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Harvard Business School has expanded its Executive Education offerings within the Marketing category to include five programs for 2001. Marketing, of course, has long been a critical functional area in most organizations, and HBS's Strategic Marketing Management program has long been popular with executives around the globe. So what prompted the development of four new programs? In a recent conversation with Executive Education, Professor Kash Rangan, the head of HBS's Marketing Unit, explained how the convergence of several diverse factors created the need for a broader Executive Education marketing portfolio.
EE: HBS recently announced four new marketing programs for executives. What motivated these additions — and how do they relate to what is occurring in the global marketplace?
Rangan: Part of the motivation came from executives who attended Strategic Marketing Management, our flagship marketing program. We've had numerous requests for new programs that more deeply explore certain aspects of the marketing discipline and address the major issues managers now face in those areas.
The dominant driving force, however, has been the dramatic change we're experiencing in markets worldwide. While the 1980s brought significant change to the way firms marketed goods and services, the late 1990s brought a sea of change for marketers everywhere. They now must contend not only with the Internet's evolution, but also with the globalization of markets, declining trade barriers, technology advances on several fronts, dramatic productivity improvements, and more. As a leading research institution, HBS has a wealth of cutting-edge information that only has value when shared with those who actively manage the world's business organizations. However, the platform offered by Strategic Marketing Management is too limited and its audience too broad to examine these important areas in-depth. The programs we're introducing now, along with those added last year, are intended to facilitate the sharing of information on an altogether different plane.
EE: Since you mentioned the Internet, let me start there. How do you see e-commerce reshaping the way firms compete and market their goods and services?
Rangan: I think it affects the marketing process in three ways. First, the Internet presents an entirely new buyer-seller interface with its own unique benefits and limitations. Second, it alters established buying patterns and, in the case of digitally based products like music, data, and software, it also becomes a distribution vehicle. Finally, the Internet provides a whole new structure for delivering customer service.
The opportunities and challenges the Internet and e-commerce present can be daunting, particularly for large, established organizations that previously invested heavily in systems designed to function smoothly in a nondigital world. Now, they must decide whether to modify those systems in hopes that they will work effectively in the digital world — or invest in the development of entirely new systems, often with great risk to their bottom lines. Given the far-reaching impact of the Internet on both established players and new ventures in virtually all industries, every one of our marketing programs features a curriculum component that explores the opportunities and challenges posed by the Internet. There is the temptation to dismiss Internet business opportunities as a fad, especially with the beating that the dot-coms have taken recently. The truth is, regardless of how we read the current e-business climate, the Internet is here to stay. The future for all businesses is to integrate this utility into their business model.
EE: Customers have witnessed major changes in distribution and retailing over the years. What do these trends mean to players up and down the retail chain?
Rangan: All players face complex challenges that will impact their organizations' performance for many years. But let me explain. Every transformation that has occurred, from the emergence of discount chains to online "stores," has had serious implications for business systems and organizational processes in retailing, distribution, and manufacturing. Many supply chains for industrial products have undergone similar transformations. All this, in turn, has greatly expanded the scope of distribution management. It is no longer a tactical afterthought; it is a core element of corporate strategy.
Recognizing the new level of understanding and expertise that is demanded of senior executives today, HBS has added a new course specifically targeted to the needs of suppliers, distributors, and retailers. Channels to Market will help them understand where distribution/retail is headed and what key players are doing to ensure competitiveness. Participants also will acquire the "total approach" to channel management that is key to improving productivity, boosting profitability, and enhancing shareholder value. Because of the core focus of the program on the value chain, it is as much relevant for retailers and distributors as it is for suppliers, who market through the channel day in and day out.
EE: Innovative technologies are certainly getting a lot of attention these days. Do such products have any impact on the marketing function? If so, please explain.
Rangan: Absolutely — and for many reasons. Let me start by saying that the marketing of technology-related products is, indeed, vastly different from marketing everyday products. The long development cycle, atypical cost structure, and less-predictable buyer behavior are just some of the realities that create complex issues for marketers who find themselves in increasingly technological roles. The old world of marketing simply falls short, and new approaches are needed to achieve and sustain product success.
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| The truth is, regardless of how we read the current e-business climate, the Internet is here to stay. | |
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| — Kash Rangan |
EE: Brand management seems to be taking on new dimensions these days as well. Are brands viewed and managed differently now than in the past?
Rangan: We saw brand management really take off in the 1990s as companies became increasingly aware of the inherent value of their brands. A brand symbolizes a set of attitudes that become established in consumers' minds over time. When seeing a brand in use, consumers transfer that attitude set to the product or service being associated with the respective brand. Consumers build brand meanings based on a variety of sources, including personal experience, advertising, word of mouth, and even news media. Guiding the creation of positive brand images in the minds of millions of individual consumers is a lengthy and costly process. Consequently, well-established brands are now viewed as important corporate assets, often having significant measurable value. Today, we see them purchased and sold much like tangible assets.
Internet growth has greatly accentuated the importance of brands to the marketing process. Consumers shopping online rely strongly on brands because they cannot directly examine the merchandise being offered. As e-commerce becomes integral to the marketing process, managing brand meaning becomes essential for every firm. This is a major reason for dot-com companies spending so heavily on marketing during the introductory stage.
Now in its second year, our Managing Brand Meaning program will present marketers with a new framework for looking at the way brand meaning can be developed and managed for optimal market performance across the media spectrum.
EE: Isn't marketing to other businesses much like marketing to consumers?
Rangan: Business-to-business (B2B) marketing is very different from consumer marketing because business customers buy very differently. Business purchasing is a more rational process. For example, business customers frequently must adhere to established buying parameters and product specifications. Purchase quantities are generally much larger, and selling is typically done on a face-to-face basis. The value/price trade-off is more important here, as well. By contrast, consumer purchasing behavior has a stronger psychological component. It appears less rational and more idiosyncratic.
B2B marketing is exploding as communications technology brings a wealth of product and service information to buyers' fingertips. B2B sales have soared to $200 billion annually, surpassing its consumer counterpart by tenfold. To help executives better understand the unique characteristics of B2B marketing, we introduced Business Marketing Strategy last year. Back by popular demand, this program will examine such key issues as serving the global customer, using value-based pricing strategies, and, of course, competing effectively in an increasingly digital world.
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