Chapter 5

MARKETING ORGANISATION FOR

CONSULTANCY SERVICES

The present chapter analyses the nature of marketing organisation

and the extent of marketing orientation in consultancy organisations. A

responsive marketing organisation is necessary for achieving the twin objectives

of marketing, namely, profit maximisation and client satisfaction. The marketing

function must be well-organised and integrated with the other functions of the

organisation. Moreover, consultancy organisations need a marketing orientation

throughout the organisation which fosters the marketing concept and manifests -

a marketing approach to all its activities.

5.1 Marketing Orientation in Consultancy Organisations

Marketing orientation is the actual implementation of the marketing

planning, programmes and strategies which contribute greatly to an

organisation's effectiveness. It is an integrated activity bringing together

management from all relevant functional areas to design and co-ordinate effective

marketing solutions.

From the review of relevant literature a n d discussions with

academicians and professional consultants the following components of

marketing orientation have been identified.

1. Client Orientation : The main task of the consultancy

organisation is to determine the needs and wants of target clients

and to satisfy them through the design, communication, pricing

and delivery of appropriate services.

2. Competitor Orientation : The consulting firm identifies the

rivals in the marketplace, their strengths and weaknesses and

- thei,r market share and positioning.

- 3. Strategic Orientation : The consultancy firm has a long term

focus on profitability and growth and generates innovative

strategies for achieving long term objectives.

4. Integrated Marketing Organisation : The consultancy firm

recognises formal marketing function for client satisfaction and

generating profit and the marketing organisation is fully

equipped to carry out marketing analysis, planning,

implementation and control.

5, Interfunctional Coordination : The marketing function is

fully integrated with other functions in the organisation.

The summary of the ratings of the above five variables by

respondents is presented in Table T23.

Table T23

Analysis of Marketing Orientation

,-

Ranked on Five point Scale 1. Excellent 2. Very Good 3. Good 4. Poor 5. Very Poor (N = 200)

Source: Research Data

Table T23A

Relative Presence of Marketing Orientation Variables

Total

200

200

200

200

200

Variables

Client Orientation

Competitor Orientation

Strategic Orientation

Integrated Marketing Organisation --

Interfunctional Coordination

Source: Research Data

No, of Respondents

Variables

Client Orientation

Competitor Orientation

Strategic Orientation

Integrated Marketing Organisation

Interfunctional Coordination

V.Poor

-

-

-

-

-

Excellent

112

32

34

62

83

Mean Score

4.495

3.605

3.710

3,815

4.250

Rank

I

V

IV

I11

I I

Poor

3

7

28

V.Good

75

60

81

67

84

Good

13

105

78

43

33

Of the five variables of marketing orientation cited above client

orientation is found to be the most important variable present in consultancy

organisations. It is rated as excellent by 56 per cent of the respondents, very

good by 37.5 per cent a n d good by 6.5 per cent respondents.

The second important variable present is interfunctional coordination.

It is rated as excellent by 41.5 per cent respondents.

The variables integrated marketing organisation, strategic orientation .

and competitor orientation come in the third, fourth and fifth positions

respectively.

The mean scores of all the variables lie between 3.5 and 4.5 which is

indicative of the moderately good marketing orientation of consultancy

organisations.

l o o -

81) - V) , s ] g v.Good C60' I rc 0

i @ Good i

640- ; 0 Poor Z - ----

20 -

0 " 7 ---

Client Competitor Strategic Integrated Interfunctional Orientation Orientation mientation Marketing Coordination

Organisation

Fig. F13 Marketing Orientation of Consultancy Organisations

5.2 Organising of Marketing in Consultancy Services

Organising of marketing in consultancy services is the process of

identifying the marketing activities, grouping these activities into marketing

functions and assigning necessary authorities to persons to carry out these

functions for achieving marketing objectives. The set of relationship amongst

marketing personnel is referred to as the marketing organisation.

In the study the majority of the respondent firms state that they have

some form of organisation for marketing. The nature of organisation for'

marketing ranges from having a single person, most probably the consultant

himself, undertaking marketing as one of several managerial functions, to full-

fledged marketing department with adequate number of-emptoyees. It is seen

that consultants favour a value-driven marketing organisation in their firms -

responsive to the needs and expectations of their clients.

5.3 Marketing Function in Consultancy Organisations

Table T24 shows the number of consulting firms having a formal

marketing function in their organisations.

Table T24

Formal Marketing Function In Consultancy Organisations

Source: Research Data

Particulars

Having formal marketing function

Not having formal marketing function

Total

No, of firms

- 146

54.

200

Percentage

73 27

100

It is evident from the table that the majority of the consulting firms

(73 per cent) have formal marketing function in their organisations. Only 27

per cent firms do not have formal marketing functions in their organisations.

They are either small in size or prefer to use the terms like 'business promotion'

or 'business development' for marketing function. It is found that the barrier to

the installation of formal marketing function in consultancy business is mostly

internal rather than external.

The acceptance of marketing function by the majority of the

consultancy organisations reveals that marketing does not appear to have the

internal clout of other management functions. Marketing is now recognised as a -

serious issue in the context of increasing competitive pressure in the market

place and relaxation ofprofessional regulations.

Fig. F14 Marketing Function In Consultancy Organisations

5.4 The Head of the Marketing Function in Consultancy Organisations

Table T25 shows the nature of the designation of the person in charge

of marketing function in consultancy organisations.

Table T25

The Head of the Marketing Function in Consultancy Organisations

Source: Research Data

Designation of the person

in charge of marketing

The Proprietor himself

The Chief Executive Officer

The Marketing Manager

Others

(N = 200)

The table reveals that in 72 firms, the proprietor himself oversees the

marketing function. The chief executive officer, that is, the manager or the

managing director heads the marketing function in 32 firms. In 40 consultancy

firms, the marketing manager or the business promotion manager as he is

often called, looks after the marketing function. 'Others' used in the table include

two consultancy firms, both partnership, where marketing function is discharged

by a Managing Committee which also looks after other managerial functions.

No. of firms '

72

32 .

40 -

2

Percentage

36

- 16

20

1

Thus it is seen that the person in charge of marketing function does

not have formal organisational identity or designation in many consultancy firms.

He is the proprietor himself or the chief executive officer in small consultancy

firms. In large consultancy firms like that of software consultancy in the corporate

sector the chief of marketing is called the marketing manager or director of

marketing.

5.5 Evaluation of the Marketing Department

It is already established in Table TI8 in the study that out of 200

consultancy firms, only 56 firms have separate marketing department in their

organisations.

The effectiveness of the marketing department in consultancy

organisations is analysed on the basis of the following parameters:

1. Whether the marketing department is working in perfect

coordination with other departments or not,

2. Whether the marketing department is adequately staffed or not,

3. Whether the marketing department is provided with adequate

marketing resources or not,

4. Whether the activities of the marketing department are cost

effective or not, and

5. Whether the marketing department is given sufficient authority

to carry out its functions or not.

From the analysis it is revealed that the majority of the consultancy

organisations d o not satisfy the above parameters of an effective marketing

department. Many consultants view marketing as a less imporant function than

finance or personnel and the marketing department is not given its due recognition.

Consultants also state that in small consultancy organisations there is not much

scope for division of marketing function into subfunctions like marketing

information, marketing planning, marketing research, marketing communication

etc. However, the respondent firms having marketing departments state that -

their marketing departments work satisfactorily and their activities are cost -

.-

effective.

5.6 Marketing Resources without formal Marketing Function

Small consultancy organisations which cannot afford or choose not

to install formal marketing function get some marketing resources from outside

agencies. The firm engages a marketing consultant or marketing research firm

or advertising agencies for specified marketing tasks when needed. Table T26

shows the number of consultancy organisations hirindnot hiring the services of

outside marketing agencies.

Table T26

Consultancy Firms hiring/not hiring the s e r v i c e s of outside Marketing Agencies

Source: Research Data

Particulars

Firms hiring the services of outside marketing agencies

Firms not hiring the services of outside marketing agencies

Total

The table reveals that only very few firms (6 per cent) hire the

services of outside marketing agencies. Thus most of the consultancy

No. of firms

12

188

200

organisations do not depend on outside agencies for marketing assistance.

Percentage

6

94

100

~ o s t of the consultancy firms having no formal marketing department state -

that they get sufficient marketing inputs without formal marketing departments

in their organisations.

5.7 Marketing Information System in Consultancy Services

The marketing department in consultancy organisations needs timely,

accurate and adequate marketing information for making sound marketing

decisions. Table T27 shows the number of consultancy firms having / not having

Marketing Information System in their organisations.

Table T27

Classification of Consultancy Organisations on the basis of Marketing lnformation System

Source: Research Data

The table reveals that 68.5 per cent of the consultancy firms have

Percentage

68.5

31.5

100

Particulars.

Firms having Marketing Information System

Firms not having Marketing Information System

Total

Marketing Information System in their organisations. Thus .- the majority of the

No. of firms

137

63

200

consultancy~organisations realise the need for sufficient marketing information ,-

for solving current and potential problems and making marketing decisions.

Consultants are of the opinion that they need the latest information relating to

the developments in the area of their expertise for offering the right services or

solutions to the problems of clients.

It is revealed in the study that many consultants maintain and update

a database of clients and prospects. Most of the consultants also keep sufficient

internal records like key manuals, handbooks, engagement related materials,

work schedules and budgets as part of the Marketing Information System.

Consultants also subscribe to professional journals and attend conferences and

seminars for keeping abreast with latest developments in their respective fields

of expertise.

r i ~ a v l n ~ formal marketing function I 10 Not havlng formal marketing function 1

Fig. F15 Marketing Information System in Consultancy Organisations

5.8 Marketing Intelligence System

Consultancy organisations use Marketing Intelligence System - to

monitor changes in market conditions, analyse client needs and behaviour

and understand the strategies of competitors. Table T28 shows the number of

consultancy organisations havingJnot having Marketing Intelligence System

in their organisations.

Table T28

Classification of Consultancy firms based on Marketing Intelligence System

Source: Research Data

Percentage

81

19

100

Particulars

Firms having Marketing

Intelligence System

Firms not having Marketing Intelligence System

Total

No. of firms

162

38

200

163

The table reveals that most of the consultancy organisations

(81 per cent) make use of the Marketing Intelligence System in their

organisations. This makes it clear that consultancy organisations give due

importance to the need for marketing intelligence to get necessary feedback

about clients' behaviour, needs and expectations.

It is found in the study that consultants collect information for the

intelligence system directly from clients, from site offices, journals and periodicals,

research reports of different organisations, national and international business

publications, government reports etc. Consultants also state that they use the

marketing intelligence system to formulate a sound portfolio of services by

identifying areas of profitable services.

-

5.9 Marketing Research in Consultancy Organisations

Consultancy organisations use marketing research for finding solutions

to specific marketing problems. Table T29 shows the number of consultancy

organisations which have undertaken marketing research:

Table T29

Classification of Respondents based on Marketing Research

Source: Research Data

- The table shows that only very few firms (8 percent) have-undertaken

marketing research among the respondent firms. It indicates that most of the ,-

consuitancy organisations are not convinced of the need for conducting

marketing research. I t is seen in the study that small consultancy organisations

do not conduct marketing research because it is costly and they cannot simply

afford it. It is revealed in the study that out of 16 firms which conducted

marketing research 13 firms conducted the study earlier in the past when they

felt the need under different situations, and the remaining 3 firms conducted the

study recently.

Percentage

8

92

100

Particulars

Firms which have undertaken Marketing Research

Firms which have not undertaken Marketing Research

Total

5.10 Marketing Planning System

No. of firms

16

184

200

The Marketing Planning System is an integral part of the marketing

organisation and guides the activities of the consultancy organisat ion in the market

place. Table T30 shows the number of consultancy organisations havindnot having

marketing planning system in their organisations.

Classification of Consultancy Organisations based on Marketing Planning System

Source: Research Data

Particulars

Firms having marketing planning system

Firms not having marketing planning system

Total

It is evident from the table that only 42 per cent of the consultancy

firms have marketing planning system in their organisations. Thus the majority

of consultancy organisations have no marketing planning system. It is seen in

the study that only medium and large-sized consultancy firms employ marketing

planning system. However, most of the consultants are convinced of the need

for marketing planning for achieving marketing goals and designing appropriate

marketing strategies.

5.11 Marketing Budget in Consultancy Organisations

No. of firms

116

200

Marketing budget in a consultancy organisation is a written plan covering

a year's marketing operations for a given service or group of services. Table T31

Percentage

58

100

gives the number of consultancy organisations preparindnot preparing marketing

budgets.

Table T3 1 Classification of Consultancy Organisations based on

Marketing Budgets

Source: Research Data -

As per the table only 16.5 per cent of the firms studied prepare

marketing budgets. Thus preparation of an annual budget containing marketing

Percentage

16.5

83.5

100

Particulars

Fims preparing marketing budget

Firms not preparing marketing budget

Total

operations for the period is not practised by a majority of the consultancy

No, of firms

33

167

200

organisations. However, it is revealed from the study that consultants are aware

of the advantages of preparing marketing budget. They agree that marketing

budget serves as an operational guide to them in each phase of the marketing

effort for a given service or market. Without a budget a consultant can never

be certain whether his operations are going successfully. It is seen that the

criticism of consultants against budgeting is based on the fact that they find it

difficult to make a reliable forecasts of their operations on which to base a

meaningful budget due to uncertainties of the future.

5.12 Methods used for Marketing Budget

Consuftancy organisations making use of budgeting employ different

methods in the preparation of marketing budgets. Table T32 shows the methods

used by consultancy organisations in the preparation of marketing budgets. .

Table T32 Methods used for Marketing ~ u d ~ e t s

Source: Research Data

Methods ,

Client survey method

Statistical / Trend Projection Method

Objective and task method

Other methods

(N = 200)

The table shows that out of 33 consultancy firms preparing marketing

budget, 15 firms use the statisticaytrend projection method, 11 firms use the

objective and task method and the remaining 7 firms use the client 1 survey

method. Thus it is evident that the statisticalltrend projection method is the

popular method used for marketing budgeting by consultancy organisations.

This is because this method is less costly and is based on past data which are

readily available to them from past records.

No. of firms

7

15

11 -

Nil

Percentage

3.5

7.5

5.5

0

5.13 Marketing Control System

It is found in the study that only a few consultancy organisations use

marketing control system to evaluate their performance in the market place in

relation to their marketing objectives. 'The tools of marketing control that are

used by consultancy firms include income analysis, market share analysis,

profitability analysis and ratio analysis. Table T33 shows the nature of marketing

control techniques used by consultancy firms.

Table T33

Marketing Control Techniques in Consultancy Organisations

Source: Research Data

Consultancy firms use more than one technique of marketing control

to evaluate their performances. The table shows that 16 per cent of the firms

in the study conduct profitability analysis to evaluate the profitability of each

service or group of services. It is revealed that such analysis helps these firms

in identifying the profitable and non profitable services and in designing the

services portfolio. he next important technique is ratio analysis used by

Percentage

-13

7

16

15.5

Technique -

-

Income Analysis

Market Share Analysis

Profitability Analysis

Ratio Analysis

(N = 200)

No. of firms

26

14

32

31

15.5 per cent of the firms. 13 per cent of the firms conduct income analysis

and 7 per cent of the firms conduct market share analysis to evaluate the

marketing performance. Thus it is inferred that consultancy organisations are

generally poor in exercising marketing control as in the case of adopting

marketing planning.

5.14 Marketing Audit in Consultancy Services

Marketing audit in consultancy organisation is a periodical, systematic .

and objective appraisal of its marketing activities with a view to ascertaining the

total efficiency of the marketing plan.

- In the study none of the consultancy organisation is found conducting

- marketing audit. It is seen that consultants are aware of the need for such an

audit to improve the effectiveness of the total marketing operations of their

undertakings. They agree that marketing audit can identify opportunities and

remove the shortcomings of the marketing operations and help the firm in

adopting a sound marketing strategy.