What is the Marketing Value Chain?
Simply put, it is the concept of treating your marketing department (whether it is three people or three hundred people) as a stand-alone business, and improving every aspect of the Value Chain, as outlined by Michael Porter (Competitive Advantage, 1985).
Put concisely, “a [Marketing] Value Chain is the basic tool for examining all the activities a [marketing department] performs and how they interact… in order to understand the behaviour of costs and the existing and potential sources of differentiation”.
Whereas Michael Porter’s Value Chain had nine generic categories of activities, the Marketing Value Chain that we propose has only four – Plan, Create, Distribute and Optimise. Each of these generic categories of course varies significantly from company to company but retains all the common, generic, features.
Why should we care about the Marketing Value Chain?
To quote again directly from Michael Porter, “a firm gains competitive advantage by performing these strategically important [marketing] activities more cheaply [efficiently] or better [more effectively] than its competitors”.
Which means that we should focus on efficiency and effectiveness above all else within the Marketing Value Chain. Areas of core value within each category are outlined below.
The Marketing Value Chain (generic example):
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Plan
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Requires individuals with the right capabilities for strategy, research and insight development
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Internal communication is essential
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Embedded processes will ensure lack of duplication and repetition ensuring efficiencies in time and money
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Organisational design is key to both efficient and effective planning
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Create
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The experience and ability to generate a clear, directional brief
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Individuals with the capability to originate ideas with cut through
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Resource requirements, either in-house or agency
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Creative Studio
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Production facilities
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An open culture of honesty and trust
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Distribute
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Media planning expertise
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Media buying resource
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Digital Trading Desk
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Content Management System
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SEO optimisation expertise
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Social Media Management
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Optimise
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Data monitoring software
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Data analysis capabilities
