03 marketing but not as we know it
TRANSCRIPT
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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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Future Trends in Marketing
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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Future Trends in Marketing
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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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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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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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