CHICAGO -- Brand marketers should assign account planning responsibilities to a freestanding trade marketing group and create cross-functional teams to work with major accounts.
"This is becoming the price of admission to become a favored supplier," said Al Whitteman, managing director of Ryan Management Group, Westport, Conn.
Whitteman discussed account planning and budgeting at a conference here titled "Co-Marketing With Today's Power Retailers," hosted by The Marketing Institute, a division of the Institute for International Research, New York.
"The purpose of an account planning process is to integrate the objectives, strategies and resources of both manufacturer and retailer towards satisfying consumer needs and generating mutually profitable growth," he said.
He said the most effective -- but also most revolutionary -- approach is to assign account planning and budgeting responsibility to a freestanding trade marketing group, as opposed to the marketing or sales departments.
When these tasks are retained by the marketing department, their effectiveness is "evolutionary" and "seldom adequate in practice," Whitteman said.
Shifting them to sales, whether national, regional or both, can be highly effective, but the outcome is skill-driven, based on the sales department's ability to execute, he said.
"This structure is the most common among packaged goods manufacturers today and has proven to be highly effective in some cases because of clear responsibilities [sales is responsible for both volume and spending] and close integration with retail accounts," he said.
Where this approach has failed, it can be traced to a lack of professional discipline or control systems, he said.
A freestanding trade marketing group shares objectives with both the marketing and sales departments and directs each key account team in all areas of execution, he said.
"This system is the most difficult and complex, but where it has worked it is the most effective structure. Teams work extremely well for companies where customization of assortment, promotions and displays is crucial to overall distribution and feature support," he said.
With all functions aligned at a single objective, this system is strategically and financially sound, yet flexible and responsive, he said.
On the negative side, establishing a freestanding trade marketing account team represents a major cultural change, with sales acting like marketing and vice versa, and requires common functional objectives, Whitteman said.
He described a case where a brand marketer was managing a flood of promotion programs, often timed on top of one another in terms of starting and shipping dates. They had little strategic consistency; and substantial advance planning was required by most retailer business systems, he said.
The company in his example determined how to provide reasonable customization without violating strategic needs by first defining a core portfolio/assortment for every account. It determined timing flexibility, but within "windows"; maintained long-term pricing structure integrity, and provided a menu of field-activated promotions, he said.
Whittman urged manufacturers to present one face to the trade, with a single entry point into the supplier and a standard set of policies and procedures.
He also strongly recommended the creation of cross-functional account teams, particularly for major accounts. All members of the account team have to subscribe to a constant, unchanging set of account goals that can be adjusted on an annual basis, he said.
He recommended that some portion of each participant's incentive compensation be derived from a shared account-specific objective.
"Establishing an account planning structure and program is ineffective and ultimately self-defeating if it is done in the absence of a clear strategic objective," Whitteman said.
