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The Procurement Leaders Forum in Singapore opened today with a masterclass in marketing. The reoccurring theme throughout the presentations was building the bridge between buyer and marketer.
Part of this involves procurement moving away from the comfort blanket offered by old KPIs in the role. Cost-cutting may not always be welcome, or applicable.
“Focus on the demand for specifications instead of focusing on cost,” said Chloe Ellis, global category management for marketing at ANZ Bank.
In the past, buyers have often resorted to their spreadsheets and to detailed cost analysis. Whereas marketing was more interested in results. The primary focus of the function is conducting effective campaigns which engages consumers. The cost of these is a rather secondary matter as the uptick in sales usually outweighs any costs.
Once this principle is understood, and successfully conveyed to marketing, buyers can start to add value to their partners.
Key to this was an improved management of suppliers and agencies. Procurement has a major value to bring to the organisation in the form of greater discipline and control over contracting and payment.
Exploring different avenues of performance-related pay, for example, is one of the central means that buyers can positively impact upon the marketing category. But also assuring that discipline is maintained.
"For any variable payment structure the business needs to honour the commitment" Wei Yong Tiow, Global Procurement Director at Diageo.
Currently, it does seem that purchasing is not entirely successful in this space. In an interactive session, organised by Tag, a marketing services company, 35% of the participants stated that procurement did not positively support the unique needs of marketing.
It goes to show that this is still one of the hardest category for buyers to put their hands around.
But, if they are willing to connect with marketers, understand their needs, they can build a case to provide value for their marketing partners.