Chapter 22 Managing the Total Marketing Effort by

1. Chapter 22 Managing the Total Marketing Effortby PowerPoint by Milton M. Pressley University of New Orleans

2. Kotler on Marketing The marketing organization will have to redefine its role from managing customer interactions to integrating and managing all the company’s customer-facing processes.

3. Chapter Objectives • In this chapter, we focus on the following questions: • What are the trends in company organization? • How are marketing and sales organized in companies? • What steps can a company take to build a stronger customer focused culture? • How can a company improve its marketing-implementation skills? • What tools are available to help companies monitor and improve their marketing activities?

4. Trends in Company Organization • Main responses of companies to a changing environment • Reengineering • Outsourcing • Benchmarking • Supplier partnering • Customer partnering • Merging • Globalizing • Flattening • Focusing • Empowering

5. Discussion Question Outsourcing can save companies money by passing on to another firm the overhead involved with maintaining specialized staff positions, or eliminating the need to maintain specialized equipment that does not directly support their core business. What are the potential risks associated with outsourcing?

6. Figure 22.1: Stages in the Evolution of the Marketing Department Marketing Organization • The Evolution of the Marketing Department

7. Marketing Organization Figure 22.1 (cont.): Stages in the Evolution of the Marketing Department • Simple Sales Department • Sales Department With Ancillary Marketing Functions • Separate Marketing Department • Modern Marketing Department / Effective Marketing Company • Process-And Outcome-Based Company

8. Marketing Organization Figure 22.2: Functional Organization • Organizing the Marketing Department • Functional Organization • Field sales • Customer service • Product management • Geographic Organization • Area market specialist

9. Discussion Question Organizing a marketing organization geographically can allow marketing managers to focus on regional and cultural differences in their market segments. What are the reasons why geographical segmentation might be a bad idea? What could be done to minimize these problems in geographically organized marketing departments?

10. Krispy Kreme’s Web site promotes new store openings

11. Marketing Organization • Product- or Brand-Management Organization • Product and brand managers have these tasks: • Develop a long-range and competitive strategy for the product • Preparing an annual marketing plan and sales forecast • Working with advertising and merchandising agencies to develop copy, programs, and campaigns • Stimulating support of the product among the sales force and distributors • Gathering continuous intelligence on the product’s performance, customer and dealer attitudes, and new problems and opportunities • Initiating product improvements to meet changing market needs

12. Figure 22.3: The Product Manager’s Interactions

13. Marketing Organization • Pearson and Wilson’s five steps to make the product-management system work better • Clearly delineate the limits of manager’s role • Build a strategy-development-and-review process • Take into account areas of potential conflict • Set up a formal process that forces to the top all conflict-of-interest situations • Establish a system for measuring results

14. Marketing Organization Figure 22.4: Three Types of Product Teams • A Second Alternative is to switch from product managers to product teams • Vertical product team • Triangular product team • Horizontal product team • Third Alternative: Brand Asset Management Team (BAMT)

15. Figure 22.5: Managing Through Teams at Kraft

16. Marketing Organization • Market-Management/Customer Management Organization • Market-management Organization • Markets manager • Customer-management Organization • Product-Management/Market-Management Organization

17. Figure 22.6: Product- / Market-Management Matrix System

18. Marketing Organization • Corporate-Divisional Organization • No corporate marketing • Moderate marketing • Strong corporate marketing • Marketing Relations With Other Departments • R&D • Engineering and Purchasing • Manufacturing and Operations • Finance • Accounting and Credit

19. Marketing Organization • Building a Companywide Marketing Orientation • Transforming into a true market-driven firm requires: • Developing a companywide passion for customers • Organizing around customer segments instead of around products • Developing a deep understanding of customers through qualitative and quantitative research

20. Marketing Organization • What steps can a CEO take to create a market and customer focused company? • Convince senior management of the need • Appoint a senior marketing officer and a marketing task force • Get outside help and guidance • Change the company’s reward measurement and system • Hire strong marketing talent • 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 process-outcome focus • Empower the employees

21. Marketing Organization • Injecting More Creativity Into the Organization Strategic innovation resource: Brighthouse

22. Marketing Implementation • Thomas Bonoma’s four sets of skills for implementing marketing programs • Diagnostic skills • Identification of company level • Implementation skills • Evaluation skills

23. Evaluation and Control Table 22.1: Types of Marketing Control See text for complete table

24. Figure 22.7: The Control Process Evaluation and Control • Annual-Plan Control • Sales Analysis • Sales variance analysis • Microsales analysis

25. Evaluation and Control • Market-Share Analysis • Overall market share • Served market share • Relative market share • Marketing Expense-To-Sales Analysis

26. Figure 22.8: The Control-Chart Model

27. Evaluation and Control • Financial Analysis

28. Figure 22.9: Financial Model of Return on Net Worth

29. Evaluation and Control • Market-Based Scorecard Analysis • Customer-performance scorecard • Stakeholder-performance scorecard • Profitability Control • Marketing-Profitability Analysis

30. Table 22.2: A Simplified Profit-and-Loss Statement

31. Evaluation and Control Table 22.3: Mapping Natural Expenses into Functional Expenses • Step 1: Identifying Functional Expenses

32. Evaluation and Control Table 22.4: Bases for Allocating Functional Expenses to Channels • Step 2: Assigning Functional Expenses to Marketing Entities

33. Evaluation and Control Table 22.5: Profit-and-Loss Statements for Channels • Step 3: Preparing a Profit-and-Loss Statement for Each Marketing Entity See text for complete table

34. Evaluation and Control • Determine Corrective Action • Direct Versus Full Costing • Direct costs • Traceable common costs • Nontraceable common cost • Activity-based Cost Accounting (ABC) • Efficiency control • Marketing Controller • Sales-Force Efficiency • Advertising Efficiency • Sales-Promotion Efficiency • Distribution Efficiency

35. Figure 22.10: Dynamic Interactions Between Sales Orders and Distribution Efficiency

36. Evaluation and Control • Strategic control • The Marketing Effectiveness Review • The Marketing Audit • Marketing audit’s four characteristics: • Comprehensive • Systematic • Independent • Periodic

37. Table 22.6: Components of a Marketing Audit See text for complete table

38. Evaluation and Control • The Marketing Excellence Review

39. Table 22.7: The Marketing Excellence Review: Best Practices See text for complete table

40. Evaluation and Control • The Ethical and Social Responsibility Review