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Published: November 30, 2004

 
 

The Fall and Rise of the CMO

On the other hand, the president of marketing of the Food and Beverages division experienced challenges. First, the division’s senior team considered the global integration of Bestfoods, a recent acquisition, to be its top priority. Second, because culinary tastes vary from one locality to another, most of Unilever’s food and beverage brands were regional or local rather than global. The division’s effort never got traction.

Companies need CMOs only if the brands for which they are responsible are highly visible and important to a critical mass of customers who expect products that carry the brands to have common attributes.

When a company has many subbrands, targeting many small and dissimilar markets, there is no reason to have a CMO. For example, Hasbro appointed a CMO who was responsible for the Hasbro brand; the duties also included ensuring consistently high standards of marketing among the individual Hasbro products. Hasbro’s product line included such strong, enduring brands as Mr. Potato Head, G.I. Joe, and My Little Pony. The target markets for these products were vastly different, making the case for consistency less potent. In addition, Hasbro’s corporate brand was neither visible nor important to its 5- to 12-year-old consumers. Hasbro’s CMO stayed less than a year, and the position was not filled after his departure.

Multiple Descriptions
Not all CMOs are created equal. Indeed, there is enormous variability in their responsibilities and job descriptions. The variance exists because different models are appropriate for different types of companies at different stages of marketing orientation. Our own research — supported by a study released in October by the Association of National Advertisers and Booz Allen Hamilton — indicates three possible models. (See “Making the Perfect Marketer,” s+b, Winter 2004.) In the right context, any of the three can be successful.

1. VP of Marketing Services. A vice president of marketing services operates a cost center made up of marketing professionals. Business unit managers have profit-and-loss accountability and use the marketing expertise in this “center of excellence” as they deem necessary. For example, the VP of marketing services may oversee a central market research function; however, line managers can opt to procure these services externally.

The VP of marketing services typically develops and monitors compliance with the brand, logo, and trademark guidelines. In addition, the VP coordinates brochure designs and collateral worldwide.

The VP of marketing services may coordinate relationships with ad agencies, market research firms, direct-mail houses, and other marketing services suppliers. However, the responsibility to negotiate these deals often rests with the individual business units, a central procurement group, or the finance function.

This model operates successfully at the global pharmaceutical company Merck & Co. The firm has a strong R&D-driven culture in which product managers have complete profit-and-loss accountability. Product managers use Merck’s marketing center of excellence
as needed.

What are the required qualities for a VP of marketing services? He or she must:

  • Be an efficient administrator, but not necessarily a strategic thinker
  • Have a “supporting role” versus a “starring role” mentality
  • Demonstrate technical proficiency in marketing support functions (e.g., market research)
  • Excel at developing supportive relationships, building teams, and influencing others

2. Classic CMO. In an organization not led by marketing, the classic CMO role is to ensure that longer-term marketing and brand-building considerations are part of the top management team’s deliberations. The CMO must monitor the evolving consumer landscape, represent the voice of the customer, and act as the catalyst to develop and then interpret the consumer insights that can produce new product or service development. These contributions can be especially valuable in a corporation that is driven by sales as opposed to marketing. The classic CMO may also have responsibility for a company-wide (as opposed to divisional) CRM system. The CMO’s role may be broad, but his or her power to influence the business is often limited, because the role rarely includes oversight of sales, strategy, or product management.

 
 
 
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Resources

  1. Andrew Ehrenberg, “Marketing: Are You Really a Realist?” s+b, Second Quarter 2002; Click here.
  2. Leslie H. Moeller, Sharat K. Mathur, and Randall Rothenberg, “The Better Half: The Artful Science of ROI Marketing,” s+b, Spring 2003; Click here.
  3. Randall Rothenberg, “John Quelch: The Thought Leader Interview,” s+b, Third Quarter 2000; Click here.
  4. Steve Silver, “Bring on the Super-CMO,” s+b, Summer 2003; Click here.
  5. “When Art Meets Science: The Challenge of ROI Marketing,” s+b/Knowledge@Wharton white paper, Dec. 17, 2003; Click here.