When the world’s media exploded recently with thousands of articles, analysis, opinions, criticisms and much more appearing about the discoveries, admissions and resignation to rock vehicle manufacturing powerhouse VolksWagen (VW), I have to say that I was glad that the top marketing bod was not the first to be ‘obliged’ to resign.
We’ve all been told how VW spent the past seven years falsifying emissions data on its vehicles in the US, in order to mislead the authorities that its cars were cleaner than they are. Consequently, the Environmental Protection Agency believed that the VW cars met the legal standards on the emission of nitrogen oxides, when in reality the cars could give out emissions of as much as 40 times the level set by the standard! The company’s shares fell by 20 per cent in immediate response, wiping €25bn of their value within a matter of hours of news of the scandal. In addition, the authorities can fine the car manufacturer $37,500 per car – adding another @€25bn to the bill.
Bearing in mind that the emission claims have been central to the unique selling proposition of the German car manufacturer’s recent heavy weight, international advertising and communications campaigns, there are bound to be those out there who see the shocking revelations as a marketing disaster on a colossal scale. After all, how could the marketing department not have known that the emission figures were doctored? Surely, marketing must have been complicit in the deceit and therefore the head of marketing should have been the first to go, I’m sure quite a few are saying.
Alas, there is a wealth of theory, methodology and practice within business in general and marketing itself specifically that supports this viewpoint, and the involvement – or lack of – of the marketing department in the deceit, is actually irrelevant. It all stems from the ‘marketing mix’ concept, which forms the cornerstone of what we do in marketing. Originally proposed as the ‘4 Ps’ by E. Jerome McCarthy in 1960 and then extended to the ‘7 Ps’ by Booms & Bitner in 1981, the marketing mix proffers that the marketing department is responsible for and concerned with the following functions that are core to the business: the Product, Price, Place, Promotion, Physical Evidence, Processes and People. This means that VW’s marketing team were responsible of the features of the product itself, meaning that the marketing team should have known whether the cars were actually as ‘clean’ as they were claiming, and before they started rolling out their ‘clean diesel’ campaigns.
Chief executive, Martin Winterkorn, resigned over this matter. VW’s share prices rose by 8.7 per cent on the news of his resignation, although they still remained lower than before the scandal broke. And there continue to be many calls for many more heads to roll; plus the promise of a thorough investigation into the matter by German chancellor Angela Merkel. I do not doubt that it is only a matter of time before we hear that the head of marketing has also stepped down. Strongly believing that responsibility for the 7Ps should continue to remain squarely on the shoulders of marketing, my head has been spinning to find a fundamental learning point for marketers from VW’s disaster. Is there anything that marketers could – and should – be doing to increase the degree of control they have over the verification of the authenticity of features, capabilities, test results, functionality and so on, of the products and services that they are custodians of? Could internal procedures, such as air-tight signing-off processes, detailed documentation and clear communication ever be adequate enough to prove innocence, and, prevent automatic finger-pointing? Or is this an example of living by the sword and dying by the sword?