When companies meet their sales targets, the kudos tends to go to executive management. When sales are declining, ‘Mark the marketing director' is summoned to the boardroom to explain the sliding sales. Sound familiar?
If ‘Mark' is the first port-of-call to stem any financial bleeding, then he and his department must be of major value to the bottom-line. Then why are companies not more marketing-driven; why is ‘Mark' not a board member? How come there isn't a greater communication flow between the CEO, CFO and the CMO? Why is marketing not considered the engine of the company and why is the business strategy and marketing strategy two separate documents?
South African companies tend to lag behind the UK and the US in converting to a marketing-driven culture. Marketing returns are reflected in the annual reports of companies such as P&G and Coca-Cola in the US and Reckitt Benckiser in the UK. They have linked their brand messages to their wider business strategy and have figured out how to communicate the value of marketing to their shareholders.
Why convert to a marketing-driven company?
Old methods are unsustainable. The world is getting more competitive, complex, unpredictable and never stops changing. Evolvement is taking place that is gradually pulling organisations closer in alignment with their markets. They are being pushed by their strategies and pulled by increasingly assertive customers who demand more accountability and responsiveness to their distinctive needs.
So which companies will prosper in this environment and into the future? Only market-driven companies.
How do marketing-driven companies operate?
Companies that adopt a marketing-driven approach consider this area of the business to be the life blood of the company. They have a competent, astute, objective marketing director who also sits on the board. The company's business strategy is marketing-driven, has an external view, is long-term, and is flexible enough to be orientated to every market change.
A marketing-driven company anticipates competitor moves and has an intimate knowledge of its consumer. It has developed marketing intelligence, what we like to call ‘business wargaming', that assists the company with its strategy, operations and tactical planning, right through to execution. It succeeds in turning customer and competitor insights into improved business performance.
A marketing-driven company is so attuned to its target market it can literally sense today what customers will want tomorrow. It anticipates rather than reacts to market threats and opportunities. It can easily identify which distinctive capabilities to develop and which investment commitments to make, and all its marketing activities are aimed at increasing company value.
And, most importantly, it has metrics in place to quantify financial returns on brand-building spend.
The development of a market-driven strategy is a long-term endeavour that usually requires a complete redesign of the company. Research demonstrated that companies that operate as adhocracies - focusing on innovation, risk taking and adaptability - tend to outperform hierarchies (traditional pyramid-type organisations).
The challenge for a market-driven organisation is to create a cross-functional structure and processes that can combine the depth of knowledge found in a vertical hierarchy with the responsiveness of horizontal process teams.
Until these challenges are overcome, marketing will never sit on the top of managements' agendas, the value of marketing will always be questioned and it will maintain its reputation as a cash burner” instead of a “value creator”.
