Marketing Management in Singapore, APAC and Elsewhere

The recent Procurement Leaders event in Singapore had the procurement and marketing relationship as its starting act, with speakers from AIG, Estée Lauder, MediaCom, P&G, Qatar Airways, tag:, and Williams Lea addressing this topic. Take a look at some of the other coverage from the event here.

If any activity is localized, it’s marketing – infamously complicated (to the point of subjectivity – at least in the eyes of outsiders) in the ways it slices market segments, how to reach and how to influence them. This, of course, results in highly varied approaches depending on products and markets – where creativity, flexibility, execution quality and similar qualitative factors are critical. Procurement, on the other hand, tries to standardize everything to control for non-price components, ideally on a global scale to create firm benchmarks, KPIs, etc. And anyone wonders why the two don’t naturally get along?

FREE Research: The 4 Faces of Procurement

My first write-up on (my understanding of) how marketing and procurement work together was published exactly 2 years ago – take a look at this article. The gist of the relationship can be described along the lines of the story of the frog and the scorpion about to cross the river. Marketing being deadly afraid (justifiably so) that procurement will pull out its sharpened “savings” sword and plunge it into their “suppliers” at any given moment – just because it’s in procurement’s nature. (Quotation marks used to show that marketing doesn’t think price reductions equal actual savings if performance is lost, and they absolutely hate referring to their strategic partners (ad agencies and creative content providers) as mere suppliers, ready to be replaced at a moment’s notice.) Using the wrong terms can put procurement permanently in the penalty box even before the game has begun. Be careful – learn to speak marketing. Also, dress the part, you’re hanging out with the “cool” team – having the right visual cues is as important as sounding the part. Since my first article, I think I’ve learned more and would adjust my advice to both sides to listen more, a lot more.

Back to the Singapore event, where the morning began with Quasim Hussain, an associate director from P&G’s Global Brand Building Purchases (and setting a high sartorial bar for all in procurement) had a set of snappy bullets as starter:

  • Commercial mastery – through savvy buyers
  • Organizational mastery – by capable leaders
  • Business mastery – with influential partners

As always, when publicly traded US firms present, it’s a carefully polished message – one that I like to reverse-engineer to understand why the content made it into the deck. I assume that either the content has been important to the presenter’s firm, or the presenter thinks the audience hasn’t understood the content yet. If this holds true for P&G’s content, then even they (with their mighty brand, matched by few) have been struggling (as all firms) to find procurement talent that isn’t pounding everything with the “savings” hammer, that isn’t merely reactively responding to requests and cannot cooperate well with outside entities. Sure, that reads harshly, but it’s worth consideration.

Quasim continued with these bullets defining success:

  • Empowerment - ownership, systems & processes, capability development
  • Relationships - people and company, drive continuity, internal and external relationships
  • Know your business - build capability, accept what you don't know, realize that you get what you pay for
  • Focus on value - look beyond CPM, play your position, pay for performance
  • Be the change agent – deliver ROI, drive the right measurements, transparency and simplifications
  • Effective risk management

Similarly to my cynical read of the earlier bullets, we can easily see what Quasim and P&G must have gone through (probably still are going through) to make the marketing and procurement relationship work. Still, I like the bullets, especially the last one, it’s all too easy in procurement to get so focused on compliance and risk avoidance that you eliminate options from the business that they might be willing to carry – P&G’s choice of “effective” risk management implies that they’ve engaged in considerable pseudo risk management of the check-the-box approach in the past.

At this point, Nihar Das, the global P&G relationship owner from MediaCom, takes over and shares some of his insights from working with P&G – and these require less tealeaf reading:

  • Marketing doesn't sell to the brands, they sell to P&G – there is a corporate-centric versus brand-centric approach
  • Google and Amazon are suppliers to P&G but are larger than P&G - unique experience for P&G (and one that it sounded like P&G has had a hard time with)
  • P&G has lost buying edge - the current effective ad buying pricing has them paying the same as the local mom and pop store
  • Scale buying in a bidding system self inflates the price – a high base price – they have zero negotiation leverage when dealing with a machine
  • There is a new balance of power - new marketplace where scale counts

As an interesting (to me anyway) example, he said that to reduce noise (in their performance analysis), they have changed the view of a Facebook presence to display media and not treat it as CRM.

Quasim also brought up the evergreen (globally it seems) topic of how the marketing function and creative agencies give procurement no respect. There is some consolation to other firms in that this is an issue even in sophisticated companies like P&G.

Final takeaway here – and maybe most interesting – was Quasim’s parting advice around what value you can bring as a function and not just as an individual. You can find yourself in a position where you rely on a single individual for smooth interaction between the two functions, and if that person moves one, you’re back to the old situation.

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