1 who let the barbarians in? dr. ajay k. sirsi schulich school of business york university...
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Ajay Bio
Schulich School of Business, Marketing professorResearch, writing, teaching (Exec, MBA, BBA) Marketing Led - Sales Driven (Trafford) Marketing: Real People, Real Decisions (Pearson) Marketing: A Roadmap to Success (2009, Pearson)
Consulting Royal Bank Bayer International Paper Glaxo Smithkline Imperial Oil Manulife Financial TELUS Amgen Schneider Electric
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1Current State Of The Marketing
Discipline 2 3The Silver LiningImplications For
Teaching And Practice
4Discussion
Today’s Discussion
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1Current State Of The Marketing
Discipline 2 3The Silver LiningImplications For
Teaching And Practice
4Discussion
Today’s Discussion
5
Barbarian
Foreign individual or tribe whose first language was not GreekA Greek individual or tribe speaking Greek crudelyThe Vikings Label for the Goths during the Gothic revolt that put an end to the Roman Empire in 470 A.D.
Began the Dark Ages
Label for Normans during their invasion of England
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Barbarian
Foreign individual or tribe whose first language was not GreekA Greek individual or tribe speaking Greek crudelyThe Vikings Label for the Goths during the Gothic revolt that put an end to the Roman Empire in 470 A.D.
Began the Dark Ages
Label for Normans during their invasion of England
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Recent Experiences
Four marketing consulting projects initiated by
CFOs SalesOperations
Frustration withLack of Marketing initiativeMarketing disconnect with customer needs
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Recent Experiences
Member of interview panel to hire AVP of Sales
Candidate performed well in first interviewClient’s question: can she do Marketing as well?
Hire her for VP Marketing and Sales?She has no formal Marketing experience
I developed a case study for second interview
She passed with flying colours
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Recent Experiences
Marketing function is worriedCurrent CEO is retiring in the fallNew CEO does not “understand” marketing
Perused 3 years of Marketing monthly reports
To glean Marketing’s value to corporationWhat I found What new CEO did
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Support in Literature
Anderson 1982, Day 1992, Varadarajan 1992Webster Jr. et al. (2005)
“Financial pressures, a shift in channel power, and Marketing’s inability to document its contribution to business results have combined to force reductions in Marketing spending and influence, and to accelerate a transfer of funds and responsibilities to the field Sales organization”
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Support in Literature
Response: Formation of CMO RoleThe problem?
Only 50% of Fortune 1000 firms have a CMO (Booz & Co 2004)CMO makes no difference to firm performance (Nath and Majajan 2008)
Multi-industry sample of 167 firms over a 5-year period
Average CMO tenure is 23 months (Spencer Stuart statistic cited in 2004 Harvard study)
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Why Has This Situation Occurred?
Failure to talk the same language amongst ourselves
Marketing used synonymously with Marketing Communications
AdvertisingMarketing collateral material
Product used synonymously with GoodMarketing used to only denote activities that generate immediate sales
Failure to objectively demonstrate value created by Marketing
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Why Has This Situation Occurred?
Failure to understand CEO’s agendaArrogance
“Why do you need to know what is in our Marketing Plan?”
Other functions have taken on traditional Marketing roles
CFO (Couto, Heinz, and Moran 2005)Sales (Webster Jr., Malter, and Ganesan 2005)
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1Current State Of The Marketing
Discipline 2 3The Silver LiningImplications For
Teaching And Practice
4Discussion
Today’s Discussion
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Silver Lining
Research demonstrates that Marketing is critical for organizational success (Booz & Co survey of 9 industries 2004; Krasnikov and Jayachandran 2008; Nohria 2003)
Organizations want Marketing to take on non-traditional roles: driving innovation and cross-functional collaboration
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Silver Lining
Late 2005 survey by Prophet and IDGBroad, customer-focused issues are crucial drivers of business growth
Customer service and deliveryCustomer experience
Advertising and promotion (1%)
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Silver Lining
Current financial meltdown is making Marketing more attractive (WSJ)Clients investing in marketing fundamentals to drive business growth
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Silver Lining
CMO success is evidentIBM, Pepsi, UPS, P&G, Microsoft, GEKey corporate decision makersOn par with other C-level executivesShape company directionPropel financial performance
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1Current State Of The Marketing
Discipline 2 3The Silver LiningImplications For
Teaching And Practice
4Discussion
Today’s Discussion
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What Can We Learn From Successful CMO’s?Choose from 3 CMO models
Marketing Service ProviderMarketing AdvisorDriver of Growth
Understand the CEO’s agenda for driving growth and innovation (Kumar 2004)Establish controls“How to market Marketing”Develop organizational linkages
What you ownWhat is matrixedWhat you need to informally influence
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What Can We Learn From Successful CMO’s?
• Demonstrate organization dashboards§ In conjunction with CEO§ Combination of financial and brand equity
metrics
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Problem RecognitionProblem Recognition
Repeat PurchaseDecision
Repeat PurchaseDecision
Information SearchInformation Search
Purchase Consideration
Purchase Consideration
Purchase IntentPurchase Intent
Purchase DecisionPurchase Decision
•Marketing communications awareness (%)•Brand awareness (%)
•Brand associations (qualitative)
•Brand equity (scale)
•Purchase intent (scale)
•Win rates (%)•Sales volume ($)•New net revenue ($)
•Customer satisfaction (scale)•Customer retention (%)•Customer defection (%)•Profit as percentage of revenue (%)Source: Sirsi (2009, forthcoming) Marketing: A Roadmap to Success
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What Can We Learn From Successful CMO’s?
• Take risks• Come up with big ideas• “Marketing is about building new
businesses, finding the white space, and leading the integration across the organization with sales and R&D” (Hyde, Landry, and Tipping 2004)
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Strategic Plan•3-5 Year Horizon•High-level strategy
Resource Allocation•Capital Allocation•Budgets
Performance Measurement•KPM (key performance measures)
MarketingPlan
Sales & Customer PlansManufacturing Plan
IT PlanHR Plan
Source: Sirsi (2005) Marketing Led – Sales Driven
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Implications For Students Are Profound
Previous
• Broad marketing experience
• Understands the customer experience and translates into brand strategies
Now• Move from project to project
as part of cross-functional team
• Periods in non-marketing roles
• Understands market opportunities and value system management
• Strong knowledge of supply chains, audience engagement and contracting
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Implications For Students Are Profound
Previous
• Gregarious, outspoken• Works hard, plays hard• Numbers driven• Motivated by
responsibility and fear of failure
Now
• Creative, flexible, long-term goal orientation
• Motivated by unstructured environments and corporate social responsibility
• Right-brain and left-brain skills
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Implications For Practice And Teaching
• What we teach has to change• Less focus on terms and definitions• Broader focus on material, strategy• From NPD to innovation• From logistics to SCM• From microeconomics to pricing strategies• Customer satisfaction and brand strength
relationship to firm performance• Cross-functional linkages • Marketing – Sales linkage• Marketing ROI
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1Current State Of The Marketing
Discipline 2 3The Silver LiningImplications For
Teaching And Practice
4Discussion
Today’s Discussion
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Ajay Contact Information
• Email: [email protected]• Phone: (416) 486 – 8490• Work: Schulich School of Business at York
University, Toronto, Canada