growth team membership: 2011 european marketing priorities survey results

1

The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved.

growth team m e m b e rs h i p™

2011 Marketing Priorities Survey Results

Europe

Marketing Survey Executive Summary . . . . . . . . . 2What is the Growth Team Membership™ . . . . . . 3Survey Purpose and Respondents . . . . . . . . . . . . . 4

Respondent Demographics . . . . . . . . . . . . . . . . . 43

External Factors Shaping Marketing Strategy . . . . 5

Key Marketing Challenges . . . . . . . . . . . . . . . . . . . 9

Marketing Effectiveness and Expenditures . . . . . 15

Social Media Expenditures and Ownership . . . . . 29

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2011 marketing prioritiesgrowth team m e m b e rs h i p™

Source: Growth Team Membership™ research.

Key Internal Challenge Internal Challenge Root CauseThe challenge is identifying adjacent market opportunities The root cause of the challenge is insufficient personnel

Budget Priorities Resources Budget as a % of RevenueB-to-B marketers are prioritising expenditures on both traditional and online media activities, while B-to-C marketers are focusing on traditional Marcom activities

2011 budgets will increase moderately while staffing levels will remain constant

The median percentage of company revenue allocated to marketing budgets is 2%

Social Media Use Social Media Objectives Social Media MetricsOnly a third of respondents use social media in their marketing activities

Lead generation is the primary purpose for engaging in social media

Brand awareness is the most important metric

Main External ChallengeThe challenge is capitalizing on opportunities in emerging markets

Marketing Survey Executive Summary

3




What is the Growth Team Membership™?

The Growth Team Membership™ (GTM) is a subscription program that supports executives within the functions reporting to the CEO.

GTM provides best practices, events, and services to enable executives to address internal challenges within their companies.

CorporateStrategy

Corporate Development

Marketing

CompetitiveIntelligence

MarketResearch

SalesLeadership

R&D/Innovation

Investors/Finance

CEOMarketing

Email us [email protected] Visit us online www.gtm.frost.com

CEO’s Growth Team™ GTM: Creating Client Value

GTM’s case-based best practices help executives:

Speed the design and implementation of initiatives by not reinventing the wheel

Save money and reduce risk by avoiding mistakes made by other companies

Accelerate problem solving with a cross-industry perspective

Improve their function/company’s performance and productivity

4




Survey Purpose and Respondents

Survey PopulationMethodologyResearch Objective

To understand the most pressing external and internal challenges shaping marketing executives’ 2011 planning .

Web-based survey platform Target respondents were Manager level and above marketing executives from companies throughout Europe .

266survey

respondents

5




External Factors Shaping Marketing Strategy

6




Marketing strategy is influenced heavily by opportunities in emerging markets and the need to drive innovation

Top Three External Factors

Survey Question: Please specify the Top Three external factors shaping your marketing strategy in 2011 .

External Factor 1 Emerging global markets (24%)

External Factor 2 Demand for “green/sustainable” products and services (12%)

External Factor 3 Need for product and service innovation (11%)

7




B-to-B B-to-C Hybrid

External Factor 1 Emerging global markets (26%)

Need for product and services innovation (50%)

Need for product and services innovation (22%)

External Factor 2Demand for “green/sustainable” products and services (13%)

Decreasing customer willingness to pay [downward price pressure] (25%)

Emerging global markets (19%)

External Factor 3 Need for product and service innovation (12%)


Product commoditisation pressures (17%)

There is a considerable overlap in challenges regardless of business modelTop Three External Factors (By Business Model)

8




External Factors Impact on Marketing

Survey Question: Please indicate if the following factors present a challenge or an opportunity for your 2011 marketing strategy .

Opportunities for Marketing


Demand for “green/sustainable” products and services (74%)

Need for product and service innovation (71%)

9




Key Marketing ChallengesBy Business ModelBy Company Revenue

10




Key Marketing Challenges Snapshot

Identifying new, adjacent market opportunities

Challenge 1


Challenge 1


Challenge 1

Increasing the pace of new product and service introductions

Challenge 3

Developing segment-specific marketing programmes

Challenge 3

Understanding changing customer preferences and needs

Challenge 3

Improving Sales and Marketing integration

Challenge 2

Improving Sales and Marketing integration

Challenge 2

Formulating a coherent social media strategy that clearly supports

corporate objectives

Challenge 2

All CompaniesTop three challenges:

B-to-B CompaniesTop three challenges:

B-to-C CompaniesTop three challenges:

11




Challenge 1 Identifying new, adjacent market opportunities (31%)

Challenge 2 Improving Sales and Marketing integration (14%)

Challenge 3 Increasing the pace of new product and service introductions (12%)

Challenge 4 Improving channel partner effectiveness (11%)

Challenge 5 Developing segment-specific marketing programmes (12%)

Marketing executives are under pressure to stimulate growth and to strengthen internal and external partnerships

Top Five Key Marketing Challenges

Survey Question: Please indicate the top five functional challenges shaping your marketing strategy in 2011 .

12




Marketing’s top challenges are largely the same across business models, but vary in their prioritisation

Top Five Marketing Challenges (By Business Model)

B-to-B B-to-C Hybrid

Challenge 1 Identifying new, adjacent market opportunities (33%)

Identifying new, adjacent market opportunities (33%)


Challenge 2 Improving Sales and Marketing integration (16%)

Formulating a coherent social media strategy that clearly supports corporate objectives (33%)

Developing segment-specific marketing programmes (19%)

Challenge 3Developing segment-specific marketing programmes (11%)

Understanding changing customer preferences and needs (33%)

Improving Sales and Marketing integration (42%)

Challenge 4Increasing the pace of new product and service introductions (12%)

Embedding voice of the customer data into marketing strategies (33%)

Increasing the pace of new product and service introductions (18%)

Challenge 5Understanding changing customer preferences and needs (10%)


Identifying, qualifying, and ensuring action on high-quality leads (19%)

13




Marketing’s top challenges are largely the same across revenue bands, but vary in their prioritisation

Top Five Marketing Challenges (By Company Revenue)

Below $100 Million

€100–€500 Million

€500 Million– €1 Billion

€1–€11 Billion

More than €11 Billion

Challenge 1Identifying new, adjacent market opportunities (27%)





Challenge 2






Challenge 3Improving Sales and Marketing integration (22%)


Embedding voice of the customer data into marketing strategies (22%)

Providing high-impact tools to the sales force (13%)


Challenge 4Improving channel partner effectiveness (18%)




Measuring marketing ROI (20%)

Challenge 5

Preparing the organisation for a social media strategy (9%)


Improving channel partner effectiveness (22%)



14




Challenge 1Identifying new, adjacent market opportunities (31%)

Staff: Limited resources (57%)

Challenge 2Improving Sales and Marketing integration (14%)


Challenge 3Increasing the pace of new product and service introductions (12%)


Challenge 4Improving channel partner effectiveness (11%)


Challenge 5Developing segment-specific marketing programmes (12%)


The root cause of Marketing’s challenges is limited staff

Survey Question: Please indicate if the root cause of your top five functional challenges are—staff, process, technology/systems, or strategic alignment .

Root Cause of Top Five Marketing ChallengesTop Five Marketing Challenges

15




Marketing Effectiveness and ExpendituresBy Business ModelBy Company Revenue

16




Marketing Expenditures and Effectiveness Snapshot

Rank their marketing effectiveness as “Below Average”

15% of their company’s revenue is allocated to the marketing budget

Largest budget item is staff

Expect their staffing levels to increase substantially in 2011

Expect their marketing budgets to stay the same or increase moderately in 2011

Rank their marketing effectiveness as “Above Average”



Expect their staffing levels to stay the same in 2011

Expect their marketing budgets to increase moderately in 2011

Rank their marketing effectiveness as “Average”



Expect their staffing levels to stay the same in 2011

Expect their marketing budgets to increase moderately in 2011

All Companies B-to-B Companies B-to-C Companies

17




The majority of respondents rate their function as “Average” or “Below Average”Marketing’s View of Its Effectiveness (By Business Model)

Survey Question: Please assess the overall effectiveness of your marketing function compared to those in other firms within your industry .

All Companies B-to-B Companies

B-to-C CompaniesHybrid Companies

3%

38%

45%

14%

Above Average

ExceptionalBelow Average

Average

33%

67%Below Average

Average5%

18%

73%

5%Above Average

Exceptional Below Average

Average

3%

43%

41%

14%

Above Average

ExceptionalBelow Average

Average

18




10%

0%

20%

30%

40%

50%

60%

70%

53%

33%

61%

21%

33%

6%

12%

0%

11%

5%0% 0% 1%

33%

11% 11%

8%

0%

54%

12%

4%

8%

19%

3%

On average, Hybrid companies have larger marketing budgets2010 Marketing Budgets (By Business Model)

Survey Question: Please indicate your 2010 total marketing budget (all expenditures on marketing activities and general & administrative—including staff) in the following EURO€ ranges .

The red percentages are for all respondents .

Below €1 Million €1 Million to €2.99 Million

€3 Million to €4.99 Million



€20 Million or more

All Companies B-to-B Companies B-to-C Companies Hybrid Companies

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B-to-C companies allocate more of their revenue to marketing than companies with other business models

Percentage of Annual Company Revenue Allocated to Marketing (By Business Model)

Survey Question: Please provide your 2010 total marketing budget (from the previous question) as a percentage of total company revenue: (The graph above indicates the median percentages of each business model) .

0%

5%

10%

15%

2%

15%

3%

All Companies2%

B-to-B Companies

B-to-C Companies

Hybrid Companies

20




Staff is the largest budgetary expenditure across business modelsMarketing Budget Allocation (By Business Model)

Survey Question: Please provide the percentage allocation of your total 2010 marketing budget to the following activities .

0%

10%

20%

30%

40%

50%

60%

50%

55%

50%

15%

27%

15%

10%

5%3% 2% 1%

5%3% 2%

0% 0%1%

0%2%

4%2%

5%

1%

10%

1%0%

4%

15%

7%

2%3% 0%

2% 1%

50%

5%

The red percentages are the median values for all companies’ marketing budget by category .

Personnel/Staffing

Marketing Communications

(Traditional Media)

Marketing Communications (Online/Digital

Media)

Channel Partner

Programmes

Customer Relationship Management

(CRM) Software and Maintenance

Marketing Resource

Management (MRM)

Software and Maintenance

Knowledge Management

Training Non-CRM And Non-MRM Information

Technology Investments (Lead

Management Software, Sales Tools, etc)

All Companies B-to-B Companies B-to-C Companies Hybrid Companies

21




Regardless of business model, Marketing will avoid further staff cuts, either maintaining existing numbers or recruiting at a moderate level

2011 vs . 2010 Staffing Plans (By Business Model)

Survey Question: In comparison to 2010, your 2011 marketing staff will:



9%6%6%

43%

35%

Stay the Same

Decrease Moderately

Decrease Substantially Increase Substantially

67%

33%Stay the Same

Increase Substantially

Increase Moderately

27%

7%

20%

47%

Stay the Same

Decrease Moderately

Decrease Substantially

Increase Moderately

6%

35%

6%

47%

5%

Stay the Same

Decrease Moderately Decrease Substantially Increase Substantially

Increase Moderately

22




Budget cutting appears to be over—84% of companies expect to maintain or increase marketing budgets

2011 vs . 2010 Budgets (By Business Model)

Survey Question: In comparison to 2010, your 2011 marketing budget will:



13%5%

3%

37%42%

Stay the Same

Decrease Moderately Decrease Substantially Increase Substantially

Increase Moderately

33%33%

33%

Stay the Same Increase Substantially

Increase Moderately

19%

31%

6%

44%

Stay the Same

Decrease Moderately

Increase Substantially

Increase Moderately

13%

42%

3%

38%

4%

Stay the Same

Decrease Moderately

Decrease Substantially Increase Substantially

Increase Moderately

23




Respondents in larger companies are less satisfied with their function’s effectivenessMarketing’s View on Its Effectiveness (By Company Revenue)

Survey Question: Please assess the overall effectiveness of your marketing function compared to those in other firms within your industry .

Below €100 Million

All Companies €100 Million to €499.99 Million


€1 Billion to €11 Billion


0%

50%

100%

3%

38%

45%

14%

5%

30%

40%

25%

4%

46%

39%

12%

50%

44%

6%

3%

43%

43%

11%

31%

62%

7%

Below Average Average Above Average Best-in-Class

24




As company revenue increases so does marketing’s budgetMarketing Budget (By Company Revenue)

Survey Question: Please indicate your 2010 total marketing budget (all expenditures on marketing activities and general & administrative-including staff) in the following EURO€ ranges .

Below €1 Million €1 Million to €2 .99 Million

€3 Million to €4 .99 Million



€20 Million or more






0%

50%

100%

54%

19%

12%

4%3%

8%

91%

7%2%

39%

35%

13%

9%

4%

18%

41%

24%

12%

6%

25%

11%

21%

4%

14%

25%

63%

25%

12%

25




Smaller companies tend to allot a larger portion of their revenue to marketing budgets2010 Marketing Budget (By Company Revenue)

Survey Question: Please provide your 2010 total marketing budget (from the previous question) as a percentage of total company revenue: (The graph above indicates the median percentages of each revenue category) .






0%

1%

2%

3%

4%

5%

4%

1% 1% 1%

3%

All Companies2%

26




Staffing is Marketing’s largest budget item across revenue rangesMarketing Budget Allocation (By Company Revenue)

Survey Question: Please provide the percentage allocation of your total 2010 marketing budget to the following activities .






Personnel/StaffingMarketing Communications (Traditional Media)

Marketing Communications (Online/Digital Media)

Channel Partner ProgrammesCustomer Relationship Management (CRM) Software and Maintenance

Marketing Resource Management (MRM) Software and Maintenance

Knowledge Management Training

Non-CRM And Non-MRM Information Technology Investments (Lead Management Software, Sales Tools, etc)

0%

50%

100%

50%

15%

7%2%

3%2%

5%1%

33%

14%

10%

2%4%

2%5%3%

50%

15%

10%

5%

5%1%

5%3%

33%

20%

8%

5%4%

1%5%3%

2%

60%

15%

5%2%

3%5%

60%

10%

5%1%

5%

27




Regardless of revenue, respondents see their 2011 staffing levels as staying the same or increasing moderately

2011 vs . 2010 Staffing Levels (By Company Revenue)

Survey Question: in comparison to 2010, your 2011 marketing staff will:






0%

10%

20%

30%

40%

50%

60%

70%

6%

35%

43%

9%6% 5%

27%

49%

8%5%

50%

41%

5%

0% 0%

10%

70%

20%

0%

11%

46%

39%

0%

4%

9%

46%

18%18%

9%

Increase Substantially Increase Moderately Stay the Same Decrease Moderately Decrease Substantially

28




Marketers from larger companies are less optimistic about budget changes for 20112011 vs . 2010 Budget (By Company Revenue)

Survey Question: In comparison to 2010, your 2011 marketing budget will:




€ 1 Billion to €11 Billion


0%

10%

20%

30%

40%

50%

60%

70%

5%

42%

37%

13%

3%

8%

42%

28%

17%

5%

9%

39%

43%

9%

0%

9%

18%

64%

9%

0% 0%

61%

32%

7%

0% 0%

28%

46%

18%

9%

Increase Substantially Increase Moderately Stay the Same Decrease Moderately Decrease Substantially

29




Social Media Expenditures and Ownership

30




Social Media Snapshot

The majority do not use social media in their marketing activities

Corporate Marketing is the owner of the company’s social media activities

Lead generation is the most important social media metric

Lead generation is the most effectively applied social media metric



Brand awareness is the most important social media metric

Search marketing is the most effectively applied social media metric



Lead generation is the most important social media metric

Brand awareness is the most effectively applied social media metric

All Companies B-to-B Companies Hybrid Companies

Note: Due to small response rates, there is no B-to-C data for this section.

31




The majority of marketers do not use social media as part of their marketing activitiesSocial Media Usage (By Business Model)

Survey Question: Does your company use social media in your marketing activities?


Hybrid Companies

69%

31%

No

61%

39%

No

Yes

Yes

70%

30%

No

Yes

32




Corporate Marketing usually owns social mediaOwnership of Social Media (By Business Model)

Survey Question: Which department is responsible for managing social media within your company?

E-marketing/Digital

Marketing

Corporate Marketing

Independent Social Media

Team

Corporate Communications

Customer Service

Cross-Functional Team

Other

F

F

F

F

F

F

F0%

10%

20%

30%

40%

50%

60%

70%66%

38%

16%13%

0% 0%

16%

25%

0% 0%3%

25%

0% 0%

15%

0% 0% 0%

61%

17%

7%

All Companies B-to-B Companies Hybrid Companies

33




Objective 1 Generate leads (37%)

Objective 2 Drive word of mouth about existing products and services (27%)

Objective 3 Drive word of mouth about new products and services (18%)

Objective 4 Increase online share of brand messaging (20%)

Objective 5 Engage in category-, brand- and product-related conversations (20%)

Survey Question: Please rank in order of importance the following objectives of your social media activities .

The majority of marketers see social media as a tool to drive revenue opportunitiesSocial Media Objectives

34




Survey Question: Please indicate the importance of the following social media metrics within your company:

Respondents stress the importance of traffic and lead generation metricsImportance of Social Media Metrics

0%

50%

100%

26%

54%

16%

4%

26%

28%

36%

10%

38%

42%

12%

7%

33%

42%

15%

10%

37%

40%

16%

7%

24%

38%

30%

8%

38%

38%

21%

5%

Interaction (comments,

retweets, sharing, etc.)

Traffic (page views, time on site, etc.)

Leads (requests for trials or brochures)

Search Marketing (search engine

ranking)

Brand Awareness (number of

mentions online or share of voice)

Sentiment (positive or

negative mentions online)

Satisfaction and Loyalty (repurchase, renewals)

Not Important Slightly Important Important Very Important

35





B-to-B marketers identify brand awareness as the key metricImportance of Social Media Metrics (B-to-B Companies)








ranking)





0%

50%

100%

24%

55%

15%

6%

27%

27%

37%

9%

38%

38%

15%

9%

35%

38%

18%

9%

44%

38%

12%

6%

25%

38%

31%

6%

33%

40%

21%

6%

36





Marketers from Hybrid companies stress the importance of lead generation metricsImportance of Social Media Metrics (Hybrid Companies)








ranking)





0%

50%

100%

33%

50%

17%

17%

33%

33%

17%

33%

67%

20%

60%

20%

50%

33%

17%

20%

40%

20%

20%

60%

20%

20%

37




Survey Question: Please rate the effectiveness of your company’s application of the following social media metrics:

Marketers are confident they use brand awareness and traffic metrics effectivelyEffectiveness of Social Media Metrics






ranking)






0%

50%

100%

3%

18%

54%

20%

5%

3%

10%

34%

40%

13%

11%

54%

27%

18%

23%

43%

23%

11%

3%

24%

41%

29%

3%

3%

57%

27%

13%

5%

11%

43%

30%

11%

Do Not Use Below Average Average Above Average Best-in-Class

38





B-to-B marketers indicate interaction metrics are ineffectiveEffectiveness of Social Media Metrics (B-to-B Companies)







ranking)





0%

50%

100%

3%

21%

46%

24%

6%

3%6%

33%

42%

15%

3%

59%

28%

10%

26%

36%

25%

13%

3%

22%

41%

31%

3%

3%

56%

25%

16%

3%

13%

44%

28%

12%


39





Hybrid company marketers deem lead generation metrics to be effectiveEffectiveness of Social Media Metrics (Hybrid Companies)







ranking)





0%

50%

100%

100%

40%

40%

20%

60%

20%

20%

100%

40%

40%

20%

60%

40%

20%

40%

40%


40




Survey Question: Does your company use social media in your marketing activities?

Larger companies are more likely to use social media in their marketing activitiesSocial Media Usage (By Revenue Category)

Yes No






0%

50%

100%

31%

69%

25%

75%

30%

70%

25%

75%

30%

70%

50%

50%

41









Survey Question: Which department is responsible for managing social media within your company?

Corporate Marketing generally owns social media activities regardless of company revenueOwnership of Social Media (By Business Model)

0%

50%

100%

61%

15%

17%

7%

58%

17%

8%

17%

63%

25%

12%

50%

17%

33%

70%

10%

10%

10%

50%

17%

33%

Cross-Functional Team

Corporate Communications

E-marketing/Digital Marketing

Corporate Marketing

42




The Growth Team Membership™ (GTM) is an annual subscription program that supports executives in Marketing, Sales Leadership, Corporate Strategy, Corporate Development, R&D/Innovation, Market Research, and Competitive Intelligence . GTM offers best practices research, events, and services to address the internal challenges executives face . Contact us at GTMResearch@frost .com .

what’s keeping marketing executives up at night in 2011?

Marketing Overarching Challenges Sample Solutions from the Growth Team Membership

Segmentation

Marketers are focusing on creating segment-specific campaigns and identifying new, adjacent markets .

Learn how Tandberg used customer segmentation as the foundation for building a customer-centric business model to enter adjacent markets .

Return on InvestmentStaff limitations and moderately increasing marketing budgets require marketing to identify and prioritise the highest potential campaigns .

Learn how Kimberly-Clark instituted an ROI-based process to evaluate, select, and monitor marketing programmes .

Social Media MetricsMarketers are beginning to experiment with social media and need to understand where, when, and how to engage .

Learn how Kodak used a systematic approach to create and activate a social media strategy .

The Top Three Overarching Challenges Affecting European Marketing Executives

43




Respondent Demographics

44




Respondent Demographics

Survey Question: Please indicate the type of enterprise best represents your company .

N = 243

N = 245N = 248

Enterprise Type Business Model

Company Revenue

28%

9%

64%

15%4%

81%

Public

Hybrid Company

Private

B-to-B Company

Venture Capital

0%

30%

60%

31%

20%

11%

23%

11%






B-to-C Company

The overwhelming majority of the respondents work in B-to-B companies .

More than half of the respondents work in a private company .

45




Respondent Demographics: Top Five Participating Industries

Survey Question: Please indicate which industry categories best describe your company (check all that apply .)

N = 260

Energy and Power Systems

Information and Communication Technologies

Automotive and Transportation

Chemicals, Materials, and Food

Healthcare and Life Sciences

0% 20% 40%

22%

20%

19%

19%

18%

growth team membership: 2011 european marketing priorities survey results

Business

marketing marketing

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section marketers

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section productivity

growth team membership

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