Marketing's Role in Profitability Role Term Paper

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The focus specifically in the build-to-order strategy is in the quote-to-order workflow process that spans both direct and indirect channels of distribution as order capture points, followed by managing orders from a distributed standpoint, measuring the effectiveness of specific advertising and promotion programs on order rates and profits per order. The quote-to-order process also has significant implications for managing inventories and increasing inventory turns specifically. With an optimized inquiry-to-order process it is common to see a factor of 5 or more increase in inventory turns per year, a reduction of 30% or more in Days Sales Outstanding, and an increase in average order size by over 40-60% based on the use of more effective quoting and demand sensing and execution strategies throughout a company. The entire value chain for many companies is dependent on their ability to quickly sense and responds to customized product and service requests. At the intersection of quote-to-order strategies and increased financial performance due to greater efficiencies is the effectiveness of marketing's role in influencing financial results.

Taking a process-centric perspective to the contribution of marketing to a company's financial results captures the most relevant aspects of how being focused on customers pays off for the long-term. First, with a process-centric approach to analyzing the contribution of marketing to a firms' financial performance, there's the need of defining just who the customer is for a specific activity, development, or strategy.

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Trimming back on or even discontinuing processes that don't directly influence customer growth is the most significant contribution marketing, from a process-centric approach, can make. Askegar and Columbus (2002) highlight a maturity model that specifically addresses this point from the standpoint of recruiting, growing, retaining or re-directing channel partners. This has major implications for measuring per-channel sales productivity, gross margins, and channel partner revenue contribution. Second, a process-centric view of marketing's contribution to revenue highlights a series of financial measures that best reflect the immediate impact of changing strategies to make them more customer-centric. These metrics include average cost per order to fulfill, Days Sales Outstanding (DSO), gross contribution margin per order, inventory turns, and percentage of orders fulfilled right the first time (sometimes called the perfect order metric), costs per lead, lead escalation rates. Taking all these metrics together yields a dashboard that highlights how efficiencies gained in marketing processes directly influences the financial strength of a company.

The bottom line is that marketing's role of revolutionizing an organization to become more agile and aligned with customers' needs requires a process-oriented approach to removing organizational roadblocks that get in the way of helping customers. This is the strongest contribution of marketing of all to financial performance, and that is a glimpse into what levels of financial performance are possible once processes inside a company are more aligned with the needs of.....

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