My dear friend AG Lafley and I have written a book called Playing to Win: How Strategy Really Works and we are gratified by all of the positive reviews — The Economist, the Financial Times, Fortune, etc. Even on Amazon.com, the reviews have been 100% 4’s and 5’s.
But sometimes those 4’s inspire a blog post.
One of the Amazon reviewers, ‘Greg’, said lovely, positive things about the book, but ranked it a 4 because: “I seriously question whether this is a strategy book or a marketing book. Yes, the word strategy pops up a lot, but the examples and the cases … belong to marketing.”
In his head, I am sure Greg has a definition of marketing and the book reflects his definition of marketing. But to make his point, he has to have a useful definition of strategy that is truly distinct from marketing. Therein lies the rub. As business thought and understanding has evolved, any useful definition of the difference between marketing and strategy has disappeared. That is why Greg could call a strategy book a marketing book. The dividing line between strategy and marketing has disappeared in practice.
It was not always so. Strategy and marketing emerged out of very different traditions.
Marketing came out of sales: given that a company wanted to sell stuff to customers, how could it think about doing that in an intellectually rigorous and planned way? The answer that emerged in the late 1940s was a thoughtful ‘marketing mix’ which gave rise in 1960 to the most famous concept in marketing history: the 4 Ps — Product, Price, Promotion, and Place.
The implicit notion behind this approach was this: if the company was going produce some kind of product (or service but this thinking really emerged in a products environment), it had better optimize the 4 Ps in order to sell as much of it as possible. The players explicitly considered in this equation were the company and the customer.
In stark contrast, business strategy emerged out of military theory: how could a company beat it is enemy? In the case of business, that meant its competition. Thus, the early business strategy thinking that emerged in the 1960s focused on the capabilities of the company relative to its competitors. Was the company farther down the experience curve than its competitors? Was it using the resources from its Cash Cows to fund its Stars to a greater extent than competitors could?
Unsurprisingly, the customer did not loom large in this early view of strategy. In military strategy, customer needs was a pretty simple notion. They — i.e., your citizens — wanted you — their military — to defend against or conquer the enemy. That is about it in terms of customer understanding.
Hence the roots of marketing involved the company and its customer while the roots of strategy involved the company and its competitors. And in that era, marketing and strategy looked a lot different.
But as the practice of each scrolled forward over time, they converged. Marketers figured out that the crux of the issue was product, price, promotion and place relative to competition and sometimes that meant completely changing every P in order to carve out a useful place relative to competitors with some set of customers. Strategists figured out that beating competition entailed having intimate knowledge of exactly what customers wanted so that the capabilities they invested in would actually meet a customer need in a way that would result in better performance than that of competitors.
When these two realizations manifested themselves, the line between marketing and strategy disappeared. Good marketing and good strategy are both about making choices that build and maintain a particular set of capabilities that enables the company to outperform its competitors with a particular set of customers.
Because business schools are generally dedicated to narrow knowledge fields and opposed to integrative knowledge, they have assiduously maintained two separate disciplines in marketing and strategy to the benefit of no one. And because companies have fallen in love with specialization in skill development and fragmentation of organizational structures, they have followed suit and generally maintain separate marketing and strategy departments. That is probably Greg’s organizational experience.
The very best companies in the world have eschewed this unproductive distinction between marketing and strategy, and P&G is one of them. That is one of the reasons why Playing to Win is co-written by its former CEO.
