Aligning Corporate, Sales, and Marketing Strategies: A Function of Communication

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In the increasingly globalized world of free-market business, competition drives market forces. Competition and conflict are two different things, however, and a lack of communication within an organization can have deleterious effects on short-term gains and long-term organizational focus. In his essay on corporate strategies, Raynor (2007) warned that “divisional autonomy has gone from managerial principle to mantra.” Business in the twenty-first century necessitates the communication of corporate management within and between divisions of an organization, specifically the sales and marketing departments.

The sales and marketing wings of corporation share responsibilities yet can be rivals. Fostering cross-organizational competition between sales and marketing departments has obvious benefits, yet much research has revealed the problems that come with an overt emphasis on one over the other. In an analysis of 25 firms, Strahle, Spiro, and Acito (1996) found a serious disconnect in the shared understanding of product and customer-based strategies between sales and marketing managers. Sales managers were asked to identify sales objectives, which many did successfully. They were far less successful at identifying how those sales strategies matched up with organizational marketing strategies. The opposite was true for marketing managers. They found a lack of proper organizational communication. While it is easy to fault corporate management for a lack of communication, strategy implementation is an organization-wide responsibility. Strahle et al. (1996) concluded that performance incentives should reward product or customer-based thinking, not individual departmental autonomy. Sales and marketing managers must understand how the objectives of corporate strategy affect each department.

Proper communication of corporate strategies facilitates organizational understanding, and as a result, these different departments are tasked with joint responsibilities. Guenzi and Troilo (2007) found that increasing the perceived value of a customer-base leads to an increase in competitive advantage. Market performance and customer value creation are linked to long-term organizational strategy, an effective relationship between marketing and sales, and a customer-oriented sales staff (Guenzi et al., 2007). Strategic orientation of long-term strategy is a corporate management responsibility, but key strategic actors are not always high-level corporate managers (Skærbæk & Tryggestad, 2009). Short-term objectives frequently become the focus of individual business units, a product of situational pressures that every organization can understand. Simply increasing perceptions of inter-unit teamwork takes a big step in the right direction, but so does implementing corporate strategy throughout the culture of the organization (Guenzi et al., 2007). Such a focused culture of strategy can affect gains at the customer-organization interface.

Some divisions in the implementation of corporate strategies almost seem inherent to the process of modern business, compounding the task of cross-organizational teamwork. Individual perceptions of worth often generate a marketing-sales conflict. Improperly trained sales staff commonly see their purpose in the organization as a function of customer relations, in which unnecessary marketing costs dictate the sales-customer relationship (Kotler, Rackham, & Krishnaswamy, 2006). Kotler et al. found that such a dispute can quickly lead to increased costs of entry into new markets, longer sales cycles, and an increased cost of sales. This necessitates organizational change, sometimes on a large and costly scale. Kotler et al. offer a model for the implementation of organizational change during certain periods of miscommunication. When the relationship between sales, marketing, and corporate interests is undefined, it must be clarified by setting rules of engagement for departmental managers. When this relationship becomes clearly defined, it must be realigned through regular meetings between departments by identifying personal responsibilities within the umbrella of corporate strategy. Once an organization’s departments are aligned and subsequent departmental factions are tasked with increasingly autonomous goals, corporate management has the ability to implement incentives for rewarding synergistic accomplishment (Kotler et al., 2006). While these divisions seem inherent to the human condition and can be beneficial when managed properly, the organization benefits when short-term goals are seen through the lens of long-term goals.

A fundamental shift in the focus of long-term corporate business goals indicates a functional change in the way markets are approached. With a focus on customer-based relationships, as opposed to product-based strategies for the sale of products and services, a company can realign itself to better serve its markets. Day (2006) cites the success of companies such as IBM and Cummins India who have realigned marketing strategies into smaller market units to target specific customer bases. As organizations restructure to meet the increasingly important demands of small market units, certain considerations apply. Day (2006) provides the example of Motorola Incorporated CEO Edward J. Zander and his realignment of the company’s culture of rivalry between sales and marketing departments. The continued success of Motorola Inc. is a testament to the power of this growing trend.

Much research justifies the focus on customer-oriented strategies across sales and marketing departments. Homburg and Jensen (2007) found that when marketing and sales departments are considered as a joint-interest unit, corporate communication is maximized, nevertheless leaving room for cross-organizational competition in market-focus. Homburg et al. (2007) cite a conceptual model to aid in this process. In a seminal look at organizational restructuring around marketing concepts, Homburg, Workman, and Jensen (2000) detailed the managerial implications of coordinating communication with sales departments. Such accountability is key to decreasing divisional autonomy, but it also must take place with market-specific measures (Homburg et al., 2000).

Importantly, corporate management must implement an organization-wide, customer-based strategy linked to an understanding of customer-driven market forces. Ethnographic studies of markets reinforce this customer-driven trend. In a case study of Ford Motor Company’s redesigned Mustang, Arnould, Cayla, and Beers (2013) showed a strange reaction to a staple of the American automobile industry. Customers were increasingly dissatisfied with the performance of the new Mustang, a disconnect with earlier models known for their power. The irony was that Ford worked hard to increase the performance standards of the new Mustang, which outperformed earlier models. The problem wasn’t the product, though, it was Ford’s marketing approach (Arnould et al., 2013). Ethnographers contracted by Ford found that customer perception favored the earlier model as a function of feeling and hearing a powerful engine. The new model was more powerful, but it didn’t seem more powerful. Identifying this negative perception allowed Ford to focus marketing strategies on the original customer base, the older Baby Boomer generation that still wanted the nostalgia of the original Mustang. Here corporate management implemented a new strategy under the umbrella of a customer-driven approach.

A customer-oriented strategy can take on many forms when small market segments are considered. In a longitudinal case study of an Italian Food Company, Baby Food Incorporated, Lamberti and Lettieri (2009) found that corporate social responsibility is a powerful driver of customer satisfaction. Baby Food Inc. implemented a number of measures at the community, customer, shareholder, and employee levels to increase perceptions of corporate social responsibility. The implementation of these measures differed for each of these groups, and top corporate managers largely didn’t advertise internal strategies to the market (Lamberti et al., 2009). The result was a continued success within international food markets. The pressure came from external competition. Other companies bolstering their own corporate social responsibility forced a customer-oriented change in the corporate strategy. Improper communication across sales and marketing departments would have led to a market-driven failure.

The alignment of corporate, sales, and marketing strategies across an organization are necessary components to the successful operation of a corporation. In today’s globalized world of free-market business, this alignment is increasingly important as organizations coordinate company-wide strategic initiatives to remain competitive within their respective markets. A customer-oriented focus has become a popular trend as the market focus of organizations moves to smaller market units in place of broad product-based markets. Communication is a key component of corporate management, but a successful organization in today’s business world will require a shared responsibility for strategic implementation at all levels of corporate, sales, and marketing departments.

References

Arnould, E., Cayla, J., & Beers, R. (2013). Stories that deliver business insights. MIT Sloan Management Review, 55(2). Retrieved from http://sloanreview.mit.edu/article/stories-that-deliver-business-insights/

Day, G. S. (2006). Aligning the organization with the market. MIT Sloan Management Review, 48(1). Retrieved, from http://sloanreview.mit.edu/article/aligning-the-organization-with-the-market/

Guenzi, P., & Troilo, G. (2007). The joint contribution of marketing and sales to the creation of superior customer value. Journal of Business Research, 60(2), 98-107.

Homburg, C., Workman Jr., J. P., & Jensen, O. (2000). Fundamental changes in marketing organization: The movement toward a customer-focused organizational structure. Journal of the Academy of Marketing Science, 28(4), 459-478.

Homburg, C., & Jensen, O. (2007). The thought worlds of marketing and sales: Which differences make a difference? Journal of Marketing, 71(3), 124-142.

Kotler, P., Rackham, N., & Krishnaswamy, S. (2006). Ending the war between sales and marketing. Harvard Business Review, July-August 2006, 1-14.

Lamberti, L., & Lettieri, E. (2009). CSR practices and corporate strategy: Evidence from a longitudinal case study. Journal of Business Ethics, 87(2), 153-168.

Raynor, M. E. (2007). What is corporate strategy, really? Ivey Business Journal, November/December 2007. Retrieved from http://iveybusinessjournal.com/topics/strategy/what-is-corporate-strategy-really#.UvpvO2JdUud

Skærbæk, P., & Tryggestad, K. (2009). The role of accounting devices in performing corporate strategy. Accounting, Organizations and Society, 35, 108-124.

Strahle, W. M., Spiro, R. L., & Acito, F. (1996). Marketing and sales: Strategic alignment and functional implementation. The Journal of Personal Selling and Sales Management, 16(1), 1-20.