INSIGHT: Companies seek strategic marketing gains

11 April 2007 17:22  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS news)--Chemical and plastics producers are not alone in taking very different views of strategic marketing, the rigorous process that should provide an organisation with a roadmap for growth.

Strategic marketing stands at the start of the business planning process, helping to define what products are made, which services are provided and the target audience. Its demands are significant and multi-functional.

New research suggests, however, that while SM as a concept is understood by most chemicals and plastics producers and suppliers it is associated more with future, longer-term innovation and not with immediate, customer-driven opportunities.

That is why chemical companies are losing out.

“Strategic marketing is acknowledged as important and understood a bit but very few companies are doing it,” says Phil Allen, the co-director of a collaborative study from the European Chemical marketing and Strategy Association (ECMSA), his own company GEMS and Market Planning International (MPI).

Allen says that the few companies that have got strategic marketing right are seeing a payback in their financial results and in terms of growth. The majority, however, appear not to be there yet, although their SM processes are evolving.

One purpose of the study, the first phase of which was released late last month, is to help chemicals and plastics producers and suppliers benchmark their own practice against a defined framework. It will then be possible to determine where improvements can be made.

“SM is an evolving art form,” MPI’s Hugh Ross says, and only a handful of companies are approaching best practice.

Current SM practice in chemicals tends to focus on analysis and planning, portfolio and innovation management and managing implementation, the study suggests.

There is a great deal of room for improvement as firms pay more attention to real customer insight and market segmentation, to branding and ultimately to value chain re-engineering.

SM is evolving in chemicals and plastics but that evolution is taking time.

The traditional or comfortable approach has been to focus on optimising current businesses with little or no emphasis on (marketing) innovation.

Companies are challenged to be creative and focused on longer-term growth.

In rapidly maturing markets, strategic marketing can be the main driver for innovation in both technology and commercial or business models. There need be little or no SM involvement in day-to-day operations but SM can inform most of what the company does in the market.

Interviews conducted by GEMS and MPI have indicated that there seems to be a pattern of evolution for SM in chemicals and plastics companies.

Marketers first try to explain the benefits of SM to the businesses units but are held back by legacy issues and traditional thinking and structures.

A central team eventually develops the SM argument and wins over the BUs, which are then keen to develop SM capabilities of their own.

This push back and pull out is probably not unique to chemicals. Companies in other sectors have similar problems in deciding just how strategic marketing can help define where real business opportunities lie.

But SM is all about capturing growth and of developing new products and services that ultimately will help the company rise above the pack.

Strategic marketing by its very nature is forward-looking and not confined to the short term. Companies that are in chemicals for the long haul should aim for SM best practice.

By: Nigel Davis
+44 20 8652 3214

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