Who doesn’t like great marketing? I love the passion of it, the ways in which people come up with clever ideas to make us laugh or think, or even point out something so historically obvious that we think we should have thought of that ourselves. It can’t be an easy thing to continuously try and innovate new ideas and push the boundaries so far, especially when exactly that has been a constant for such a significant amount of time.
“It simply just isn’t that black and white when it comes to marketing…”
Great marketing comes from pushing boundaries, finding ways to effectively communicate to the masses driving leads/sales all whilst building a brand, managing public perceptions and often damage control. Marketing is an exception to almost all the rules and as such will need to have some rules bent for them too, procurement is certainly one of the biggest functions that need to recognize marketing as an exception.
The norm is for a department or individual to assess what they need and find a provider for it, procurements function is to say “ok, you obviously have to have this, let’s find it cheaper” and this is good business practice, unless you’re dealing with the exception to the rule which is marketing.
Marketing will often have to use advertising agencies and other such 3rd party providers to create and implement some campaigns, these agencies would have been very carefully selected based on their abilities, ideas, and responses given over the course of a number of face to face and over the phone meetings. This isn’t something the procurement function can actually see, so if they see a cost for let’s say a TV advert for $xxx, procurement will naturally seek out alternatives for TV adverts costing $xxx – y, that’s what they do and they will most certainly find you many cheaper alternatives.
It simply just isn’t that black and white when it comes to marketing, most other industries tend to do things in almost the exact same way that their competition does, in fact, a lot of successful companies have been built on that alone, so it’s much easier to gauge a like for like quote. Marketing is the exact opposite of that, in fact, if you attend a marketing meeting and pitch an idea for an advert that is the exact same advert as your competition for the reason that it is popular and it worked for them, you’d likely be out of a job pretty soon.
PepsiCo was sort of on the right track towards the end of last year when they dissolved their Marketing Procurement Department. I believe that what they are trying to do here is allow greater visibility of finances to the people who need to make the spending decisions. PepsiCo reported that decisions are made more frequently in real time. “You can realize better effectiveness and efficiencies by putting this responsibility on brand teams who are closer to the consumer and allows them to more quickly balance cost value and quality in all of their decisions.”
What they should have done was implemented a solution like Procurementexpress.com, there are going to be problems with removing the procurement function, it still has a huge part to play in marketing. Things like Contractual Compliance, Financial Due Diligence, and conflict resolution are the things that make procurement professionals shine, to the more emotive creative types you’ll find in marketing these things are soul sucking annoyances that will affect their usual work.
What procurement needs to do is simply adapt a little, they should continue to do all they do so well, but with marketing when it comes to the “let’s find it cheaper”, stop and think about adding value as opposed to adding savings, use your finely honed negotiation skills to get them to throw in something extra. It’s very important to allow marketing to assess the needs and authorize any spend, that’s why it’s crucial to have the financial visibility available so that mistakes are not made, sometimes we simply just cannot afford the things we want and have to settle for just the things we need. I think this will cause problems for PepsiCo, but I’m guessing the loss of a few million here and there is no big matter to them most of the time. If you’re thinking along the same lines as them, then get in touch, I’ll arrange a free trial of our system and you’ll easily see what difference it can make without having to remove a single person beyond the boundaries of their skill sets.
