In the searing aftermath of the Lehman collapse, it was inevitable that corporates would become more risk averse, and that finance and procurement, rather than marketing departments, would have the upper hand.
Caution rules and, in this environment, finance has greater influence. In fact, half of the FTSE 100’s current chief executives are former chief financial officers (including me!).
We’re biased, of course, but the only way in the long run for companies to survive and prosper is by growing the top line rather than focusing exclusively on costs – and that means investing in marketing.
Investment in brand is all the more essential as consumer goods manufacturers come under ever-greater price pressure from retailers. Walmart, Tesco and Carrefour amongst others continue to focus on leveraging their buying power on a global level. Although, they now face pressure from online retailers, who will give manufacturers a new opportunity to build direct relationships with consumers.
There are few manufacturers who do not feel pressed to reduce prices and commodify their brands. Equally, there is continued overproduction in many industries. True, Detroit makes fewer cars and trucks, but any shortfall has been taken up by Tata, Hyundai, Kia and Geely.
There is only one solution in a crowded, stressed market suffering from overcapacity: differentiation – from continuous product innovation (tangible) and stronger branding through marketing communications (intangible).
The world’s 30 largest companies*
|Rank||Company||Market cap $m||Country|
* Market values as at 21 March 2014.
|2||Exxon Mobil Corporation||407,536||US|
|5||Berkshire Hathaway Inc.||308,826||US|
|6||Johnson & Johnson||271,321||US|
|7||Wells Fargo & Company||258,462||US|
|8||Roche Holding Aktiengesellschaft||254,997||Switzerland|
|9||General Electric Company||254,635||US|
|10||Wal-Mart Stores, Inc.||246,716||US|
|12||Royal Dutch/Shell Group||228,423||Netherlands|
|13||JPMorgan Chase & Co.||226,005||US|
|14||PetroChina Co Ltd||225,502||China|
|16||Procter & Gamble Company (The)||211,164||US|
|18||Industrial And Commercial Bank Of China Ltd||200,104||China|
|20||International Business Machines Corporation||194,387||US|
|21||Verizon Communications Inc||194,056||US|
|22||HSBC Holdings plc||188,207||UK|
|23||Bank of America Corporation||185,576||US|
|26||BHP Billiton Limited||172,004||Australia|
|28||Coca-Cola Company (The)||169,363||US|
|30||Toyota Motor Corporation||168,154||Japan|
Chapter 7 of 13