Wednesday, March 05, 2008

The Category Management Function in IT Services

Today at lunch a few of us were chuckling over the latest pepsi campaign - an inane piece of advertising involving 3 film celebrities (at an obnoxious cost) purportedly selling a new world called "YoungIstan". It is sometimes distressing to think of the quantum of marketing and creative talent being invested in creating meaningless and trashy communication. Is there no meaning to "meaningful marketing" any more ? In an earlier post I had talked about quality marketing processes involving identity, positioning, propositioning etc - but there is a larger question around the business impact of marketing that keeps getting asked; precisely because of profligate marketing expenditure.
Therefore - it may be the right time for me to record my thoughts on the Category Management function in HCL. The term is borrowed from Retail - and essentially stands for Brand Manager +. In HCL's Business Marketing function which I lead, this is the battery and the driving force - and I happen to be quite proud of the team playing this role.
It is sometimes difficult for product marketers to grasp the complexity of marketing IT services. To begin with - there is no defined product. But (and more worrying) is the fact that organisations in this industry operate in multiple geographies with services delivered in unique vertical (industry oriented) and delivery (operations / technology oriented) structures. Value propositions peep out of a 3 dimensional rubics cube with 100's and 1000's of individual cells. Strategy automatically becomes a key weapon in the Category Manager's hand. Using strategy, a category manager has to generate sufficient influence to bring material changes in service offerings, alliances, IP investments and the like - while at the same time impacting the demand side through right focus.
At this stage - it may be wise to explain the meaning of Category in our context. It's simple actually - a category is a vertically or horizontally defined unit of business (typically upwards of $ 200 mn) which has direct go to market. While Financial Services would be an example of a vertical category, Enterprise Applications (including SAP and Oracle services) would be an example of a horizontal category.
It has actually taken us years to bring this function to a level where it approaches maturity. We finally have clarity on the 4 things a Category Manager needs to do to convert marketing activity to business impact.
1. Campaign : Campaigns are wild cards in this industry. In a product company - the entire marketing team may run 4 campaigns in the year (and that's a lot). This year alone we will have run over 60 campaigns across the world - a daunting task indeed. It becomes critical to think in terms of effort ROI for each campaign - and this comes from sufficient analysis (not just market but also sales goals) to focus on the right segments. But by itself this is not sufficient. Campaigns need to be "effort right sized" basis their objectives, target segment size and organisation competency. This is possible to do by placing all campaign areas in a 2x2 created from axes representing Market opportunity and Competitive Capability. There are 6 approaches to campaigns that can be identified in this grid. In the high opportunity and capability zone lies proposition based (clear proposition to limited audience) and power positioning campaigns (able to touch a wide audience). In the High Opportunity but low Capability section lie Innovation based (thought leading campaigns allowing development of vision and capability) and Partnership based campaigns ( an ecosystem solution to bridge the capability gap). In the low Opportunity but high Capability zone status quo campaigns are required - Cross Sell campaigns focused on existing customers or Sales based campaigns with primarily a collateral focus. Unfortunately when a category manager does manage to do all this strategy work (phew !!!) he then has to implement it as well.
2. Business Strategy : unfortunately, the above piece only had to do with marketing aspects of strategy - there is a larger piece left. Though it is clear that sufficient market, competitive and internal knowledge is required to be able to influence business in the direction of creating new services, partnerships et al - the path of doing this is a thorny one indeed. A Category Manager needs to engage with the various arms of the business leadership in creating and moderating strategy workshops. The workshop model covers four areas - an outside in approach to problem definition, an inside out approach to solution identification, a detailed Go to Market section and the business case creation. As if this were not enough, the category manager has to be the custodian of the service articulation exercise - another (proprietary ?) model we use to convert competencies into high value services basis customer insight. As part of the strategy ask - Category Managers need to be au fait with initiatives planned for the year, track business performance and create necessary escalations. Over and above all this - from an annual planning perspective the CM uses a Neo modeler methodology to work with business owners to define plans and initiatives.
3. Opportunity Support : This is an industry with deal sizes upwards of $ 100 mn. Deals like these cannot be handled by just a sales organisation - typically extended organisations come together to work on them. Category Managers can be sources of immense value in such deal situations - bringing research and creative capability to the table to create unique differentiators and positioning strategies for the deal - while playing execution roles in creating differentiation out of technical content. This is also a very strong area for a CM to build the influence over stakeholders he so desperately requires to run his strategy ask.
4. Brand Visibility : Yes. This is the last thing to do. Amazing - is'nt it ? It needs to be understood that in specific target segments, campaigns generate significant visibility - however, there is a task in making the entire category visible to analysts, media and customers. But - this is not an area where an advertising agency gets briefed and lots gets spent on media. The best form of visibility in this industry comes through thought leadership - the Category Manager needs to be able to don the mantle of a thought leader for the segment and thus position his business appropriately while creating salience.

Just 4 things. Should be easy right ? - Wrong. And I havent even started talking about Account based marketing yet ....

Perhaps that will be the next subject.


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