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Marketing warfare strategies

From Academic Kids

Marketing warfare strategies are a type of strategies, used in business and marketing, that try to draw parallels between business and warfare, and then apply the principles of military strategy to business situations. In business we do not have enemies, but we do have competitors; and we do not fight for land, but we do compete for market share. It is argued that, in mature, low-growth markets, and when real GDP growth is negative or low, business operates as a zero-sum game. One person’s gain is possible only at another person’s expense. Success depends on battling competitors for market share.

The use of marketing warfare strategies

Strategy is the organized deployment of resources to achieve specific objectives, something that business and warfare have in common. In the 1980s business strategists realized that there was a vast knowledge base stretching back thousands of years that they had barely examined. They turned to military strategy for guidance. Military strategy books like “The Art of War” by Sun Tzu, “On War” by von Clausewitz, and “The Red Book” by Mao Tse Tung became instant business classics.

From Sun Tzu they learned the tactical side of military strategy and specific tactical proscriptions. In regards to what business strategists call "first mover advantage", Sun Tzu said: "Generally, he who occupies the field of battle first and awaits an enemy is at ease, he who comes later to the scene and rushes into the fight is weary." From Von Clausewitz they learned the dynamic and unpredictable nature of military strategy. Clausewitz felt that in a situation of chaos and confusion, strategy should be based on flexible principles. Strategy comes not from formula or rules of engagement, but from adapting to what he called "friction" (minute by minute events). From Mao Tse Tung they learned the principles of guerrilla warfare.

The first major proponents of marketing warfare theories was Philip Kotler (Kotler, P. and Singh, R. (1981) "Marketing warfare in the 1980s", Journal of Business Strategy, winter 1981, pp. 30-41) and J.B. Quinn (Quinn, J. (1980) Strategies for change: Logical Incrementalism, Irwin, Homewood Il). In an early description of business military strategy, Quinn claims that an effective strategy: "first probes and withdraws to determine opponents' strengths, forces opponents to stretch their commitments, then concentrates resources, attacks a clear exposure, overwhelms a selected market segment, builds a bridgehead in that market, and then regroups and expands from that base to dominate a wider field.

The main marketing warfare books were:

  • “Business War Games” by Barrie James, 1984
  • “Marketing Warfare” by Al Ries and Jack Trout, 1986
  • “Leadership Secrets of Attila the Hun” by Wess Roberts, 1987

By the turn of the century marketing warfare strategies had gone out of favour. It was felt that they were limiting. There were many situations in which non-confrontational approaches were more appropriate. The “Strategy of the Dolphin” was developed in the mid 1990s to give guidance as to when to use aggressive strategies and when to use passive strategies. Today most business strategists stress that considerable synergies and competitive advantage can be gained from collaboration, partnering, and co-operation. They stress not how to divide up the market, but how to grow the market. Such are the vicissitudes of business theories.

Marketing Warfare Strategies

Companies typically use many strategies concurrently, some defensive, some offensive, and always some deterrents. According to the business literature of the period, offensive strategies were more important that defensive one. Defensive strategies were used when needed, but an offensive strategy was requisite. Only by offensive strategies, were market gains made. Defensive strategies could at best keep you from falling too far behind.

The marketing warfare literature also examined leadership and motivation, intelligence gathering, types of marketing weapons, logistics, and communications.

Learning from Napoleon

To understand how business strategists used military strategies, we can look at the innovations of Napoleon and apply then to business situations. Napoleon made four key innovations. They were 1) increase his army’s marching rate, 2) organize the army into self contained units, 3) live off the country, and 4) attack the opponent’s lines of supply. All four provide lessons for business strategists:

1) By increasing the speed that the army marched and fought, they created a military advantage. They could implement their tactics faster than the enemy. Hitler used the same strategy with his Blitzkrieg. The enemy was overrun before they were able to organize a viable resistance. But once these innovations were used, other armies made adjustments and the nature of warfare changed. All armies had to increase their pace of operations to be effective. Businesses, like armies must operate at a faster pace than their competitors in order to have a competitive advantage. They must develop and introduce products faster, implement strategies faster, and respond to environmental factors faster. They must be proactive.

2) Napoleon returned to the cohort organization of the Greek phalanx. These were self contained fighting units of citizens that knew each other in daily life, and had a wide variety of skills and various skill levels. Under the Roman Empire the phalanx was replaced by specialized legions containing 100 fighters (centurion). Each legion had a specialized skill (such as the archer legions from Thrace). For more than 100 years, businesses have taken Adam Smith’s advice and organized by functional specialization, just like the Roman legions did. Accountants populated the finance department and technicians populated the operations department. According to Adam Smith this is the most efficient way of organizing. But as the speed of business increases we need a more flexible system. We use cross functional teams (like the Greek phalanx) that have enough breadth of knowledge to see the big picture, are objective enough to get accurate and unbiased perceptions of environmental factors, and are flexible enough to act quickly.

3) Napoleon’s armies lived off the country instead of bringing supplies with them. This allowed them to march faster. The disadvantage is that stealing from the local population created resentment. But this was a longer term problem. It could be dealt with when the time came. The short term advantage outweighed the long term disadvantage. In business we no longer stock inventory based on an EOQ model. We use a Just in Time model and this reduces costs considerably. However it makes us vulnerable to our supply channel partners. Just as Napoleon had to manage the local people that supplied him his provisions, businesses today have found supply chain management to be a critically important part of doing business.

4) Striking at the opponents lines of supply is known as a flanking strategy. It is effective because it eliminates the need to fight the enemy head-on. An attack on a poorly defended supply line can render the whole enemy army unable to fight. In business today we attempt to do this with exclusivity agreements with suppliers (if you sell Pepsi, you can’t sell Coke). If Pepsi has an exclusivity agreement with Pizza Hut, Coke will effectively be eliminated from that part of the market.

Robin Hood invades business schools

Many MBA students have been introduced to business warfare theory by doing the case of Robin Hood. They are given a summary of the Robin Hood story (or part of it) and asked to relate this to the business world.

You might recall that Robin Hood lived in Nottingham England when England was at war with the Dutch. King John went on a crusade to the continent only to be captured by the Dutch and held for ransom. While he was detained the evil sherrif and incompetent baron whom he had put in charge of Nottingham were abusing their power. They were taxing the people beyond what they could aford and offering them almost nothing in return. Robin Hood, a noble in Nottingham, resented this abuse so he moved to Sherwood Forest where he and a group of followers, robbed from the tax collector and other wealthy patricians associated with the baron and sheriff, and returned the money to the poor maligned peasants.

There are a number of business scenarios that can be devised from this narrative, depending on how you choose to redefine the characters. Some go beyond military strategy to include political intrege and social factors. One popular analogy sees King John as a CEO who appoints the sherrif and baron as managers in charge of the "Nottingham division". In this scenario the Robin Hood story is about corporate governance, alliances, and hostile takeovers. The CEO (King) attempts a hostile takeover of a rival firm (the Dutch) only to encounter unexpected resistance. He is forced to swallow a poison pill from which he dosnt recover for several years. While engaged in such acquisition matters, he loses contact with some of his operational divisions. Divisions with incompetent managers (such as the "Nottingham division") lose their focus and are confronted with internal insurrections and competitor attacks. When the CEO regains strategic focus and realizes what has happened in these divisions, he cleans house, firing the managers and appointing new ones, possibly even the insurrectionists.

Another way of interpreting the narrative sees the peasants as customers, the taxes they pay represent the price of the product, and Robin Hood is a competing firm. This scenario is a tale of marketing incompetence. In it management has lost its customer focus. It no longer offers value for money and is trying to charge far too much for the product. It is not treating customers with respect, and as a result, it is losing market share to the competition. The moral of the tale is that market dominance is not something that is decreed. It must be earned everyday and with every transaction.

Other interpretaions are possible. If you are a labour organizer, for example, you might craft an entirely different story. And what is the significance of maid Marion's role? Why did Robin Hood go to the tournament even though he knew the sherif's men would be waiting for him? Several variants of this case are being used.

See also

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