HYBRID GLOCAL MARKETING STRUCTURES: 57% OF CMOS support them

Reshaping Global Engagement Operations. The current study of the CMO Council provides arguments for new thinking and action in the digital age. "More customer centricity & more brand for more business success" is the motto. The future belongs therefore in many cases hybrid organizational structures, extreme centralized or decentralized structures are outdated.

GLOBAL COMPETITION AND NEW CUSTOMER EXPECTATIONS REQUIRE NEW ORGANIZATIONAL FORMS FOR GLOBAL MARKETING

Marketing is expected to be more agile, to create a better customer experience while ensuring growth, efficiency and measurable effectiveness. The unmistakable demands for change and digital transformation culminate in the vociferous chant "disrupt or be disrupted".

The CMO Council, the network of Chief Marketing Officers with nearly 16,000 members from 110 countries, in cooperation with Worldwide Partners, one of the largest networks of privatly owned communications agencies, conducted a study this spring to determine what changes are needed in marketing for global brands at a time when the demand for customer centricity and personalization is at the top of the agenda. 350 marketing executives from around the world who are responsible for global brands participated in this study.


"Reshaping Global Engagement Operations" is the title of the study. It provides reasons for the appeal for new thinking and action. According to the study, the fear of missed opportunities (FOMO) or of falling behind in global competition, is the main driver for change. The most important task of marketing is to ensure growth. "To conquer markets successfully and quickly worldwide" is named first by 40% of all CMOs.

However, CMOs are dissatisfied with what they have achieved so far, despite having already invested in new talents and technologies as part of the digital transformation. Goals and opportunities are missed. The vast majority of leading marketing executives (77%) believe that they are not realizing the full revenue potential with today's networked customers because they cannot fully meet their expectations.

Acting responsibly, ensuring security, all-round service and culturally relevant content are at the top of customers' expectation lists. Relevance is not meant superficially; customers want to be addressed in their own language, their own world, in the context of their own culture and values.

The localization trend has not yet cought fire

The frustration of CMOs with their globalization actions is understandable, since most global omnichannel campaigns are only realized with considerable costs and delays.

  • Nearly two-thirds of global brand managers surveyed by the CMO Council gave their ability to adapt global messages and content to different markets and channels below average ratings.
  • More than half of the marketers (57%) attribute their unrealized customer opportunities to the lack of local insight.
  • 42% of marketers admit to significant dissatisfaction with their current localization efforts

On closer examination, it turns out that the problems are mostly not to be found in the strategy, but are rather caused by the structure of the marketing organization.

EXTREME ORGANIZATIONAL MODELS DO NOT PRODUCE OPTIMAL RESULTS

The study therefore examined three operational structure models in detail: fully centralized (27 percent), fully decentralized (30 percent) and hybrid structures (30 percent).

Marketing managers in highly centralized companies regret that they do not really understand local market needs and are not close enough to their customers.
However, strong customer orientation is becoming more and more important and is absolutely necessary to be successful with modern, networked customers.

And those in highly decentralized organizations cannot guarantee that a truly uniform brand understanding will be successfully implemented and that the higher expenses will actually pay off for the brand.

Trend TOWARDS Hybrid

The study revealed a trend away from the extremes of completely centralized or completely decentralized models. The answer seems to be a hybrid structure - a centrally developed strategy that uses local market intelligence in its development and implementation. The CMO Council found that in hybrid structures, marketeers can better understand the expectations of local customers, while at the same time communicating global strategies and objectives more effectively. As a result, they also achieve better efficiency values. Disadvantages still exist, but they are primarily due to a slow decision-making process rather than the quality of information, strategy and implementation.
Marketing managers in global companies who believe in success thrusts through customer orientation are therefore increasingly re-evaluating their internal structures; pure top-down approaches are losing their appeal.

Better synchronization of agency and brand organization needed

The agencies must also improve their game. According to the study, marketing managers are looking for new strength and inspiration from partners. While data-related tasks are increasingly being shifted into companies, companies are prepared - at least outside of Germany - to rely even more on external support for communication, from creative and media to live experiences and expert commitment. The greatest value of agencies seems to be inspiration and creative thinking worldwide. 84% of respondents say that they will continue to outsource exactly such work to agencies.

However, when it comes to designing complex processes and new structures, only 17% of CMOs believe that they are in step with their agency partners.
Marketeers are looking for agencies that can scale quickly, are aligned with the client's business objectives and can provide sufficient resources with the ability to identify and meet client expectations around the world. 45% of CMO's expect agencies to overcome both the silos in the agency industry and the silos in their companies in order to strengthen company-wide collaboration and realize process efficiencies.

The self-reflections of CMOs also reveal a new sense of responsibility for communicating business and communication requirements, and especially the overarching growth goals, to their own organization and agency partners in equal measure, much more clearly and distinctly.

REDESIGN OF THE GLOBAL MARKETING ORGANIZATION: MORE CUSTOMER CENTRICITY, MORE BRAND FOR MORE BUSINESS SUCCESS

All in all, this study does not necessarily propagate total radical change, but it is a call for a dynamic further development of organisational structures, in which both the brand and the agency are more strongly aligned to growth and business objectives and the transformation from a product-centred to a customer-centred company is also carried out in global marketing. 

How and under which conditions such a transformation can be successful can be read in our article: "Hybrid glocal marketing structure: How to manage the Transformation: Experiences and 8 Tips", in which we report on our experience of serving many global customers and the lessons we have learned from this:

The whole study: CMO Council (2019) in Zusammenarbeit mit Worldwide Partners. inc: "RESHAPING GLOBAL ENGAGEMENT OPERATIONS". https://cmocouncil.org/thought-leadership/reports/reshaping-global-engag...

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Psychology, culture, market conditions, new digital channels, speed and impact requirements call for a move away from purely centralized brand management, which is usually cost-effective, but loses a great deal of impact due to a lack of customer centricity.
https://waechter-waechter.de/en/insights/global-local-digital


Ingrid Wächter-Lauppe's picture

Ingrid Wächter-Lauppe

Geschäftsführende Gesellschafterin der Wächter & Wächter Worldwide Partners

i.waechterlauppe@waechter-waechter.de