how good is your marketing organization?

How good is your marketing organization? Does it deliver what is expected of it? Is what is expected clearly understood throughout the business?

Marketing is the term that collectively describes all those functions that anticipate and satisfy customer demand profitably. As described, marketing is fundamental to any business as it is responsible for the generation of revenue necessary for a business’s survival and future. Because of its importance in the generation of revenue, marketing needs to be demonstrably efficient and effective. But how does one define what is efficient and effective?

Of all the various business functions,- finance, production, personnel, – that of marketing is often the least clear in terms of its responsibilities. Although marketing departments appear to have distinct specialist areas such as sales, advertising and promotion, research, and customer relationship management, in practice this is often not the case, as job descriptions can be broad and ill defined.
Company departments often have no clear definition of purpose, with uncertain objectives and standards of performance. Marketing departments are no exception. Although ostensibly defined by name, marketing departments rarely have their purpose and objectives clearly stated. Without a clear definition of purpose, seeking relevant measurements of performance is unlikely to be helpful in effective management. Performance can only be judged against defined objectives.

Before seeking to measure anything, it is essential to define the mission and objectives of the marketing department and it separate disciplines. In any business, the main objective of the Chief Marketing Officer (CMO) is the maximization of sustainable profitable revenue, with the minimization of costs and assets used. The overall objectives of the marketing department should be set out in the corporate business plan, principally in the form of the revenue objectives. To achieve the corporate financial objectives, the marketing organization needs to produce a marketing plan that defines the required marketing objectives, and details the strategies, actions and resources, to be used to achieve them.

Because marketing is responsible for generating the sales revenue, it is also responsible for developing and maintaining all the activities which support customers and assist selling. The marketing function therefore undertakes a wide variety of activities not all of which are directly related to customers and sales. Organizing the marketing function is the responsibility of the CMO. When assessing the efficiency and effectiveness of marketing, questions should be asked about the marketing function as a whole. What are its objectives? What are its resources? How well is it managed? How does the marketing organization relate to the strategic business plan?
The efficiency and effectiveness of a marketing organization, depends largely on what that organization is meant to do. Therefore, its purpose needs to be stated in a mission statement that can be clearly understood throughout the business, especially by senior management and the CMO,

Periodically, the CMO needs to review all the various tasks ascribed to marketing and to consider whether they fit the marketing mission, and how they contribute to the business objectives. Tasks can be separated into routine and non-routine groups. Routine tasks are those that are regularly required and directly relate to the business objectives. Non-routine tasks are those other occasional tasks, such as corporate team building events, which may have importance but do not relate directly with the defined marketing objectives.

All tasks should be assessed according to how they assist in either generating revenue, or reducing costs and the use of assets. Tasks can be prioritized in terms of their relevance to the marketing objectives. Activities, which do not directly contribute to the objectives, need to be evaluated on the basis of the opportunity costs incurred of devoting time and resources to them.

When reviewing all the tasks required of the marketing function, consideration needs to be given to the range of resources available, in terms of personnel and skills. Are they sufficient for the tasks or are additional resources required via recruitment, training or out-sourcing? Certain tasks, such as the preparation of the marketing plan, are fundamental to the management of the marketing function. These activities must therefore take a priority of time and resource, so that they can be completed and “signed off” before the start of the business’s financial year. All other tasks can be scheduled to the calendar, with targeted completion dates.

In most businesses, marketing consists of two functional areas; sales and sales support.
The sales function, which is directly responsible for the generation of revenue by sales of product and services, is generally organized by markets and product groups. The sales support function is usually organized into specialist activities such as advertising and promotion, research and customer relationship management. Support to the sales function is initially by the provision of a marketing plan for the use of marketing resources to achieve the sales revenue objectives. Selling activity is directed by marketing research and supported by with advertising promotion and literature to maintain and develop customer relations.

Part of the CMO’s job must be to monitor and analyse market and sales performance, which requires an effective Marketing Performance Measurement system. In addition, the CMO must continually re-appreciate the current marketing situation and revise the marketing plan as necessary to meet changing requirements. The quality of organization and leadership is fundamental to good marketing management. Only by measuring marketing performance can one demonstrate how good the marketing organization is and whether the management delivers that which is expected of it.

© N.C.Watkis, Contract Marketing Service 17 Oct 07
Contract Marketing Service, (Specialists in Measuring Marketing Performance and Return on Marketing Investment.

October 17, 2007   Posted in: marketing management

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