15 marketing but not as we know it

PÓS-GRADUAÇÃO EM MARKETING RELACIONAL Future Trends in Marketing

Marketing but not as we know Marketing but not as we know itit

Marketing organisation – Marketing organisation – a new process-based management a new process-based management

approachapproachProfessor Luiz Moutinho

Foundation Chair of Marketing

School of Business and

Management

University of Glasgow, Scotland


In complexity science’s terms, strategic intent is decomposition of exploration rules into the next level of detail, the linkages to the exploration rules and the transition rules that define how the organisation will migrate from its current design and ecosystem to a future business design and ecosystem.


The organisational design must contribute maximum value to the accomplishment of the organisational strategy

Activities in organisations do not move up and down the hierarchy steps – they flow through the organisation in various directions, obtaining the changing shapes of variable business processes.

It is not enough to optimise one dimension (product, geography or functional performance) of the business.

Organisations have to optimise multiple dimensions in order to compete effectively.


Today’s priorities have shifted from scale to variety, customisation and speed. Top companies are splitting themselves up into smaller units to achieve these goals.

Self-managing teams – with innovation, impermanence and change dominating the features of today’s market, temporary teams are likely to become the primary unit of performance in successful organisations.

In order to achieve a level of “service leadership”, personnel could be teamed into matrices, with each team having the responsibility to bring fresh ideas and directions to their clients.


Work Teams (strengths-based PBM)

Mini-Action teams (MATS)

Cooperation-Coordination Peer teams (COPS)

Business Process, Analysis and technical teams (BAT)


One key common traits of Marketplaces leaders

Operational Excellence: making certain that all component of the business are linked on an operational basis, an environment that allows cross-pollination of ideas extensive communication and collaboration among management, departments, and people across all functions and discipline.

Focus in Innovation: recognising that in every business function the most obvious way of doing things is probably not the most efficient approach, thinking outside the box in order to discover the way to stand out from the competition.


There was a time when marketing was a straightful profession. You had a product and, provided that it was a good one, you could sell it.

Marketing was geographically centered and based on countries with easily define boundaries. National differences were often product differences. And consumers believed what they were told…

Today, the classical model of Marketing is being overturned, and the brand management system that dominated thinking for so long is being questioned. The costs involved in successful brand management are growing as total cost of the product, yet consumers are increasingly skeptical about many brand propositions, and completely immune to others…


Causes of Marketing Misalignment

Many internal and external forces work to undermine the prospects of marketing alignment.

Target audiences are fragmented into smaller and smaller segments, each with unique needs and definitions of value

Media options, already highly fragmented, show every indication of becoming more so over the coming decade.

Data is readily accessible to almost everyone in the organisation and consequently open to interpretation by nearly every parochial interest.

An explosion in the number of marketing programmes or initiatives makes it increasingly difficult to determine the results of any single effort; a melting pot of tactics all lay claim to the desires outcomes.


Causes of Marketing Misalignment

Web-enabled data sharing has given birth to geographically scattered work teams that may be closer to the customers.

These new realities are corrosive influences on old marketing organisation models, eating away at both effectiveness and productivity while simultaneously causing marketers to work harder to protect the illusion of control.

Companies once hailed as maters of brand management let their systems harden into a form of corporate sclerosis.

The easy times made them complacent and helped them to forget that not only were their brands their raison d’être but that brand care and attention should come from the very top.


Best Practice Marketing: Past Predictions

A few years ago the marketing function was in the midst of a revolution. Marketing was in a “mid-life crisis” or “at the crossroads”.

A veritable army of trends, business buzzwords and new concepts looked set to transform the face of marketing. Recession and cost cutting was leading the downsizing and delayering of the marketing department.

Business process re-engineering and TQM would mean that the marketing department would be absorbed into horizontal processes such as order-generation and order-fulfilment.

Cross-functional team working would leave marketing increasingly as secondary support function.


The rising importance of the delivery channel would prompt the increasing integration of sales and marketing. Internationalization and global branding was forcing national marketing departments to cede their territorial powers to global centres of strategic brand management, leaving local marketers as mere tactical implementers. And, of course, the rise of “total-company” marketing would end up with the diffusion of marketing across the whole company.

For example, Unilever subsidiary Elida Gibbs, caused quite a stir when it abolished the role marketing director and redivided the marketing department up into brand development innovation and category management.


A chartered Institute of Marketing (CIM) web-based research study carried out in December 2005 found that:

Only 11 out of FTSE top 100 companies have

a marketing executive at main board level …

and at operating board level only 17

(BP, Imperial Tobacco, W. Morrison, Rentokil, BPB, BA, Tesco, Vodafone, Legal & General, Marks & Spencer, SAB Miller)


Marketing has become too remote from the pulse beat of the organisation. Marketing has failed to market itself. It has failed to pick up on major trends in its sphere of operations. These include:

Global competition – Marketing has been too nationally focused, and worried more by turf protection than contributing to real business success;

New technologies – Information technology has created new, real time information flows about markets which in many cases bypass marketing departments;


Service Revolution – Lack of product differentiation has put a premium on service delivery. But, again, areas like warranties and customer support often come under departments other than marketing;

Confident, powerful buyers – Retailers are flexing their increasingly powerful muscles, while end users are becoming far more conscious of value for money. This put the concept of branding in the spotlight;

Lack of innovation – Too often brand extension has been a substitute for true innovation.


Marketing as a function is some danger of becoming marginalised or not very important

Some think that marketing people do little more than blue-light specials and coupons.

Distribution-chain responsibilities have migrated out to supply-chain management.

The operations strategy has tended to be assumed by the general management function.

And the customer-satisfaction responsibility – the core of marketing – has now become an information-technology function with database management.


Marketing itself is in need of rejuvenation.

Many marketing departments have turned into bureaucratic “sweat shops”, and the innovation is seen as a “holy grail” solution.

But the fundamental problem is that marketing is in danger of losing its necessary and virtual potency.


The most important point to bear in

mind is that we must make the word

“marketing” really mean that vital,

imaginative, forward-thinking insightful

world that comes to mind when we say

“innovation”, otherwise the marketing

functions really will be overcome by

“bureaucratic” statistics.


The classic marketing department’s functions are being dispersed across the organisation, and marketers are having to prove their value in new and different ways.

Elements of the marketing function are migrating elsewhere (e.g. some of the most powerful research tools are by-products of operations, not marketing: POS scanner, for example).

The responsibility for finding new ways to add value is being dispersed, too (e.g., corporate branding). A large element of the “VALUE” experienced by customers does not come just from products, but from the quality of the customer/company interface

PEOPLE AND PROCESSES


… Brand management and marketing strategy are being forced to step beyond the confines of the marketing profession per se, to demonstrate a new strategic and cross-disciplinary ability to deliver upon non-marketing business goals.


Marketing is not something the marketing department does to customers and prospects

INTEGRATED MARKETING

PROCESS-BASED MARKETING MANAGEMENT


Ever since the concept of process management – the idea that rather than flowing up and down functional departments, decisions and actions should flow horizontally across an organisation from supplier input to customer outlets – hit business, the marketing function has been a prime candidate for re-engineering.


PBM2

Process-based management is a management approach that governs the mindset and actions in an organisation. It is a philosophy of how an organisation manages its operations, aligned with, and supported by the vision, mission and values of the organisation. It is the basis on which decisions are made and actions are taken.

Process-based management is oriented towards achieving results rather than targeting specific activities and tasks of individual functions.


Process-Based Marketing Management Changes in the genetic foundation of the company

The “silo mentality” cells

Company “cells” (cross-cell functional teams)

Integrated marketing (Integration, Agility and Flexibility)

Two types of companies

those with a Mk Department

those with a Mk Soul

Classic marketing department's functions are being dispersed across the organisation. Elements of the marketing function are migrating elsewhere (e.g., logistics handling, interest marketing, pricing, new product development, corporate advertising, packaging).

“Synoptic” marketing


While downsizing the marketing departments, companies cannot downsize the importance of marketing

Companies have begun to realise the marketing is almost too important to be left to the marketing department alone, it has to be something that is a core competence of the company


Marketing in too important to keep in the marketing team

Involve whole organisation in marketing plan

Customer experience is the only way to make your company stand out as different

Small things can make a big difference

What should happen if your company cancelled all marketing?

The greatest product/services in the world do not need hard selling! … And the greatest selling is when the customers sells an idea to themselves! Adapted from P. Dixon


If service and delivery are as important as packaging and advertising, and if companies systems and order handling are crucial to your product offering, then the rest of the company is as big player in marketing as the marketing department itself!

The brand now needs to become a carefully designed business system cutting across functions.

What this means is that marketing must become a genuinely integrated function, working right across the core of the organisation.

In short, the realisation that the whole organisation is the brand!


Why should management systems be integrated?The reasons:

◘ reduce duplication and therefore costs◘ reduce risks and increase profitability◘ balance conflicting objectives◘ eliminate conflicting responsibilities and relationships◘ diffuse the power system◘ turn the focus onto business goals◘ formalise informal systems◘ maximise and optimise practices◘ create consistency◘ improve communication◘ facilitate training and development


The GOAL is to achieve a holistic view of the customer and an integrated interaction chain


As a result, many marketing departments are now being examined, analysed and turned inside out.

They can no longer avoid getting swept up by the latest management thinking about how companies operate, which is that rigid functional silos which focus solely on their own operations should be replaced by a more fluid, cross-functional, way of working.


CFM manages business processes across the traditional boundaries of the functional areas minimising suboptimisation. The real work of the marketing is increasingly carried out in cross-functional teams that are aligned with the business processes.


Cross-Functional Excellence for Managing TechnologyIn the new era of systemic innovation, cross-functional technology managers are in high demand. In the Silicon Valley, for example, many companies found that when they moved to a flatter organisation, they had plenty of top-flight technologists but few technology managers.

These managers are skilled technologists who also value the contribution from other functions, and who play an active role integrating their functions during the innovation process.


Research Findings:

Over 90% of companies reported that the effective use of cross-functional teams play a large part in reducing time-to-market.


Transformation of Marketing

Traditional marketing departments are being torn apart and restructured, yet no one seems to know what the new one should look like or what its remit should be.

Marketing is torn between a “holistic” and a specialist approach.

Clusters are the essence of a dynamics NEO-MARKETING organisation, always moving in time with the rhythm of the market.


Transformation of Marketing Today’s marketing organisation seems to create

customer value in a matrixed collaboration of all major functions of the company.

Many of the historically marketing driven activities have expanded to include Finance, Human Resources, Information Technology, Operations, and other internal disciplines, putting quite a few cooks in the kitchen.

One way to deal with the explosive complexity of today’s marketing organisation is to evolve from a command-and-control approach to one initially focused on defining the right set of controls that then applies all energies to drawing the best out of decentralised contributions.


You have to be expert not only in your silo of marketing, but to be able to demonstrate a skill, knowledge and understanding of how the organisation works as a whole.

It’s a case of thinking organisationally and seeing the bigger picture


Use your credibility and capacity in customer research to help other key organisational function achieve their goals.

Ground your interest in achieving measurably better results for everyone.


Tracking the coordination between departments and acknowledging that marketing is not just a series of isolated activities is a good way to help cut through the “smoke and mirrors” thrown up by so many marketing budget justification devices.


There is no one answer. Whatever the route, brands have to be the signposts for everyone in the company.

Marketers become “added-value coaches” across organisational business teams, while they also keep abreast of consumer/market changes that could rewrite the brand script.


The fully integrated marketing department of today manages the brand on a much more expensive level, taking a clear role in defining and handling many aspects of the customers value proposition, from product or service conception to forecasting to sales effectiveness to touch points experiences.


The fully integrated marketing department is much more likely to be linked closely with the overall organisational planning process, in many instances helping to set the strategic agenda for the entire company and establishing key cross-functional milestones like customers satisfaction, share of-customer penetration and perceptions of quality.

It is more likely to be speaking the same language as the rest of the organisation – revenues operating margins, efficiencies and process improvement.


The key is that the vision – the customer centric approach – must permeate everything that the company does. In customer centric companies management must:

PAN-COMPANY MARKETING (PCM)

◘ share the PCM vision

◘ promote the practice of customer value management

◘ ensure the organisational structure and systems are customer centric

◘ integrate branding


See every interaction with a customer as a learning opportunity

Develop and encourage flexible cross-functional teams to deliver value to the customer

Reward employees for improving and increasing customer value

Reward information sharing and knowledge transfer – across functions and also across teams.


Successful companies will in the future rely primarily on – and organise themselves around – integrators + functional specialists: integrators will be responsible for serving each distinct customer channel or product/market segment superbly; specialist will create competitive advantage by helping the company build world-class skills in the key most important functional areas of marketing.

In tomorrow’s marketing organisations, integration will play the critical role of guiding activities across an industry’s entire value chain to ensure that a company is maximising its long-term profitability.


• The consumer integrator will be responsible for meeting the needs of distinct and-user segments;

• Product integrators will also needed in most companies. They will provide cross-functional leadership for specific products, ensuring that each organisational unit is delivering value to the customer and maximising the corporate goals generated by each of its product categories.

They will be fewer in number, more senior in the organisation and have more experience of different functions than today's brand managers.

Tomorrow’s companies will design their marketing activities around different types of integrators:


Stages of Integrated Marketing Success

Marketing Integration

MarketingValue-added

Zone 1Marketing Silo

Zone 2 Marketing partner

Zone3 Unhealthy Dependence

As you move from silo to marketing partners, value-added increases

But past a certain point, the scope curve declines in productivity and value


is also known as Marketing Resource Management (MRM), and Enterprise Marketing Management (EMM).

These terms refer to process enhancement and technologies deployed across the marketing value chain and across multiple channels to market, designed to improve marketing efficiency, a accountability and accelerate time to market, ultimately enhancing customer relationships and measure ROI from marketing initiatives.

Marketing Operations Management (MOM)


MOM emphasises governance of marketing as a integrated process and how and where to apply technology to optimise marketing efficiency and effectiveness.

The examination of the end-to-end marketing value chain, from planning and budgeting, though sourcing of marketing content and automation of creative workflows, to worldwide execution and analysis.


The most progressive companies increasingly work in a networked or cross-functional way. This enables the company to look at the way in which the brand promise is delivered in a holistic way.

Traditional distinctions between product, service and delivery/distribution dissolve into new all-embracing concepts like “customer solutions”.

Familiar job titles disappear to be replaced by a bizarre assortment of new tags such as “development manager, market to collection” or “manager, customer satisfaction, quality and re-engineering”. In short, the marketing department of old finds itself sliced, chopped and dispersed across the whole business…!


Say goodbye to the old, dry, inward-looking distinctions…

Say hello to the rich and fascinating world of…New PBM2

(1)

◘ Demand chain management◘ Customer acquisition◘ Brand experience delivery◘ Strategic brand management◘ Time to market◘ Innovation management◘ Order-generation and order-fulfilment◘ Solutions design


Say goodbye to the old, dry, inward-looking distinctions…

Say hello to the rich and fascinating world of…New PBM2

(2)

◘ Customer relationship management◘ Reputation management and CIC◘ Market to collection◘ Supply chain management◘ Customer service◘ Business intelligence and security◘ Strategic corporate knowledge◘ Financial appropriation and return


It is critical to link the CS Measurement System to business processes (e.g., “solutions design”, “time to market”, “CRM”, “innovation management”, “demand chain management”, “brand experience delivery”, “order generation and order fulfilment”, “reputation management”, “market to collection”, “supply chain management”, etc).!


Case note: IBM

Marketing is now the core of IBM. Marketing is now a centrally managed global operation

IBM has created a number of customer-focused business units which focus on the needs of larger customers within specific sectors such as banking or retailing, and which operate on a regional or even global basis; also product sales units which specialised in particular technologies, and a global services unit which is, effectively, a consultancy.


IBM

Results (2004)

50% in development costs

61% in time-to-market in hardware segment

90% in “abandoned project expense (sunk costs)

25% in warranty costs


IBM

Each of them “does” their own marketing. They have their own budgets and most activities of the traditional marketing department are dispersed across them. E.g.

Integrated Product Development (IPD) process

Integrated portfolio Management team (IPMP)

A strategy and planning team

A pipeline Management team (resource allocation)

A lifecycle Management team


IBM

At the same time, the job of brand management and advertising strategy has been seized back by head office.

On by-product is that advertising is now all but completely separate from the marketing department.


Case note: Unipart

A “demand chain management” division integrated logistics services.

The core operational marketing activity for its spare parts business is now conducted not by a marketing department but by eight different “cells” which bring engineers, purchasing staff and product managers together into cross-functional teams.

These cells make key decisions related to range, price, packaging, promotion and specification.


Case note: Xerox

Xerox has four key processes: “time to market”, which is responsible for upstream product development including working out what the market wants: “supply chain”, which includes most other traditional operational marketing and selling activities, plus “installation and after sales administration”; and finally “customer service”.


Case in point: Nurturing Cross-Functional Experts at Hewlett-Packard (HP)

Most companies tend to recruit, train and promote people within functional corridors. But HP breaks the wall creating a career network that begins with the recruitment of diverse people in terms of their skills and personality and then promotes horizontally, as well as vertically throughout the company.

Typically, HP employees move through 4 to 6 functional areas in the course of their careers.

Other examples: DELL computersTESCO SupermarketsZARA clothing retail stores


The perennial Management Proverb:

AActivity

chievement!

is not

Date post:	19-Jun-2015
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