Marketing implementation, organizational change and internal marketing strategy 543
Customer-based management
structures
One interesting suggestion is that, in organiza-
tions of the future, traditional product manage-
ment structure will evolve into customer-based
structures, where several customer portfolios
replace products as the ‘pillars’ of the organiza-
tion, and product managers will provide ser-
vices to each customer portfolio group (as will
functional specialists) (Berthon et al., 1997).
Venture marketing organization
(VMO)
More radically, the VMO is a fluid approach to
identifying new opportunities and concentrat-
ing resources on the best. It adopts the prin-
ciples of venture capitalism to fund fluid teams
of managers and partner organizations to prog-
ress an innovation bypassing the traditional
organizational routes. For example, Starbucks
has a VMO-style approach to innovation. Star-
bucks approaches new opportunities by assem-
bling teams whose leaders often come from the
functional marketing areas most critical to
success. The originator of the idea may take the
lead role only if qualified. If teams need skills
that are not available internally they look
outside. To lead the ‘Store of the Future’ project,
Starbucks hired a top executive with retail
experience away from Universal Studios, and
to develop its lunch service concept, it chose a
manager from Marriott. After the new product
is launched, some team members may stay to
manage the venture, while others are rede-
ployed to new opportunity teams or return to
line management. Success on a team is vital for
promotion or a bigger role on another project.
Teamwork extends to partner organizations.
When pursuing a new ice cream project, Star-
bucks quickly realized they lacked the in-house
packaging and channel management skills to
move quickly. Teaming up with Dreyer ’s Grand
Ice Cream got the product to market in half the
normal time, and within four months it was the
top selling brand of coffee ice cream. Starbucks
emphasizes the importance of identifying new
opportunities throughout its organization.
Anyone in the company with a new idea for an
opportunity uses a one-page form to pass it to
a senior executive team. If the company pur-
sues the idea, the originator, regardless of
tenure or title, is usually invited onto the
launch team as a full-time member. In its first
year, Starbucks’ Frappuccino, a cold coffee
drink, contributed 11 per cent of company
sales. The idea originated with a front-line
manager in May 1994, gaining high priority
status from a five-person senior executive team
in June. The new team developed marketing,
packaging and channel approaches in July. A
joint venture arrangement with PepsiCo was in
place by August. The first wave of roll-out was
in October 1994, with national launch in May- A high-level steering committee meets
every two weeks to rate new opportunities
against two simple criteria: impact on company
revenue growth and effects on the complexity
of the retail store. The committee uses a one-
page template to assess each idea, relying on a
full-time process manager to ensure the infor-
mation is presented consistently.
It is too early to reach conclusions about
the role that marketing can and will take
generally in these new organizational and
network forms, although it is highly likely that
there will be some redefinition of its role which
may be radical and which will directly influ-
ence strategy implementation capabilities.
Identifying implementation problems in marketing
This more complex organizational setting and
its impact on strategy implementation capabil-
ities underlines the importance of adopting
practical approaches to the implementation
issue. A first step in confronting the marketing
implementation issue is to build a picture of the
ways in which a company’s marketing plans
and strategies fail to reach the marketplace.