Author: Kevin Monahan - Categories: Procurement Intelligence
Are marketing and procurement really that far apart? A few colleagues may suggest I've finally lost it for attempting to compare the two, but marketing spend is certainly on many a CPO's festive wishlist, so let's persevere for a second.
In a recent PIU survey marketing ranked as the number two area providing potential for savings (IT came first), while a separate blog debate rages over at our sister organisation, the Procurement Leaders Network, about procurement's potentially negative effects on the creative industry, with margins being driven into the ground. In a recent benchmarking project, everybody wanted to discuss TV advertising, but very few could answer for it. Marketing is after all, as a top procurement executive stated at a recent PIU workshop, 'one of the last bastions of spend for procurement to get a hold of'. And we all know it's pretty intangible stuff when you get there.
However, let's look at the objectives of procurement versus the objectives of marketing. Unless I'm mistaken, one attempts to get the right products, at the right time, at the best total cost of ownership for the organisation, while the other attempts to get the right products, at the right time and at the right price for the organisation's customers. But don't take my word for it, that's just loose translation for the Chartered Institute of Marketing's definition of marketing - 'the management process responsible for identifying, anticipating and satisfying customer requirements profitably'. So, in other words, both require a deep, expert understanding of the needs of its stakeholders. And although we're comparing top-line vs. bottom-line growth, note the word 'profitably' in the marketing definition too.
Where I see a really important difference is perhaps what comes naturally to marketing, as it's part of the job spec - shout about the value you add and the way you're meeting the needs of your audience, both internally within the organisation and externally to the market. Tell the story of the clever things that you did and their positive effects, using soft skills along the way to shape behaviour and ultimately a brand.
We deliberately asked where 'marketing procurement's value' sat in the aforementioned 2010 CPO Strategy survey, with preliminary analysis showing 13% of 210 respondents saying it was their 'highest priority', while 32% said it was 'not a priority'. But imagine the effects of branding procurement, of measuring its value against the goals of the business, of having an internal communications strategy, of focusing on what the savings generated allowed the business and its various departments to do? Fast forward to a more viable and exciting option for graduates and cross-departmental high flyers, a highly motivating place for the procurement team itself to work and an empowering one when it comes to opening doors to other areas of untapped or unrealised potential.
The point is, both marketing and procurement go at somewhat similar, high-level objectives with a very different approach. Looking into that further, there is an argument to be made that both can learn a lot from the other for the good of themselves and the business. Some have bridged this divide already, some know it's another issue on the horizon and some dismiss the idea out of hand. Which one are you?