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What is Marketing’s Role in M&A?

By Kyle Rees | August 04, 2021 | 0 Comments

MarketingBranding and Value PropositionMarketing Organization and OperationsMarketing Strategy and Innovation

The Issue

M&A transactions almost always seek to achieve greater commercial and financial outcomes, usually through the promise of cost savings and revenue growth. However, companies that make hasty decisions related to marketing strategy limit M&A success.

Why M&A is Top of Mind Today

Meggitt Soars on $8.8 Billion Purchase by Parker Hannifin / Yahoo! Finance: Adding Meggitt will nearly double the size of Parker-Hannifin’s aerospace systems unit, it said in a statement. That would position the Cleveland-based company to better compete in an aviation sector that’s just emerging from the biggest slump in history.

Gartner Industry Marketing Quick Take

If the deal goes according to plan, Parker Hannifin gains favorable exposure to major blue chip accounts across commercial and military aviation, as well as energy equipment markets. Meggitt’s presence as a component part supplier to almost every major aerospace and defense company, from Airbus to Rolls-Royce, is hard to ignore. Currently, the company maintains a large installed base of roughly 73,000 civilian, commercial and military aircraft. Long-term supplier contracts, tied to aftermarket product revenue, are also enticing. This could afford Parker Hannifin valuable insight into customer maintenance plans and  forward demand planning.

What is Marketing’s Role in M&A?

The case above probably sounds familiar to some marketing leaders. M&A may be a part of standard business operations. For others, this might be new terrain. Either way, this story serves an important reminder of the role that marketing leaders and their teams play in ensuring M&A success. Ultimately, M&A transactions create rich opportunities for marketers to build strong brands, improve CX, and win influence across the organization. So, what should you be doing if you were leading marketing at Parker Hannifin?

1. Market Sizing and Orientation

Begin to size the addressable market under the assumption of combined product and service portfolios. Align stakeholders across marketing and sales teams to prioritize customer segments and high-value opportunities. Work together to develop and deploy a combined brand story to help orient stakeholders (e.g. customers, employees, and investors) to long-term vision.

2. Brand and Customer Messaging

Assess brand and customer messaging, as well as value proposition design. Use campaign reports and web analytics to better understand differences in audience and customer behavior.

3. Customer Experience

Evaluate strengths and weaknesses tied to a combined customer experience. Ask yourself and your team, “How might personas and customer journey maps differ between the buyer and target company?” Furthermore, will this M&A activity lead to larger shifts in enterprise-wide CX strategy?

4. Sales and Partner Enablement

Develop sales and partner enablement materials to drive customer retention and growth. Playbooks and vision decks are a great place to start. When possible, be sure to use shared business communication platforms to coordinate marketing and sales activities for key accounts and high-value opportunities.

5. Discounts and Promotions

Review discounting and promotion policies across the combined product and service portfolio. Work with sales and finance leadership teams to reduce risk to profitability that comes from low-margin offerings and deals.

6. Digital Roadmaps

Define the digital roadmap. Plan for a scenario in which you decommission domain names and need to redirect traffic to new URLs. Outline the steps for content and digital asset migration. Prepare to update copy and links on landing pages and social channels. Determine the budget and resources needed to advance media, advertising and direct marketing strategies.

7. Marketing Technology

Finally, work with IT partners early to find potential cost savings across a combined marketing technology ecosystem. Gartner predicts that by 2022, CMOs who utilize 70% of their martech stack’s capabilities will achieve 20% better marketing ROI than peers. Gartner clients, read Identifying the Most Critical Components for Your Martech Stack.

Two roads merge together and then separate around a mountain. M&A is like a mountain that business leaders need to navigate around.
Find your way around the M&A mountain.

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