Embed value-based marketing as a core business practice in Royal Mail, including the leadership and culture, processes and

capabilities.
Marketing matters more than ever
Markets are incredibly complex and competitive

• Competitive intensity has tripled in most markets

• Typical segmentation models now have 400 clusters
• Product lifecyles have reduced by 70% over last decade

Customers are much more powerful than ever

• Consumers now receive 1500 messages per day

• 54% of consumers have registered for “do not call”
• Purchase decisions are typically made in 2.6 seconds

Shareholders demand higher, faster returns

• Intangible assets make up 78% of the Fortune 500’s value

• 60% of brand investment impacts future years
• 21% of CEOs are marketers delivering 5% better TSR

© Peter Fisk 2005

 The old ways don’t work anymore. Complexity, speed and
power means that even the best brands and marketers need
to think differently in order to succeed
© Peter Fisk 2005
 Marketing Products Innovations Communications

1837 Candles and

Marketing soap products
function

First colour print ads

1900
First radio ads
Laundry products
Direct selling
Brand
Hair care Synthetic to consumers
Management
Detergents Radio soap operas
Oral care

Home cleaners First TV ads

1950
Inhouse TV
Supply chain Coffee Flouride toothpaste programming
management
1-800 Numbers
Disposable nappies
Salted snacks
Global category
Enzyme detergents Cable TV
management
Cosmetics
2 in 1 shampoos
Digital ads
Corporate venturing Pet food
Tooth Whitening pg.com
2000
Customer is boss

© Peter Fisk 2005

 Intuitive
Divergent
Imaginative
Non-Linear
Holistic
Subjective

Interactive
Convergent
Directive
Linear
Analytical
Objective

Marketing needs to be more intelligent and imaginative. It

must combine more rigorous analysis and more radical
creativity, to make sense and stand out in today’s markets.
© Peter Fisk 2005
 Genius Original
thinking

Analytical Creative
thinking thinking

Dual Observational
thinking thinking

Visual
Volume
thinking
thinking

Holistic
Pragmatic thinking
thinking

Genius marketing requires the skills and confidence to make

the best ideas happen. It brings together left and right-brain
thinking with practical, integrated action.
© Peter Fisk 2005
 Outside in

Inside in

Companies need to work “outside in” rather than “inside

out”. Rather than improving what they do, they should be
focused on the best opportunities in their marketplaces
© Peter Fisk 2005
 Complexity
Space
Power
Networks
Pace
Insight
Responsibility
Inversion

Genius insights include Apple, Coca Cola, eBay, Enterprise,

Microsoft … Genius tools include Market Mapping,
Ethnography, Ethics Compass, and Reverse Marketing.
© Peter Fisk 2005
 Traditional definitions of markets make little sense.
Boundaries blur, and new markets emerge. The pace and
impact of this change can be phenomenal.
© Peter Fisk 2005
 3 new stores
open every day
Starbucks name is taken from
the sailor in Moby Dick, its
painted lady emblem taken
from an old fishing boat.

Acquires Tazo
tea company

7225
Howard Schultz acquires Frappucino
Starbucks and starts launched
coffee bar roll-out With Pepsico

Key accounts 4709

with corporates
and airlines
Pike Place Market
2135
Seattle starts selling
coffee beans 1412
676
116 272
17 55

1971 1988 1990 1992 1994 1996 1998 2000 2002 2004

Source : starbucks.com
 Cool Places Hot Spots
where latest where the new
trends emerge competition is

Black Holes White Spaces

where old where nobody
brands die has ventured
© Peter Fisk 2005
 Marketing needs to work outside in too. Starting with the
customer and their need, rather than supplier and product.
Campaigns are dead, channels invert, start with a Google.
© Peter Fisk 2005
 Power Profile™

Brands define supplier or product S C Brands reflect buyer aspirations

Communicate in mass campaigns S C Get in touch when want to know

Products standard and discrete S C Solutions assembled by buyer

Distributed through defined channels S C Agents help buyers solve problems

Price based on competitors and costs S C Pricing based on perceived worth

Relationships sought by suppliers S C Buyers loyal to people like them

Innovation drives product derivatives S C Innovation redefines contexts

Strategy based on current capabilities S C Strategy based on best opportunities

Measured on financial-based metrics S C Measured on customer-based metrics

Overall, supplier calls the shots S C Overall, buyer calls the shots

© Peter Fisk 2005

 Short-term

Long-term

Marketing must create tomorrow whilst delivering today.

Build the brands, innovations and relationships to drive
future cashflows whilst also delivering quarterly profits.
© Peter Fisk 2005
 Stakeholders
Value
Strategies
Brands
Innovation
Design
Portfolio
Intangibles
ROI
Genius insights include Boden, BMW, Paul Smith, Panera
Breads, Virgin, Zara … Genius tools include Market Strategy,
Value Propositions, Memetics, Brand Equity and Innovation.
© Peter Fisk 2005
 What is the measure of marketing success? In the European
car market, a different brand is “best” when measured on
market share, revenue, operating profits or shareholder value.
© Peter Fisk 2005
 £

Past Future

Shareholders care about the future not the past. Shareholder

value is the sum of likely future cashflows. Marketing creates
three times more value than anything else.
© Peter Fisk 2005
 Marketing – customers, brands, innovations – should be top
of the boardroom agenda, at the front of the annual report
(OFR) or a key topic for every investor relations meeting
© Peter Fisk 2005
 Operating
Economic
Profit
Profit

However this also requires marketers to think differently,

identifying the few markets, products and customers than
really do “create value” and focusing creatively on them.
© Peter Fisk 2005
 Nike outsells Reebok
3 times, with a market
value of $12 billion.
Knight hands over
CEO role to Bill Perez
Phil Knight Nike regains
launches his market leadership
Nike brand of from Reebok
running shoes with “Just Do It” Nike buys
Converse
and Starter
brands

Nike signs tennis Nike signs Nike grows Nike signs

Superbrat basketball rookie internationally. golfing star
John McEnroe Michael Jordan Soccer is key. Tiger Woods $12bn

Nike becomes “Nike Air”

top US running launched $7bn
shoe brand and With the
goes public Air Max

$3bn

$1bn

1972 1980 1985 1990 1995 2000 2005

Source : nike.com
 Right brain

Left brain

Marketers need to change personally - to be more strategic,

innovative and commercial. To drive the market and the business.
They don’t need to be on the board, but they do make the best CEOs.
© Peter Fisk 2005
 Ideas
Decisions
Focus
Integration
Capabilities
Influence
Leadership
The best CEOs

Genius insights include Diageo, Dyson, Innocent, Nestle,

P&G, and Nokia … Genius tools include Market Manager,
Leadership, Customer Capital and Brand Blogging.
© Peter Fisk 2005
 Even in difficult markets, there is space to stand out and be
profitable. Jet Blue’s incredible success combines the
lessons of low-cost and premium service airlines.
© Peter Fisk 2005
 Value of
Value of “Value for money”
benefits
benefits
to
to
customer
customer
Perceived
Perceived
Perceived
worth
worth
value Priced
Priced
relative
relative to offer
to offer
Price
to others value for
money
money”
Return
Return
Return
to investors
to investors

The only route to more shareholder value, is to create more

value for customers – to manage perceptions and price, to
change context and connotations of value.
© Peter Fisk 2005
 Jones Soda Co. is perhaps the most radical of the 50 genius
brands – “nobody needs my shit, but they love it” – explains
Peter van Stolk, the man who makes turkey and gravy soda!
© Peter Fisk 2005
 Radical
creativity

Innovative state

Conventional state

Rigorous
analysis

Genius drives innovation in every aspect of marketing – from

products and media to market rules and business models. It requires
disruptive push and creative pull, focused in the right places.
© Peter Fisk 2005
 Marketers need the mind and skills of Steve Jobs, to spot the
best opportunities, to make sense of complexity, and think
how to best exploit their brands commercially.
© Peter Fisk 2005
 Marketers need the guts and passion of Phil Knight, who
gave up his running aspirations to sell shoes from his car,
and over the years created a $12billion brand called Nike.
© Peter Fisk 2005
 Outside in
Market
Competitive
Sensing Customer

Inside out
Business
Capabilities
Finance

Long term
Market driving
Responding

Strategic
Value

Short term
Market driven
Tactical
Sales

Organisation
© Peter Fisk 2005
 Market Inspiring
strategies leadership
Shaping the Leading the
market Distinctive business
Profitable
brands focus

Deep
Disruptive
Customer
innovation
insight

Genius
Marketing
Compelling
propositions Collaborative
working

Engaging
experiences Integrated
Engaging the activities Aligning the
customer operation
Personal Effective
relationships delivery

© Peter Fisk 2005 Diagnostic available from peterfisk@peterfisk.com

 Right brain
Concepts
Creative
Sensing Holistic

Left brain
Facts
Analytical
Specific

Radical ideas
Conceptual
Responding

Possibilities
Development

Practical action
Operational
Priorities
Delivery

Organisation Individual
© Peter Fisk 2005
 Analytical Creative
thinker thinker
Evaluating Exploring
opportunities Factual possibilities
Idea
evaluator
generator

Externally Inner
adaptive conviction

Genius
Marketer
Pragmatic
realist Conceptual
guide

Focused
deliver Integrated
Practical deliver Creative
implementation implementation
Controlling Empowering
manager manager

© Peter Fisk 2005 Diagnostic available from peterfisk@peterfisk.com

The edge 1. Invert

Marketing must bring an “outside in” approach to

business, delivering today and creating tomorrow.

2. Insight

Marketing must build brands around customers, create

pull not push, work on their terms

3. Innovate

Marketing must drive more significant innovation of the

business and marketplace

4. Influence

Marketing can take centre stage, shaping markets and

driving the business. Marketers make the best CEOs.

5. Inspire

Marketing can combine deep intelligence and radical

creativity to deliver extraordinary results.

© Peter Fisk 2005

 Genius marketers combine the intelligence of Einstein and
imagination of Picasso to focus their efforts, build brands,
drive innovation, and to deliver extraordinary results.
© Peter Fisk 2005
 Marketing Genius is the radical new book from Peter Fisk. It describes a better
approach to marketing in today’s complex markets, one that combines deep
intelligence and extreme creativity in order to deliver extraordinary business results.

Markets are incredibly complex, competition is intense, change continues at pace, and power
has fundamentally shifted to customers. Yet most companies still do business inside out, driven
by financial blinkers, trying to improve what they have always done. Whilst the markets,
competitors and customers do otherwise.
Business needs marketing more than ever, but not as today.
Customers are more different, discerning and demanding than ever. Competitors challenge from
every angle, across sectors and geographies, imitation is immediate and differentiation is rare.
Shareholders, similarly demand better returns on investment, quicker and at less risk.
Marketers are under pressure to deliver better results.
Marketing is the key driver of long-term shareholder value in business. Intangible assets now
account for around 70-80% of market value, and much of this is driven by marketing, and can
increasingly be accounted for. Witness the enormous “customer capital” paid by P&G for Gillette,
contributing to a price 25 times the operating profits.
Profits are not the same thing as value creation.

Cont >

Marketing Genius will be published by Wiley Capstone in September 2005 at

£14.99. You can order your copy now from Amazon, and download free extracts
at www.MarketingGeniusLIVE.com
 Marketing Genius is the radical new book from Peter Fisk. It describes a better
approach to marketing in today’s complex markets, one that combines deep
intelligence and extreme creativity in order to deliver extraordinary business results.

Marketing creates the future whilst delivering today. Whilst supporting current sales, it also
develops the markets and innovations, brands and relationships, which secure future profitability.
Indeed, most large investors take a long-term view on their investments, despite the short-term
obsession with quarterly results internally.
Marketers need to work in double time. Value-based marketing starts with focusing on what matters
most – the few markets and segments, brands and products which will deliver a superior, return on
equity in future years. Evaluating most portfolios will reveal that most companies are still focusing
on many activities which actually cause them more harm with every penny spent on marketing, and
every extra sale.
Focusing on the value creators, eliminating the value destroyers. Value-based marketing is typically
about doing the right things, identifying the best opportunities, focusing on what matters most,
doing less rather than more.
Value-based marketing is about creating more value for customers and shareholders. Shareholder
value has often been tarred with the brush of short-term greed, and the financially-blinkered
behaviour and corruption which that can drive. Indeed creating this virtuous circle is the only way to
drive long-term value for shareholders.
More customer value creates more shareholder value.
Cont >

Marketing Genius will be published by Wiley Capstone in September 2005 at

£14.99. You can order your copy now from Amazon, and download free extracts
at www.MarketingGeniusLIVE.com
 Marketing Genius is the radical new book from Peter Fisk. It describes a better
approach to marketing in today’s complex markets, one that combines deep
intelligence and extreme creativity in order to deliver extraordinary business results.

Creating more value for customers is about insight and innovation, but also about managing
perceptions and perceived value in smarter ways. That is the route to the win-win, where strong
brands really can charge a premium. This requires more radical innovation, more compelling
propositions, and doing business on customer terms – where, how and when they want, not you.
The death of campaigns, the reversal of channels.
Value-based marketing demands that marketers step up to lead both their markets and the
business, to be the driving force of strategy and decision-making, investment and performance.
This requires marketers to work more strategically, innovatively and commercially. It also requires
them to be more collaborative and accountable, better team players and leaders.
Indeed marketers make the best CEOs.
Marketing needs to articulate its real value to business. The new OFR requirements for annual
reporting, which came into effect on 1 April 2005, are an excellent opportunity. Marketing is the
driving force of future performance, its time for to take centre stage, and become the drivers of
business.
A marketing genius, brings together the intelligence and imagination to achieve this, and to
deliver exceptional business results.

Marketing Genius will be published by Wiley Capstone in September 2005 at

£14.99. You can order your copy now from Amazon, and download free extracts
at www.MarketingGeniusLIVE.com
 Peter Fisk
Peter is a highly experienced marketer. He spent many years
working for the likes of British Airways and American Express,
Coca Cola and Microsoft. He was the CEO of the world’s largest
professional marketing organisation, the Chartered Institute of
Marketing, and for almost 10 years led the global marketing
Peter is a highly experienced marketer. He spent many yearsof
practice working for the likes of
PA Consulting British Airways and American Express, Coca Cola and
Group.
Microsoft. He was the CEO of the world’s largest professional marketing organisation, the Chartered Institute of Marketing, and for almost 10
years led the global marketing practice of PA Consulting
He is Group.
Managing Director of Brand Finance, the leading brand
strategy and valuation firm. He writes and speaks regularly on all
He is Managing Director of Brand Finance, the leading brandof
aspects strategy and valuation
marketing, and infirm. He writes and
particular speaks
on how regularly on brands
marketing, all aspects of
marketing, and in particular on how marketing, brands and innovation drive exceptional long-term value for customers and shareholders. He
and innovation drive exceptional long-term value for customers
recently authored The Marketing Society’s Manifesto for Marketing, and led the development of Customer Capital in response to the DTI’s new
OFR reporting requirements. and shareholders. He recently authored The Marketing Society’s
Manifesto for Marketing, and led the development of Customer
Capital in response to the DTI’s new OFR reporting
requirements.
Peter’s new book Marketing Genius will be published by Wiley
later this year, and describes how a more intelligent and creative
approach to marketing can deliver exceptional results in today’s
complex markets. He has also authored over 50 papers,
published around the world, and is co-author of the FT Handbook
of Management and The Complete CEO.
You can email him at peterfisk@peterfisk.com
Or visit his website www.MarketingGeniusLIVE.com
Embed value-based marketing as a core business practice in Royal Mail, including the leadership and culture, processes and
capabilities.

peterfisk@peterfisk.com
www.MarketingGeniusLIVE.com