For many years marketing and procurement have been at logger-heads. No one really knows why or what started it but the tension has always been there, bubbling away under the surface. The problem for the business is that this has left a lot of cash on the table.
If procurement tried to get involved in a marketing campaign the response would usually be something along the lines of "its not important how much it cost, it only matters how successful it was", much to the annoyance of procurement.
Things are changing though. Delegates at the Procurement Leaders Masterclass on managing marketing and digital spend were told by Tom Dixon, CMO at food and beverage group Welsh’s, that as the media market changes so too is the relationship between the two functions.
Dixon spoke about the new channels his function were having to utilise and how different the media landscape is now as compared to just a few years ago. This rapid pace of change, he said, is focusing minds on the way marketing spends its money and that those who embrace these changes will be more likely to succeed. This has had his function turning to procurement in order to tap into their expertise in these areas.
Dixon outlined exactly how he has gone about forging these closer ties, which he called his ABC’s.
A - Alignment. This, he said, was fundamental. You need to align your objectives as well as your behaviour and your thinking.
He pointed to one example where, for him, it was made plainly clear that the two functions had to work closer together. Procurement was working on a deal to cut logistics costs in one particular region of the US. Marketing meanwhile was working on a deal with a retailer in the same region but there had been no thought to try and work together to meet both objectives.
B - Thinking like your counterparts in the opposite function was, Dixon suggested, key. At Welsh’s procurement had been invited to spend time with marketing, which helped as the two functions forged closer ties.
C - C stands for consumer value and making decisions around whether consumers will actually pay for any changes made to a product. Dixon pointed to one example where the marketing team wanted to change the colours of screw-top lids for different juice flavours. This was going to cause procurement a headache to organise while some market research showed that consumers would not notice any change so the plan was scrapped and just one colour was used, saving the company thousands of dollars.
With lots of nods in agreement from those delegates in the room it will surely be that the ties between marketing and procurement will continue to strengthen and deliver even more value back to the business.
To find out more about the PL Boston Forum click here.