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STRATEGY

Market Driving Organizations

[Abstract ]

This paper approaches the scientific micromarketing opportunity through initially posing the following questions that in all likelihood would present themselves to the C-level executive suite of a company considering the benefits, costs and other considerations involved in joining the scientific marketing revolution:

a. How will a demand management & revenue optimization strategy make our organization much better than it is today?

b. What differentiates one particular DMRO solution from all others and how can this help me gain an enduring performance advantage?

Actively shape demand rather than market to it: market driving versus market-driven management

Many good companies are market-driven – that is, they listen carefully to what their customers are telling them and continually react to perceived shifting market needs. This is a positive attribute – yet the marketplace in hypercompetitive industries is much more complex and volatile than the organization’s ability to succeed simply by listening and responding. The key to sustained performance advantage is to shift the paradigm and drive the market through value creation, change and/or leadership (Hills and Sarin 2003). Industries with highly competitive, choice-rich demand environments provide a playing field for enterprises to differentiate themselves through scientifically manipulating the levers such as advertising, pricing and cross-selling to move the market in directions that are strategically and tactically advantageous.

Market driving leadership starts with the elusive ability to do things differently than others. Being better than your competitors is not enough – in today’s fast-paced business environment the rapid adoption of product and process innovations can erase a competitive advantage within one or two business cycles or even fiscal quarters. Doing new things – or doing old things in new ways – that are hard to replicate is the key to successful strategy (see Porter 1996).

Nothing is closer to the heart of strategic success in hypercompetitive industries than mastery over the demand environment – an increasingly complex demand environment where the only certainty, driven by the proliferation of choice, is an exponentially increasing configuration of potential customer-facing transactions, every day (Bright, Kiewall and Kincheloe 2006). Mastering this environment does not lend itself to old, tried and true pricing and revenue management practices no matter how effectively the organization performs them. By doing things in a new way – by harnessing the power of computational technology with the qualitative insights gained from leading-edge learning and experimentation methodologies and combining these sources of power into a deep awareness of revenue opportunities at the micro level – the organization learns to anticipate its customers’ demand curves before they even manifest and meet that demand with the right price, in the right place at the right time.

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