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Chapter 9

Chapter 9. Marketing Strategy Reformulation: The Control Process. In this chapter, you will learn about…. Strategic Change Sources of Strategic Change Strategic Change: Threat or Opportunity? Operations Control Nature of Marketing Cost Analysis Product-Service Mix Control Sales Control

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Chapter 9

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  1. Chapter 9 Marketing Strategy Reformulation: The Control Process

  2. In this chapter, you will learn about… • Strategic Change • Sources of Strategic Change • Strategic Change: Threat or Opportunity? • Operations Control • Nature of Marketing Cost Analysis • Product-Service Mix Control • Sales Control • Marketing Channel Control

  3. In this chapter, you will learn about… • Considerations in Marketing Control • Problems versus Symptoms • Effectiveness versus Efficiency • Data versus Information

  4. Operations Control Strategic Control Doing the right things Doing things right Components of Marketing Control MARKETING CONTROL

  5. Strategic Control Operations Control Focus on heightening the marketing effort or identifying ways to improve efficiency Improving effectiveness in seeking opportunities and mitigating threats in the environment Remedial Actions under..

  6. Strategic Change Change in the environment that will affect the long-run well-being of the organization

  7. Sources of Strategic Change Technological Innovation (DVDs) Market Evolution (Calcium) Market Redefinition (Electronic banking) Change in Marketing Channels (Internet)

  8. Dealing with Strategic Change • Attempt to marshal the resources necessary to alter its technical and marketing capabilities to fit market-success requirements. • Shift emphasis to product markets where match between success requirements and the firm’s distinctive competency is clear. • Leave the industry.

  9. Goal of Operations Control To Improve the Productivity of Marketing Efforts

  10. Purpose of Marketing-Cost Analysis To trace, assign, or allocate costs to a specified marketing activity or entity in a manner that accurately displays the financial contribution of activities or entities to the organization. It is based on the principle that certain costs are directly or indirectly assignable to every market segment.

  11. Marketing Segment Variables for Cost Analysis Marketing Channels Elements of Product-Service Offering Sales Divisions, District, or Territories Type or Size of Customers

  12. Should all costs be allocated to market segments? What costs should be allocated? Issues in Cost Allocation How should costs be allocated to separate market segments?

  13. Product-Service Mix Control • Assessing the performance of the offerings • Sales (Kodak vs. Fuji) • Market Share (Goodyear) • Appraising financial worth of product-service offerings • Assign costs to offerings (red-eye flight) • Contribution-margin approach (gas station)

  14. Behavioral Aspects Cost Aspects Sales Effort Allocation of Selling-Time Performance Expenses Sales-function Administration Sales Control Sales Control

  15. Measures to Assess Sales Performance Sales Revenue Gross Profit Penetration of Accounts in Sales Territory Sales Call Frequency Selling and Sales Administration Expenses

  16. Example of Disaggregating Service Station Costs for Product-Service Mix Control ($’000)

  17. Performance Summary for Two Sales Reps

  18. Selected Operating Indices of Sales Performance

  19. Selected Operating Indices of Sales Performance

  20. Marketing Channel Control Assess Environmental and Organizational Factors Evaluate Profitability of Marketing Channels

  21. Order- Getting Cost Include sales expenses and advertising allowances Order- Servicing Cost Include packaging and delivery costs, warehousing costs, and billing costs Types of Costs in Marketing Channel Control

  22. Disaggregated Costs of Furniture Improvement Products for Marketing Channel Control ($’000)

  23. Considerations in Marketing Control Data versus Information Problems versus Symptoms Effectiveness versus Efficiency

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