Integrated Marketing Management: Rajendra Mamodia, Cognizant

The current economy is forcing consumer goods marketers to do more with less. However, most companies still struggle with the dilemma of how to best leverage IT to meet their unique marketing analytical needs. This month, Rajendra Mamodia, head of the global Consumer Goods practice at Cognizant shares his thoughts on how globalization -- coupled with the current tumultuous economic environment -- is affecting the marketing practices at leading consumer goods companies.

How are marketers coping with the current economic turmoil?

Mamodia: While the rest of the enterprise has benefited by leveraging globalization from a technology perspective, marketing, due to the nature of its function, has not realized these benefits as of yet. We are seeing that marketing is just now catching up with leveraging labor and intellectual arbitrage. One of the reasons for this is that marketing spend is fragmented across the global enterprise due to the need for this spend to be closer to the markets they serve. What I think is happening is that the current economic turmoil is making marketers look at areas where economies of scale can be gained by consolidating certain activities, which in turn leaves more money for investment in marketing programs. They are increasingly realizing that their IT function -- with its global reach -- is able to provide them with a platform that can be leveraged to solve some of its common challenges -- brand building, consumer insights and category management. But more than that, we recommend that marketers take a holistic approach to leveraging technology -- perhaps thinking of it as total brand management services or something similar.

Can you provide specifics as to how this affects the consumer goods industry?

Mamodia: Consumer goods companies spend roughly 12 percent of revenue on marketing activities. Analysts are in agreement that most companies still don't have an enterprise tool for marketing similar to an ERP that can plan, manage and measure the spend. Marketing has traditionally had a "best-of-breed" approach to technology, and today, you find marketers' technology to be a maze with issues in integration and synergizing the investments. For example, it is a well known fact that only 16 percent of promotions are profitable. It is also an open secret that a 5 percent reduction in spending adds 10 percent to the bottom line. The worst kept secret in this is 47 percent of consumer goods companies measure trade promotions as more of an art than a science, mainly due to the lack of integrated systems for measurement. Modeling the relationship between promotion spend and incremental sales and profitability to help determine promotion budget for a category and/or brand involves a modeling process which reads in data, business rules, applying optimization techniques and baseline forecasts to remove the gut feel of any promotion. We are finding that marketers are asking for a solution. In spite of the focus on such areas, most companies have not really been able to leverage technology and the global talent available to their competitive advantage.

How can marketers leverage "globalization" to their competitive advantage?

Mamodia: There is not one globalization solution out there that can solve the problems I mentioned, but partners that know how to apply technology and have a global presence can help. Globalization can be leveraged for labor arbitrage and intellectual arbitrage. While labor arbitrage is helping companies do more with less, companies are learning that intellectual arbitrage will enhance competitive advantage.

Obtaining consumer insights from the plethora of data available within an enterprise is an example. This is an area that can be called upon as a competitive advantage as opposed to relying on products -- which can be replicated by the competition. So, more and more, companies are figuring out how tapping into global talent can build models that will drive competitive advantage.

As I mentioned, there is not a cookie cutter solution that can be applied to each company, but there are technology frameworks that can help implement these solutions in the shortest time once a strategy is in place.