Lean Marketing

Marketing TransformationLean Marketing

CCIMS Presentation – 9.11.09

2

Agenda

• Role of Marketing

• Factors Impacting Marketing

• Lean Marketing:

– Vendor Management

– Creative Development Management

– Low Cost Country Sourcing

– Brand Asset Management

– Production / Fulfillment Management

Copyright © 2009 Accenture All Rights Reserved.

3

The Role of Marketing


100%

40%

60%

Enterprise Value

Intrinsic Value

Premium

Future Value

This is the value that the market believes will be delivered from

assets in the future

Current Value

This is the value that is expected from the current

assets performing as they are today

Companies are looking to Marketing to drive organic growth andshareholder value.

4

Marketing Spread/Growth


-10%

0%

10%

20%

30%

40%

50%

-4% -2% 0% 2% 4% 6% 8% 10% 12%

Risky Growth

Value Destroyers

Market Leaders

Profitable ‘Bond-like’

Returns

Average Spread (ROIC-WACC)

Spread / Growth Matrix

Revenue Compound

Annual Growth Rate

Unprofitable Revenue

Growth

PEER AVERAGE

Marketing must drive growth efficiently and effectively to impact shareholder value.

5

External Marketing Challenges


• Increasing Complexity

• Product / Service Proliferation

• Rapid Innovation

Direct

Price

Distribution

Sales Force

MarketingInvestment

GeographyMix

ProductMix

SegmentMix

MarketingMix

ChannelMix

$$$

Media Advertising, Print, Radio, Online, Outdoor, Direct Mail

Promotions Online, In/Outbound Call Centre, On-Premise, Mobile, Mail, Billing

0% 20% 40% 60% 80% 100%

0%

20%

40%

60%

80%

100%

NoGrowth(12%)

Noreply

Decrease(2%)

Gro

wth

Ra

ng

e o

fP

rod

ucts

/Se

rvic

es

19%

25%

16%

23%

… 23% of organizations said

the number of products / services they offered more

than doubled in the last five years.

Increasing technological innovation

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ItaniumTM

Pentium III®Pentium® 4

Pentium II®

80286

486TM

386TMPentium®

4G1G

256K

1K64K

1M

4M

64M256M

MicroprocessorMemory

Power density

101

102

103

104

105

106

107

108

109

1010

1970 1975 1980 1985 1990 1995 2000 2005 2010

The external environment is becoming more precarious.

• Globalization

6

Internal Marketing Challenges


Implementation

Ability to execute quickly and stay ahead of

competitors

Strategy

Ability to develop growth initiatives

63%Strong

Planning

Ability to plan end-to-end implementation

41%Strong

30%Strong

Marketing is struggling to deliver growth efficiently.

Source: Innovation & Growth, March 2006; The Economist Intelligence Unit

• Increasing Costs

• Declining Budgets

• RIF/Headcount Freezes

• Increased Accountability

7

Lean Production


Over 20 years ago, manufacturing / operations used lean techniques to address similar environmental conditions.

• Eliminate waste at every phase of production

• Streamlined workflow for improved efficiency and effectiveness

• Increased flexibility to handle frequent changes – including new product introductions

• Access live, current data to eliminate information gaps that delay decision making

• Meet customer demand for higher quality products and lower costs, using less labor, less space and less inventory

8

Lean Marketing


Now is the time for Marketing to learn from production and apply ‘lean’ principles.

ILLUSTRATIVE

Time to market is critical

ILLUSTRATIVEILLUSTRATIVEILLUSTRATIVE

Time to market is critical

SPEED

Direct

Price

Distribution

Sales Force

MarketingInvestment

GeographyMix

ProductMix

SegmentMix

MarketingMix

$$$

FLEXIBIITY

THROUGHPUT

CampaignWave 1

CampaignWave 2

CampaignWave 3

Campaign ManagementSegmentation

Capability to move marketing

money and resources across brand, geographies, etc. to

pursue opportunities of greatest

value

Capability to move from idea

conception to in-field execution rapidly

Capability to revise in-field campaigns to improve effectiveness

Capability to produce

more marketing campaigns allowing

them to take full

advantage of customer segmentation and

targeting, and support expanding portfolios

• Current value = cost reduction

• Future value = cost reduction, speed, flexibility and throughput

9

Marketing Production Value Chain


We see early adopters begin to apply lean principles to the Marketing Production Value Chain.

Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials

Transport / Warehouse

Fulfillment Reorder

• Need to produce more without spending more

• Increased pressure on CMO to justify decisions to organization

• Proven effectiveness of lean strategies / tactics in other areas of the firm

• Opportunity to leverage new technologies and global sourcing

• Need for greater SOX controls

10

Procurement


Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials


Fulfillment Reorder

Procurement departments are becoming increasingly more involved in marketing purchases and vendor selection.

� Poor planning results in rush jobs – 30% extra

� Limited / visibility planning leads to failure to gang work for better pricing

� Failure to bid jobs

� Poor contract terms

� Too many vendors

� Existing vendors get work not well qualified for

� Inability to plan prevents volume buying

� Often buy through a middle man

Vendor Mgt.

Plan & Forecast

Media / Raw

Materials

Situation Solutions

• Rationalized vendor set

• Preferred supplier base with clear SLAs

• Strategic sourcing including auctions

• Clear new item request processes

• Accurate demand aggregation

• Self service portal ensuring compliance and ability

to tailor to local needs

• Effectiveness measurement process

• Consistent quality of 3rd party management and service level

11

Procurement Leading Practices


Limited to No Sourcing Controls

Vendor Bidding / RFP Process

Vendor Rationalization/ Preferred Vendor Set

Performance Based Pricing

Brokers / Online Auctions

Volume / Revenue Discounts

Benchmarking

Event Based Purchasing

Implementation of sustainable marketing procurement process

Use Procurement Analytics / Modeling

The application of analytics to sourcing is yielding major returns.

• Forecast / Demand Modeling

• Order Quantity Modeling

• Procurement Optimization Modeling

• Model Impact of Creative Elements

Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials


Fulfillment Reorder

12

Creative Production

Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials


Fulfillment Reorder

The creative development process is broken and riddled with hidden costs and waste.

Situation Solutions

� Utilize high price resources for low concept creative

� Failure to reuse existing assets

� Poor project mgt. leads to rush jobs – 30% extra

� Review & approvals process is excessive –often leads to rework

� Poor planning limits ability to off-shore materials

� Order quantities rarely rationalized

� Poor scheduling limits ability to gang runs

Create Content

Produce Materials

• Process standardization across brands &

geographies

• Mandated brief developed by marketer

• Clear roles/responsibilities around creative

development process

• More early stage reviews

• Project measures are in place and

efficiency/effectiveness is tracked

• MRM software (supports workflow and automatic

notification) is being implemented to drive greater

control of program schedules, budgets and

resources

13

Creative Production Leading Practices

Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials


Fulfillment Reorder

Marketing creative process is being reshaped by technology which supports asset reuse and low cost country sourcing.

Technology enablers• Brand asset solution

spanning digital

materials/assets • Search engine capability to

enable access to resources• MRM technology supports

on-the-fly material

development & JIP production

Low cost sourcing• Low cost sourcing of marketing

content development activities

currently done by high cost, onshore providers

• DA "Factory" given full accountability for content tagging

and repository management

New ways of working• More collaborative and

standardised business

processes to encourage content reuse

• Reduced content reinvention – Increased re-

use and leverage of

materials and assets through DAL

2

1

3

Solution

Strategy & Design

Digital Asset

Development &

Repository Maintenance

Germany

Etc…

US

China

Brazil

24/7 Digital Asset “Factory”

Brand Asset Solution

India

Search

14

Distribution


Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials


Fulfillment Reorder

Situation Solutions

• Global strategy exists for physical inventory

management

• Formalized process and models for

determining demand - identify quantities

produced and shipping / storage logistics

• Process and supporting technology in place

to track and manage physical asset inventories

• Replenishment is driven by actual material use

and forecast forward coverage

• Data is shared real time among firm and

suppliers

• Emphasis on materials usage as well as

delivery

Focus is shifting to effective utilization of marketing materials as well as effective distribution.

� Limited use of best practices in logistics

� Materials often held by printer / high storage costs

� Lack of inventory mgt. prevents off-shore kitting

� Limited visibility into where materials reside

� Inability to track inventory leads to surprise reorders

� Difficulty retiring old materials / quantifying waste


Fulfillment Reorder

15

Distribution Leading Practices


Vendor Mgt.

Plan & Forecast

Create Content

Media / Raw

Materials

Produce Materials


Fulfillment Reorder

Early adopters are applying physical inventory practices to the digital asset management.

• Marketing assets are stored in centralized,

searchable repository

• Enterprise-wide marketing taxonomy is

employed to categorize assets and support

maintenance and search

• Asset rights and history are linked to each

marketing asset

• Clear, published guidelines for using marketing

assets exits - standards manual / training exists

• Asset use is tracked and measured

• Asset library is well maintained - assets are

updated, retired, versioned

• Download access to raw assets (photography,

copy, etc.) is restricted

DAM

Store/Manage

Deliver

Create

DAM

Lean Marketing

Business

Transcript of Lean Marketing