1 Changing Role of the Marketing Executive The Marketing Exchange #7 Large Company Research, 2005

2 CEOs are “growing impatient with marketing,” wrote Northwestern University professor Philip Kotler early in “They feel that they get accountability for their investments in finance, production, information technology, even publishing, but don’t know what their marketing spending is achieving.” “Contrary to prevailing wisdom, the marketing function is more important (77% of respondents) now than ever before,” asserts Booz Allen Hamilton in a recent online study of marketing and non-marketing executives. “The role of the Chief Marketing Officer is transforming and bifurcating as an emerging strategic function while continuing to support traditional tactical activities,” proclaims Mosaic Partners in a recent study of leading marketing executives for Microsoft Corporation. Context

3 Start a Conversation Regarding the Changing Role of the Executive Level Marketing Office. –Facilitate Discussion Around Key Lessons Learned from Day in the Life Interviews. Expand the Conversation to Include Marketing Executives Participating in the Marketing Exchange. –We need to collectively explore “what is happening” in the marketing function and “why this is happening” to plan and deal with it. Continue the Conversation at the Next Marketing Exchange. –Early June –Ed Schechter, Chief Marketing Officer from Duane Morris –Deeper Dive on one of the Issues Discussed Today Objectives

4 “?” Challenges

5 “!” Result isn’t Great! Deemed to be one of the most hazardous positions in modern firm, with CMO tenure averaging only 23 months – less than half the tenure of CEOs in 18 industries – the food industry has shortest tenure at 12 months. According to CMO Tenure: Slowing Down the Revolving Door, a report by Spencer Stuart in August 2004.

6 What are the objectives of your marketing organization? What are the expectations of marketing? –CEO –Sales –Service –Functions Do these objectives/expectations compete or align to: –The CEO’s Agenda –Other Functions Objectives

7 Competing Objectives with the IT Function –Trying to grow the business while IT is trying to reduce their cost. –Leaves the marketing function without analytics and technology support or they are focused on adding this capabilities to their team. Getting Closer to the Customer –Driving many processes to better understand the needs of the customer and align the sales and service side to execute Target Marketing and Segmentation Thought Leadership Customized Offerings Thought Leadership is a Huge Push in Marketing to Enhance Value –Avoid price pressures through higher value add –Marketing leading NPD Objectives

8 Who has restructured their marketing function in the past 24 months? What has this solved and what new challenges do you face? –Closing the Great Divides? –Closer to Customers? How do you measure success? Structured for Success

9 Getting Closer to the Customer –Marketing (in most cases) is driving resources to the lines of business while maintaining functional control for communication and leverage. –Account-based marketing, sales and service – not brand wide or product wide marketing Still a Divide Between Sales and Marketing –Measures aren’t aligned - not easy to demonstrate the value of marketing, especially in sales driven organizations –Closing gap by demonstrating value in terms of getting me into places I’ve never been and setting me up for a successful relationships Levels of Marketing Integration –None, Integrated within the Function, Integrated with Sales and Service, and Aligned to the Objectives of the Business –Alignment drives measurements Structured for Success

10 What is the basis of value creation when a Walmart is emerging in your industry? Why is the role of the CMO Emerging? –47% of Fortune 1000 Companies –Where does your marketing function report today? What skills required are required of the CMO and the Marketing Function? Skills and Key Processes

11 More Analytical! –Win/Lose Analysis –Target Marketing –Viral and Advocacy Measures More Consultative to Solve Business Issues and Grow the Biz –Industry Knowledge –Customer Knowledge –Functional Knowledge Thrust to Become More Strategic –Move beyond brand police, signage experts, etc. –Strategy creates value…numbers measure value Skills and Key Processes

12 How do you balance control and influence? –Why is this important? –Positioned to orchestrate cross-functional team? Communication and Control

13 Matrix Organization and More Complex Marketing Tactics will Continue to Drive Need for Better Project Management Tools for Larger, On-going Customer Touch Points –Coordinate Value: Vendors, Partners, Customers, Sales Team, Service Team, etc. –Level of Complexity: Thought Leadership, Client Events, NPD, etc. Budgets are Moving Away from the Function and into the Line of Business. Leverage Investments to Ensure Cost Control and Consistency –Marketing Portals are leading edge, but most are using or marketing databases Focal Point of Functional Collaboration is Line of Business Communication and Control