03 marketing but not as we know it

8/10/2019 03 Marketing but Not as We Know It

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PS-GRADUAO EM MARKETING RELACIONAL

Future Trends in Marketing

Marketing but not as we know itMarketing but not as we know it

Marketing organisationMarketing organisation

a new processa new process--based management approachbased management approach

Professor Luiz Moutinho

Foundation Chair of Marketing

School of Business and Management

University of Glasgow, Scotland


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In complexity sciences terms, strategic intent isdecomposition of exploration rules into the next

level of detail, the linkages to the exploration

rules and the transition rules that define how theorganisation will migrate from its current design

and ecosystem to a future business design and

ecosystem.


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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 nor enough to optimise one dimension (product,

geography or functional performance) of the business.

Organisations have to optimise multiple dimensions in

order to compete effectively.


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PS-GRADUAO EM MARKETING RELACIONALFuture Trends in Marketing

Todays 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 todays market,

temporary teams are likely to become the primary unitof performance in successful organisations.

In order to achieve a level of service leadership,

personnel could be teamed into matrices, with eachteam having the responsibility to bring fresh ideas and

directions to their clients.


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Work Teams (strengths-based PBM)

Mini-Action teams (MATS)

Cooperation-Coordination Peer teams (COPS)

Business Process, Analysis and technical teams

(BAT)


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One key common traits of Marketplaces leaders

Operational Excellence: making certain that all component

of the business are linked on an operational basis, anenvironment 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.


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There was a time when marketing was a straightful

profession. You had a product and, provided that it was a

god one, you could sell it.

Marketing was geographically centered and based oncountries 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 sceptical about many brand propositions, and

completely immune to others


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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.


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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 workharder 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 dtre but

that brand care and attention should come from the very top.


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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 anddelayering of the marketing department.

Business process re-engineering and TQM would mean that

the marketing department would be absorbed into horizontalprocesses such as order-generation and order-fulfilment.

Cross-functional team working would leave marketing

increasingly as secondary support function.


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The rising importance of the delivery channel would prompt

the increasing integration of sales and marketing.

Internationalization and global branding was forcing nationalmarketing 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 thediffusion of marketing across the whole company.

For example, Unilever subsidiary Elida Gibbs, caused quite a

stir when it abolished the role marketing director andredivided the marketing department up into brand

development innovation and category management.


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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)


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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 itssphere of operations. These include:

Global competition Marketing has been too

nationally focused, and worried more by turfprotection than contributing to real business success;

New technologies Information technology has

created new, real time information flows aboutmarkets which in many cases bypass marketing

departments;


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Service Revolution Lack of product differentiation

has put a premium on service delivery. But, again,

areas like warranties and customer support oftencome under departments other than marketing;

Confident, powerful buyers

Retailers are flexing

their increasingly powerful muscles, while end usersare 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.


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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 ofmarketing has now become an information-technology

function with database management.


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Marketing itself is in need of rejuvenation.

Many marketing departments have turned intobureaucratic 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.


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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 wesay innovation, otherwise the marketing

functions really will be overcome by

bureaucratic statistics.


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The classic marketing departments 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 beingdispersed, 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


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Brand management and marketingstrategy are being forced to step beyond the

confines of the marketing profession per se,

to demonstrate a new strategic and cross-disciplinal ability to deliver upon non-

marketing business goals.


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Marketing is not something the marketing

department does to customers and prospects

INTEGRATED MARKETING

PROCESS-BASED MARKETING MANAGEMENT


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Ever since the concept of process management

the idea that rather than flowing up and downfunctional departments, decisions and actions

should flow horizontally across an organisation

from supplier input to customer outlets hitbusiness, the marketing function has been a

prime candidate for re-engineering.


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PBM2

Process-based management is a management approachthat 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 activitiesand tasks of individual functions.


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Process-Based Marketing Management

Changes in the generic 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 aremigrating elsewhere (e.g., logistics handling, interest marketing,pricing, new product development, corporate advertising, packaging).

Synoptic marketing


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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 leftto the marketing department alone, it has to

be something that is a core competence of

the company


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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 needhard selling! And the greatest selling is when the

customers sells an idea to themselves!

Adapted from P. Dixon


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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 themarketing 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!


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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


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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.


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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 arealigned with the business processes.


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Cross-Functional Excellence for Managing Technology

In the new era of systemic innovation, cross-functional

technology managers are in high demand. In theSilicon 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.

F t T d i M k ti


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Research Findings:

Over 90% of companies reported that

the effective use of cross-functional

teams play a large part in reducing time-to-market.

PS GRADUAO EM MARKETING RELACIONAL

F t T d i M k ti g


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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.




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Transformation of Marketing

Todays 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 todays

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.




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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.

Its a case of thinking organisationally and

seeing the bigger picture




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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.




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Tracking the coordination between

departments and acknowledging thatmarketing 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.




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There is no one answer. Whatever the

route, brands have to be the signposts freveryone in the company.

Marketers become added-valuecoaches across organisational business

teams, while they also keep abreast of

consumer/market changes that could

rewrite the brand scrip.




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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 serviceconception to forecasting to sales

effectiveness to touch points experiences.




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PS GRADUAO EM MARKETING RELACIONALFuture Trends in Marketing

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 ofquality.

It is more likely to be speaking the same language

as the rest of the organisation revenues

operating margins, efficiencies and process

improvement.




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PS GRADUAO EM MARKETING RELACIONALFuture Trends in Marketing

The key is that the vision the customer centric

approach must permeate everything that thecompany 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 andsystems are customer centric

integrate branding




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g

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 increasingcustomer value

Reward information sharing and knowledge

transfer across functions and also across

teams.




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g

Successful companies will in the future rely primarily on

and organise themselves around integrators +

functional specialist: integrators will be responsible for

serving each distinct customer channel orproduct/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 tomorrows marketing organisations, integration will

play the critical role of guiding activities across an

industrys entire value chain to ensure that a company is

maximising its long-term profitability.




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g

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 isdelivering 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.

Tomorrows companies will design their marketingactivities around different types of integrators:




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Stages of Integrated Marketing Success

Marketing Integration

Marketing

Value-added

Zone 1

Marketing SiloZone 2

Marketing partner

Zone3

Unhealthy Dependence

As you move from

silo to marketing

partners, value-

added increases

But past a certain

point, the scopecurve declines in

productivity and

value




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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 valuechain 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)




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MOM emphasises governance of marketing as a

integrated process and how and where to apply

technology to optimise marketing efficiency andeffectiveness.

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.




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The most progressive companies increasingly work in anetworked or cross-fictional 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 costumer solutions.

Familiar job titles disappear to be replaced by a bizarre

assortment of new tags such as development

manager, market to collection or manager, customersatisfaction, quality and re-engineering. In short, the

marketing department of old finds itself sliced,

chopped and dispersed across the whole business!




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

Say hello to the rich and fascinating world of

New PBM

2

1)

Demand chain management

Customer acquisition

Brand experience delivery

Strategic brand management

Time to market

Innovation management

Order-generation and order-fulfilment

Solutions design




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

Say hello to the rich and fascinating world of

New PBM

2

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




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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 collection, supply

chain management, etc).!




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Case note: IBM

Marketing is now the core of IBM. Marketing is now a

centrally managed global operationIBM has created a number of customer-focused

business units which focus on the needs of larger

customers within specific sectors such as banking orretailing, 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.




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IBM

Results (2004)

50% in development costs

61% in time-to-market in hand mare segment

90% in abandoned project expense (shrinkcosts)

25% in warranty costs




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IBM

Each of them does their own marketing. They have

their own budgets and most activities of the

traditional marketing department are dispersedacross 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




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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 nw all butcompletely separate from the marketing

department.




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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 differentcells 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.




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Case note: Xerox

Xerox has four key processes: time to market,

which is responsible for upstream productdevelopment including working out what the

market wants: supply chain, which includes

most other traditional operational marketingand selling activities, plus installation and after

sales administration; and finally customer

service.




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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 thewall 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 computers

TESCO Supermarkets

ZARA clothing retail stores




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The perennial Management Proverb:

ctivity

chievement!

is not

03 marketing but not as we know it

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