Unilever – Is a Centralized Marketing Structure a Good or Bad Idea?

The Pros and Cons of a Centralized Structure

Unilever was recently in the press for making big changes to its marketing. Following the drive to zero-based budgeting, and the monster acquisition of Dollar Shave Club, Unilever announced a significant centralization of its marketing structure. Local marketing teams will now report to global marketing teams, rather than up to market GMs, in a move which is designed, apparently, to “ensure its marketers are better equipped in today’s “super-connected consumer landscape.” Is this a good move? Most organizational shifts are a compromise, in that they bring good and bad things to the organization. A more aligned consumer response to the market may be desirable, but there are plenty of nasty downsides of disconnecting marketing from the rest of the business. What are the pros and cons of centralized versus local marketing? Have Unilever got it right?

A better consumer response for a connected consumer

Clearly Unilever see inefficiency in their current approach. An increasing globalized consumer, an increasing globalized response? There is some sense in that. As I spend time in market after market, it is clear that there are many similarities in consumers’ behavior and attitudes around the globe. But there are also massive differences, and the challenge will be to ensure that ‘local’ doesn’t get lost. Most in-market marketers (and General Managers for that matter) grumble at some point about central marketing teams just not getting it. The hard-wired connection between local and central marketing teams that is inherent in the new Unilever marketing structure should help this issue, creating a direct line for local needs to be fed into the global marketing leaders, and hopefully averting the accusation of global marketers living in ivory towers.

Centralized consumer marketing structure – But – Where art thou, shopper marketing?

So in theory, at least, this could create a better, more efficient consumer marketing effort. The consumer marketing structure could well help. But in all the coverage of this, there is, alas, no mention of the shopper, or of shopper marketing. We are therefore left to wonder whether shopper marketing will go global too, or whether this stays local, or somewhere in between? The answer to this will be critical to the success of this new marketing structure. In most organizations the ability to connect consumer and shopper marketing is a critical make-or-break for brand success. If consumer marketing goes global, what happens to shopper marketing? Or is it simply deemed as unimportant?

The sales integration problem

Which then leads us to the biggest question mark. What about sales teams? Most businesses we work with could benefit from closer integration between marketing and sales. Integrating consumer marketing, shopper marketing and customer management has been proven to drive real returns. How will this work in this new global marketing world? Sales teams are, what? Still local, one presumes. This creates the possibility of a worrying fracture in the organization – with sales teams further disconnected from the marketing teams they really need to get close to.

Changing organization isn’t the best way to change behavior

Coming on the back of the zero-based budgeting initiative, one is tempted that this change to the marketing structure is more tactical than strategic: a desire for the center to better control marketing budgets which it feels are perhaps being squandered. If this is the case, it is a heavy-handed solution to a control issue. Because trying to fix problems with organization structure solutions is rarely the best solution. Organization structures are flawed, almost always. They are an approximation of how we want people to work, but they are nearly always a compromise. Every marketing structure decision (or any other organization structure for that matter) has a negative impact as well as a positive one. Shopper marketing in the sales team creates close alignment with customers, but distances consumer and shopper strategies. Put shopper in with marketing, and the brand is brilliantly aligned across consumer and shopper, but sometimes doesn’t fit with customer strategies. Too global, and we lose the benefits of local focus: and vice versa.

One quote in the Campaign article was that this was (in part) to stop squabbling between local and global teams. Good luck with that! I’m pretty sure that squabbling is here to stay! And if by any chance Unilever does manage to bring harmony across all of its marketing, then the danger is that all that happens is that there will be more squabbling between marketing and sales, and marketing and local market GMs.

Better communication, better process, and more integration

So, what is the answer? Better communication, and a lot more flexibility is the answer. The creation of a truly integrated process is the answer. Whether shopper marketing reports along global or local lines the connections between consumer, shopper and customer must be hard wired into the organization at a strategic and execution level. Does it fix all of your problems and make every meeting harmonious? Of course not. Does it create clarity, focus, alignment and growth? Absolutely. If that sounds good, get in touch and I’ll tell you a little more about how it works.

What is your view on central versus local marketing? What do you see as the pros and cons? Please share in the comments section.

This blog found in Course 37: Internal Structure.

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