Earlier this week Bacardi scrapped the global CMO role to create two “centres of excellence” which would lead the marketing duties and initiatives. With these changes put in place, CEO of the brand Mike Dolan said the company had a “real shot at success” and can re-invest more in its iconic brands and “industry leading innovation.”
Just two months ago, Heineken also rubbed out the role of chief marketing officer as it restructured in a bid to “accelerate the delivery” of its refined global strategy. This resulted in global CMO Alexis Nasard leaving the business this June. According to a statement from the company then, this was done to “better focus on growth opportunities, to be more agile in responding to consumer needs” in the marketplace.
These are not the only brands who have in recent years done away with the global CMO role. Earlier this year apparel brand Gap also decided to do away with the global CMO role for Banana Republic and Gap and replaced it with a head of customer experience title. That included the existing CMO role and incorporated the e-commerce duties. These new hybrid CMOs would report to the individual brands' global presidents.
If this is the case, does that mean that a global CMO is fast becoming redundant? Are global CMOs losing their agility and importance?
Yes, it is
According to Darren Woolley, founder and global CEO of TrinityP3 said that the global CMO role today is largely ceremonial and often enough, the global CMOs are simply globe trotters playing cheerleader or coordinator for the regional and local marketers.
“What is the role of the global CMO other than the co-ordinator of the activity and the brand champion to ensure that the adaption of the brand in those specific markets does not conflict with the global brand overall? Marketing is about specific markets. If someone can define a true global market then there is an active value driving role for the global CMO. Otherwise, this role is effectively being reduced in importance or even made redundant,” said Woolley.
No, it is not
However Paul Davies, managing partner APAC, Roth Observatory International argued that while there was clearly a need for the global CMO role to start delivering better value, the role would not become redundant anytime soon.
He explained that the global CMO role today is evolving and in some organisation the role is being separated into two or more different titles. Global roles for brand, customer and experience and technology are now becoming more prevalent and these changes clearly complicate the CMO job description is and how it can add value.
“Take for example the creation of a chief brand office in an organisation. In this case, who is responsible for the long term health of the brand? What now is the role of the CMO? Is the CMO just the short term tactical marketing initiatives to deliver sales?” Davies questioned.
Moreover, all of these changes are having a significant impact on agencies. For example, if a CMO role is being split with a chief brand officer’s and the CMO is no longer responsible for the long term brand health, who should the agency partners report to? Would the communication strategy be for a long term result or should it remain for tactical communications? All these decisions, said Davies, will have an impact on the agencies as well.
“The real challenge for any company's CEO today is to find a CMO that has the skillsets the organisation needs which surpasses just marketing communication expertise -And to properly define and structure the global CMO role. Only then can the global CMO effective support and drive the business forward,” Davies added.
Global vs Local
According to Davies, the move between global or local is a "continuing revolving door” and organisations are flipping back and forth between these two strategies. To be global or local first however completely depends on the industry, business strategy, brand positioning and several other factors in the company. There is no right answer as to which approach a brand should take.
Luxury brands for example, typically need to be more global than local. Whereas, grocery retailers need to be highly localised from the products they stock to their marketing.
“On a global CMO versus regional CMOs there is no definitive answer. The global CMO role is much maligned as it struggles to show value across the whole organisation – and how can it when a key part of the role is to make the hard choices? But it could work for some brands if they have some way of ensuring alignment, a strong culture of cooperation and the individuals act for the greater good of the company not just their own egos or targets,” said Davies.
Ultimately, it’s down to creating the right structure that fits your brand's overall business strategy.
"What would be beneficial though is clients sticking to a strategy long enough that it has the ability to show results,” Davies added.
Woolley argues that while marketing strategy could be developed on a global platform, it still requires customisation to suit the market and the region. One simply has to look at brand adaptations where many companies have reduced marketing investment in traditional, established and low growth markets to fund the marketing and sales activities in the high growth markets.
Brands need to quickly adapt the brand execution to suit the needs of specific markets, said Woolley.
Previously, says Woolley, there was a strong belief that globalisation would mean that companies would be able to develop global campaigns for the global village and benefit from the huge economies of scale of this approach. However, with the rise of the connectivity, cultural differences in markets have become far more clear.
“It is the difference between markets that acts in conflict with this concept of global consolidation of the marketing role. Beyond cultural, markets will vary by economic maturity and performance, infrastructure, demographic profiles and more. This variability negates the economies of scale and control that is implicit in the concept of a global CMO, reducing the role to one of being the standard bearer, the cheerleader or the co-ordinator,” said Woolley.
Yes, marketing strategy could be developed on a global platform, but it still requires customisation to suit the market and the region, said Woolley.