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Lean Marketing

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Presentation to Center for Customer Insight and Marketing Solutions - University of Texas, Austin, September 2009

Presentation to Center for Customer Insight and Marketing Solutions - University of Texas, Austin, September 2009

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    Lean Marketing Lean Marketing Presentation Transcript

    • Marketing Transformation Lean Marketing CCIMS Presentation – 9.11.09
    • 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. 2
    • The Role of Marketing Companies are looking to Marketing to drive organic growth and shareholder value. Future Value This is the value that the market 60% believes will be delivered from assets in the future 100% Current Value This is the value 40% that is expected from the current assets performing as they are today Enterprise Intrinsic Premium Value Value Copyright © 2009 Accenture All Rights Reserved. 3
    • Marketing Spread/Growth Marketing must drive growth efficiently and effectively to impact shareholder value. Spread / Growth Matrix 50% Market 40% Risky Growth Leaders 30% Revenue Compound 20% Unprofitable Revenue Annual Growth Growth Rate 10% PEER AVERAGE Profitable 0% Value ‘Bond-like’ Destroyers Returns -10% -4% -2% 0% 2% 4% 6% 8% 10% 12% Average Spread (ROIC-WACC) Copyright © 2009 Accenture All Rights Reserved. 4
    • External Marketing Challenges The external environment is becoming more precarious. Marketing Geography Product Segment Marketing Channel • Increasing Investment Mix Mix Mix Mix Mix Media Advertising, Print, Radio, Online, Outdoor, Direct Mail Complexity Price $$$ Direct Promotions Online, In/Outbound Call Centre, On-Premise, Mobile, Mail, Billing Distribution Sales Force 100% 23% • Globalization Products/Services Growth Range of 80% … 23% of organizations said 60% 16% the number of No products / services Growth 40% (12%) 25% they offered more than doubled in the Decrease 20% (2%) 19% last five years. No reply • Product / Service 0% 0% 20% 40% 60% 80% 100% 1010 Increasing technological innovation 4G Proliferation 109 Power density 256M 1G 64M 108 Memory Itanium TM Microprocessor 4M 107 Pentium ® 4 1M 106 Pentium III® 256K Pentium II® 105 64K TM 486 Pentium ® 104 1K • Rapid Innovation 386TM 103 8086 80286 8080 102 4004 101 1970 1975 1980 1985 1990 1995 2000 2005 2010 Copyright © 2009 Accenture All Rights Reserved. 5
    • Internal Marketing Challenges Marketing is struggling to deliver growth efficiently. Strategy Planning Implementation Ability to develop Ability to plan end-to- Ability to execute quickly growth initiatives end implementation and stay ahead of competitors 63% 41% 30% Strong Strong Strong Source: Innovation & Growth, March 2006; The Economist Intelligence Unit • Increasing Costs • RIF/Headcount Freezes • Declining Budgets • Increased Accountability Copyright © 2009 Accenture All Rights Reserved. 6
    • 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 Copyright © 2009 Accenture All Rights Reserved. 7
    • Lean Marketing Now is the time for Marketing to learn from production and apply ‘lean’ principles. Time to market is critical Capability to move from idea conception to in-field execution rapidly • Current value = Capability to revise in-field campaigns to improve effectiveness cost reduction SPEED ILLUSTRATIVE Marketing Geography Product Segment Marketing Investment Mix Mix Mix Mix Capability to move marketing • Future value = $$$ Price Direct money and resources across brand, geographies, etc. to pursue opportunities of greatest cost reduction, Distribution Sales Force value speed, flexibility FLEXIBIITY Campaign Capability to produce and throughput Wave 1 Campaign more marketing campaigns allowing Wave 2 them to take full advantage of customer Campaign Wave 3 segmentation and Campaign targeting, and support Segmentation Management expanding portfolios THROUGHPUT Copyright © 2009 Accenture All Rights Reserved. 8
    • Marketing Production Value Chain We see early adopters begin to apply lean principles to the Marketing Production Value Chain. Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials • 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 Copyright © 2009 Accenture All Rights Reserved. 9
    • Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials Procurement Procurement departments are becoming increasingly more involved in marketing purchases and vendor selection. Situation Solutions • Rationalized vendor set Plan & Vendor Media / Forecast Mgt. Raw Materials • Preferred supplier base with clear SLAs • Strategic sourcing including auctions Poor Failure Inability planning to bid to plan • Clear new item request processes results in jobs prevents rush jobs volume • Accurate demand aggregation – 30% Poor buying extra contract terms Often Limited / buy • Self service portal ensuring compliance and ability visibility Too through to tailor to local needs planning many a middle leads to vendors man failure to • Effectiveness measurement process Existing gang vendors work for get work • Consistent quality of 3rd party management and better not well pricing qualified service level for Copyright © 2009 Accenture All Rights Reserved. 10
    • Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials Procurement Leading Practices The application of analytics to sourcing is yielding major returns. Use Procurement Analytics / Modeling • Forecast / Demand Modeling Implementation of sustainable • Order Quantity Modeling marketing procurement process • Procurement Optimization Brokers / Online Auctions Modeling • Model Impact of Creative Benchmarking Elements Performance Based Pricing Vendor Rationalization/ Preferred Vendor Set Event Based Purchasing Volume / Revenue Discounts Vendor Bidding / RFP Process Limited to No Sourcing Controls Copyright © 2009 Accenture All Rights Reserved. 11
    • Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials Creative Production The creative development process is broken and riddled with hidden costs and waste. Situation Solutions • Process standardization across brands & Create Produce geographies Content Materials • Mandated brief developed by marketer Utilize high Poor planning • Clear roles/responsibilities around creative price resources limits ability development process for low concept to off-shore creative materials • More early stage reviews Failure to reuse Order existing assets quantities rarely • Project measures are in place and Poor project rationalized mgt. leads to efficiency/effectiveness is tracked rush jobs – 30% Poor extra scheduling • MRM software (supports workflow and automatic limits ability Review & to gang runs notification) is being implemented to drive greater approvals control of program schedules, budgets and process is excessive – resources often leads to rework 12
    • Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials Creative Production Leading Practices Marketing creative process is being reshaped by technology which supports asset reuse and low cost country sourcing. 1 New ways of working • More collaborative and standardised business 2 Low cost sourcing processes to encourage • Low cost sourcing of marketing content reuse content development activities • Reduced content currently done by high cost, reinvention – Increased re- onshore providers use and leverage of • DA "Factory" given full materials and assets accountability for content tagging through DAL and repository management Digital Asset Development & Solution Repository Maintenance Strategy & Design 3 Technology enablers India Germany • Brand asset solution spanning digital Brazil materials/assets China 24/7 Digital Asset • Search engine capability to “Factory” enable access to resources US • MRM technology supports on-the-fly material Etc… Brand Asset Solution development & JIP Search production 13
    • Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials Distribution Focus is shifting to effective utilization of marketing materials as well as effective distribution. Situation Solutions • Global strategy exists for physical inventory management Transport / Fulfillment Reorder Warehouse • Formalized process and models for determining demand - identify quantities produced and shipping / storage logistics Limited Lack of Inability to • Process and supporting technology in place use of inventory track best mgt. inventory to track and manage physical asset inventories practices prevents leads to in off-shore surprise • Replenishment is driven by actual material use logistics kitting reorders and forecast forward coverage Materials Limited Difficulty often held visibility retiring old • Data is shared real time among firm and by printer into materials / / high where quantifying suppliers storage materials waste costs reside • Emphasis on materials usage as well as delivery Copyright © 2009 Accenture All Rights Reserved. 14
    • Plan & Vendor Media / Create Produce Transport / Fulfillment Reorder Forecast Mgt. Raw Content Materials Warehouse Materials Distribution Leading Practices Early adopters are applying physical inventory practices to the digital asset management. • Marketing assets are stored in centralized, Create searchable repository • Enterprise-wide marketing taxonomy is employed to categorize assets and support maintenance and search • Asset rights and history are linked to each DAM marketing asset • Clear, published guidelines for using marketing assets exits - standards manual / training exists St Asset use is tracked and measured o r • ve re i / l M De • Asset library is well maintained - assets are an ag updated, retired, versioned e • Download access to raw assets (photography, copy, etc.) is restricted Copyright © 2009 Accenture All Rights Reserved. 15