Product vs Marketing – The GOP’s Long Road To Recovery

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(Source: CC-BY-SA-3.0/Matt H. Wade at Wikipedia)

Consider two companies that are each given a billion dollars and ten months to close a sale. One does, the other doesn’t. 


What should the losing side do? Re-think its products, its strategy and its marketing campaign? Or blame dumb, incompetent  and worthless consumers for buying the other company’s product?

 

That is the challenge that the GOP faces today. If the GOP is to win in the future, post-election GOP navel-gazing and voter bashing must evolve into an honest and thorough analysis of its core problems and not confusing Product with Marketing. 

 

Product vs Marketing

 

This business framework is befitting the GOP, given its self-given party of business moniker.

 

Product here refers to the political parties’ policies, as they relate to things such as business regulations, taxes, healthcare, immigration, the environment and various social and cultural “issues”. In the U.S., each party has a certain philosophy and this, for the most part (and opportunism and cynicism for the remainder), determines how the product (or a basket of goods, to be more accurate) is created and shaped.


Then comes marketing. The tricky thing is that though most people know marketing when they see it on the front-end, in the form of branding and advertising (aka, the Promotion part of the 4 Ps of marketing), in reality the more important  and difficult part of marketing happens on the back-end, in the form of voter segmentation, targeting and positioning. Segmentation means classifying consumers (or voters) in various demographic groups such as young and old, married and unmarried, religious and non-religious, Caucasians and Protestants and Jews, Hispanics and Caucasians and African Americans and Asians, etc. You get the picture. Then comes Targeting. Here, the parties understand which segments they want to attract and how their products benefit each such segment. And for people that belong to, say, 4 segments at the same time? They try to understand the segment-affiliation that matters the most! Then we move to Positioning, where, for each population segment that the parties target, they determine how to create a succinct and compelling message that is the answer to the “Why should I buy X?” question. 

 

After the S-T-P is done and done well, the parties transition into the front-end part of marketing which leverages the insights gained above around its core products to build each candidate’s brand and begin the selling process. Voters encounter the front-end selling in the form of advertisements, celebrity spokespersons, rallies, debates and other ways in which each party tries to get its message out, increase the likelihood that its core customers (“the base”) is motivated enough by what it hears to buy the product (show up and vote for its candidate) while, at the same time, attempting to persuade in-the-middle consumers (the independents, the undecideds) why they should buy their product and not the other one.

 

Still with me? OK, lets now talk about why this matters for the GOP. 

 

(Not) Closing The Deal

 

As everyone knows, the parties sold their product in their “safe states”. But that is inconsequential – because the prize for the parties were the swing states, the ones with the greatest number of persuadable consumers. 


That is where the Democratic operation (again, I refer to both its back-end and front-end marketing) shone like it never did before. Virginia, Colorado, all-important Ohio and every other swing state other than North Carolina ended up buying what the Democrats were selling. 

 

Merely and Mostly A Marketing Problem?


Most of the GOP’s non-establishment punditry class, especially those on the likes of Fox News, National Review or Redstate.com have quickly concluded that this is merely and mostly a front-end marketing problem. 


They feel that Romney’s defeat boils down to two things: an inability to brand and sell himself in a way that appealed to undecided (and some of their otherwise loyal) consumers in the swing states; and a failure to combat the Obama campaign’s relentless efforts starting around April, to shape and damage Romney’s brand in these states before Romney had a chance to do it himself. This, they feel, not only swayed persuadable consumers but also depressed turnout among the GOP’s previously loyal consumers in those places.


There may be some truth to this. But then, remember that most of the initial damage to Romney’s brand occurred in the GOP Primaries, when Newt Gingrich, Rick Perry and Rick Santorum – each of who had their own set of distinctively loyal consumers – created the first set of negative “vulture capitalist” brand associations for Romney (interestingly, the first long-form 30 minute video that created the initial damage was bank-rolled by a Las Vegas billionare who subsequently supported Romney). The Obama campaign built-upon and sharpened those barbs and executed well.


So for these pundits to predict a Romney landslide (until 9pm, on Nov 6!) and then pivot in less than 24 hours and pin the blame on poor salesmanship (to the “makers”) while denigrating consumers that bought the competing product (by labeling them as “takers”) not only misses the point, but more damagingly, frames the loss in terms that do not help the GOP’s future prospects.


A few GOP operatives and pundits have recognized the strength of the Democrats’ exceptionally well crafted and executed back-end marketing strategy. They have realized that a big part of the Nov 6 win stems from the extensive ground operation that not just targeted various consumer segments, but was able to micro-target sub-segments and make sure its message resonated with them leading up to election day. But these voices are few and far in between.

 

What Would A Business Do?

 

In the business world, if a company spent $1 Billion on selling something and failed (actually $3 Billion, if you include the company’s “partner” ecosystem), numerous heads would roll, starting with those that wildly and consistently overestimated their chances of closing the sale in an echo chamber that had no room for naysayers. Next to go will be the ones that now cite Sandy and Chris Christie as excuses for the lack of a return on the billions invested. It would then call for a brutally honest and thorough review of what went wrong with its front-end marketing, its back-end marketing, its competitive strategy and most importantly, its products.  


Yes, products – or policies on various issues in their current form, that have become sacrosanct for the GOP’s loyal consumers. Branding and selling are important no doubt, but how many great companies do you know of that make outdated products that appeal to a small and shrinking consumer base and yet succeed and flourish because of great commercials on TV? At the same time, asking your target consumers not to buy the competing product doesn’t mean that they will buy yours, does it?


And guess what? Great products are not static, monolithic beasts that rest on their laurels for years and years. Having your ear to the ground or continually engaging in honest Segmentation, Targeting and Positioning exercises can quickly reveal changing consumer tastes and preferences. You know in 4 years or 8 years which groups of consumers will still be interested, which ones won’t and how to change your products to make sure most customers buy your products.


Consider The Newspaper Industry

 

Let me illustrate this by using the newspaper industry. 

 

As many know, newspapers have been having a tough time over the last few years. Their core consumers, people that like to buy, open and read a newspaper printed on real paper, are diminishing in number. More and more people are either getting their news online, or, are simply not bothering to consume as much as news as before.

 

Hear about any newspapers bashing those that are not buying or subscribing to their products? I thought so.

 

Instead, newspapers are trying to understand what consumers want, better. They are experimenting with new business models – like providing online access to their print consumers. Creating online only packages. Creating Smartphone and Tablet apps that consumers pay for. Experimenting with paywalls. Promoting their articles on social media. So in order to survive, they are relentlessly changing their product itself, not just the way in which it is marketed to consumers. 

 

What they are not doing is blaming their marketing departments for not selling more subscriptions. What they are not doing is blaming those that drop their subscriptions. What are not doing is blaming the unwashed masses for not having the intelligence required to buy, read and appreciate their newspapers.  

 

The GOP, Its Partner Ecosystem Problem And The Road Ahead


There is precedent here.


The core products “sold” by both parties in the U.S. have changed with time. Remember that the Republicans were the ones that abolished slavery under President Lincoln in the 1800s. And as recently as 1960, the Democrats were a largely Southern party that fought against de-segregation. Consider also that in 1980, President Regan re-made the GOP product in ways that appealed to a very large number of U.S. consumers in the form of raising taxes and signing an amnesty law for illegal immigrants – both of which are anathema to today’s GOP. 

 

Since its loyal consumers today have been raised on a steady diet of the laziness, the un-American-ness and the general un-desirableness of those that buy the Democratic product, any changes to the GOP product will alienate them and consequently those changes risk being non-starters. 


The numerous talking heads on the right that have predicted sure victory will resist any attempts at remaking the product.  They will continue to shrilly blame marketing, the candidate, Hurricane Sandy, Chris Christie and most curiously, the very consumers that the GOP needs to win over.


For them, that strategy works just fine, because unhappy loyal customers will tune in to them to hear them vent and rant. This in turn drives up their ratings and increases their own pay packets. So the GOP is an unenviable position of having consumers who will fight tooth and nail any changes to its products, aided and abetted by a cheering and extremely wealthy partner ecosystem, which further diminishes the chances of close the sale even next time around.


Until it figures out that marketing cannot trump product, like many companies – once great, big and successful – it is doomed to slowly but surely become irrelevant.


5 Responses to “Product vs Marketing – The GOP’s Long Road To Recovery”

  1. Srini says:

    Mohan — Nice insights into product, marketing and the approach S-T-P – absolutely critical to succeed.

    On the product side — keep in mind that 48% of the nation chose the GOP product (58M – popular vote for Mr. Romney) — I think the S-T-P part is where the GOP campaign machine failed (or came short). IT failed them big — Project ORCA which was GOP’s answer for of Mr. Obama’s smart analytics for micro segmentation, micro targeting using bid data failed miserably…

    • Yes, ORCA definitely was a big miss for them and probably contributed to some of what happened on Nov 6. But both ORCA and the Democratic equivalent were a last-day get out the vote efforts, from what I understand.

      And great point on the 48% that “bought” the GOP product. By itself, as an independent data point, it seems so close to 50% that it appears not to be a problem. But it seems that those that constitute the 48% represent a shrinking population segment, percentage-wise.

      Take a look at http://www.washingtonpost.com/politics/the-gops-electoral-map-problem/2012/11/11/35ec162e-2c20-11e2-89d4-040c9330702a_story.html.

      Until 1992 the GOP’s loyal consumers constituted a number that guaranteed enough safe electoral votes that they didn’t have to worry about the product. But since then, changing demographics, the aging product and the increasingly vocal “conservative entertainment complex” are driving the unpersuaded consumers to the other side…So the electoral college seems to be slipping away more and more, for the GOP. If the core product is not overhauled I don’t see how they can win going forward.

      • Srini says:

        Agree – if you are not inclusive you will be exclusive — that should be the tag line from lesons learnt of the GOP2012 campaign… :-)

        Marco Rubio may be a shot in the arm for the party in 2016 — so its not only the product mix – the ceo of the company who is selling matters too :-)

  2. Noni Mausa says:

    You also need to draw a line between the product the GOP claims to be selling, and the product that arrives in the mail.

    They offer fiscal responsibility, but spend like crazy. They offer respect for hard working Americans, but enact policies that make it increasingly difficult for those exact people to succeed. They claim to value life, but hack away at the policies that help children and their families flourish.

    I would say that, given their product since the late 70s, it is astonishing that US elections are as close as they are.

  3. Icouldabenacontendah says:

    “The numerous talking heads on the right that have predicted sure victory will resist any attempts at remaking the product. ….

    For them, that strategy works just fine, because unhappy loyal customers will tune in to them to hear them vent and rant. This in turn drives up their ratings and increases their own pay packets.”

    It’s not a stretch that the GOP “entertainment” pundits, including gurus like Karl Rove, do as well or better financially when the party does worse. Great business model for them, but a conflict of interest from the party’s viewpoint. Somebody’s gotta wise up.

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