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MARKETING: The Dilemmas of the Marketing Organization
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altFaced with an increasing demand for accountability, marketing managers are being asked by top management, as never before, to address organizational issues. Do you have the right organizational structure to provide success for the company? Are you aligned with other key stakeholders across the business? Is your organization set up to optimize its marketing investment? These are not easy questions to answer.
 
Traditional type of organisation
Many large companies tend to follow a traditional type of organisation, and so they are made of three levels: corporate level, business level, and functional level. The corporate level is the highest level in the organisation, and managers here address issues concerning the overall organisation, while decisions made here have an impact on the entire organisation. Corporate vision, corporate objectives, resource allocation, corporate growth strategies, and business unit composition are some of the strategic decisions made at this level. The business level consists of units that are typically managed as self-contained businesses. The idea is basically to split up a complex organisation into smaller units to be operated like independent businesses in order to make it simpler. Usually, companies compete against other companies at the business level, and so, decisions regarding market scope and competitive advantages are made here. At the functional level are all the various functional areas within a business unit and one of them is marketing.
This type of organisation provides a rather clear overview and it's simple to see what  different managers are accountable for. However, there is one major concern with this type of organisation, which is very often addressed by marketing managers: The silos that are built between units and functions.
 
The silos
altTraditionally, different functions within a business, work largely in isolation. Manufacturers manufacture, accountants account, marketers market, and so forth. Often with very limited communication between functions, managers tend to be focused on their own functional objectives to which their annual bonuses are linked. Even inside the marketing department, there can be silos preventing the big picture from arising. Researchers are not coordinating with advertisers which again are not talking to brand managers who are not completely aligned with sales people. Public relations, advertising, executive speechwriters, sales, and investor relations each tend to create messages that address their specific audiences, and generally they fail to take the extra step to connect these messages with common themes that best reflect the value and essence of the whole company. There are many concerns with this kind of organisation and culture, and some of them are: no coherent brand, very confusing messaging from the company, and a risk of working inefficiently.
A survey, done among senior marketing leaders at large global companies around the world, shows the number one problem they face is organisational silos. The silos slow down decision making and makes it difficult to reach a consensus on critical issues such as brand values, communication strategies, new offers, and messages. Even worse, the process often ends up as a compromise being far from the most ideal solution, because so many stakeholders have a say.

Marketing is often held accountable for coherent messaging within a company, but in a silo structure, marketing cannot do much more than beg and plead with others to get into line.
 
Marketing out of the prison of silos
Many companies have acknowledged that even though production is measured based on how low production costs can be, there is no point of having low production costs if the product is not something that consumers will purchase. Therefore, many companies have been adopting a marketing philosophy which stresses that everyone within the company focus on satisfying customer needs. If companies chose to apply a marketing philosophy in a traditional organisational structure, in order to succeed, then at least the company must overcome differences in functional objectives and must advocate and motivate for teamwork across functional teams and business units.

But is teamwork and cross functional objectives good enough?....
Organisations can benefit more from actually changing the structure, and there are many good arguments to create a corporate marketing function and a corporate research and insight department. Firstly, the marketing department plays a great role in applying a customer driven culture instead of a product driven culture, since marketing is doing market and consumer research and is always thinking in customer terms. Secondly, marketing plays a large role in developing the business strategy of the entire company. Put simply, the general strategic planning process consists of examining the current situation, evaluating trends in the market to identify potential threats and opportunities, setting objectives based on this analysis, and developing strategies to achieve these objectives. This cannot be done without involvement from the marketing department and without access to the market and consumer research done by the marketing department. A well-functioning marketing department must at all times know what the USP(unique selling point) of the company is, what competitors are doing, where future market opportunities will be, consumer preferences and characteristics, and where  consumers are going in the near future. If so, then the marketing department is critical in developing the overall business strategy.

So back to the question “is teamwork and cross functional objectives good enough”, the answer will in many cases be “no”.
If a corporate marketing department is created, it must work closely together with the business unit marketing departments to ensure a coherent brand strategy and to make sure that messaging is aligned in a way that both allows the profiling of the company and the promotion of individual products. Having a corporate marketing department does not mean that a company should not have a strong business unit marketing department. The two departments will serve two different purposes, and will have to work closely together based on a clear mandate description.

If research resources within a company are put together in one corporate “research hub”, it is guaranteed that the company will get more value for the money and that the findings will be shared and used across the business more efficiently than if the research was scattered all over the company in different – and smaller – research departments. Combining different research is very often what provides the big picture instead of just looking at all the puzzle pieces.

It is not easy to reinvent a marketing organisation. An example is Microsoft, who has spent a good ten years doing this. There are no quick fixes when it comes to organisational and cultural changes.
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Fact based Marketing
One thing is to get the best possible marketing organisational structure to enhance the company’s performance.  Another thing is to have a capable and up-to-date marketing department. Many marketing departments today are not analytical enough in their approach, and not being able to provide numerical data to top management and account for the ROMI (Return on Marketing Investment) is one of the reasons why marketing departments often do not get the organisational power that they should have. Then, marketing ends up being about slogans and colours. Marketing managers need to be very focused on what the data is telling them about consumers,  competitors,  sales, channel performance, etc. If the marketing department can provide insights that lead to actions that drive growth, then they will automatically be invited to the “big meetings”.

Decisions can be made in two ways: with data influencing a decision or based on a deadline. It is important to make sure that information is on hand during the “window of actionability” for each major decision point in the process. The marketing department has an opportunity to be in the front seat of this very important decision process in the company.

The job of marketing managers is becoming more demanding. Big businesses now operate in a multi-market, multi-lingual, and frequently, multi-brand world. A world filled with commercial and cultural nuances. At the end of the day, marketers need to transform their organisations to address these challenges if they want to truly affect a company’s decision making and bottom line. Managers and shareholders are already demanding it, so take on the challenge and do it.


by Heidi Skovhus
 
 
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