Marketer’s Toolkit

How to Cure the Epidemic of Obsolescence

by
G. David Dodd, Principal
Point Balance

• A majority of companies spend at least 20% of their marketing budgets on

marketing consumables.

• Over 70% of companies don’t track the obsolescence of marketing

consumables. Of those that do, 40% say they waste 20% or more of their
marketing consumables because of obsolescence.

• This article explains how a marketing consumables management system

eliminates obsolescence waste and improves marketing productivity.

Prompted by growing demands from the C-suite, marketers are aggressively working
to improve the productivity of marketing. For example, they are boosting the
effectiveness of marketing campaigns through more precise targeting and the increased
use of personalization.

Marketers are also taking steps to make marketing operations more efficient. They
have recognized that increasing the productivity of operational activities and processes
is a powerful way to stretch marketing budgets. The equation is simple: The dollars
saved by improving the efficiency of marketing operations can be redirected to fund
more revenue-generating programs.

One area of marketing operations that offers huge opportunities for improvement in
most companies relates to marketing consumables. Marketing consumables are
materials such as marketing collateral documents (brochures, product sheets, etc.),
promotional items, and point-of-sale displays. Most, though not all, marketing
consumables are printed materials. Research has shown that over half of the total
spending associated with marketing consumables results from product obsolescence
and from activities such as procurement, storage, fulfillment, shipping, and inventory
management.

Copyright © 2010 by G. David Dodd 1

All rights reserved.
Marketer’s Toolkit
The obsolescence of marketing consumables constitutes a major problem for many
companies. The Chief Marketing Officer (CMO) Council has said that obsolescence
creates an “epidemic of waste” that undermines the development of an optimized
marketing supply chain. A recent survey of marketers by the CMO Council reveals the
scope of the problem.

• Obsolescence potentially affects a large portion of marketing budgets—

Sixty percent of survey respondents said they spend at least 20% of their total
marketing budget on marketing consumables, and 30% of respondents said they
devote at least 30% of their budget to such materials.

• Obsolescence is an “invisible” waste in most companies—Seventy-three

percent of survey respondents said they do not track the obsolescence of
marketing consumables.

• Companies that do track obsolescence report large amounts of waste—

Forty percent of respondents said they waste 20% or more of their marketing
consumables because of obsolescence, and another 30% of respondents put the
level of obsolescence waste at between 10% and 20%.

Source: Mapping + Tracking: The Optimized Marketing Supply Chain (CMO Council, 2010)

Obsolete marketing consumables represent a complete waste of precious marketing

dollars. The cost of obsolete materials is essentially an investment in marketing
communications that never reach the intended audience. That closet or storeroom or
trash container filled with obsolete marketing materials is a tangible manifestation of
budget funds that could have been used to
Obsolete materials are a support productive marketing programs.
tangible manifestation of funds
that could have been used for In addition to the direct financial costs,
productive programs. But the obsolescence can have a major negative impact
most serious problem can be on marketing effectiveness. Forty-two percent of
the revenues and profits they the respondents to the CMO Council survey said
that fresh marketing content is critical to their go-
put at risk.
to-market strategy, but 51% of the respondents
admitted they had used marketing materials that contained outdated content. In today’s
hyper-competitive business environment, every interaction with a potential buyer is
important, and sales can easily be lost if prospects are provided outdated information.
Therefore, the most serious problem with obsolete marketing materials may not be the
wasteful spending they cause, but rather the revenues and profits they place at risk.

Copyright © 2010 by G. David Dodd 2

All rights reserved.
Marketer’s Toolkit
Obsolescence Is Not Inevitable

The good news for marketers is that obsolete marketing consumables are no longer
an inevitable “cost of doing business.” Today, a growing number of companies are using
new technology tools and services to dramatically reduce the obsolescence of marketing
consumables. Collectively, these tools and services constitute a marketing consumables
management system (MCMS) that eliminates waste and improves the productivity of the
marketing supply chain.

A marketing consumables management system is a suite of technologies, services,

and print production capabilities that automates the process of procuring, producing, and
fulfilling orders of marketing consumables. An MCMS reduces obsolescence by
eliminating the need to acquire marketing consumables in large quantities. By
combining easy online ordering, automated pre-
A marketing consumables production workflows, and digital printing
management system reduces technologies, an MCMS enables companies to
obsolescence by enabling acquire marketing consumables in small
companies to acquire marketing quantities on a cost-effective basis. And because
materials in small quantities as lead times are short, companies can order
and when they are needed. marketing consumables as and when they are
needed, rather than rely on advance forecasts
that are often inaccurate. Therefore, an MCMS eliminates the need for large physical
inventories of marketing consumables, which greatly reduces the possibility that
materials will become obsolete before they can be used.

Here’s a brief overview of how a marketing consumables management system

works.

• The core component of an MCMS is an online catalog of the marketing

consumables that a company uses. When an authorized user needs to order
marketing materials, he or she logs into a secure website, selects the desired
items from the catalog, specifies the desired quantity of each item, and submits
the order.

• If the user is ordering an item than can be customized, the online catalog will
contain a template for that item. The template identifies the content elements
that can be customized, and the system provides the ability to customize the item
in allowable ways. When the user has customized the item, he or she will review
an online proof of the customized item and then submit the order.

Copyright © 2010 by G. David Dodd 3

All rights reserved.
Marketer’s Toolkit
• The MCMS provider uses digital printing technology to produce the ordered
item(s) and then packages and ships the completed materials.

• In the few cases where production economics don’t allow marketing

consumables to be acquired in small quantities, a capable MCMS provider will
usually offer warehousing and real-time (or near real-time) inventory tracking and
reporting. This provides the data needed to more accurately forecast future
needs for these materials.

The obsolescence of marketing materials constitutes a significant and unnecessary

waste of marketing resources. Today, marketing consumables management systems
can greatly reduce, if not completely eliminate, obsolescence waste. With marketing
budgets under constant pressure, can you afford to be without such a powerful solution?

If you’d like to learn how a marketing consumables management system can help
eliminate obsolescence waste from your marketing operations, contact G. David Dodd at
931-707-5105 or via e-mail at ddodd@pointbalance.com.

Copyright © 2010 by G. David Dodd 4

All rights reserved.