An Integrated View of IGMC Management

1. An Integrated View of IGMC Management Sunarto Prayitno

2. Introduction • Traditionally management of the marketing communication area, either a marketing communication manager or perhaps an advertising director. • In some cases it might be the sales manager or director who adds communication responsibilities to his or her portfolio. • Thus communication has been managed as organizational activity or element based on functional objectives.

3. Introduction • The goals of the communication unit are typically set by senior managers who are often responsible for broad areas of the organization. • Likewise, senior management has determined communication budgets either based on requests by the functional manager or simply as allocations made during the annual budgeting cycle. • Commonly funds dedicated to marketing and communication have come from the general resources available within organization or, increasingly, have been allocated into a common pool by the various strategic business units (SBUs) as part of their budgeting process.

4. Introduction • In marketing communication program development and support, the marketing communication manager relied on either an internal department, commonly staffed by media, creative, or visual specialists, or and external organization such as an advertising agency or communication development and placement organization. • Compensation of the external groups was often based on some type of media commission for space or time purchased, markups on purchased supplies or materials, perhaps fees for time invested in the development of plans and programs.

5. Introduction • In both managing and financing various marketing communications program, the amount spent by the marketing organization was taken as a fixed expense by the firm. • That is, it was budgeted at the beginning of the accounting period, and withdrawals were made from a reserve set up for the purpose as the program were executed. • Thus the senior management assumed marketing and communication expenditures were a sunk cost or an accrual account that could be “raided” near the end of the accounting period if expenses needed to be reduced or funds moved to shore up the bottom line.

6. Introduction • Therefore, marketing communication in most organizations has deserved little or no top management attention since: • it was difficult to measure results, • it expensed costs, and • Little or no immediate business impact was felts as a result of adjusting the level of investment. • Thus, while marketing communication has been important to the person involved in the function, unfortunately, the same cannot be said for senior management in many firms.

7. Introduction • Thus the systems used to manage the marketing communication function and to determine how and in what amount communication program development should be founded or measured have received little attention outside the immediate areas of the functional activity.

8. A Traditional Approach to MC Management • For the most part marketing communication has been designed as a function or a department or an area activity in most organizations. Thus it has come under the traditional approaches of command and control management. • There are generally three or more basic activities of the organization – operations, finance, and sales/marketing. Under each activity a number of groups deal with the specific area related to the function. • Operations control manufacturing or development and distribution. Finance deals with accounting, billing, and payroll. Marketing deals with customer contact, market planning, product management, and so on.

9. A Traditional Approach to MC Management The Typical Corporate Organization

10. A Traditional Approach to MC Management • It is clear from this organizational structure that there can be little or no integration within the total organization. • Each functional element is separate and has its own areas and activities for which it is responsible, and each is managed and rewarded on what it does, not what it accomplishes. • From the view of the functional manager, he or she is separate and unique activity unrelated to the whole of the organizations.

11. A Traditional Approach to MC Management • The IGMC approach to marketing communication management takes exactly the opposite track from traditional management thinking: “We start with a customer view of the organization and work back.” • That develops management approaches that fits customer needs, rather than organization structures and flowcharts that fits managerial goals. • Along the way, of course, we must bring the customer needs and organizational structure and capability together, but the concept of customer-centric organization is key to our approaches.

12. What Needs to Be Managed? • If the organization takes an inside-out approaches, the management and the communication function will equate to managing the communication output of the firm. Management will be focused on managing the advertising program or the sales promotion activities or direct marketing mail drops or public relations events. • Thus the communication people and managers will be focused on what gets done, not on the impact of the programs the group is implementing. • Focusing on the outcomes rather than the output, again is a major difference in how the marketing communication group views itself and its responsibilities. It is the IGMC approach.

13. What Needs to Be Managed? • The real task for the marketing communication group and the marketing communication manager is not the management of the communication delivery vehicles but: • How to attract and acquire new customers for the organization, or • How to retain desirable present customers, and/or • How to manage acquired and retained customers through the product portfolio of the organization. • Each of these tasks is unique, and each requires a different set of marketing and communication skills, tools, and tactics.

14. What Needs to Be Managed? • From a marketing communication management standpoint, the first issue for the IGMC manager is “How can I best invest the finite resources of the organization in marketing communication to attract new customers?” • Then, once a prospect has been attracted and retained, the next question is “How can I manage the new customer through our product portfolio so it will provide benefit to the customer and to the firm?” • That, of course, demand totally different from and type of communication program from the one used initially to attract customers to the brand.

15. What Needs to Be Managed? • Finally, the management issue of the marketing communication manager and group become “How can we assist in retaining the customers we have attracted and are migrating through our product or services assortment so that they remain with us overtime?” • Again, retention demands a different type of communication program from acquisition or migration, and it demands a different type of approaches and communication mix. • In some cases advertising may be very important; in others, it may not be used at all. The approach of managing customers and customer communication requirements is vastly superior to the management traditional communication delivery vehicles.

16. What Needs to Be Managed? Customer Management Structure

17. What Type of Management Structure? • While the organizational structure of many IGMC organizations is still developing, we have identified three forms that appear to have possibilities for the present and future: • A Revised Brand Management Structure • Centralized Marketing Communication Activities • The Market Segment Design

18. What Type of Management Structure? 1. A Revised Brand Management Structure: • This structure illustrates one way of moving toward being a customer-focus organization. Rather than being focused on products or brands, the organization is focused on customers and market segments. • Further, another group is responsible for the various market segments that have been identified: for example, heavy or light users or present customers and prospects and the like. • Yet another group focuses on new or special products – managers who identify new market segment or who identify new products that can be developed for existing customers.

19. What Type of Management Structure? • There are also to support groups in this design: • Marketing services – the support group that provides expertise in the marketing communication areas. • Sales – the face-to-face contacts that occur with customers and prospects.

20. What Type of Management Structure? Market-Focused Organization

21. What Type of Management Structure? 2. Centralized Marketing Communication Activities: • Another way to become customer focused is to control all marketing or brand communication through a central office or marketing communication manager. • This approaches is being used increasingly by organizations that are attempting to move from sales oriented to a marketing- or brand-oriented approaches to marketing and communication. • Often called the corporate communication director, this manager is designed to consolidate control and responsibility for all forms and types of corporate and product brand communication in one place, increasingly in the office of the CEO or chairman of the organization.

22. What Type of Management Structure? Marketing Communication Management Structure

23. What Type of Management Structure? 3. The Market Segment Design: • The market segment design is based on the concept of being totally customer oriented and developing and delivering services to satisfy customer needs through focused approach. • The primary value of the market team design is that it is in line with the increasing focus on teams and work groups within many organization – the famous “flat organization”. • In the team approach the traditional hierarchy is abandoned in favor of group of specialists who come together for long or short periods of time to attack specific problems or opportunities.

24. What Type of Management Structure? • In the structure illustrate a unique team of functional specialists comes together to manage a group of customers. • Almost all activities required to provide products and services to a group of identified customers or prospects are represented within the team. • Granted, the team may need to draw on production and distribution activities from the central organization, yet it contains the resources needed to acquire, manage through the product or service portfolio, and retain a group of customers either locally or around the world.

25. What Type of Management Structure? Market Team Structure

26. What Type of Management Structure? • In our view this market team design is the most appropriate for a global marketing organization. • The market team is focused on the customer wherever the customers or prospects might be located. • The goals is to manage the customer, not the geography or the products or services.

27. What Type of Management Structure? Understanding the marketing communication process: • Eight steps are involved in developing and delivering a marketing communication program. • While some of the activities may blend across the various boxes we illustrate, these are generally the activities involved.

28. Understanding the MC Process

29. Understanding the MC Process 1. Information or Data Gathering: • This is the process of gathering information, knowledge, and records about customers and prospects, markets, and marketing systems in the marketplace to be served. • Commonly this is done by research organizations or perhaps database organizations. • In some cases it falls to an internal information technology group.

30. Understanding the MC Process 2. Data Consolidation and Analysis: • These are firms or people who take the raw data gathered in the first step and consolidate or bring the data together to examine what customers are doing in the marketplace. • Commonly these are organizations that compile data and provide it to organization for analysis or make data interpretation.

31. Understanding the MC Process 3. Market Analysis to Develop Market Understanding: • These firms take the gathered and consolidated information on markets and customers and analyze and attempt to understand how the market operates, how customers buy, how product are used, an so on. • A few advertising agencies still operates in this area, but increasingly those activities are being outsourced to external groups.

32. Understanding the MC Process 4. Market Strategy Development: • Traditionally this has been the province of the marketing organization and the brands or product manager. • Increasingly, however, consulting organizations and market research and database firms are entering this field.

33. Understanding the MC Process 5. Message or Incentive Development: • Historically the advertising agencies have provide this services. Agencies took the strategy the organization developed and turned it into messages and or incentives ready to be distributed. • Increasingly the advertising agencies are turning into holding companies with operating units in all the specific marketing and communication activities ranging from advertising to public relations to sales promotion.

34. Understanding the MC Process 6. Message or Incentive Production: • Again, this has historically been the province of the advertising, promotion, or communication agency. • While those agencies have often employed specific production organizations such as television producers, type and film houses, and the like, the agency has operated as the consolidator or those services and presented a unified package to the client organization.

35. Understanding the MC Process 7. Message or Incentive Distribution: • Distribution of marketing messages and incentives usually occurs through various forms of media organizations ranging from newspapers to television to cinema to direct mail.

36. Understanding the MC Process 8. Message or Incentives Response Analysis: • Measurement of the effect and results of marketing communication programs has not been well developed in any specific market and certainly not in global term. For the most part measurement has focused on the marketing communication output. • Increasingly the area of marketing communication measurement is being developed by specialized consulting organizations that are focused on developing this area.