designing a winning marketing organization

Prof. Sundar BharadwajCoca-Cola Company Chair Professor of MarketingTerry College of BusinessUniversity of Georgia

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Designing a Winning Marketing Organization

Uncovering the Anatomy of a WMO• The Structure of a WMO

• The Responsibilities of a WMO

• The Path to Become a WMO

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471 Responses (79 public firms)

Size (Employees)• 29% Less than 1000• 22% 1000-4999• 7% 5000-9999• 17% Greater than 10,000• 25% Unknown

Data Collected in Feb, June and December 2020

Data Description

Country of Origin• 70% for USA • 30% from outside

the US

Firm Age• 25% of the companies

were started post 2000• 75% Prior to 2000

Industry Sectors• 18% B2B• 26% B2C• 56% Both

Size (revenues)• 43% Less than $1B• 10% Between $1B-$10B• 6% Between $10B-$50B• 2% Greater than $50B• 39% Unreported

Sourced from the Marketing Capability Benchmark Study marcaps.com/research

Distinguishing Winning Marketing Organizations (WMO) From Lagging Marketing Organizations (LMO)

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Economic Growth• Achieve revenue and profit goals• Find new ways to achieving growth• Measure the return and optimize marketing investments

Customer Growth• Engage consumers/customers and build brand equity• Personalize offerings to customer preferences, needs and situations• Increase convenience and enjoyment across the customer journey

WMOScore in the Top 2 Box

6 or 7

LMOScore in the Bottom 3 Box

1, 2 or 3

Additional criteria in future (In Progress): Employee growth -engagement and satisfaction

Capability Fit Impacts Growth

1.86

5.31

1

2

3

4

5

6

7

Aver

age

Satis

fact

ion

w G

row

th

Low Fit High FitCapability Fit of Marketing Org. (0% – 100%)

Effect of MarCaps Fit on Growth*

*Growth is an aggregate of satisfaction (on a 1-7 scale) with company’s ability to 1) Achieve revenue and profit goals, 2) Find new ways to achieving growth and 3) To measure the returns and optimize marketing investments. The graph is based on the results of a model controlling for firm size, age, industry type.

Gro

wth

(1-7

sca

le)

Growth At Low vs High Fit

3xCompanies with high marketing capability fit reported 3x the level of growth than companies with low marketing capability fit – after controlling for other factors.

0% 100%

1

7

5

The Structure of WMOs•More customer centric

• Less centralized

•More externally connected

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WMOs Are Significantly More Customer Focused and Complex In Their Structure Design Choices

52%

42%

23%

11%

54%

46%

46%

38%

0% 10% 20% 30% 40% 50% 60%

Product/BrandStructure

Expertise Structure

Customer SegmentsStructure

Acquistion/RetentionStructure

Incidence of Organization Structure

23%

46%

0%

10%

20%

30%

40%

50%

Matrix Structure

Incidence of Matrix Structures

Lagging Marketing Organizations (LMOs)

Winning Marketing Organizations (WMOs)

Q. Which of the following statements reflects the way marketing is structured in your organization?

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2.69

3.38

3.14

3.97

4.384.27

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2.5

3

3.5

4

4.5

Decentralization_Marketing Budget Decisions Decentralization_Product/Service Decisions Decentralization_Marketing Program Decisions

Extent of Decentralization by Marketing Organization Type

Scale: 1 (Centralized) – 7 (Decentralized)

WMOs Manage Less Centralized Marketing Organizations



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Q. Please use the slider below to indicate the extent to which marketing budget, product and program decisions in your company are centralized (i.e.: made by a corporate team for the entire organization) or decentralized (i.e.: made by local/ regional/ functional teams)

Mea

n D

ecen

traliz

atio

n Sc

ore

WMOs Are More Actively Engaged With The Outside Ecosystem

1.79

0.97 1.01

2.83 2.8

2.17

0

0.5

1

1.5

2

2.5

3

Outsource_Engagement Roles Outsource_Exchange Roles Outsource_Experience Roles

Insource/Outsource Of Marketing Tasksby Marketing Value Area

1.3

2.6

EMO WMO

Insource Vs. Outsource Of Marketing Tasks


Winning Marketing Organizations (WMOs)Q. Please indicate if the activity listed below is OUTSOURCED (i.e.: 50% or more effort/spend is by outside agencies). 9

Mea

n N

umbe

r of T

asks

Out

sour

ced

Mea

n N

umbe

r of T

asks

Out

sour

ced

L M O

The Modern Marketing Framework

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Matching offerings to individual customer needs and context in ways that facilitate transactions

Increasing convenience and enjoyment across the customer journey

Deepening and expanding the meaning, community, and purpose around an offering

Discovery of new growth via branded platforms, revenue streaming, and marketing model innovation

Facilitate stronger and more flexible organizational links to nurture speed, synergies, and drive

Build and leverage information loops to increase causal understanding and expand resource optimization

Overall Levels of Outsourcing Are Low and Centered on Engagement Activities

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0%

10%

20%

30%

40%

50%

60%

70%

Journey m

anag

ement

: Gen

eratin

g a data

-based…

Digital S

ervices

and So

lutions :

Design

ing an

d…

Customer

Servic

e : Help

ing consumers

resolve

…

Product

Delivery

and Dist

ributi

on : Man

aging…

Channe

l Orch

estrat

ion : Man

aging t

he seam

less…

Experie

ntial m

arketin

g : Desi

gning c

onsum

er…

Customer

Involvem

ent : A

ctive

ly invol

v ing…

Media M

anag

ement

: Man

aging m

edia s

trategy,

…

Socia

l Med

ia : M

anagi

ng socia

l med

ia including…

Content &

Storyt

elling

: Desi

gning

, crea

ting, an

d…

Sponso

rship M

anage

ment :

Selecti

ng an

d…

Socia

l Purpo

se : M

anagin

g the s

ocial p

urpose fo

r…

Public/

Influence

r Rela

tions :

Managi

ng rela

tions…

Community M

anagem

ent :

Creating a

sense

of…

Marketin

g Perso

nalizat

ion : Desi

gning a

nd…

Marketin

g Autom

ation : M

anagi

ng the…

Perform

ance

Marketi

ng : M

anagin

g digit

al…

Product

Research

& Developmen

t : Ide

ntifying

…

Sales

Team M

anage

ment :

Managin

g sales

…

Shopp

er Marke

ting a

nd Sales

Promoti

ons :…

Pricing

Strat

egies a

nd Policies :

Defining a

nd…

Key Acco

unt Man

agem

ent : Gen

eratin

g con

sumer…

Product

Marketin

g : Man

aging p

roduct mess

ages…

CRM and Lo

yalty

Manag

ement

: Desi

gning

and…

Extent Of Outsourcing by Specific Marketing Activity EMO WMO

Experience Engagement Exchange

% O

utso

urci

ng

LMO

The Responsibilities of WMOs• It is not about digital, it what marketing

activities that they do that matters

• They are more involved in customer experience.

• They deliver greater personalization through exchange value

• Engagement value is their base camp.

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LMOs Tend To Focus Their Responsibilities On Engagement Activities. WMOs are More Involved On Experience and Exchange

56%

70%

47%

38%

57%

48%

56%

51%

63%

70%

64%

59%

20%

30%

40%

50%

60%

70%

80%

Digital Engagement Exchange Experience Front-End Back-End

Responsibility of Marketing by Type of Organization

Q. Below is a list of marketing activities. For each activity, please indicate if it REPORTS INTO MARKETING, i.e.: It is a marketing dept. responsibility. Select 'N/A or don't know' if the activity does not apply in your organization.



Customer Facing

Non-Customer Facing

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% A

ctiv

ities

Rep

ortin

g to

Mar

ketin

g

WMOs Operate With a Broad Bandwidth Across Diverse Growth Drivers.

82%79%

84%

55%

72%

56%

31%26%

30%

19%

38%

46%

54%

31%

62%

85%

62% 62%

69%

62%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Social Media Content &Storytelling

MediaManagement

CommunityManagement

Public/InfluencerRelations

Digital Servicesand Solutions

Pricing Strategiesand Policies

Sales TeamManagement

Product Research& Development

Product Deliveryand Distribution

Top 5 Areas for LMOs Top 5 Areas for WMOs

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% A

ctiv

ities

Rep

ortin

g to

Mar

ketin

g

8% 8% 15%

4% 1% 3%

Exchange

Experience

Engagement

Exchange

Experience

Engagement

Exchange

Experience

Engagement

Three-Stack ModelExchange + ExperienceExchange Focused

WMO

LMO

Exchange and Experience Value Seem The Most Distinguishing Basecamp Capability of WMOs

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Capability Diversity

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Level of Development by Capability/Organization Type



Top 10 Capabilities With Greatest Difference Between EMOs and WMOs

WMOs Are Strong on Converting Data to Action

• Customer experience is #1.• Balance of foundational and new.• Talent is core.• Four areas of value.

• Issues of social purpose and sustainability.

• Engagement tactics.

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Capability Definition Capability Area Value Area

Importance for WMOs

Matter Most

WMO’S

Matter Least

What Matters to WMOs…

• Data as #1• Talent not present.• Exchange is missing.• Focus on tasks rather

than customer.

• Issues of social purpose and sustainability.

• External talent is not prioritized.

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Matter Most

EMO’S

Matter Least

…Is Different from What Matters to LMOs

The Path of a WMO• Find what matters to your organization

over the next three years (Importance)

• Find how well you do it today (Performance)

• Focus on strengthening Performance-Importance Fit

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Capability Performance

Impo

rtan

ce fo

r Gro

wth

Fit Score

72.5%

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The MarCaps Capability Fit Score

Capability Performance

Impo

rtan

ce fo

r Gro

wth

WMO Fit Score

86%

LMO Fit Score

53%21

Emerging Marketing Organizations (EMOs)


Note: Financial data from publicly traded firms available in Compustat.

2.5xA 1% increase in fit leads to 2.5% increase in Sales Growth after accounting for size, age, R&D investments, Advertising investments and intensity of competition.

2019

-202

0 %

Sal

es G

row

th R

ate

Effect of MarCaps Fit on Sales Growth

Capability Fit of Marketing Org. (0%-100%)

50 70 80 9060

Fit Drives Sales Revenue Growth in 2019 and 2020

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Average Market Value in $Billion

250

200

150

100

50

0

$213.6B

HighMarketing

CapabilitiesFit

$78.9B

LowMarketing Capabilities

Fit

Note: Financial data from publicly traded firms available in Compustat.

-1

-0.5

0

0.5

1

1.5

2

2.5

3

MarketingCapability Fit

AdvertisingIntensity

R&D Intensity Firm Size Sales Growth Business toConsumer Industry

Elasticity of MarCaps Fit

A 1% increase in Marketing Capability Fit is associated with a 2.35% increase in market value of firms.

Market Valuation by Level of MarCaps Fit

And Market Valuation

Anatomy of a Winning Marketing Organization

• Structured externally around customers and customer outcomes and more complex structures rather than around internal product or functional expertise.

• Decentralized decisions and greater tendency to draw on external expertise.

• Demonstrate a diverse set of marketing capabilities and create environments where people thrive.

• Develop a high degree fit by aligning performance to capabilities that matter to future performance.

• The marketing capability fit delivers growth, customer and financial market performance by leveraging the possibilities of today (e.g. Agility, technology, analytics, societal, etc…).

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Where Next?

…read our article in the Nov-Dec 2020 issue of HBRfor more details on the framework.

Visit

https://marcaps.com/research

for a free assessment.

http://marcaps.com/research

designing a winning marketing organization

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