Lean Marketing

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


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)


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


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


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


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

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


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


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


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

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

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


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


Lean Marketing

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