Chris Hammel, six foot plus of articulate, immaculate marketer, is Oracle’s vice president marketing for Asia/Pacific. He whistle stopped Auckland recently, explaining the company’s approach to managing its marketing budget as he went. He also threw some light on the reasons why his boss sees marketing and product development as the two most critical functions of his US$20 billion enterprise.
Two years ago Oracle decided that the fundamental power of its brand was based on two things: consistency of the (product) message and synchronisation of delivery of that message. To get the message consistent they centralised the process of determining competitive positioning, product statements and corporate themes.
Synchronisation in delivering the company’s messages meant handing responsibility for all marketing resources over to newly created ‘marketing organisation’. Regional and country managers had marketing extracted from their direct management report. Marketing could no longer be viewed as discretionary spend option available for cutting to achieve bottom-line targets.
With the marketing budget owned by the marketing organisation New Zealand’s marketing manager Nigel Murphy reports to Hammel who in turn reports through to Ellison’s global marketing chief. “It means,” says Hammel, “that in difficult times I get to keep the marketing budget in my region fairly steady.” Oracle’s global marketing spend discretion rests with Ellison.
The new reporting line means that the “short-to-medium term balance gets addressed little more in favour of the medium term”, according to Hammel. The trick in the exercise is to ensure marketing does not get carried away with its independence and start building programmes without regard to results.
There was some opposition. Managing directors and heads of sales in some countries resisted their loss of direct control over marketing spend. “There was transition period where the relationship broke down little bit,” admits Hammel. “But now everyone understands that they are getting better service [from marketing]. The programmes we are delivering now are much higher quality than they were.”
Centralising the message and its method of delivery means countries don’t have to spend time and energy on “creating their own programmes” and the focus in the field has shifted to executing the programmes that work best. In New Zealand, for instance, they can work on how best to deliver given programme in Wellington which might be slightly different from delivery in Auckland.
“There is no question the quality of our marketing has gone up,” repeats Hammel. “There is also no question that in terms of brand awareness and recognition that Oracle has emerged in the last two to three years as much bigger brand, particularly at [senior] executive level.” And this is important because, he says, IT purchasing decisions have moved from the IT department to include more top level managers.
Hammel credits advertising with much of Oracle’s recent market success. The fundamentals of that advertising are “an impact message, said often and said consistently”. “Don’t change [the message] too much because if you do it doesn’t sink in.”
Oracle has upped its advertising spend around the world at time when most IT companies are slashing budgets. The industry was hit first by the dot-com collapse and is now facing depressed sales induced by the faltering United States’ economy. Oracle, on the other hand has upped its awareness activities and raised it PR profile. “We are able to do this because we aren’t doing different things in different places anymore,” says Hammel.
Having settled management resistance to where the responsibility for marketing decisions should rest, marketing expectations have been raised. “People are now saying ‘we want our marketing and advertising to be even better because I can now see just what advertising can do’,” says Hammel. Oracle managers are looking for more tactical programmes to back up the “push” campaigns. They want the “pull” as well. And for Oracle that means developing its increasingly sophisticated e-business and customer relationship programmes.
The change in managing the marketing function is also changing the corporate culture, according to Hammel. “It has lifted the calibre of marketing people attracted to and recruited by the company.”
Hammel admits his own sales background and conversion to the broader visioned role of marketer. The company has now brought professional marketers into senior executive positions and raised the discipline’s profile internally. The result has been significant switch in the way in which Oracle thinks about marketing and marketers. “We have good example of it here in New Zealand. When the incumbent [marketing executive] moved on to take good job with another company we went out and found an even more high profile and qualified replacement in Nigel [Murphy].”
The approach is changing the company. great deal more marketing strategy, rather than sales strategy, is “driving” the organisation. “It is critical part of the maturity of the organisation,” suggests Hammel. Marketing people are now more involved in product development, pricing strategy, research, interpreting market intelligence and branding.
In acknowledging the realignment of marketing at Oracle, Hammel concedes product development is still the centre of the corporate universe. “Building good products is the foundation of our business. Continuing to build good products is core business.” Of the initiatives Larry Ellison puts his weight behind, product development and now marketing are key.
Ellison not only writes Oracle’s advertising copy, he also sets the advertising creative policy in terms of what Oracle’s advertising should look like. Look at an Oracle ad and there are three distinct characteristics. Firstly, it is text based. Second, the content is minimalist (with lot of white space) and must be read and understood instantly. Third, the name Oracle cannot be substituted for any other. The claim made in the copy must be fact-based and Oracle specific. “Read claim made by Coke ad and you could probably replace the brand with Pepsi and the claim could be equally true,” Hammel explains. “If you look at any Oracle advertising there is no other company name you can substitute [to fit the claim].”
Oracle seemingly views the IT industry’s current downturn as opportune and presents an opportunity to capitalise on its growing market position. Spend on marketing and advertising when competitors cut back is well-researched wisdom. The transition seems to run deeper however, to change in strategy, management philosophy and even corporate culture. “We have hit kind of watershed,” says Hammel. “We are in transformation mode, driven by Larry. He takes very hands-on approach. He is getting the resources in the company ready to deliver whatever it is we say we can do.” And that is marketing exercise. M
Reg Birchfield is editor of Management magazine.
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