Wei, Zhe
As the definition of marketing varies according to different institutes and academics (Baines, Fill, 2014), and its definition from the same source evolves with the changing business environment (Keefe, 2004), the role of marketing in the organisation also changes over time. This article will first state a general background information of the organisation. Then the article will follow the framework that Frederick E. Webster, Jr discussed and critically examine the role and value of marketing in the organisation from three levels: 1) corporate level, 2) business (SBU) level and 3) operating level (Webster, 1992). Since the organisation that the author’s currently working for is not a global enterprise and the business of which is also focus on domestic market, topic like the difference of strategic business units between countries would not cover. However, the author will analyse some discrepancies from region or business perspective. Another dimension worth amplify is the time, because the enterprise is weathering merger and re-organisation. At last, a short summary will be provided with a limitation analyse of this essay.
The organisation which is going to discuss is a domestic logistic group (Group Z) in China. Due to confidentiality issues, the organisation will be anonymised as ‘Company X’, ‘Company Y’, etc. The logistic group was formed by 2015 via merge and acquisition activities by a private equity fund owned by CITIC, one of the largest conglomerates in China. It consists of two major business. One (Company A) is business-to-business lorry trucking services including less truck load (LTL) and full truck load (FTL) which was acquired by 2014, and the other part (Company B), which was purchased from privately-owned enterprise in 2015, focuses on business-to-customer express delivery services like large amount but small volume parcels mainly coming from ecommerce. In the year of 2016, the fund conducted a spin-off from Group Z to set up a new technology company (Company X) focus on providing logistic IT service solution and consultancy. All of the resource came from the original IT department of Company A and Company B and the remaining non-technology transportation business (Company Y) will behave as key account for the newly established technology company. During this special transition period, the role of marketing has been changing over the time with the M&A and further spin-off under the group.
Although there is a centralised marketing department in the group headquarters, the role of this marketing team under the organisation hierarchy is relatively weak. On one hand, the team is in charge of corporate level branding communications and provides necessary supportive guidance and suggestions to the strategic business planning proposed by marketing team from different business units. It is mainly because of the nature of market differs among these business. For example, the customers of express parcel delivery business are mainly coming from three sources: 1) citizens’ ordinary shipment requirement, 2) orders from ecommerce online shops, 3) 4PL delivery resource and information exchange platforms such as Cainiao (under Alibaba Group). The relationship between customer and delivery service provider is relatively loose and the marketing strategy is different from lorry trucking which relies on business customer especially those key accounts coming from FMCGs, manufacturing or pharmaceutical industry or its upstream industry like shipping rather than individuals. Moreover, the customers of the technology company (Company X) are quite different from the traditional business. The new company are still enduring major pressure on their profits, as their revenue relies on the key accounts under the group (Company Y). However, the equity fund owner and shareholder hope the technology company could increase its market share in logistic software business or the booming cloud computing software-as-a-service (SaaS) market.
On the other hand, the corporate marketing would also initiate innovative project or mid to long term direction. For instance, with the advance of technology, the importance of digitalisation can not be neglect by any organisation. The projects of digital marketing and digitalisation of marketing and other departments or functions can not be accomplished with single function or department. The corporate level marketing department may setup POC project and work with marketing team from specific business unit and with specialist from other departments (e.g. finance, operation or legal) to motivate innovations and improve competencies that could lead to mid or long term objective achievements. Therefore, it could be observed that corporate marketer played the role as marketing philosophers (Hooley, Lynch, Shepherd, 1990). They are reluctant to hand in every staff or marketing details while they will keep close eye on the direction and review whether specific business planning proposal matches corporate objectives and will also play leading role on innovation for future corporate competencies in the market.
The role and value of marketing viewed differently within different departments or functions of the organisation. As mentioned above, the logistics transportation service has two category of business: one is express delivery services with large amount but small parcels and the other is lorry trucking service. The average per customer transaction is relatively low in the form business and major customer are individuals, which the later business largely relies on key account and the relationship is maintained by only a few business partner in the company. In this situation, the attitude toward marketing is thoroughly different between the two businesses. The express delivery services have a mature marketing team and the team will follow top management strategies and cooperate with other departments like finance, operations or IT to setup annual marketing plan and will also hold regular performance review quarterly. For example, in the year of 2016, the vice president in charge of this part of business launched a promotion project to attract individual and small business to use its special service for household appliances delivery with free initial setup and installation service. The campaign adopted digitalized marketing approach to spread the information in e-brochure format online via WeChat and Weibo (two major online social media in China). Moreover, with the sophisticated CRM and tracking system built by IT, the propagation data such as aliveness, seed customer and new recruits are available on handy. The entire campaign was directed, planned and executed under the supervision of chief marketing technologist, a new type of executive that emerging with the transformation of marketing (Brinker, McLellan, 2014).
To the contrary, the business to business lorry trucking service marketers are reluctant to launch such activities and they do not even have a specialised marketing team. Since there is no obvious benefit and direct revenue generated from the customer, finance is always unwilling to allocate resources for this area, therefore the relationship between finance managers and marketers have raise much of the tension. It is probably because of the two departments have different objectives and vantage point of view (de Ruyter, Wetzels, 2000). As the relationship is retained by only a few people with power, top management are incline to hire those people with resources rather than launch promotion activities with little reward. However, from anther perspective, as the road network is the essential capability of a transportation provider, in order to offer better service for those key accounts and potential customers, the company will make alliance with other small companies especially those in northwest remote area of China. While for the transportation line in those prosperous area such as Beijing, Yangtze River Delta and the Pearl River Delta Economic Zone, the top management prefers attack marketing strategy to defensive or cooperate.
However, the role and value in the new established technology company (Company X) is viewed differently, because the marketing people are formed from two IT department of logistic company, whose culture and product characteristics are not similar to each other. The product of warehouse management system (WMS) acquired from the express delivery service is relatively mature and its target customers are those small business companies. While the product of transportation management system (TMS) originated from the lorry trucking service is mainly an in-house project. It is not that marketised as the WMS product which is more commercialised and featured with SaaS. Therefore, the marketers of these two different product have different role in their product team respectively. The sales and marketers from WMS product and its SaaS services cooperates effectively for customer value creation and the performance of both functions are much better than sales and marketers from TMS product. The sales of TMS product feel that their uncommercialised product is not competitive enough to satisfy customers in the market and most sales opportunities are related to their endeavor. In their mind, marketing activities are not important at all. The TMS product itself also evolves slowly and not as profitable as WMS. Unsurprisingly, the relationship between sales and marketers under TMS product business unit is not harmonious. The case could directly reflect the joint contribution of marketing and sales to the customer value creation and further performance impact (Guenzi, Troilo, 2007).
The cases in the corporate shows that even under the same organisation, the role and value of marketing viewed differently and the relationship between marketing and other departments and functions are diverse as well. These are affected by three key factors: 1) the business nature itself – the product or service that the business provides, 2) the market environment – the state of customers and competitors and their customers, 3) the culture of organisation – the view of marketing between different departments and functions and the attitude of top management. The role of marketing can also evolve with the changing factors. However, there is no unified standard to define what kind of role that marketing viewed by the organisation is superior to another. Fancy marketing strategy might not always lead to better performance either. Due to the case under discussion is limited to one specific organisation, and the analytics is also in a qualitative approach, further systematic and quantitative method on the role and value of marketing within organisation might be more preferable.
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