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‘Who cares about savings?!’

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Who cares about savings?

Adding value in marketing procurement

CIPS Surrey Branch Event

John Butcher / Global Category Director (Marketing ) Thursday 16th October 2014

By taking a marketing approach to marketing

procurement, understanding who the business

stakeholders are and what they need, you will

know who cares about savings.

Agenda

1. Marketing

2. Marketing Procurement

3. 7’s

4. NPD

5. Communicating

6. ROI

7. Conclusions

Marketing

What is Marketing?

© Proxima 2012. All rights reserved

“The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The process by which companies create value for customers and build strong customer relationships, in order to capture value from customers in return” AMA (American Marketing Association)

Marketing is broken in to 7 key components that combine to help an organisation meet its marketing needs and those of the target audience; Product, Price, Place (channel), Promotion (making people aware), People, Process and Physical (tangible reminder) CIM (Chartered institute of Marketing)

“Now we understand that the most important thing we do is market the product. We've come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool” Phil Knight, Nike Co-founder and Chairman

“Marketing is what you do when your product is no good” Edwin Land (Creator of Polaroid)

"The sole purpose of marketing is to sell more to more people, more often and at higher prices. There is no other reason to do it.“ Sergio Zyman, Marketing Exec Coke (best known for the failed launch of new coke)

"What really decides consumers to buy or not to buy is the content of your advertising, not its form.“ David Ogilvy “In good times people want to advertise, in bad times, they have to.” – Bruce Barton, co-founder BBDO

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Product, Price, Place, Promotion, People, Process, Physical

– Chartered Institute of Marketing

http://www.youtube.com/watch?v=2NRXz5bkgiQ

Marketing Procurement

8


The procurement of marketing services is substantially different from buying products or more commoditised services.

• Marketing services are very diverse; sub-segments, involving many different categories

• Its creative drive, thus quality and innovation are crucial KPI's • Marketing is not cost-driven…. Marketing are ultimately measured by Sales

and customer attitudes (e.g. brand perception), not cost-saving • Measuring success, beyond sales, is far more ambiguous; measuring Consumer

attitudes and behaviours requires complex research models and theories, thus, it is sometimes subjective to whether a project/activity even worked or was successful! “Half the money I spend on advertising is wasted, and the problem is I do not know which half” Lord Leverhulme 1851-1925, British founder of Unilever

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• Stakeholder engagement & strong relationship management – working

with client & agency stakeholders to build relationships and credibility, earn trust and respect

• A clear understanding of the value of creativity - performance monitor key suppliers, link performance with pay; added value services to client are required

• Alignment of marketing & procurement objectives – Support marketing objectives with commercial rigour. Participate in company wide market forums & external procurement groups

• Demonstrate ROI - Demonstrate impact of marketing expenditure. Conduct thorough feasibility and segment Marketing to identify opportunity segments and extract further value from agency supply chain

Critical success factors for effective procurement are therefore:

Agency Landscape

Agency Collective

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7's

© Proxima 2014. All rights reserved.

7 Steps Strategic Sourcing

12

Demand Analysis Supply

Analysis Strategy

Definition

Communi-

cation

Supplier Selection

Implement-ation

Supplier Manageme

nt

Category

Brief

Business

Objectives

Category

Baseline

Process /

Constraints

Future

considerati

on

Supply

Market

Analysis

Supplier

Short List

Category

Positioning

Matrix

Sourcing

Approaches

Strategy

Summary

Stakeholder

Management

Change

Management

RFx

Negotiation

Sourcing

Governance

Contract

Management

Action Plan

Operational

Qualification

Action and

Benefits

Tracking

Supplier

Performance

Evaluation

Supplier

Integration

Supplier

Development


7 Steps Strategic Sourcing

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Analysis Strategy

Definition Supplier Selection

Implement-ation

Supplier Management

Communications

Communications is fundamental, underpinning everything Communications are two way

Important to understand Important to be understood

1 Understand the need 2 Plan to do the right thing 3 Do the right thing 4 Ensure it continues and evolves, 5 Let everyone know along the way


7 P’s Marketing

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Product Price Place Promotion People Process Physical

“Marketing is broken in to 7 key components that combine to help an organisation meet its marketing needs and those of the target audience; Product, Price, Place (channel), Promotion (making people aware), People, Process and Physical (tangible reminder)” CIM (Chartered Institute of Marketing)


7 into 7…. a perfect fit?

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Product Price Place Promotion People Process Physical


Analysis Strategy

Definition

Communi-

cation

Supplier Selection

Implement-ation

Supplier Manageme

nt

Not necessarily 1 stage equals 1 step…. But what in procurement should we consider our Product? Or price, Our Place etc…..? What should we be doing?


New Product Design // Procurement Service Development


Product Design - NPD

Functional benefit Emotional benefits Perceived benefits Branding

Successful businesses ….

understand the consumer Involve the consumer

We read about retailers and tech companies being “consumer-centric” or “customer-led” organisations… Is your procurement department consumer-centric?

Client –focussed? How could it be / be more?

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Designing product to suit the need of the target consumer


Consumer-centric

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Listening to the consumer, talking to the consumer

Communications are fundamental Consider your stakeholder your consumer, your client, your customer Applies internally at your company with functional stakeholders Applies externally


Communicating with Marketing


Communicating with Marketing

Standard Procurement Tool Stakeholder mapping

Interest / Influence grid Positioning and mgt action

20

Non-standard Leadership Communication Grid Berne communication Other tips……


Stakeholder Analysis

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Find out who your stakeholders are Consider the Power/Interests grid Find out what motivates them Investigate how you can win them over and keep aligned

Feeds the communication plan

Interest

Po

wer

Monitor Keep

informed

Keep satisfied

Manage closely

High

High

Low

© Proxima 2014. All rights reserved. 22

A stakeholder and communications plan helps to structure all your information and target your efforts

Stakeholder Analysis

Name Title / role Power / Interest

Key Interests Status Desired Support

Desired Role

Communication / Plan

Manage Closely Advocate High Sign-off

Monitor Supporter Medium Expert input

Keep informed Neutral Low Resources

Satisfy Blocker Advice

Sponsor


Leadership Communications Grid

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STRUCTURED Emphasis on planning and containment

Emphasis on spontaneity and emergence

UNSTRUCTURED

C1

Conventional Forums and

Processes

C2

Structured, Dialogic

Conversation

C4

Role Modelling

C3

Everyday Conversations

and Interactions


Communicating with the marketing stakeholders

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Marketing stakeholders typically do not like filling out template questionnaires and loathe spread-sheets

Meet them face to face or talk by telephone if that is not possible Any key points can be noted in the meeting

It is essential to consider the overall aim and background of each meeting before determining any question sets. i.e. a fifth meeting will have a different tone, pace, level of detail to a first meeting. Don’t forget the Berne communication model for moving through topics in any stakeholder discussions Warm them up with easy open opening questions and cliché topics (e.g. travel) Find and talk about shared interests…. Football?... Common ground

Rapport

Ritual/Cliché

Facts/Information

Beliefs/Attitudes

Emotions/Feelings

Trust

Risk

( Berne, 1964)


Inside the Marketing stakeholder's mind

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What this means for us

I am only in this job for 18 – 24 months, then I need to be promoted or move sideways for development

Whatever you do it better deliver positive results within 6 - 12 months

I don’t rate procurement A GREAT opportunity for us to get them to open up about how their past experiences of procurement sucked and thus more easy for us to talk abut how we do it differently….. etc



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I have rosters and consolidate my investment

“Rosters” not “Preferred supplier lists”, built by giving more focussed investment with the best performing agencies (not “rationalising”).

I am measured on top line growth

It needs to focus on value, not price

Marketing budget is an investment, not a cost

Talk about benefits and value, not cost savings; Work on demonstrating ROI

I have external partners who help me achieve my goals

Work with and call them “agencies”, not “suppliers” I want to squeeze more output and impact from them, not constrain the input



27


My CEO wants better governance and EBIT

Talk about profit impact and how to deliver the top line growth without compromising bottom line profit

My CFO is pushing my budget down yet demanding top line growth

Help marketing demonstrate the impact of it’s budget… help gain clarity on the unknown ineffective half and enrichment of the working half….. i.e. ROI and marketing effectiveness – new agencies and managing agencies differently

My Competitors are doing XYZ

Should we be doing it? Understand why others are and share with marketing... Should we swim against the tide or go with the flow before being left behind drowning?

My agencies are telling me…..

Find another perspective to validate or challenge the agency natural bias


Get with the lingo

28

Industry news and trends Google alerts Read common definitions (see industry bodies for glossaries)

http://www.brandrepublic.com/

http://www.ipa.co.uk/

http://www.mediaweek.co.uk/

http://www.isba.org.uk/


ROI


ROI is a high priority for CEOs CMOs and CFOs

Each individual and organisation is different Even COOs will appreciate the balance between improved efficiency and improved effectiveness Software, suppliers, common sense Healthy tension between

faster // better // cheaper

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Growing the business profitably

I need more!

Faster

Cheaper Better

Effectiveness (Impact: the “return” of ROI)

Efficiency (lowering cost of the “investment”

Efficiency & Effectiveness (Speed to market and / or process savings)

Understanding your consumer (sic client stakeholder)

31

Savings on cost Return on Investment

Moving the dial from cost to value enables your business to get a better return on its investment, whether measured in bottom line savings or top line impact.


Concluding comments


Wrap-up / concluding section

Each individual and organisation is different You will know if you apply those tools and frameworks Probably all, in this economic climate

Even CMOs and brand managers, but they will privately or quietly admit it CFOs and procurement stakeholders certainly do As do CEOs, supply chain directors

You can satisfy all with clever messaging E.g. the dilemma within media for cost saving vs reinvestment

The role of clear direction, Importance of governance inc’ timely relevant MI, role segregation

Your clients and stakeholders will be a feel more valued and understood Your reputation will improve Your agencies will appreciate you more, because you will be working more collaboratively, working to solve the same or similar client / stakeholder problems 33

Who cares about savings?


Any further comments or questions?

John Butcher Global Category Director Marketing Procurement @ Proxima [email protected] 07432 694 298 www.proximagroup.com

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CIPS Surrey Branch Welcome to ‘Who cares about … Speaker... · CIPS Surrey Branch Welcome to ‘Who cares about savings?! ... Not necessarily 1 stage equals 1 step ... Rapport