Integrated Sales and Marketing: It's Time for a True Demand Chain

For a few years now, people have been talking about the Demand Chain in ambiguous terms. Consultants, software companies and the industry at large have mentioned many definitions, but none has focused on the most pressing matter – that stronger integration of the Sales and Marketing departments is driving lower operating costs as well as a complete 360^o view of the consumer and shopper.
 

Many CPG organizations have multiple groups within their Sales and Marketing departments performing similar tasks, similar analytics and similar processes – albeit in separate groups.   If a CPG organization wants to have a truly complete understanding of the consumer, shopper and customer, then it’s critical to have these different Sales and Marketing groups successfully pull together in all aspects of their activities, especially when a better understanding of the shopper and consumer via predictive analytics and insights will drive the future. Many times, this pulling together doesn’t occur until the very top of the organization chart.   The best of the best are shifting this model.
 

Traditionally, many Sales and Marketing departments function in small silos at an account level. Trade Promotion, Category Management, Social Media, Sales Force Automation (SFA), Pricing and on and on... Each of these silos requires technology layers, functional expertise within each layer, and – sitting on top – Analytics.    Then there are multiple cylinders of various widths and depths for each major area (see Figure 1):
 

Inefficiencies abound in this type of model including the largest waste – making key decisions based on incomplete data. It’s very difficult to have a 360^o view of anything when the processes and data are spread across a spectrum of people, devices and computers. Inefficiencies also abound when time is wasted, tasks are unnecessarily duplicated and there is a general lack of visibility into the money flow. No one wants this, but most continue down the same path. We have seen this before in industry – in the 1980s when there was a variety of areas that today is called the Supply Chain. Back then, there were individual groups and functions for inventory, procurement, warehousing, logistics, sourcing and transportation. Now, we barely remember that these were separate functions, services and processes.
 

We are about to go through the same metamorphosis with Demand functions. Industry leaders have started the process; very few are complete, yet they are already seeing benefits. For a few years now, SFA and Customer Relationship Management (CRM) have become intertwined.   The best have also started to intertwine Pricing and Trade Promotions – still only at a Management level, but it will evolve to Optimization over the next 24 months.
 

What will be the catalyst for an integrated Demand Chain to finally become reality? Analytics and Insights. We cannot successfully measure effectiveness without an integrated view of the data, especially when we want to know more about our consumers. Consumer data is both structured and unstructured. Loyalty information is reasonably structured from our retail partners, but Social Media data is almost completely unstructured. More importantly, it’s also unsolicited. Better data management and new hierarchy needs will be required. Without taking great strides in data management starting now, the leaders will pull further ahead of the pack. CPG companies will lose sight of this important, yet unsolicited social media data, and not properly understand their consumers.
 

As painful as the unsolicited data will be to bring into your decision making, there is going to be a lot of it.   Many are trying to use three years of historical data, and the industry is used to shipment and syndicated data. What we imagined as “lots of important data” will dwarf in comparison to the amount of scan-data and consumer data. Infrastructures, archaic ERP-driven hierarchy decisions, and integrating into older ERP data will be required and could be cumbersome. Companies will be saving and using a lifetime of consumer data, not just three or so years of retailer and shipment data. The leaders have started this process, and many have found the hierarchy to be the biggest challenge.

 

Where is it going? Wipro sees an evolution underway. The leaders are deeply integrating their Sales and Marketing functions. They are looking at Pricing and Promotion in an integrated fashion saving millions of dollars by moving non-controllable spending into controllable and predictable sales lifts. 
 

Market Mix Analysis is already becoming commoditized by the leaders, while others are still trying to figure out how to better manage just their trade spend. The best see trade optimization as a subset to the entire Market Mix Analysis opportunity.
 

Social Media and Digital Marketing are playing huge roles in new product developments, identifying new shoppers and consumers and reducing unsaleable inventories. Leaders are able to monetize their Social Media spending, while others are just beginning to understand how to use it for brand-building.
 

To the delight of the retailers, Category Optimization is being driven. The prediction that there will be three players at the shelf – private brands, national brand #1 and national brand #2 – is becoming reality in many categories.
 

This evolution is driving 360^o analytics. Without the proper Sales and Marketing integration, the complete view of the shopper and consumer is nearly impossible. The following diagram (Figure 2) shows the Wipro strategy on how to evolve the Sales and Marketing functions driving quantifiable and tangible benefits for your organization. Notice that some of the vertical silos have been horizontally transformed so that these areas traverse the entire functional landscape. We believe that the Digital Marketing and Social Media areas will also become horizontal functions for the leaders.
 

The future is clear – Analytics driving Insights, and Insights driving predictable results. It will impact “from the consumer backwards” to the manufacturer’s suppliers. While many are trying to move from a push to a pull strategy starting at the shelf, consumers are squarely becoming the starting point. They are comparison shopping and learning about products before even entering a store.  
 

The best CPG organizations already realize it, and we will see many areas of analytic driven insights - Customer Insights, Shopper Insights, Household Insights, and Consumer Insights.   Predictable results will be driven by those that are capturing the proper information, moving it into a common repository (the DSR) and creating the holistic view of the shopper and consumer. Wipro has been successfully helping leading global organizations move to this strategy.