A new study has revealed companies should not cut their marketing costs during the recession, but should improve efficiency instead. This research claims there is 20 to 30 per cent of avoidable waste in marketing which can be eliminated by adopting certain changes in idea generation, production, distribution and analysis of demand patterns.

As part of the research project, Bob Shaw, Honorary Professor of Marketing Metrics at London-based Cass Business School, and Philip Kotler, Professor of International Marketing, Kellogg School of Management, created a new concept called Ideas-To-Demand (I2D), a process aiming to reduce complexity and improve controls in organisations. They worked with more than 100 organisations and researched how those businesses struggle to stimulate demand while trying to keep costs down.

Looking at reasons for success and failure, the researchers formed a performance improvement framework, suitable for any company in any market. There are different points for every step of the I2D process, all focusing on efficiency.

Professor Shaw (pictured below) said: “Marketing is the function which has the most troublesome relationship with the board. Companies who spend a billion pounds in marketing didn’t realise that the whole thing could be done more efficiently.” He also disagrees with the ‘outdated argument’ that marketing results are long-term and cannot be measured. He said non-financial measurements, such as brand awareness, do not have clear benefits: “In a recession, brand awareness is not a substitute for sales.”

The research, entitled Re-thinking the Chain, was conducted between 1997 and 2008, and revealed reasons for organisations’ failed attempts to transform I2D. The most common three mistakes are:

• Junior people in charge of reforms
• People issues overplayed or underplayed
• Sloppy implementation

On the other hand, for a minority of companies which successfully implemented overall efficiency improvements and long-term changes, the reasons behind their success are:

• Executives employing a hands-on approach
• Acceptance that people must change
• New or improved systems

Robert Shaw