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Lord Garel-Jones: My Lords, noble Lords who have spoken have been absolutely right to both congratulate and thank my noble friend Baroness O'Cathain for introducing this groundbreaking debate. Perhaps I may say also that we have listened to two most distinguished maiden speeches from speakers who both spoke of their awe and trepidation. I believe that the House is entitled to say that they are also--although too modest to do so--both entitled to speak with a certain pride. The House will look forward to distinguished contributions from both of today's maiden speakers.
The noble Lord, Lord St. John of Bletso, made some criticisms in his speech with which I agree about our failures in the past. I intend to do likewise. However, it is worth reminding ourselves here in Britain that we
have not always failed. Indeed, my noble friend Lord King of Wartnaby and the noble Lord, Lord Marshall, have each in their turn presided over one of the great marketing successes in the United Kingdom. I think that we should remind ourselves, too, that if one were to list the 50 major transnational corporations inside the European Union, the United Kingdom would have more names on that list than any other country in the Union. Let us not get into the usual business of knocking Britain. However, at the same time it is worth recalling that too often our failure to understand the importance of marketing has meant that we have let down British inventors, British innovation and British engineering skills.I give one example, of which the whole House will be aware. It was a British firm, Rover, which moved the old Land Rover, with which we were all so familiar, to being the Range Rover--a real breakthrough in the concept of motoring. Yet today that company does not enjoy the share of the market in those types of vehicles that that incredible concept which it pioneered rightly deserved. I believe that that was a failure of marketing.
How can we improve our performance? Like many noble Lords on this side of your Lordships' House I am reluctant to extend the writ of the Government into any field. I say that not just of this Government, but of any government. However, my noble friend Lady O'Cathain was right to draw our attention to the Chartered Institute of Marketing. If the DTI is able to work in partnership with the institute to help small and medium-sized businesses in the way my noble friend suggests, and to set bench-mark standards, that is the sensible way to proceed.
Perhaps I may refer to the final secret of marketing, if there is such a thing. My noble friend Lord Saatchi gave us a lesson in that. I had the privilege of being in the room when my noble friend was appointed to market the Conservative Party in the mid-1970s. He will agree with me, as I think will noble Lords opposite, that the starting point in marketing is a good product and a good service. But then one has to tell the truth about that product and that service. Quite often those who have invented the product or made the service, as was the case with my party in the mid-1970s, are not the right people to convey that message to their fellow citizens. In that regard we have to be grateful to my noble friend. No doubt noble Lords opposite have others similarly skilled to whom they owe thanks for marketing their product.
Finally, my noble friend Lord King of Wartnaby is right to tell the House that we stand on the brink of the information technology revolution. The whole House will be eager to hear from the Minister as to how the White Paper will reflect the importance of marketing to British industry; and the way in which we shall use that in the new information technology revolution which lies ahead.
10.56 p.m.
Viscount Thurso: My Lords, from these Benches I congratulate the two maidens. The brevity of my
welcome is only matched by the sincerity, but with a time limit of four minutes one cannot pay too long a tribute. The noble Baroness is welcome and I am sure she will make a tremendous contribution to your Lordships' House. I thank the noble Lord, Lord Marshall of Knightsbridge, for his kind breakfast this morning, which I very much enjoyed with 250 other people. I am sure he too will make a great contribution.I am extremely grateful to the noble Baroness and congratulate her on bringing forward this Question in your Lordships' House. When I first saw the Motion for debate I asked myself what there was to debate. It is such a statement of the obvious that I wondered where the questions would come from. However, as I reflected I realised how sagacious and perceptive the noble Baroness had been. The debate has proved how much the subject needs to be aired. I am slightly shocked to find from the noble Viscount that in 22 years it has never been aired in your Lordships' House.
Marketing is the key to business success and productivity. In this country we have the culture of the finance director. Perhaps alone among the many developed industrial countries, we look for our chief executives among our finance directors. I am constantly looking over my shoulder at my finance director wondering when he will take my job. But in America, for example, the chief financial officer does not necessarily become the chief executive officer. It is very much a route chosen in this country. It has a rather black and white balance sheet approach. We do not always see the longer term investment that is required by marketeers.
When I first began in business as an apprentice commis in the Berkeley kitchens a long time ago, the Savoy Group had no marketing department. About three or four years later a gentleman was employed who was known as the business promotions manager, but no one knew what he did--except that he had a lot of free lunches. There was the press office, but its job was entirely to make sure that the press did not have too much access to customers of the Savoy. I am happy to say that the Savoy has moved a long way and, as I moved up in the company and on out of the company, I came more and more by sheer simple practical experience to understand the vital role of marketing. First came sales, but later I grew to understand the all-encompassing role that marketing needs to play in a business. Like any convert, I now display religious zeal.
One or two of your Lordships may be aware of my current business. Marketing is right at the centre of it. It has pre-eminence over the finance department, much to the annoyance of my finance director. It is involved in our human resources department. I believe that the vision we have for serving our customers is so important that it is part of what we do in our recruitment campaign and it is an integral part of our training. Therefore, marketing and human resources work closely together. We research precisely what it is that our customers want and we continue researching to see whether or not we have satisfied their aspirations. The noble Lord, Lord King of Wartnaby, has already said that the customer is king. I have that very same motto in my office. That is the one rule that exists in my business. I believe that
much of the success it now enjoys is due to the fact that we developed a vision for the business that was conceived out of our customers' wishes, which we have prosecuted irrespective of all other considerations.One of the anxieties that I have about British business is that on many boards--I am on a number of plc boards--we all talk the talk but when one gets down to a business one does not necessarily find that the talk is walked. I am not going to say anything about that, but I am employed by British Airways to lecture to its middle management on leadership skills. Sometimes what they say to me at those meetings does not always accord with what the boardroom might think they say. However, I shall leave it at that.
In her opening remarks, the noble Baroness made one crack about the fact that salmon fishing appears to get more debating time in your Lordships' House than many other subjects. As one of the repertory company that appears in the House to debate salmon fishing with monotonous regularity, may I say to her that there is a link between salmon fishing and marketing: both share the same aspiration, which is to fish where the fish are and use the right fly.
11.2 p.m.
Baroness Miller of Hendon: My Lords, I join with others of your Lordships who have thanked my noble friend Lady O'Cathain for initiating this debate on what is a very important and clearly a most neglected topic. I was told recently that the convention of this House is that only the speaker following the maiden speakers is meant to thank them. I am absolutely delighted that so many of your Lordships have done so and I am taking the liberty of doing likewise.
I speak as a longtime member of what was called the Institute of Marketing. I am just one very small example of the wide and diverse range of qualifications and experience of the real world outside the Palace of Westminster that especially abounds in your Lordships' House, and has abounded in greater amounts this evening.
I began by teaching marketing techniques such as how to discover what the customers want and how to create empathy with a potential customer. The noble Lords, Lord Marshall and Lord Borrie, said how important that is. I taught how you managed to help the customer buy from you something that they want and not to go out and sell something that they do not want, as my noble friend Lady O'Cathain said. There is the need for the people producing a product to know how to promote it and the need to advertise it. There is also the need to help people to feel that it is something that they require. There are also the various methods of closing a sale; post-selling and helping the customer to believe that they made the absolutely right decision in buying your product. There is also the setting of personal goals and objectives and self-motivation. I believe that self-motivation is an important part of it and all good salesmen need a lot of motivation and re-motivation, especially after a bad day has lowered their confidence. I recall one very successful insurance agent who used to drive to work every day listening to
tapes such as "How to influence people". When I asked him why he continued to do so, he said, "I need to pump myself up every single morning".Then disproving the aphorism that "those who can, do, and those who can't, teach", I set up my own very successful marketing business which operated in the United Kingdom, Germany and Australia. I have taken a few minutes of your Lordships' time to explain my qualifications because I would like to make one special point.
Although it is absolutely true that good salesmen and marketeers are born, not made, just like accomplished musicians, carpenters, sportsmen or indeed members of many trades and professions, all those instinctive skills must have proper training and, equally, experience. Simply taking a young person, giving him a job in whatever area and telling him about the products on offer does not turn him into a salesman. Businesses which take the trouble to train their sales staff and supervise them can enjoy the dividends of the extra business that they will generate.
However, small firms have neither the time nor the resources to take on the whole burden of training sales people, especially as no sooner have they done so any salesman worth his salt will take his expertise off to more lucrative opportunities. Therefore, there is a strong case for including marketing and salesmanship in the many commercial courses that are taught in our schools, colleges and universities. I very much hope that the Government will encourage all educational establishments to do so.
Your Lordships will see that I am turning my pages quickly. I am afraid that the one thing I have not done in marketing is to tell people to keep to time. I have just noticed that I have taken four minutes and am only about half way through my speech.
I conclude by saying that marketing is not simply the work of a sales person behind a counter. It includes the people who need the knowledge and skill to sell everything. Marketing includes making a product or providing a service, listening to customers, and carrying out research. It must not be forgotten that no matter how good the product is it needs to be sold. Perhaps the days are gone when you could say, in the words of Emerson, that if you build a better mousetrap the world will beat a path to your door. Someone may copy it and try to sell it cheaper than you unless you happen to be the better salesman.
I hope that the Minister will tell us that the Government are in favour of good marketing skills; that as part of their programme of education they will ensure that money is invested. That is what it will be; an investment in training people in all the skills of marketing, which are no less important than any other commercial skill, as noble Lords have said tonight.
I hope that in due course we will hear about tax incentives for all manner of training and research and development. Investment is paid for out of profits and profits come from being competitive in the marketplace. The Government can ensure that British industry is
competitive and has the money to invest by removing the impediments which take money out of investment budgets and simply add it to social engineering costs.11.8 p.m.
Lord McIntosh of Haringey: My Lords, I gladly join other noble Lords in congratulating the noble Baroness, Lady O'Cathain, on choosing the topic for today's debate and on the way she introduced it. I also congratulate her on her appointment as president of the Chartered Institute of Marketing, to which she referred. Like the noble Baroness, Lady Miller, I was a member of the institute for many years. Indeed, I was a member of the Institute of Marketing and Sales Management before it became the Institute of Marketing and then the Chartered Institute of Marketing. The noble Baroness did well not only in the way she introduced the subject but also in the range of expert speakers whom she encouraged to take part. In particular, she encouraged two excellent maiden speeches from my noble friend Lady Scotland and the noble Lord, Lord Marshall.
My noble friend Lady Scotland was right to draw attention to the marketing assets of diversity and, in particular, diversity in a multi-cultural and multi-ethnic society. There are lessons for all of us to be learned from what she said.
The noble Lord, Lord Marshall, played a key role in setting up the Marketing Council. He deserves our congratulations on that; his expertise was evident in his speech. I am only sorry that other noble Lords took away my chance to refer to the customer as king.
Like the noble Baroness, I have been involved in marketing all my life. I was a professional market researcher and social researcher for nearly 40 years. In addition to being a member of the Institute of Marketing, I was also, many years ago, chairman of my own market research society and I am retiring as president of that society next week. Therefore, it cannot be said that I am speaking in any way for the market research business. But it is recognised as being one of the core disciplines in marketing more generally.
I thank the noble Baroness, Lady O'Cathain, for her complimentary remarks about new Labour's use of marketing. The noble Viscount, Lord Montgomery, referred to our key seats strategy, and that of the Liberal Democrats who, I think, copied it from us. We successfully targeted key seats and we used our effort, as he said, to fish where the fish are. It will be seen at the next election that the Labour Party will successfully build up customer loyalty which we intend to result in repeat purchasing.
The answer to the noble Baroness's question is that the Labour Party itself, I understand, will continue to use those marketing skills which she praised so highly. But also--and this is a quite separate answer--the Government are keenly appreciative of the need for marketing this country in the most general, as well as in particular, senses. We understand what marketing is about and we shall apply it to government policies, making the correct and proper distinction between party and government.
The Government want to develop a partnership with business. We need to do that because after all the Government are the biggest single business in the whole country. In his recent speech to the CBI conference, the Secretary of State for Trade and Industry said:
- "The partnership I want to build is one where business and government are clear about their respective responsibility, both to each other and the wider community".
However, my noble friend Lord Borrie was right also to draw attention to what is the key element of all of that. It is communication--taking notice of the customer and listening to the customer. Customer service, as he rightly put it. That is what we intend to promote in our own activities and what we intend to encourage business to promote in its activities.
We recognise that marketing covers a wide range of specialist skills and disciplines. Successful businesses are closely integrated. The marketing function is no longer isolated or remote but it is the key driver. I do not know--and I do not think I very much care--what are the professional origins of those in boardrooms as long as they are good at their jobs. It may well be, as some have suggested, that we have too many people with financial backgrounds but I do not know many people with financial backgrounds nowadays who have not been steeped in marketing and respect for customers. Fundamentally, what makes a good manager--and I think that the noble Lord, Lord Saatchi, had it right here--is the respect for reason, for rational thinking and for rational analysis. That is what I believe marketing can contribute.
It is certainly true, as the noble Lord, Lord Marshall, said, that we do have companies in Britain which are champions for marketing and whose marketing is both memorable and effective. If he will allow me to say "British Airways and Virgin" without drawing breath, I think he will understand the need that I have to be impartial in these matters. I am not convinced that we have underestimated the importance of product design and development. Indeed, that starts right from the very beginning.
The noble Lord, Lord Garel-Jones, referred to some of the failures of marketing. It is quite true that many UK businesses do lag behind the average performance of our strongest competitors in other countries. It is that difference between the best and the poorest which we must devote our attention to. One of the ways of doing so is the encouragement of professionalism in marketing. We have a strong private sector infrastructure supporting the development, status and professionalism of marketing; for example, the Marketing Council, the Chartered Institute of Marketing and the various specialist bodies, including the Market Research Society, representing the advertising and direct-sales sectors.
Without those professionals, we recognise that we will not have the core skills to present our products effectively. That is why it is so important that we have the initiative of the chartered marketer with its emphasis on life-long learning and on quality control to which my noble friend Lord Borrie referred. After all, it is in the context and under the discipline of professionalism that we can do what the noble Lord, Lord Garel-Jones, rightly said; namely, to tell the truth.
I move on now to say something about the Government's support for marketing. This is not in any way a partisan analysis. I recognise the support given by the previous government--for example, the consultancy project initiated by the noble Lord, Lord Young of Graffham, in 1988 which had a marketing consultancy strand which worked very well. There was also the "Managing in the 90s" campaign which ran from 1990 to 1997 which developed marketing workshops and disseminated best practice guidance and case studies. Therefore, I deny the contention made by the noble Baroness, Lady O'Cathain, that governments are not persuaded of the value of marketing. I believe that both this Government and the previous government have been.
The noble Baroness referred to Business Links. Advice is now available to small and medium enterprises on marketing issues through this scheme. There are 85 Business Links now open with 240 outlets. They do not all have specialist marketing advice in-house, but they do have the ability and the responsibility to refer to local quality assured consultants such as the Chartered Institute of Marketing members. Of course, they also have access to training and development on marketing issues. We are supporting the Marketing Council's project "Grow with Marketing" in which a group of Business Links are working with the council to create marketing champions and thereby raise marketing expertise. We are working with project partners to see that this is taken up across the whole Business Links network.
In answer to the second question posed by the noble Baroness, Lady O'Cathain--in fact, she asked me three questions but I cannot deal with them in the right order--we are indeed very interested in her suggestion about developing links with local colleges and universities. The noble Lord, Lord King, also made a similar point in that respect. I shall be asking the Department of Trade and Industry to consider that suggestion.
Reference was made to the DTI's UK Benchmarking Service. Companies using it are able to benchmark their marketing expenditure against the service's database. The answer to the noble Baroness's third question is that a specialist marketing module has been devised within the benchmarking index. It has been built up by the British Marine Equipment Council for use by its members using the service and is starting to be used more widely by some Business Links.
Other government support for marketing is quite widespread. Under the DTI's sector challenge initiative, 186 projects have been given grants totalling £35 million for raising competitiveness. Some 64 per
cent. of those specify the need for better marketing opportunities and marketing skills. There is a whole range of projects for marketing for exporters to which I do not have time to refer. I refer to the development of the DTI web site. My noble friend Lord Haskel was right to refer to the need to master electronic marketing. I refer to export promotion services more generally which include marketing scholarships to the best business schools in the USA and Canada.The noble Lord, Lord Cowdrey, referred to the need for tax exemptions, in particular for sport. As noble Lords who listened to the debate on hotel accommodation last week will know, we are not very sympathetic to demands for tax exemptions in particular sectors. But, of course, where business support for sport is a business decision--in other words, it is designed to increase profits and market share--then it is a proper business expense and is recognised as such in our taxation system.
For the future we are building on the Fit for the Future Best Practice Campaign. We are collaborating with the CBI on taking forward its ideas on that. That was welcomed in the pre-Budget report two weeks ago. The benefits to business of adopting best practice in marketing should be an important part of that campaign and therefore we welcome the discussions that have taken place between the Marketing Council and the CBI and hope this will lead to a strong, best practice in marketing message.
As regards the competitiveness White Paper--here I come to the first question of the noble Baroness, Lady O'Cathain--of course I cannot anticipate what will be in the White Paper but I would be astonished if the Secretary of State did not stress the importance of our need to compete in today's competitive markets when he publishes the White Paper in due course.
I agree with the noble Baroness, Lady Miller, that we can no longer rely on the motto that if you make a better mousetrap the world will beat a path to your door. We recognise the importance of marketing as a driver for competitiveness. We have some excellent exemplar countries and some world-class players in this field. We look forward to continuing to work in partnership with the Marketing Council, the Chartered Institute of Marketing and other professional bodies to encourage more companies to use marketing within their business strategy to achieve business success.
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