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Competitive Gain In the Demand Chain
CMO COUNCIL, November 2010, Pages: 50
According to the marketing executives who took part in the "Competitive Gain in the Demand Chain" study, there is significant opportunity for marketing to improve the go-to-market process. Yet, there seem to be some equally significant blind spots as we remain hyper-focused on the creative, often to the detriment of effective demand chain provisioning.
This latest report issues a clear challenge to marketers to look to the efficient and timely delivery of marketing and merchandising materials, as well as the processing of customer requests for sales literature and samples as a critical part of Demand Chain Management. The study, is part of ongoing research to identify ways to improve frontline performance through better go-to-market process innovation, supply chain optimization, and marketing ecosystem management.
Among some of the key findings:
- A surprising 20 percent of more than 250 marketers audited in the past three months admit their demand chain is under-performing or in need of improvement
- Marketers agree that demand chain provisioning is critical to business competitiveness and performance (38 percent of respondents), while an additional 31 percent believe it is important to sustaining sales and channel operations
- Only 25 percent of respondents are ensuring sales support materials and resources are delivered on-demand, which would improve sell-through and customer conversion
The 50-page Competitive Gain in the Demand Chain report includes detailed findings of over 260 marketing executives and in-depth qualitative interviews with over 267 executives from brands including Advance Auto Parts, Allergan, Hershey, MGM Resorts, Oracle, Subway, and T.Rowe Price. The online quantitative audit was conducted in the third quarter of 2010, with findings collected through November 2010
Go-to-market strategy has gone far beyond the naïve “build it and they will come” scenario. Today, go-to-market is a business critical, highly complex, and carefully sequenced process that begins at the moment of product or service development and can reach well beyond an initial appearance on a store shelf.
In fact, today’s go-to-market process must orchestrate, organize and optimize product launches and marketing campaigns across the global sales, distribution, merchandising and customer support repertoire. This involves new skills, insights, resources, warehousing footprints and analytics to improve demand-side planning, procurement, production, storage, and just-in-time provisioning of critical marketing support and product fulfillment requirements. Optimized organizations are actively investing in new logistical, technological and operational expertise that looks to connect the creative and strategic vision of the goto-market process and the delivery of a superior customer experience.
With these opportunities come new points of disruption, distress and deficiency, threatening to derail value creation and competitive advantage. Demand Chain Performance (DCP) has become the new gold standard for today’s agile and adaptive organization, seeking to drive sales effectiveness, improve customer conversion and retention, enhance point-of-sale or service experience, assure after-sales satisfaction, and develop corporate commitment to
sustainability. Yet often the overlooked aspects of the Demand Chain can create the greatest upheaval and impede go-to-market success.
Companies have lagged in sharpening the customer focus, knowledge, integration and alignment of sales, marketing and channel organizations, even as marketers look to automate back-end operations and infrastructures. Applying visibility and measurement into the distribution of demand generation materials has largely been focused on the start-point of the engagement, namely the development and creation of content, design and strategy. Once this creative process is in place and the strategy has been approved, marketers leave the distribution and fulfillment required for the connection between content and customer to other operational functions.
Competitive Gain In The Demand Chain, demonstrates a clear disconnect in demand chain performance as marketers focus process improvements on the development of strategy and creative, and then measure the impact of materials once they are distributed and in the customer’s hands. Yet there is little concentration on how these critical business-driving materials are actually fulfilled and distributed to customers, channel and business partners.
Marketers are being confronted with CEO-driven mandates to achieve significant revenue growth from effective demand generation strategies. This key marketing imperative has come coupled with increased scrutiny of the yield and accountability of marketing and sales spend. With some enterprises spending as much as 40 percent of revenues on go-to-market activities – such as branding, communications, product delivery, channel management and sales force effectiveness – there is a critical need to improve process, policy, transparency and measurement.
The need to audit, analyze and optimize every facet of the go-to-market process and customer experience continuum has become essential to furthering business performance. Frontline empowerment through enhanced analytics, product portfolio management and price realization; sales force performance and channel value creation; and all aspects of customer engagement and relationship management must be addressed and optimized by today’s marketer. Yet all too often, issues around operational processes, distribution, support and logistics are not viewed as part of the customer experience strategy, instead relegated to an “operations” task not managed within the marketing operational ecosystem. This oversight can have a direct impact on sales and marketing effectiveness, an aspect of marketing that few executives give high marks in performance.
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