Brand leaders tune into the business channel

Full integration between marketing capability and business strategy remains an unfulfilled promise, according to a recent in-depth study, and is preventing marketers from driving growth.

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Most marketers would like to think that what they do directly affects how a brand or business grows. But the reality is that only 15% of marketers say there is full integration between marketing capability and business strategy, according to research shown to Marketing Week by The Chartered Institute of Marketing and Accenture.

This revelation is “horrifying”, says Joanna Levesque, a partner at management consultancy Accenture. “If marketing really wants to be the driver of growth, we need to be looking at a much stronger alignment [between marketing and business strategy],” she says.

In an uncertain climate, marketing is under great scrutiny but it can use this time as a chance to better relate to the business strategy of a brand, according to Thomas Brown, head of insights at The CIM.

“The next three to five years will be crunch time. We are at a tipping point now. The economic downturn is not a driver of this, it is an accelerator,” he says.

Having a board-level marketer means that the strategy for the business and for marketing can be linked more closely, Brown suggests.

“Businesses are more aligned when the chief marketing officer has an active role in defining that agenda and leading it,” he says.

But Brown explains that global businesses can struggle if there is no central person or team deciding what marketing skills are needed.”We tended to see challenges in a big organisation where it is left to local marketers to sort strategy out for themselves. They decide whether they want to invest in people and define their own processes. If it is central in the organisation, it’s more efficient and effective,” he says.

Business information specialist Thomson Reuters is one company that centralises its overall brand strategy. Global chief marketing officer Gustav Carlson leads the process and says that because of this structure, marketers are part of the overall business strategy (see box).

Method

The CIM and Accenture carried out in-depth interviews with 26 chief executives, chief marketing officers and marketing directors in addition to undertaking a quantitative study of 130 brand heads in global organisations in all sectors. They asked about strategy, how brands focus on customers, digital and social media and how business strategy links to what is required of marketers, among other questions. The results are published in the report The Future for Marketing Capability.

But Carlson stresses that marketers themselves have a responsibility to learn about the strategy of a business. “There is no excuse for anyone in a corporation not to know what that business strategy is,” he says. “Listen to the quarterly earnings calls or the half yearly results, and you will find out a whole lot about the company’s strategy. Marketers can do themselves a favour and get out of their marketing bubble by doing some homework.”

For Accenture’s Levesque, having a focal marketing “centre of excellence” helps to make sure that marketing relates directly to the business.

“It is a trend we are seeing more with our clients. They have a best practice approach to marketing and then local markets are in charge of the execution of it, but are not defining the principles,” she says.

SABMiller centralises its marketing in this way. Brown praises its small team made up of brand communication and international insight skills, reporting to a chief marketing officer. “It’s like a mini management consultancy that tackles business projects, seeing directly attributable revenue improvement,” he states.

Some marketers’ roles are made easier by having a chief executive who drives a clear business strategy and wants marketing to integrate with this. Nick Adderley, marketing director at BAA, which owns Heathrow Airport, says that chief executive Colin Matthews is focusing on making passengers’ trips easier. This is reflected in its “Making every journey better” strapline.

Adderley, who joined BAA at around the same time as Matthews in 2008, says: “The strategy is very much Colin’s. He restructured the business and set a clear strategy and I’ve had the opportunity to develop that.”

The improvement strategy includes the ongoing redevelopment of Terminal 2 at Heathrow and a summer campaign that positioned the airport stores as like shopping in the West End of London but with cheaper prices.

The business strategy comes first, and marketing is completely aligned to that

Lee Jury, Walt Disney Studios Motion Pictures UK

Airport shops are clearly part of the business and marketing strategy for Heathrow, with retail revenues per passenger increasing 11.5% at Heathrow between January and September 2010. Identifying new shops and services to help grow the business is part of Adderley’s role.

He says: “We are trying to make sure that the experience for everybody is as good as it possibly can be. That is classic marketing – looking at customer data and insight and looking at how we can improve things. How can we make a better return from that service? Or introduce a new product that can make some more money?”

Disney is also looking at how it can more closely link business strategy to the marketing of its movies. For example, it now has more of a focus on the whole lifecycle of franchise films, says Lee Jury, executive marketing director at Walt Disney Studios Motion Pictures UK.

“We now approach films such as Toy Story or Pirates of the Caribbean differently. The business strategy comes first, and marketing is completely aligned to that. We are integrating marketing with the rest of the business much more than we ever have done,” he says. This is paying off, with Toy Story 3 being one of the highest grossing films of all time, taking more than $1bn (£600m) at the box office worldwide.

And for Carlson at Thomson Reuters, marketers can broaden their influence in a business by thinking about all the stakeholders, not just customers.

“Marketers can do themselves a favour by understanding that the relationship with the customer is absolutely critical. But there are a lot of other things that go towards being great marketers in a great global company – an understanding of all the stakeholders such as employees, investors, news media, friends of the company, policy makers. All of them go towards building a brand or position for the company.”

Q&A

Gustav Carlson

Gustav Carlson, executive vice-president and global chief marketing officer, Thomson Reuters

Marketing Week (MW): How do you align marketing communications and corporate strategy?

Gustav Carlson (GC): I sit on the corporation’s executive committee. My counterparts at the divisional level sit on the divisional leadership teams, so there is an immediate structural alignment with the business. We not only hear what the strategy is, we are part of the bodies that shape it.

When you get to the customer level we have what we call front-end customer strategy. This is a method that marketing executives dealing directly with customers on the product and services side can use to make sure what they are doing is aligned with the business
The bette

r integrated all the things that have to do with the company’s public face, the better they are. So the messages we are delivering to the investors are the same we deliver to the news media, the policy makers in government, the employee base of 55,000 people and are represented in our brand and our advertising.

MW: How would you define your business strategy?

GC: Our customers are professionals in areas such as financial services, legal, healthcare and science. Our core customer is that person who needs what we call intelligent information. Our value proposition is that we help professionals wade through the blizzard of data out there and turn it into information they can use to do their jobs better and make better decisions faster. The knowledge to act is our tagline, which is the value proposition behind the intelligence.

MW: How do you make sure people understand the strategy in such a large company?

GC: That is a big challenge. Technology certainly helps, but there is nothing like old-fashioned face-to-face interaction to help people understand. On the brand front we have a worldwide network of brand ambassadors, who go out and help people understand how to use the brand. There is a lot of very basic on-the-ground relationship building within the organisation.

As you grow and enter new markets and businesses, so the ability to be nimble in adapting the brand globally is really important.

MW: What are the benefits of centralising marketing?

GC: A centralising body can bring consistency, but you have to be careful that there isn’t a disconnect between the customer at the go-to- market level and the lofty corporate strategy or the marketing strategy.

If you are going to have one centralised function it has to be invaluable from a consistency point of view, and if it can support what is going on in the business then that’s great. But you don’t want to disconnect yourself from the customer.

Stats

The bad

  • Only 15% of marketers say that there is “full integration” between marketing strategy and business strategy.
  • Just under one-third say there is an informal link or a significant disconnection between the two.
  • One in five say they don’t properly manage what marketing can do.
  • When it comes to how brands are led, 30% say there is no clear leadership in determining who decides what marketing’s capability is.

The good

  • More than two-thirds (70%) say that marketing is what helps drive “value proposition development” – producing something that customers need based on insight, rather than pushing things out and hoping they are consumed.
  • Of those surveyed, 65% say that departments communicate with each other to do this.
  • But only a third say that they train marketers or help them communicate with other departments.

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