While leading companies in all markets have increasingly sophisticated go-to-market strategies that encompass all aspects of customer engagement and relationship management, "blind spots" in marketing's focus are hampering the full effectiveness of these strategies, according to results of a new study by the CMO Council, "Competitive Gain in the Demand Chain."
The results are based on quantitative/audit surveys of more than 260 marketing executives during third-quarter 2010 and qualitative interviews with executives from 14 brands, including Hershey, Subway, Allergan, Advance Auto Parts, MGM Resorts, Oracle, and T. Rowe Price.
Today, the go-to-market process begins during product development and extends beyond the product's appearance on shelves -- meaning that the process must organize and optimize product launches and marketing campaigns across global sales, distribution, merchandising and customer support, the report points out.
Thirty-eight percent of marketers surveyed agree that demand-chain provisioning -- that is, timely delivery of marketing and merchandising materials for dealers, agents, franchises, retailers and brand-office locations, as well as for processing customer requests for sales literature and samples through the Web, email channels and call centers -- is critical to business competitiveness and performance. In addition, 31% believe this is important to sustaining sales and channel operations.
However, most marketers continue to focus on development and creation of the content, design and strategy for these demand-generation materials (and attempting to measure end performance), while remaining relatively uninvolved in the operation, distribution, support and logistics needed to ensure that these materials connect with the intended users, according to the report.
More than half (56%) of marketers report being focused on campaign design, development and execution, but only 16% report looking to production, warehousing, inventory management or delivery as critical elements in an effective demand chain. In addition, just 2% currently are looking to optimize the actual delivery, fulfillment or distribution of their marketing materials.
Just 25% report being involved in ensuring that sales support materials and resources are delivered on demand, in order to improve sell-through and customer conversion, and just 15% are taking steps to audit and assess marketing supply chain effectiveness. This, concludes the report, indicates that there is "little to no visibility into the demand chain provisioning process to truly gauge content, material or operational impact and performance."
"Marketing tends to be preoccupied with staying on track with individual tactical executions or traditional marketing fundamentals like lead generation, campaign execution and content or creative development," sums up Donovan Neale-May, executive director of the CMO Council. "However, today's demand chain requires a new mix of digital, direct, and retail distribution, fulfillment, measurement and tracking capabilities to maximize customer contact, conversion and interaction."
Marketers are aware of the disconnect: Fully 80% of respondents indicated that they believe that their organizations are not efficient or effective enough in provisioning the full demand chain, and 20% said their overall demand chains are under-performing or in need of improvement.
Vendor selection and management were identified as one area promising immediate opportunities for demand-chain systems improvement.
Nearly half of marketers surveyed currently view demand-chain procurement and fulfillment as a compilation of individual vendors (asking each vendor to bid on individual elements of the demand chain). However, given that nearly 60% plan to introduce a "more disciplined" approach to marketing execution systems, "vendor visibility is likely an ideal place to begin demand-chain transformation," notes the report.
The report, sponsored by Archway Marketing Services, Inc., can be downloaded at cmocouncil.org.