Are Marketers Suitable Managers of Marketing?

The question “Are Marketers suitable managers of marketing?”, is an interesting one. On the face of it, the answer must be “yes”. But on examination the answer is more equivocal.

In theory marketers should be responsible for all those activities that “anticipate and satisfy customer demand profitably.” In practice, this is often not the case. While the other main elements of business, such as finance and production are managed by senior managers with overall responsibility for their respective areas, that of marketing, which is the driving force in producing the business revenue, is frequently not managed in that way at all.

Examination of the marketing press would suggest that many marketers have a different perspective of marketing and their responsibilities. One has only to see that the predominance of articles in the marketing press that revolve around customer relationship management (CRM), brand, advertising, product perception and public relations. There are also occasional articles on selling, but rarely on sales management. Very little is published about the management of marketing. Many marketers seem to have lost the understanding of marketing from the Chartered Institute of Marketing’s definition of “anticipating and satisfying customer demand profitably”, and view marketing on a narrower description, mainly denoting customer relations and different forms of communication and promotion. It would seem that for many, the role of senior marketing manager as being responsible for the generation of sustainable profitable revenue is not something that they would recognize.

When it comes to measuring marketing performance especially the return on investment (ROI), many marketers often confine their interest to measurements involved with CRM, advertising, promotion and brands. While measurement of performance in these areas is important for those executives who are the managers in charge of them, they are not indicative of the overall marketing performance. Individually these separate areas of marketing activity are not responsible for generating revenue. Even the sales organization is not solely responsible for bringing in the revenue, for while sales may be said to be the executive arm of “marketing”, its performance is supported by all the other disciplines of marketing, which collectively assist in making successful sales results

Several studies published earlier this year present different perspectives on marketing accountability, measurement and Return on Investment. They showed that many large marketing organizations have made significant progress in the development of sophisticated methods to improve marketing measurements. But for many organizations the plethora of measurements available tends to suggest that they are largely approached in isolation, such that it is difficult to assess overall marketing efficiency and effectiveness of the collective marketing effort.

With few exceptions, marketing department appear to measure marketing performance and “payback” in a disjointed series of technically sound but “Ad Hoc” methods. In many companies, information collected on customers, often looks at how prospects become customers, including tracking the progression, from awareness to preference, to trial and repeat purchase. Satisfaction with the customer experience is measured by surveys and reported. With some companies, the customer measurements includes attitude data on customer segments, – why they want what they want, – which is often correlated with actual customer transaction data to create a segmentation model. The segments are then monitored for mobility from one market segment to another.

Other data is used to show what was sold, where and at what price, the detail of the information tending to be governed by the underlying IT systems employed. Information on cash flow generation tends to be concentrated on the efficiency of marketing expenditures in achieving short term returns. Programme and campaign Return on Marketing Investment (ROMI) models are used to measure the immediate profit impact expected to be derived from a given investment initiative.

Survey based tracking systems are used to gauge customer and prospective customer perspectives on the brand, regarding its functionality, personality accessibility and value propositions. Brand scorecards monitor the evolution of these perspectives over time within market segment. Some companies have developed successful financial models for estimating the financial value of the brand as a means of determining its balance sheet value as an outcome of marketing investment.

All these measurements provide essentially short term information. It is generally understood that the majority of marketers only stay in post for 18 months to 2 years, thus their outlook is essentially limited.
Business and marketing plans are normally prepared as a five year rolling plan with annual reviews. To be effective, such plans need long term management. Frequent changes of management are not compatible with the effective execution of such plans

The objective of the chief executive officer (CEO), is to deliver continuity of sustainable profits for the long term, thus the CEO requires the chief marketing officer to deliver a continuity of sustainable profitable revenue. However, if marketing is the main revenue driver of a business, it requires planning and management for the long term, to provide the necessary continuity of sustainable revenue. It may be considered thought provoking, but there is a case for the effective overall management of the marketing function to be carried by a non marketing executive who knows and understands the concept of marketing contribution and optimum performance, and is able to knowledgably question and manage his specialist marketers.

If marketers want to have overall charge of all the business getting and retaining functions, they must learn to measure, manage and report on the performance of marketing as a whole, and in a way that is compatible with other areas of the business. In short, marketers must learn to be effective managers of the whole of the marketing function for the longer term, not just specialist areas for the short term, if they want to be regarded as professional managers deserving of a place in the boardroom.

© N.C.Watkis, Contract Marketing Service 25 Apr. 07
Contract Marketing Service, (Specialists in Measuring Marketing Performance and Return on Marketing Investment.) CMC- InsightExec 04 Jun 07

June 4, 2007   Posted in: marketing management

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