Marketing Insights From a to Z: 80 Concepts Every Manager Needs to Know

ing too much for support staff, we simply eliminate the
[headquarters] job.”
The sales department isn’t the whole company, but the whole
company had better be the sales department. Not everyone in a com-
pany is a marketing manager, but everyone should be in marketing
management. This point is mentioned by Hiroyuki Takeuchi about
Japanese companies: 
“Fifty percent of Japanese companies do not
have a marketing department, and ninety percent have no special
section for marketing research. The reason is that everyone is
considered to be a marketing specialist.”
Companies are organized vertically, but processes are horizon-
tal. This is the mismatch that 
reengineering
hopes to correct by ap-
pointing cross-disciplinary teams to manage key processes. (See
Marketing Department Interfaces.)
Multidivisional companies tend to be product-oriented rather

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than industry- or customer-oriented. Yet the divisions may make
products that go to the same industry or customer. Siemens re-
cently developed a focus on four industries: hospitals, airports, sta-
diums, and university campuses. Siemens has assigned for each
industry a single senior-level manager to have authority and ac-
countability to orchestrate interdivisional cooperation regarding
each industry.
utsourcing
Your company can be great at only a few things. For the other things,
hire those who can do these things better. Outsourcing originally ap-
plied only to the company’s noncore activities, such as office cleaning
and landscaping. But today’s mantra is that a company should out-
source everything that other parties can do better or more cheaply.
Outsourcers are able to offer lower costs and better results because of
their scale and specialization. Thus Nike decided not to manufacture
its own shoes; Nike hires Asian firms that can produce shoes more
cheaply and better.
Companies need to know which marketing activities to keep in-
house versus outsourcing them. They usually outsource advertising
services and marketing research. Some are now outsourcing direct
mail services and telemarketing. A few are outsourcing new product
Outsourcing
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development and a sales force. I know of companies that have out-
sourced their entire marketing department.
A company hired me to help management decide what to out-
source. After examining all of their activities, I delivered a report to
the board. “Gentlemen, you should outsource everything. You are
not good at anything.” They were stunned. “Are you saying that we
should go out of business?” “No,” I said. “I am telling you how to
make more money. Your costs will go way down. The only compe-
tence you need is to manage outsourcers.” Essentially I was propos-
ing that they become a 
virtual organization
.
Yet a company may go too far in outsourcing. What makes a
great company is that it has created a set of core competencies that
link ingeniously and would be difficult to imitate in total. This is
what companies such as IKEA, Wal-Mart, and Southwestern Air-
lines have done. They have outsourced some activities, but what
makes these companies great is they have reserved for themselves
an interrelated set of competencies and capabilities that defy ready
imitation.