Procurement Managers face new challenges in sourcing marketing collateral
As companies seek to optimize their marketing budgets in the wake of economic uncertainty and cost pressures, procurement managers tasked with sourcing marketing collateral are facing new challenges, according to a recent study by Beroe.
The study highlights that Procurement Managers are finding themselves needing to accomplish more with less, and must navigate a growing set of risks across the supply chain while aligning closely with corporate marketing strategies to maintain a competitive edge. This never-ending juggling act is leading many to adopt better practices, revisit vendor relationships, and take advantage of new technologies to help them manage all the moving pieces needed to achieve growth today and tomorrow.
The study, which covers key best practices and industry case studies, argues that adopting better practices, revisiting vendor relationships, and utilizing new technologies are essential for achieving growth in the current environment. The report suggests that strategic sourcing in marketing can help deal with increased competition, achieve cost reduction, and improve relationships with suppliers.
The report also delves into the specific steps of a typical marketing procurement category strategy plan, and focuses on the procurement best practices adopted by Fortune 500 companies across various industries. One of the key findings is that many companies are using a multiple agency engagement model, consolidating multiple agencies under one or more holding companies in order to achieve cost savings and improved efficiency.
The study also notes that pharmaceutical companies are particularly likely to engage with bespoke agencies for emerging brands, orphan drugs, and high science biotechnology products, which require a high degree of medical education. Additionally, most of the top Fortune 500 companies handle 15 percent to 20 percent of their total marketing spend in-house, with a particular focus on digital services.
Usually companies engage with 5 - 17 multiple marketing agencies under a single holding company. These also includes numerous market research suppliers that the companies have contract with since a marketing budget analysis mostly includes primary market research.
However, most market research suppliers, especially those specializing in healthcare, are independent of holding companies.
Furthermore, companies are also investing in new technologies to improve their marketing efforts. Artificial intelligence, machine learning, and big data analytics are all being used to gain a deeper understanding of customer behavior and preferences, and to create more targeted and effective marketing campaigns. This is especially important in the digital age, where companies are competing for attention in an increasingly crowded and noisy online environment.
Despite these challenges, Beroe study notes that there are opportunities for procurement leaders to drive value and maximize marketing investments. By developing a strategic roadmap, companies can improve their competitiveness, reduce costs, and create new opportunities for growth. This requires a deep understanding of the market, a clear understanding of internal company requirements, and a focus on category management and spend analytics.
Tackling the Marketing category from a sourcing standpoint can be challenging; but with the right strategy, one can deliver value and maximize the marketing investments. Marketing Procurement Professionals are usually tasked with developing a strategic roadmap to optimize their company’s Marketing budget.
As we head into 2023, it is important to recognize the transformative shift within the Marketing Procurement function over the past decade. Previously, a typical purchasing function is limited to a buy-sell transaction or focusing on cost savings or supply continuity. Today, strategic sourcing in marketing is a proven approach to establishing increased competition, cost reduction, creating relationships with suppliers, thorough understanding of market / internal company requirements, reviewing spend analytics, category management, and much more.
Many business leaders are eager to improve processing, reduce costs, and optimize competitive advantages. To do so, they must be able to reshape their supplier relationships, align on strategies to revamp the desired future state and recognize the competitive advantages strategic sourcing has shaped across decades.
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