When Marketing is Useless

In the Hutong
The Summer of Blogging Begins
1420 hrs.

Yesterday on Weibo I suggested that while some companies in China were either muffing their marketing by not putting enough time, money, and CEO attention into the function, there are actually some companies for whom marketing would be a waste of money. Naturally, somebody asked “oh yeah, like whom?”

In about five minutes, the Hutong Party Secretary and I came up with a baker’s dozen Chinese companies that I would argue don’t need to bother doing anything but taking care of product/service quality and paying their salespeople well.

Air China – The nation’s flag carrier is slowly raising its service standards to match the expectations of Asia’s spoiled-for-choice air travelers. In the meantime, relationships, a growing lock on key hubs in China, and rapid market growth help ensure its planes remain full.

Capital Car (Shouqi) – As a customer I’ve never had any complaints about Shouqi’s service, whether in buses, vans, or taxis, but I also recognize that it owes its success at least as much to its semi-protected status as its management.

China Aviation Oil – The exclusive or preferred supplier of jet fuel at China’s busiest airports, CAO needs traders, salespeople, and guys who can pump fuel into jets. They don’t need marketers.

China Minmetals – China’s minerals conglomerate, pumping mined materials into China’s economic furnace. Procurement determines success, not marketing.

China National Railroad – Except for high-speed rail (for now), CNR manages to fill most of its trains despite zero marketing and a ticket purchasing system that harkens back half a century.

China Ocean Shipping Corporation (COSCO) – China’s state-owned and dominant steamship company. Not only does it not need marketing, it needs to keep those sorts of costs as low as possible as it fights the likes of Japan’s Mitsui OSK, Taiwan’s Evergreen, Hong Kong’s OOCL, and Singapore’s NOL in the commoditized Transpacific ocean freight business.

China Ceroils (COFCO) – If you don’t know this company, think of Archer-Daniels Midland backed by the power of the Chinese central government. Some of its processed food subsidiaries and real estate companies may need marketing, but the parent company surely does not.

Gehua Cable – Beijing’s dominant cable television service provider. Decent customer service, fair collection of channels, and no need for a marketing department.

Sinopec, Petrochina, CNOOC – Lining China’s filling highways with service stations and convenience stores, the problem for China’s oil giants is securing enough fuel to sell and getting the government to let them do so at profit-making prices, not pulling cars into their service courts.

State Cigarette Monopoly – When you have a corner on an addictive product, people will find you. Don’t bother with marketing.

State Grid Corporation – A power transmission monopoly. Your local utility buys from State Grid, or the town goes dark.

Tong Ren Tang Pharmacies – A Beijing institution, the familiar red and yellow signs mix traditional Chinese medicine, over-the-counter remedies, first aid supplies, and inconsistent service into an apparently successful business. The company could use an attitude overhaul at the counter and some better merchandising, but marketing is probably unnecessary.

By now you will have noticed that these companies share one or more of the following characteristics:

  1. They are either monopolies or near-monopolies in their areas.
  2. They are the dominant players in their markets, either by government decree or acquiescence.
  3. They offer reasonable enough products or services at reasonable enough terms and conditions that customers are not running away screaming.

Obviously, not every company can afford to rely entirely on their sales force to win business, and my bet is that at some point all of the companies listed above will need to get serious about marketing.

But there is a lesson hidden in these cases, extreme as they are. As marketers we too often make the self-interested assumption that our companies or clients need marketing. Maybe they do. It would serve us well, though, to question that assumption when taking on a new job, a new client or a new campaign, or even argue the opposite (“this company doesn’t need a marketing program.”)

At the very least, we will find that doing so frees us to toss the baggage that comes with our craft, get away from the “one of each” check-the-box approach to market, and get on with only doing the things that actually sell more stuff.

Casper

Although I see where you are coming from with this post, I can’t shake the feeling that the way your are using the term ‘marketing’ is not representative of reality.
What exactly is marketing? And why would a company need it? IMHO marketing is anything a company does to secure or create a larger market share. You suggest that, since most of these companies are already monopolies or dominant players in their markets, they wouldn’t need to think about their ‘marketing’. Or, since their products are already very good, they customers won’t care about their marketing efforts.
I think what you are referring to here is marketing ADVICE. These companies do not need advice on how to reach their markets. But they couldn’t have gotten to where they are today without their continuous marketing efforts.
Furthermore, what about overseas expansion? If these companies have secured satisfactory market shares in their domestic markets, why not expand?

David Wolf

Casper, I think your feeling comes from my failure to establish a definition of marketing in the post. I wanted to avoid being pedantic, but clearly I should have established some boundaries. In this context, I define “marketing” not as the four-Ps (as it is commonly defined in academia), but with the comparatively narrow definition with which we saddle it in an operational context: those activities – outside of sales – designed to promote a company, its brands, products, and/or services to those audiences most likely to buy from it.

I would argue that, outside of a well-managed face-to-face sales effort and inside sales support, these companies need neither marketing advice nor any form of promotional activity. As to how they got where they are, my point was that they do not need marketing today, given their current situation and apparent focus. Nonetheless, I think a dive into the history of many of these companies will reveal that most if not all achieved their current positions without marketing as I define it above.

As for overseas expansion, if and when those companies decide to operate in international markets where they lack the advantages they enjoy at home, they would then, naturally, need to conduct marketing. Indeed, if they decided to diversify in China into unrelated sectors or product lines, they would also need to conduct marketing. Barring such strategic initiatives, however, they needn’t bother with marketing as I define it here.