1

Who Let The Barbarians In?

Dr. Ajay K. SirsiSchulich School of BusinessYork Universityasirsi@schulich.yorku.ca

2

Ajay Bio

Schulich School of Business, Marketing professorResearch, writing, teaching (Exec, MBA, BBA) Marketing Led - Sales Driven (Trafford) Marketing: Real People, Real Decisions (Pearson) Marketing: A Roadmap to Success (2009, Pearson)

Consulting Royal Bank Bayer International Paper Glaxo Smithkline Imperial Oil Manulife Financial TELUS Amgen Schneider Electric

3

1Current State Of The Marketing

Discipline 2 3The Silver LiningImplications For

Teaching And Practice

4Discussion

Today’s Discussion

4

1Current State Of The Marketing

Discipline 2 3The Silver LiningImplications For

Teaching And Practice

4Discussion

Today’s Discussion

5

Barbarian

Foreign individual or tribe whose first language was not GreekA Greek individual or tribe speaking Greek crudelyThe Vikings Label for the Goths during the Gothic revolt that put an end to the Roman Empire in 470 A.D.

Began the Dark Ages

Label for Normans during their invasion of England

6

Barbarian

Foreign individual or tribe whose first language was not GreekA Greek individual or tribe speaking Greek crudelyThe Vikings Label for the Goths during the Gothic revolt that put an end to the Roman Empire in 470 A.D.

Began the Dark Ages

Label for Normans during their invasion of England

7

Recent Experiences

Four marketing consulting projects initiated by

CFOs SalesOperations

Frustration withLack of Marketing initiativeMarketing disconnect with customer needs

8

Recent Experiences

Member of interview panel to hire AVP of Sales

Candidate performed well in first interviewClient’s question: can she do Marketing as well?

Hire her for VP Marketing and Sales?She has no formal Marketing experience

I developed a case study for second interview

She passed with flying colours

9

Recent Experiences

Marketing function is worriedCurrent CEO is retiring in the fallNew CEO does not “understand” marketing

Perused 3 years of Marketing monthly reports

To glean Marketing’s value to corporationWhat I found What new CEO did

10

Support in Literature

Anderson 1982, Day 1992, Varadarajan 1992Webster Jr. et al. (2005)

“Financial pressures, a shift in channel power, and Marketing’s inability to document its contribution to business results have combined to force reductions in Marketing spending and influence, and to accelerate a transfer of funds and responsibilities to the field Sales organization”

11

Support in Literature

Response: Formation of CMO RoleThe problem?

Only 50% of Fortune 1000 firms have a CMO (Booz & Co 2004)CMO makes no difference to firm performance (Nath and Majajan 2008)

Multi-industry sample of 167 firms over a 5-year period

Average CMO tenure is 23 months (Spencer Stuart statistic cited in 2004 Harvard study)

12

Why Has This Situation Occurred?

Failure to talk the same language amongst ourselves

Marketing used synonymously with Marketing Communications

AdvertisingMarketing collateral material

Product used synonymously with GoodMarketing used to only denote activities that generate immediate sales

Failure to objectively demonstrate value created by Marketing

13

Why Has This Situation Occurred?

Failure to understand CEO’s agendaArrogance

“Why do you need to know what is in our Marketing Plan?”

Other functions have taken on traditional Marketing roles

CFO (Couto, Heinz, and Moran 2005)Sales (Webster Jr., Malter, and Ganesan 2005)

14

Who Let The Barbarians In?

We Did

15

1Current State Of The Marketing

Discipline 2 3The Silver LiningImplications For

Teaching And Practice

4Discussion

Today’s Discussion

16

Silver Lining

Research demonstrates that Marketing is critical for organizational success (Booz & Co survey of 9 industries 2004; Krasnikov and Jayachandran 2008; Nohria 2003)

Organizations want Marketing to take on non-traditional roles: driving innovation and cross-functional collaboration

17

Silver Lining

Late 2005 survey by Prophet and IDGBroad, customer-focused issues are crucial drivers of business growth

Customer service and deliveryCustomer experience

Advertising and promotion (1%)

18

Silver Lining

Current financial meltdown is making Marketing more attractive (WSJ)Clients investing in marketing fundamentals to drive business growth

19

Silver Lining

CMO success is evidentIBM, Pepsi, UPS, P&G, Microsoft, GEKey corporate decision makersOn par with other C-level executivesShape company directionPropel financial performance

20

1Current State Of The Marketing

Discipline 2 3The Silver LiningImplications For

Teaching And Practice

4Discussion

Today’s Discussion

21

What Can We Learn From Successful CMO’s?Choose from 3 CMO models

Marketing Service ProviderMarketing AdvisorDriver of Growth

Understand the CEO’s agenda for driving growth and innovation (Kumar 2004)Establish controls“How to market Marketing”Develop organizational linkages

What you ownWhat is matrixedWhat you need to informally influence

22

What Can We Learn From Successful CMO’s?

• Demonstrate organization dashboards§ In conjunction with CEO§ Combination of financial and brand equity

metrics

23

Problem RecognitionProblem Recognition

Repeat PurchaseDecision

Repeat PurchaseDecision

Information SearchInformation Search

Purchase Consideration

Purchase Consideration

Purchase IntentPurchase Intent

Purchase DecisionPurchase Decision

•Marketing communications awareness (%)•Brand awareness (%)

•Brand associations (qualitative)

•Brand equity (scale)

•Purchase intent (scale)

•Win rates (%)•Sales volume ($)•New net revenue ($)

•Customer satisfaction (scale)•Customer retention (%)•Customer defection (%)•Profit as percentage of revenue (%)Source: Sirsi (2009, forthcoming) Marketing: A Roadmap to Success

24

What Can We Learn From Successful CMO’s?

• Take risks• Come up with big ideas• “Marketing is about building new

businesses, finding the white space, and leading the integration across the organization with sales and R&D” (Hyde, Landry, and Tipping 2004)

25

Strategic Plan•3-5 Year Horizon•High-level strategy

Resource Allocation•Capital Allocation•Budgets

Performance Measurement•KPM (key performance measures)

MarketingPlan

Sales & Customer PlansManufacturing Plan

IT PlanHR Plan

Source: Sirsi (2005) Marketing Led – Sales Driven

26

Implications For Students Are Profound

Previous

• Broad marketing experience

• Understands the customer experience and translates into brand strategies

Now• Move from project to project

as part of cross-functional team

• Periods in non-marketing roles

• Understands market opportunities and value system management

• Strong knowledge of supply chains, audience engagement and contracting

27

Implications For Students Are Profound

Previous

• Gregarious, outspoken• Works hard, plays hard• Numbers driven• Motivated by

responsibility and fear of failure

Now

• Creative, flexible, long-term goal orientation

• Motivated by unstructured environments and corporate social responsibility

• Right-brain and left-brain skills

28

Implications For Practice And Teaching

• What we teach has to change• Less focus on terms and definitions• Broader focus on material, strategy• From NPD to innovation• From logistics to SCM• From microeconomics to pricing strategies• Customer satisfaction and brand strength

relationship to firm performance• Cross-functional linkages • Marketing – Sales linkage• Marketing ROI

29

1Current State Of The Marketing

Discipline 2 3The Silver LiningImplications For

Teaching And Practice

4Discussion

Today’s Discussion

30

Ajay Contact Information

• Email: asirsi@schulich.yorku.ca• Phone: (416) 486 – 8490• Work: Schulich School of Business at York

University, Toronto, Canada