Chapter 5
MARKETING ORGANISATION FOR
CONSULTANCY SERVICES
The present chapter analyses the nature of marketing organisation
and the extent of marketing orientation in consultancy organisations. A
responsive marketing organisation is necessary for achieving the twin objectives
of marketing, namely, profit maximisation and client satisfaction. The marketing
function must be well-organised and integrated with the other functions of the
organisation. Moreover, consultancy organisations need a marketing orientation
throughout the organisation which fosters the marketing concept and manifests -
a marketing approach to all its activities.
5.1 Marketing Orientation in Consultancy Organisations
Marketing orientation is the actual implementation of the marketing
planning, programmes and strategies which contribute greatly to an
organisation's effectiveness. It is an integrated activity bringing together
management from all relevant functional areas to design and co-ordinate effective
marketing solutions.
From the review of relevant literature a n d discussions with
academicians and professional consultants the following components of
marketing orientation have been identified.
1. Client Orientation : The main task of the consultancy
organisation is to determine the needs and wants of target clients
and to satisfy them through the design, communication, pricing
and delivery of appropriate services.
2. Competitor Orientation : The consulting firm identifies the
rivals in the marketplace, their strengths and weaknesses and
- thei,r market share and positioning.
- 3. Strategic Orientation : The consultancy firm has a long term
focus on profitability and growth and generates innovative
strategies for achieving long term objectives.
4. Integrated Marketing Organisation : The consultancy firm
recognises formal marketing function for client satisfaction and
generating profit and the marketing organisation is fully
equipped to carry out marketing analysis, planning,
implementation and control.
5, Interfunctional Coordination : The marketing function is
fully integrated with other functions in the organisation.
The summary of the ratings of the above five variables by
respondents is presented in Table T23.
Table T23
Analysis of Marketing Orientation
,-
Ranked on Five point Scale 1. Excellent 2. Very Good 3. Good 4. Poor 5. Very Poor (N = 200)
Source: Research Data
Table T23A
Relative Presence of Marketing Orientation Variables
Total
200
200
200
200
200
Variables
Client Orientation
Competitor Orientation
Strategic Orientation
Integrated Marketing Organisation --
Interfunctional Coordination
Source: Research Data
No, of Respondents
Variables
Client Orientation
Competitor Orientation
Strategic Orientation
Integrated Marketing Organisation
Interfunctional Coordination
V.Poor
-
-
-
-
-
Excellent
112
32
34
62
83
Mean Score
4.495
3.605
3.710
3,815
4.250
Rank
I
V
IV
I11
I I
Poor
3
7
28
V.Good
75
60
81
67
84
Good
13
105
78
43
33
Of the five variables of marketing orientation cited above client
orientation is found to be the most important variable present in consultancy
organisations. It is rated as excellent by 56 per cent of the respondents, very
good by 37.5 per cent a n d good by 6.5 per cent respondents.
The second important variable present is interfunctional coordination.
It is rated as excellent by 41.5 per cent respondents.
The variables integrated marketing organisation, strategic orientation .
and competitor orientation come in the third, fourth and fifth positions
respectively.
The mean scores of all the variables lie between 3.5 and 4.5 which is
indicative of the moderately good marketing orientation of consultancy
organisations.
l o o -
81) - V) , s ] g v.Good C60' I rc 0
i @ Good i
640- ; 0 Poor Z - ----
20 -
0 " 7 ---
Client Competitor Strategic Integrated Interfunctional Orientation Orientation mientation Marketing Coordination
Organisation
Fig. F13 Marketing Orientation of Consultancy Organisations
5.2 Organising of Marketing in Consultancy Services
Organising of marketing in consultancy services is the process of
identifying the marketing activities, grouping these activities into marketing
functions and assigning necessary authorities to persons to carry out these
functions for achieving marketing objectives. The set of relationship amongst
marketing personnel is referred to as the marketing organisation.
In the study the majority of the respondent firms state that they have
some form of organisation for marketing. The nature of organisation for'
marketing ranges from having a single person, most probably the consultant
himself, undertaking marketing as one of several managerial functions, to full-
fledged marketing department with adequate number of-emptoyees. It is seen
that consultants favour a value-driven marketing organisation in their firms -
responsive to the needs and expectations of their clients.
5.3 Marketing Function in Consultancy Organisations
Table T24 shows the number of consulting firms having a formal
marketing function in their organisations.
Table T24
Formal Marketing Function In Consultancy Organisations
Source: Research Data
Particulars
Having formal marketing function
Not having formal marketing function
Total
No, of firms
- 146
54.
200
Percentage
73 27
100
It is evident from the table that the majority of the consulting firms
(73 per cent) have formal marketing function in their organisations. Only 27
per cent firms do not have formal marketing functions in their organisations.
They are either small in size or prefer to use the terms like 'business promotion'
or 'business development' for marketing function. It is found that the barrier to
the installation of formal marketing function in consultancy business is mostly
internal rather than external.
The acceptance of marketing function by the majority of the
consultancy organisations reveals that marketing does not appear to have the
internal clout of other management functions. Marketing is now recognised as a -
serious issue in the context of increasing competitive pressure in the market
place and relaxation ofprofessional regulations.
Fig. F14 Marketing Function In Consultancy Organisations
5.4 The Head of the Marketing Function in Consultancy Organisations
Table T25 shows the nature of the designation of the person in charge
of marketing function in consultancy organisations.
Table T25
The Head of the Marketing Function in Consultancy Organisations
Source: Research Data
Designation of the person
in charge of marketing
The Proprietor himself
The Chief Executive Officer
The Marketing Manager
Others
(N = 200)
The table reveals that in 72 firms, the proprietor himself oversees the
marketing function. The chief executive officer, that is, the manager or the
managing director heads the marketing function in 32 firms. In 40 consultancy
firms, the marketing manager or the business promotion manager as he is
often called, looks after the marketing function. 'Others' used in the table include
two consultancy firms, both partnership, where marketing function is discharged
by a Managing Committee which also looks after other managerial functions.
No. of firms '
72
32 .
40 -
2
Percentage
36
- 16
20
1
Thus it is seen that the person in charge of marketing function does
not have formal organisational identity or designation in many consultancy firms.
He is the proprietor himself or the chief executive officer in small consultancy
firms. In large consultancy firms like that of software consultancy in the corporate
sector the chief of marketing is called the marketing manager or director of
marketing.
5.5 Evaluation of the Marketing Department
It is already established in Table TI8 in the study that out of 200
consultancy firms, only 56 firms have separate marketing department in their
organisations.
The effectiveness of the marketing department in consultancy
organisations is analysed on the basis of the following parameters:
1. Whether the marketing department is working in perfect
coordination with other departments or not,
2. Whether the marketing department is adequately staffed or not,
3. Whether the marketing department is provided with adequate
marketing resources or not,
4. Whether the activities of the marketing department are cost
effective or not, and
5. Whether the marketing department is given sufficient authority
to carry out its functions or not.
From the analysis it is revealed that the majority of the consultancy
organisations d o not satisfy the above parameters of an effective marketing
department. Many consultants view marketing as a less imporant function than
finance or personnel and the marketing department is not given its due recognition.
Consultants also state that in small consultancy organisations there is not much
scope for division of marketing function into subfunctions like marketing
information, marketing planning, marketing research, marketing communication
etc. However, the respondent firms having marketing departments state that -
their marketing departments work satisfactorily and their activities are cost -
.-
effective.
5.6 Marketing Resources without formal Marketing Function
Small consultancy organisations which cannot afford or choose not
to install formal marketing function get some marketing resources from outside
agencies. The firm engages a marketing consultant or marketing research firm
or advertising agencies for specified marketing tasks when needed. Table T26
shows the number of consultancy organisations hirindnot hiring the services of
outside marketing agencies.
Table T26
Consultancy Firms hiring/not hiring the s e r v i c e s of outside Marketing Agencies
Source: Research Data
Particulars
Firms hiring the services of outside marketing agencies
Firms not hiring the services of outside marketing agencies
Total
The table reveals that only very few firms (6 per cent) hire the
services of outside marketing agencies. Thus most of the consultancy
No. of firms
12
188
200
organisations do not depend on outside agencies for marketing assistance.
Percentage
6
94
100
~ o s t of the consultancy firms having no formal marketing department state -
that they get sufficient marketing inputs without formal marketing departments
in their organisations.
5.7 Marketing Information System in Consultancy Services
The marketing department in consultancy organisations needs timely,
accurate and adequate marketing information for making sound marketing
decisions. Table T27 shows the number of consultancy firms having / not having
Marketing Information System in their organisations.
Table T27
Classification of Consultancy Organisations on the basis of Marketing lnformation System
Source: Research Data
The table reveals that 68.5 per cent of the consultancy firms have
Percentage
68.5
31.5
100
Particulars.
Firms having Marketing Information System
Firms not having Marketing Information System
Total
Marketing Information System in their organisations. Thus .- the majority of the
No. of firms
137
63
200
consultancy~organisations realise the need for sufficient marketing information ,-
for solving current and potential problems and making marketing decisions.
Consultants are of the opinion that they need the latest information relating to
the developments in the area of their expertise for offering the right services or
solutions to the problems of clients.
It is revealed in the study that many consultants maintain and update
a database of clients and prospects. Most of the consultants also keep sufficient
internal records like key manuals, handbooks, engagement related materials,
work schedules and budgets as part of the Marketing Information System.
Consultants also subscribe to professional journals and attend conferences and
seminars for keeping abreast with latest developments in their respective fields
of expertise.
r i ~ a v l n ~ formal marketing function I 10 Not havlng formal marketing function 1
Fig. F15 Marketing Information System in Consultancy Organisations
5.8 Marketing Intelligence System
Consultancy organisations use Marketing Intelligence System - to
monitor changes in market conditions, analyse client needs and behaviour
and understand the strategies of competitors. Table T28 shows the number of
consultancy organisations havingJnot having Marketing Intelligence System
in their organisations.
Table T28
Classification of Consultancy firms based on Marketing Intelligence System
Source: Research Data
Percentage
81
19
100
Particulars
Firms having Marketing
Intelligence System
Firms not having Marketing Intelligence System
Total
No. of firms
162
38
200
163
The table reveals that most of the consultancy organisations
(81 per cent) make use of the Marketing Intelligence System in their
organisations. This makes it clear that consultancy organisations give due
importance to the need for marketing intelligence to get necessary feedback
about clients' behaviour, needs and expectations.
It is found in the study that consultants collect information for the
intelligence system directly from clients, from site offices, journals and periodicals,
research reports of different organisations, national and international business
publications, government reports etc. Consultants also state that they use the
marketing intelligence system to formulate a sound portfolio of services by
identifying areas of profitable services.
-
5.9 Marketing Research in Consultancy Organisations
Consultancy organisations use marketing research for finding solutions
to specific marketing problems. Table T29 shows the number of consultancy
organisations which have undertaken marketing research:
Table T29
Classification of Respondents based on Marketing Research
Source: Research Data
- The table shows that only very few firms (8 percent) have-undertaken
marketing research among the respondent firms. It indicates that most of the ,-
consuitancy organisations are not convinced of the need for conducting
marketing research. I t is seen in the study that small consultancy organisations
do not conduct marketing research because it is costly and they cannot simply
afford it. It is revealed in the study that out of 16 firms which conducted
marketing research 13 firms conducted the study earlier in the past when they
felt the need under different situations, and the remaining 3 firms conducted the
study recently.
Percentage
8
92
100
Particulars
Firms which have undertaken Marketing Research
Firms which have not undertaken Marketing Research
Total
5.10 Marketing Planning System
No. of firms
16
184
200
The Marketing Planning System is an integral part of the marketing
organisation and guides the activities of the consultancy organisat ion in the market
place. Table T30 shows the number of consultancy organisations havindnot having
marketing planning system in their organisations.
Classification of Consultancy Organisations based on Marketing Planning System
Source: Research Data
Particulars
Firms having marketing planning system
Firms not having marketing planning system
Total
It is evident from the table that only 42 per cent of the consultancy
firms have marketing planning system in their organisations. Thus the majority
of consultancy organisations have no marketing planning system. It is seen in
the study that only medium and large-sized consultancy firms employ marketing
planning system. However, most of the consultants are convinced of the need
for marketing planning for achieving marketing goals and designing appropriate
marketing strategies.
5.11 Marketing Budget in Consultancy Organisations
No. of firms
116
200
Marketing budget in a consultancy organisation is a written plan covering
a year's marketing operations for a given service or group of services. Table T31
Percentage
58
100
gives the number of consultancy organisations preparindnot preparing marketing
budgets.
Table T3 1 Classification of Consultancy Organisations based on
Marketing Budgets
Source: Research Data -
As per the table only 16.5 per cent of the firms studied prepare
marketing budgets. Thus preparation of an annual budget containing marketing
Percentage
16.5
83.5
100
Particulars
Fims preparing marketing budget
Firms not preparing marketing budget
Total
operations for the period is not practised by a majority of the consultancy
No, of firms
33
167
200
organisations. However, it is revealed from the study that consultants are aware
of the advantages of preparing marketing budget. They agree that marketing
budget serves as an operational guide to them in each phase of the marketing
effort for a given service or market. Without a budget a consultant can never
be certain whether his operations are going successfully. It is seen that the
criticism of consultants against budgeting is based on the fact that they find it
difficult to make a reliable forecasts of their operations on which to base a
meaningful budget due to uncertainties of the future.
5.12 Methods used for Marketing Budget
Consuftancy organisations making use of budgeting employ different
methods in the preparation of marketing budgets. Table T32 shows the methods
used by consultancy organisations in the preparation of marketing budgets. .
Table T32 Methods used for Marketing ~ u d ~ e t s
Source: Research Data
Methods ,
Client survey method
Statistical / Trend Projection Method
Objective and task method
Other methods
(N = 200)
The table shows that out of 33 consultancy firms preparing marketing
budget, 15 firms use the statisticaytrend projection method, 11 firms use the
objective and task method and the remaining 7 firms use the client 1 survey
method. Thus it is evident that the statisticalltrend projection method is the
popular method used for marketing budgeting by consultancy organisations.
This is because this method is less costly and is based on past data which are
readily available to them from past records.
No. of firms
7
15
11 -
Nil
Percentage
3.5
7.5
5.5
0
5.13 Marketing Control System
It is found in the study that only a few consultancy organisations use
marketing control system to evaluate their performance in the market place in
relation to their marketing objectives. 'The tools of marketing control that are
used by consultancy firms include income analysis, market share analysis,
profitability analysis and ratio analysis. Table T33 shows the nature of marketing
control techniques used by consultancy firms.
Table T33
Marketing Control Techniques in Consultancy Organisations
Source: Research Data
Consultancy firms use more than one technique of marketing control
to evaluate their performances. The table shows that 16 per cent of the firms
in the study conduct profitability analysis to evaluate the profitability of each
service or group of services. It is revealed that such analysis helps these firms
in identifying the profitable and non profitable services and in designing the
services portfolio. he next important technique is ratio analysis used by
Percentage
-13
7
16
15.5
Technique -
-
Income Analysis
Market Share Analysis
Profitability Analysis
Ratio Analysis
(N = 200)
No. of firms
26
14
32
31
15.5 per cent of the firms. 13 per cent of the firms conduct income analysis
and 7 per cent of the firms conduct market share analysis to evaluate the
marketing performance. Thus it is inferred that consultancy organisations are
generally poor in exercising marketing control as in the case of adopting
marketing planning.
5.14 Marketing Audit in Consultancy Services
Marketing audit in consultancy organisation is a periodical, systematic .
and objective appraisal of its marketing activities with a view to ascertaining the
total efficiency of the marketing plan.
- In the study none of the consultancy organisation is found conducting
- marketing audit. It is seen that consultants are aware of the need for such an
audit to improve the effectiveness of the total marketing operations of their
undertakings. They agree that marketing audit can identify opportunities and
remove the shortcomings of the marketing operations and help the firm in
adopting a sound marketing strategy.