but this was interesting (as always) and actually more fun than most. Crystal clarity is an increasingly defining characteristic of your writing and very much enjoyed.

Finally – I found the personal background that tipped the scales far enough to drive this into print interesting (on the verge of gratifying). I rather suspect that Xerox probably doesn’t appreciate you as much (or perhaps in the way) as it should.

Overall another superb expression in modular synthesis, Venkat.
Keep up the great work.

jld October 21, 2010 at 4:27 am

I second this, Venkat when do you plan to use this kind of insights for your own benefit? ;-)

bonojerry October 21, 2010 at 6:12 am

I am going to have to start buying you coffees. I was telling someone yesterday that ribbonfarm is probably the best single website that I have found. Ideas are the most important thing for me; and you are constantly putting them out there, along with excellent explanations of each.

My main strength is in my understanding that all of reality is simply sets of mappings and mappings of mappings. When presented with this idea of three strategies and how you have to choose only one, I have to ask myself what other mapping strategy could be developed that includes all three, yet eliminates the necessity of having to choose one. I don’t know yet what that is, but I am on the lookout for it. It will be something new, reflecting the true newness of the world we live in, we’re not in Kansas anymore, Toto. Marketing, sales, PR, marketing, sales, PR, oh my! A three sided-rubic’s pyramid has a base that is a fourth side. What lies beneath the three eggs?

urssur October 21, 2010 at 8:09 am

That’s a crazy long approach to explain the different strategies of 3 very different companies.

Way to chuck facebook in there as well.

Very useful, and I’m sure this will more than explain the differences of the approaches to the engineers reading this.

Overall sir, I believe that I shall be purchasing your book when you launch it.

smashmouth October 21, 2010 at 9:41 am

Great post, thought provoking as usual. The first thing that I wondered about was in what context does your new, personal realization place your upcoming book, Tempo?

vishnu October 21, 2010 at 12:57 pm

Boy, u r the real PR prodigy..

Tomasz Skutnik October 21, 2010 at 3:23 pm

That was very, very enlightening post. Being an engineer I’ve always had a problem finding what was the difference between marketing, sales and PR. None of my friends or acquaintances could explain it to me – maybe because I’ve asked salespeople/marketing people. Yet you’ve managed to do it in a way that seems effortless (evidently living up to your “Candor, Cursing and Clarity” BSE post). And that’s only one of the gems that I’ve found in this single piece only. I take my hat off to you.

Now, it’s time to buy some coffee… :)

Maus October 22, 2010 at 2:22 pm

Another great paradigm for self analysis. I admit, I was a bit disappointed to realized that according to your Gervais schema I am Clueless (or at least incapable of sociopathy). But your exposition of the preferred selling mode made it clear to me that I am an idea-person and should associate with a predominately PR-driven company. It explains a great deal of the frustration I’ve been experiencing with my current organization, which is dominated by the marketing mode. Thanks again for another great post.

Venkat October 24, 2010 at 6:30 pm

Just catching up with the comments here…. sorry for the lag. Thanks for the comments everybody.

Rick and jld: The market for this stuff appears to be much smaller than you’d think :).

Dan Foreman October 26, 2010 at 6:29 pm

Sorry to hear that! I think for some people it is very important to be understood, and they will develop the skills of highlighting nuance and explaining complex concepts whether their peers appreciate them or not. Please keep up the good work.

BTW, Zuckerburg says he wants a McKinsey model for engineers at Facebook- the best young talent spends a few years learning how to build things quickly and then move on to start their ventures.

Venkat October 26, 2010 at 10:00 pm

Interesting, that Zuckerberg model. Quora has already become one of the thriving babies of Facebook, so this could create a whole new ecosystem that will shame the ‘sons of eBay’ and ‘sons of Google’ waves.

And yeah… I don’t mind at all that the market for this stuff isn’t huge. It is gratifying for me to just be able to write it.

Naveen October 26, 2010 at 12:43 pm

Venkat,

Good article. There are close similarities to “Unbundling the Corporation” (see below). In that article the three organization types are – Production innovation, Customer Relationship and Infrastructure – based. They seem to map very close to your marketing, sales and PR archetypes (not sure on the the PR mapping though). That article has some good information on the differening focus and characteristics of each organization type, with the need to choose one since fundamentally they conflict.

http://www.strategyworld.org/unbundling.pdf

Cheers,
Naveen

Venkat October 26, 2010 at 4:30 pm

Naveen:

I’d seen the article before, when I was thinking a lot about transaction costs, but had not considered it in this light. Thanks for pointing out the potential connection.

I am not sure the two are at the same level though. The Hagel article has more to do with the 7-dimensions post I did earlier. The 3-way distinction between customer-focused, product-focused, and infrastructure-focused companies is at a higher level. Every company still has a selling personality. A product-focused company must sell to channel partners who are better at selling to consumers. An infrastructure company must sell to product companies. And all those B2B relationships have a personality. Startups looking to get acquired really make one big sale, and that’s it. But that sale still has a personality.

I also think the unbundling can only happen at a small scale. When a business grows sufficiently large, it needs to do all 3.

Of course, if you believe the trend that more of the economy is moving to small scale overall, the unbundling argument is true.

Rick October 26, 2010 at 9:22 pm

Venkat,

> The market for this stuff appears to be much smaller than you’d think

Perhaps.
Or (particularly in the context of this discussion) perhaps you need to consider refining your “sales/marketing/PR” strategy?

> When a business grows sufficiently large, it needs to do all 3.

I am confident that you would agree that the larger a business is, the less tractable it becomes. That being said, your assertion that businesses typically need to induce fundamental change of this sort at a time when it is least able might be construed as logically supportive of the inevitability of eventual disruption and similarly in contradiction in with the objective of perpetuity.

It would logically follow then that part of a preventative prescription for avoiding eventual disruption would be to institute a Whole Egg/IMC approach significantly prior to the time it is actually ‘required’.

Venkat October 26, 2010 at 9:58 pm

I had to read your first comment several times before I understood your sentence “Finally – I found the personal background that tipped the scales far enough to drive this into print interesting (on the verge of gratifying)”

With this comment, I give up on this one: “That being said, your assertion that businesses typically need to induce fundamental change of this sort at a time when it is least able might be construed as logically supportive of the inevitability of eventual disruption and similarly in contradiction in with the objective of perpetuity.” :)

And as for my own sales/marketing/PR for this blog, rethinking would definitely help. Right now it is at “nonexistent” …

Venkat

Rick October 27, 2010 at 8:50 am

Los siento, Venkat and Mea Cupla on the run-on sentence.
Let me try and make amends.

In the body of your article you assert that marketing communication tends to be mono-thematic and take place along of one of 3 possible typologies. In a recent response to a comment you remark on the that mature companies identify the need (or at least make an attempt) to (presumably first diversify, and then) integrate them.

The case that organizations become less effective at making fundamental changes over time is undisputed, so what we have here is a perceived need for change coming at a time when the ability (and predisposition) to implement such a change effectively is in doubt. (Sort of like finding out that you should have been saving more once you’ve already retired.)

On this basis I would propose that in the face of effective competition, by the time an organization ‘discovers’ the need for integrated (/diversified) marketing communication, it may simply be too late in that organization’s maturity cycle to do anything effective about it.

It can also be extrapolated that in industries dominated by oligopolies, this may be one of the factors which leads to imminent disruption.

A summary of all of this would be that in a competitive environment, IMC appears to be a necessary part of the strategy and culture of any organization that intends on remaining viable (to which I believe you would agree) – and the contribution I attempt to make to that summary is that such integration must take place early and become deeply rooted in the organization’s culture, for without it, that organization’s destiny becomes a foregone conclusion.

Venkat October 27, 2010 at 9:24 am

Now that’s MUCH clearer.

I think that’s a defensible idea: you’ll need IMC when you are least able to get it, so you should plant the seeds of IMC early.

I have no idea how to get there though. I can imagine something extreme, like making your first 3 selling hires a sales person, a marketer and a PR person. They’ll either all play nice and see each others’ points of view, leading to an anemic compromise of a strategy, or one person will dominate (the colored egg), or they’ll fight and you’ll either get the seeds of future silos, or 1 or 2 will leave.

It would be interesting to see examples of each, and any examples of balanced integration out there (which by my theory shouldn’t exist… it should be colored eggs all the way… maturity simply dilutes the primary hue with some of the others…).

The only way I can see it working is with different product variants. A single product trying to satisfy marketing, sales and PR priorities is trouble.

Venkat

Rick October 27, 2010 at 12:00 pm

Very happy to see we have that one put back in the box.

To your drive towards a white (or perhaps, more evenly blended) egg:
A highly integrated egg of whatever color may be OK; a predominance of one or another color may be optimal given the particular industry. But to produce silos of any color, or even to allow a blend to be reached randomly or on the basis of a non-pertinent preferences – and/or not to monitor it to assure that it is in the best possible alignment with both current and prospective customer perspectives could (to the extent of competitiveness within the industry and the relative sophistication of the competition) – be crucial to continued viability. Your whole point was that this is a condition which should be recognized as important, monitored, and managed – and with that I believe there can be very little disagreement.

Naveen October 26, 2010 at 10:20 pm

Venkat, I agree that selling personality is distinct, but possibly a lower order bit in the organizational scheme. I say that because the selling personality is more fluid and needn’t be fixed. Ex. Apple while a product company sells directly to customers. Now, it is trying to get into the “enterprise” so it needs to change the sales model with ‘personalization’ since no Fortune 100 company is buying things in retail. Having the two distinct selling personalities is not optimal for Apple but doesn’t change the core DNA of the product focus. However, if you are a $300B company you get into whatever big sales channels you can.

I think unbundling happens over time, companies start with a certain focus area in one of the axes expand into the other axes over time. However there comes a time whether due to external circumstance (Internet, cheaper credit markets, strong downstream/upstream value chain partners etc..) or internally (strong teams in a certain axis) the marginal utility on one of the axis far exceeds on the other two so Unbundling makes a lot more sense. However it is a complex interplay of factors which makes apply management theories difficult.

I didn’t think of transaction costs, glad you mentioned it. Now that I look at the unbundling article date, it seems to be created in the during the “internet will dramatically destroy all transaction costs” hype phase. Everybody will become a free agent sitting in pajamas running loosely coupled global networks. 10 years on I think it is safe to say that transaction costs lowering have different implications for different types of business, the infrastructure businesses seems to have grown much bigger instead of smaller (Retail, search, Cloud computing) while the product type companies have become much more diversified and smaller (design/R&D shops/Open innovation..). So, I wouldn’t subscribe to all industries being smaller but maybe the ones with ‘people/creative’ focus. It would be interesting to see if someone did a follow-up on the effects of internet on company size.

Naveen

Naveen October 26, 2010 at 10:23 pm

Gah! This needs to go below Venkat’s comment to me earlier.

Robert November 10, 2010 at 9:33 am

Venkat,

In reading this article, and considering a different context, I wonder about the scalability of each model (sales, marketing, PR). The example I had in mind was the recent municipal election in Calgary that made global news. There were three front-runners, each of which fits one of the models you suggested. None of the other candidates received over 1% of the vote.

Ric McIver, long-time alderman, well known and respected in his quadrant of the city. His personable interaction represents a “sales” approach. Barb Higgins, local newsanchor for over 20 years. Her minor celebrity image represents a “marketing” approach. Naheed Nenshi (the eventual winner) was a business and government consultant and university professor. His “better ideas” campaign was clearly a “PR” approach. To make a long story short, early polls showed McIver with almost 50% support, Higgins with 30% support and Nenshi under 5% support. However, Nenshi’s PR quickly spread via Twitter, Facebook, media and word of mouth, giving him the momentum to overtake the others and win the election (Nenshi 42%, McIver 32%, Higgins 26%), with the highest voter turnout in 30 years. (This essay gives an interesting view of Nenshi’s campaign built around ideas: http://www2.canada.com/calgaryherald/news/swerve/story.html?id=f420047a-887b-4365-8b20-60f2f48f8b58&p=1)

Is it fair to conclude that PR is more scalable? Is politics an appropriate application of your idea?

Venkat November 10, 2010 at 12:55 pm

Very interesting case. I don’t think you could conclude that PR is more scalable though. It simply seems situational to me. I’d say in politics:

1. When trust is eroding in the political establishment, due to things like corruption and incompetence, but there are no clear “issues”, the salesman will win.

2. When apathy is the problem, and the challenge is to mobilize a non-voter base, the marketer will win (I put Obama in this category… through marketing he mobilized a potentially apathetic part of the electorate in his favor). Kennedy beating Nixon in the TV debates was a case of Nixon’s used-car-salesman personality failing to beat the marketing charisma of Kennedy.

3. When there are serious issues that everybody recognizes are bigger than the people involved, an idea can win. This is the rarest outcome of all, since an election being dominated by an issue where the electorate can actually understand the issue, let alone the ideas, is quite rare.

This is my zeroth order political theory. It could be completely wrong since I haven’t thought enough about political messaging.

Robert November 10, 2010 at 1:28 pm

Thanks for the response. I’m not sure political message is worth examining closer, but your treatment seems realistic. I question my assignment of “PR” mode to a candidate when there wasn’t a polarizing issue in the election. I can see that an election dominated by ideas is rare. Maybe the “idea man” was actually using marketing to project an image (with the ideas being secondary).

Josh W November 21, 2010 at 7:57 pm

If this is true, it sounds like an explanation for why microsoft broke; they put in personalisation and features, but then got hit by the problem of control and security, and got stuck.

By that logic, if microsoft have any sense, they will focus on their microsoft certified professionals and partner organisations, and use it to amplify their touchy feely side. Rather than public betas, they could set up direct feedback and specific feature tests with different people, folding them back into the core at different places. In other words “exclusive feature previews”, creating that bespoke feel for different organisations, but without the complexity of multiple interacting changes interfering with security. Folding that in would be a serious issue of course, but it might better reinforce their consumer lock-in.

Bee February 5, 2012 at 11:44 am

Venkat

I must start by saying that many of your posts are interesting and thought provoking.

This one however reflects an uneducated understanding of marketing, sales, and pr.

Marketing is about creating and sustaining exchanges. Marketing is not about advertising, it’s about understanding consumer needs broadly and helping an organization craft an offer for a target consumer. This crafting takes the form of developing a value proposition, an activation approach, fulfillment capabilities, and value capture model. To that end many collapse thses activities into the 4Ps or 5Cs. Advertising, sales and pr are tactical instruments to that end. And yes each is just a means to and end. They can be combined and IMC was not the first idea to achieve that end. IMC was an attempt to integrate communications not the offer.

Steven July 14, 2012 at 4:03 pm

Great model for how companies approach the market. How do you identify companies with a PR strategy? It seems simply having a lot of press isn’t enough…

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