Marketing Should Own Inventory

I’ve seen Marketing expected to manage these business success metrics:

  • Market share
  • Profit margin
  • Sales forecasting

To support these goals, Marketing is generally supported out of the following costs:

  • Payroll for employees
  • Media & collateral
  • Public Relations
  • Trade Shows
  • Training
  • Advertising

In two of the companies I have worked with, Marketing felt hampered in its efforts to reach its goals due to product lead times. In both cases “Lead Time” was not formally considered a Marketing Metric, and in both cases “Inventory” was not considered a Marketing cost.

This seems to me to be a fundamental organizational defect. Delivery lead time is a competitive consideration in many markets (I might dare say most markets), and it’s widely recognized that inventory can be substituted for lead time, and lead time for inventory. This equivalence is a fundamental theory of the Toyota Production System.

It’s true that the need for inventory below the shippable SKU level is partly determined by the manufacturing process capability. Manufacturing clearly owns the responsibility to continually improve the reliability and speed of the manufacturing process. But it still seems quite achievable for the responsible Marketing representative to say, “We have X inventory position in order to support Y delivery expectation.” If challenged as to why so much of X inventory is in WIP (not yet shippable), it should be fairly straightforward to show the inventory required to buffer against the supply chain performance.

As all production and supply chain managers know, a great deal of the need for inventory comes from variance between the demand forecast and the actual demand. It’s also sometimes been my experience that Marketing (or Sales) wishes to divert inventory that was built for Customer B in order to satisfy Customer A – but will still sometimes unabashedly complain about the lateness of fulfilling Customer B’s order. Sometimes these sacrifices have to be made; but Marketing should be paying out of their own pocket.

Simply put, Production and Supply Chain should have fiscal responsibility for inventory covering supply chain and manufacturing process variance, and Marketing should have fiscal responsibility for inventory covering demand variance. Somewhere out in the wide world I’m sure it is so; but I wonder why it is not the rule everywhere.

Ice Cream: A New Hope

Which of these two approaches would you expect to be more successful?

Contestant 1:

FINALLY, HEALTHY ICE CREAM

THAT ACTUALLY TASTES LIKE ICE CREAM.

And we’re not joking. While Halo Top is low-calorie, high-protein, and low-sugar, we use only the best, all-natural ingredients to craft our ice cream so that it tastes just like regular ice cream. We know it sounds too good to be true, so don’t just take our word for it – dig in and see for yourself just how good healthy ice cream can be!

Contestant 2:

Indulgence without all the guilt! Introducing Breyers® delights – a delicious new ice cream with 20g of Protein & 260-330 calories per pint! Try one today!

 

I could go on for a while about the differences here (and I will), but it’s all anchored in that first word from Halo Top: “Finally!”

What does that say?

It says you haven’t had this before, but you’ve been wanting it.

Oh? Which of my long-unmet desires are you meeting today?

“Healthy Ice Cream.”

Then a long list of happy goodness words. Happiness all around! No need to think or analyze – it’s “all-natural,” it’s crafted, it’s “healthy ice cream.” Just go with it!

And how does Unilever, giant global corporate-parent of Breyers, respond?

By measuring calories and grams. And reminding you about “all the guilt!” What a paralipsis!

Besides calling up some of the most negative associations possible for ice cream, Unilever seems not to understand what is happening here with Halo Top. The only way that “Finally!” has any emotional resonance with the audience is if they buy in to this idea that they have been searching and searching for this Great Thing, and it just wasn’t there – it didn’t exist – there had to be something New!

And this does resonate, because people have been searching for zero-consequences indulgence, and they have had no luck at all finding it. They have categorically ruled out all the familiar things.

So, Unilever, why did you try to answer Halo Top with an established brand? The whole myth Halo Top is selling is a new-to-the-world solution to an age-old problem, the Messiah in ice-cream from.

Why did you try to match the gold halo over white with the institutional black?

Halo Top is marketing not just to the desire for unrelentingly cheerful ice cream, but also to the profound uneasiness with the established order. The Sexual Revolution didn’t fix everything. The end of the Cold War didn’t fix everything. Silicon Valley didn’t fix everything. The new diet didn’t fix everything. Nothing’s working out the way it was supposed to. We need something totally new and different.

Hence Icelandic yogurt and Himalayan salt.

No, you can’t leverage your brand equity; your brand is your problem, in this case. Your incumbency is a fault. Simply by existing you became part of the disappointing past.

You could try buying up the hip cool brands, but I wouldn’t recommend it. Since these brands are mainly built on novelty their shelf life, as brands, will probably not be long.

Rather than paying a premium for the starry-eyed potential future of a young brand, it would probably be more economically sound to generate a new brand: go to your labs and get some fresh-faced multicultural food science grads with pets to design an ice cream safe for their pets, call it “Kittens and Cream,” and include biographies of various young sciency team members’ pets on the side of the carton.