The same happens with us when working
on marketing plans and campaigns. We
study case studies of other case studies
while not really analyzing which part of
our own sales cycle is broken. What would
happen if you found out that everything
you know about marketing is actually
what is holding back the business?
American Graffiti is to date one of the
most profitable movies of all time. The
film grossed over $140 million USD on
the big screen and was produced on a
budget of less than a million dollars. After
the success of Graffiti, director George
Lucas shot to stardom and immediately
started pitching his next big movie – Star
Wars.
At that time, most Hollywood science
fiction productions were flopping and
it was a gamble for George Lucas.
Fortunately for him, 20th Century Fox
signed him up and took the film. Still, the
production house only took box office sales
and let George Lucas bank the exclusive
rights to the licensing and merchandising
rights for $500,000 off his pay check. But
from 1977 – 2015, Star Wars attracted $ 5
billion at the box office and $12 billion in
merchandise!
George Lucas looked at the business
he was in differently and we all actually
should. The challenge is that majority of
CMO’s and even CEO’s look at marketing
based on their own limited references –
What they believe to be true and may miss
out on the full potential – what they may
not know. This could be killing marketing
from the inside without being truly aware
of it.
The purpose of marketing is to make
profit and Kotler has been quoted
extensively in the industry because of his
CCDVTP model – Create, Communicate
and Deliver Value to a Target Market at
a Profit. This hasn’t changed much as the
idea that marketing should ultimately
drive more sales of product than it should
create costs in order to facilitate those
sales has not changed. The only thing
that has changed in businesses recording
steady profits is the re-evaluation of the
entire function of marketing within the
company – Marketing as a profit center.
When Red Bull created an energy drink,
they had no idea that the marketing
The purpose of market-
ing is to make profit and
Kotler has been quoted
extensively in the in-
dustry because of his
CCDVTP model. This
hasn’t changed much as
the idea that marketing
should ultimately drive
more sales of product
than it should create
costs in order to facil-
itate those sales has
not changed. The only
thing that has changed
in businesses record-
ing steady profits is the
re-evaluation of the en-
tire function of market-
ing within the company
– Marketing as a profit
center.
expenses they put in to it would one day
become a profit centre that would create
one of the world’s most successful media
companies - Red Bull Media House.
In 2005, Red Bull took up major
sponsorship of Formula 1 and had a simple
task to deliver the printed guide to existing
fans with the race results immediately after
the race. When the races were over, they
would immediately add the race results
into the already pre-edited content and
print in record time and distribute to the
attendees.
In just two years, Red Bull decided to
evolve the publication into a men’s lifestyle
magazine called Red Bull Bulletin. The
magazine was launched in five countries
with 70% international and 30% localized
content. Today, the magazine has 2 million
print runs each month, published in 5
languages and distributed in 10 countries.
550,000 e-copies are mailed to online
subscribers. The magazine has morphed
into a TV Series, documentary, world class
events, a music studio, merchandising and
now also selling licensed content to news
companies like The New York Times.
Like George Lucas, The Red Bull content
team chose to see the magazine opportunity
as a natural progression, instead of looking
past it as so many marketers did before
them, or naturally would. Today, businesses
are replicating the Red Bull model in
different degrees to create profit centers out
of side projects. Johnson & Johnson runs
babycentre.com with a reach of over 45
million parents a month globally. LEGO
created the movie LEGO on $60 Million
and managed to gross half a billion USD.
In the future, businesses will prefer this
model to be recognized among the leading
innovators on the globe.
All the companies like Red Bull, Johnson
& Johnson still have their products on the
shelf like other organizations. They still buy
advertising and practice media relations;
but they have evolved their content driven
efforts and captive audiences to create
more value outside their main businesses
to create more profit.
All these initiatives undoubtedly drive
sales, but most importantly keep customers
hooked on the products longer. While
they interact with the business at various
touch points and through consumer driven
initiatives, the companies are also able to
gain deeper insights about their customer
behavior and this informs development of
new products and services. The marketing
pays for itself and generates profit.
Diana Obath is a seasoned Public
Relations
and
Communications
Specialist. You can commune with her
on this or related issues via mail on:
[email protected].