22 Managing a Holistic Marketing Organization Marketing Management

22 Managing a Holistic Marketing Organization Marketing Management, 13 th ed

Chapter Questions • What are important trends in marketing practices? • What are the keys to effective internal marketing? • How can companies be responsible social marketers? • How can a company improve its marketing skills? • What tools are available to help companies monitor and improve their marketing activities? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -2

Stonyfield Farms Embraced Corporate Enlightenment Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -3

Trends in Marketing Practices • • • Reengineering Outsourcing Benchmarking Supplier partnering Customer partnering Merging • • • Globalizing Flattening Focusing Accelerating Empowering Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -4

Organizing the Marketing Department • • • Functional Organization Geographic Organization Product- or Brand-Management Organization Market-Management Organization Matrix-Management Organization Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -5

Figure 22. 1 Functional Organization Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -6

Tasks Performed by Brand Managers • Develop long-range and competitive strategy for each product • Prepare annual marketing plan and sales forecast • Work with advertising and merchandising agencies to develop campaigns • Increase support of the product among channel members • Gather continuous intelligence on product performance, customer attitudes • Initiate product improvements Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -7

Figure 22. 2 The Product Manager’s Interactions Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -8

Figure 22. 3 Vertical Product Team • PM = Product Manager • APM = Associate PM • PA = Product Assistant Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -9

Figure 22. 3 Triangular Product Team • PM = Product Manager • R = Market Researcher • C = Communication Specialist Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -10

Figure 22. 3 Horizontal Product Team • • PM = Product Manager R = Market Researcher C = Communication Specialist S = Sales Manager D = Distribution Specialist F = Finance Specialist E = Engineer Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -11

Figure 22. 4 Product/Marketing. Management Matrix System Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -12

Building a Creative Marketing Organization • Developing a company-wide passion for customers • Organizing around customer segments instead of products • Understanding customers through qualitative and quantitative research Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -13

How Can CEOs Create a Marketing-Focused Company? • Convince senior management of the need to become customer focused • Appoint a senior marketing officer and marketing task force • Get outside guidance • Change the company’s reward measurement and system • Hire strong marketing talent Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -14

How Can CEOs Create a Marketing-Focused Company? • Develop strong in-house marketing training programs • Install a modern marketing planning system • Establish an annual marketing excellence recognition program • Shift from a department focus to a processoutcome focus • Empower the employees Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -15

Corporate Social Responsibility Socially responsible behavior Ethical behavior Legal behavior Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -16

Top-Rated Companies for Social Responsibility • • Microsoft Johnson & Johnson 3 M Google Coca-Cola General Mills UPS • • Sony Toyota Procter & Gamble Amazon. com Whole Foods Walt Disney Honda Motor Fed Ex Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -17

Life is Good Promotes Sustainability Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -18

Levi’s Eco Jeans Promotes Sustainability Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -19

What is Cause-Related Marketing? Cause-related marketing is marketing that links the firm’s contributions to a designated cause to customers engaging directly or indirectly in revenue-producing transactions with the firm. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -20

Cause-Related Marketing Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -21

Branding a Cause Marketing Program • Self-branded: Create Own Cause Program • Co-branded: Link to Existing Cause Program • Jointly branded: Link to Existing Cause Program Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -22

Possible Objectives for Social Marketing Campaigns Cognitive Action Behavioral Value Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -23

Key Success Factors for Social Marketing Programs • Study the literature and previous campaigns • Chose target markets that are ready to respond • Promote a single, doable behavior in clear, simple terms • Explain the benefits in compelling terms • Make it easy to adopt the behavior • Develop attention-grabbing messages • Consider an education-entertainment approach Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -24

Table 22. 4 Social Marketing Planning Process Where are we? Where do we want to go? How will we get there? How will we stay on course? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -25

Figure 22. 5 The Control Process What do we want to achieve? What is happening? Why is it happening? What should we do about it? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -26

Types of Marketing Control Annual plan control Profitability control Efficiency control Strategic control Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -27

Approaches to Annual Plan Control • • • Sales analysis Market share analysis Sales-to-expense ratios Financial analysis Market-based scorecard analysis Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -28

Figure 22. 6 The Control-Chart Model Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -29

Figure 22. 7 Financial Model of Return on Net Worth Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -30

Table 22. 8 Simplified Profit-and-Loss Statement Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -31

Marketing Profitability Analysis • Step 1: Identify functional expenses • Step 2: Assign functional expenses to marketing entities • Step 3: Prepare a profit-and-loss statement for each marketing entity Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -32

Table 22. 9 Mapping Natural Expenses into Functional Expenses Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -33

Table 22. 10 Bases for Allocating Functional Expenses to Channels Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -34

Table 22. 11 Profit-and-Loss Statements for Channels Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -35

Types of Costs Direct costs Traceable common costs Nontraceable common costs Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -36

Measures Tracked for Efficiency Control • • Logistics costs as a percentage of sales Percentage of orders filled correctly Percentage of on-time deliveries Number of billing errors Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -37

What is a Marketing Audit? A marketing audit is a comprehensive, systematic, independent, periodic examination of a company’s or business unit’s marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities, and recommending a plan of action to improve the company’s marketing performance. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -38

Characteristics of Marketing Audits Comprehensive Systematic Independent Periodic Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -39

Marketing Debate ü Is marketing management an art or a science? Take a position: 1. Marketing management is largely an 2. artistic exercise and therefore highly 3. subjective. 4. or 5. 2. Marketing management is largely a 6. scientific exercise with well-established 7. guidelines and criteria. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -40

Marketing Discussion ü How does cause or corporate social marketing affect your personal consumer behavior? ü Do you ever buy or not buy any products because of a company’s environmental policies or programs? ü Why or why not? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 -41