Chapter 10 : Creating Successful Long Term Growth
- 1. Chapter 10
- 2. TABLE OF CONTENTS • Summary • Trends in Marketing Practices • Internal Marketing • Socially Responsible Marketing • Marketing Implementation and Control • The Future of Marketing
- 3. SUMMARY 3
- 4. SUMMARY • The modern marketing department has evolved through the years from a simple sales department to an organizational structure where marketers work mainly on cross-disciplinary teams. • The marketing department must monitor and control marketing activities continuously. • Some companies are organized by functional specialization; others focus on geography and regionalization, product and brand management, or market-segment management. • Some companies establish a matrix organization consisting of both product and market managers. • Effective modern marketing organizations are marked by customer focus within and strong cooperation among marketing, R&D, engineering, purchasing, manufacturing, operations, finance, accounting, and credit
- 5. SUMMARY • Marketing plan control ensures the company achieves the sales, profits, and other goals in its annual plan. The main tools are sales analysis, market share analysis, marketing expense-to-sales analysis, and financial analysis of the marketing plan. • Profitability control measures and controls the profitability of products, territories, customer groups, trade channels, and order sizes. Efficiency control finds ways to increase the efficiency of the sales force, advertising, sales promotion, and distribution. • Strategic control periodically reassesses the company’s strategic approach to the marketplace using marketing effectiveness and marketing excellence reviews as well as marketing audits. • Achieving marketing excellence in the future will require a new set of skills and competencies.
- 6. LEARNING OBJECTIVES In this chapter we will address the following questions: • What are important trends in marketing practices? • What are the keys to effective internal marketing? • How can companies be socially responsible marketers? • What tools are available to help companies monitor and improve their marketing activities? • What do marketers need to do to succeed in the future?
- 7. TRENDS IN MARKETING PRACTICES Section 1
- 8. TRENDS IN MARKETING PRACTICES • Reengineering refers to appointing teams to manage customer-value-building processes and break down walls between departments. • Outsourcing refers to the buying more goods and services from outside domestic or foreign vendors. • Benchmarking is the studying of “best practice companies” to improve performance. Reengineering Outsourcing Benchmarking Supplier partnering Customer partnering Merging Globalizing Flattening Focusing Accelerating Empowering
- 9. TRENDS IN MARKETING PRACTICES • Supplier partnering refers to partnering with fewer but better value adding suppliers. • Customer partnering refers to the trend of working more closely with customers to add value to their operations • Merging is the acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope. • Globalizing refers to the increasing efforts to “think global” and “act local”. Reengineering Outsourcing Benchmarking Supplier partnering Customer partnering Merging Globalizing Flattening Focusing Accelerating Empowering
- 10. TRENDS IN MARKETING PRACTICES • Flattening is the reduction in the number of organizational levels to get closer to the customer. • Focusing is determining the most profitable businesses and customers and focusing on them. • Accelerating means designing the organization and setting up processes to respond more quickly to changes in the environment. • Empowering is encouraging and empowering personnel to produce more ideas and take more initiative Reengineering Outsourcing Benchmarking Supplier partnering Customer partnering Merging Globalizing Flattening Focusing Accelerating Empowering
- 11. TRENDS IN MARKETING PRACTICES • Shifts in marketing and business practices, firms also face ethical dilemmas and perplexing trade-offs (e.g., convenience of disposable products vs. desire to minimize waste) • Firms must develop fully integrated marketing programs and meaningful relationships with a range of constituents
- 13. Internal Marketing • R&D • Purchasing • Manufacturing • Marketing • Sales • Logistics • Accounting • Finance • Public Relations • Other Customer- Contact Personnel
- 14. INTERNAL MARKETING • Internal Marketing requires that everyone in the organization accept the concepts and goals of marketing and engage in identifying, providing, and communicating customer value. • In a networked enterprise, every functional area can interact directly with customers.
- 15. INTERNAL MARKETING • R&D listens to consumers and solicits their reactions and suggestions, involves other departments, seeks best of class solutions, improves and refines products • Purchasing searches for the best suppliers, builds long-term relationship with a few, more reliable high-quality suppliers. • Manufacturing invites customers on tours, visits customers’ factories, keep promised delivery schedules, produce goods faster, at lower costs, with fewer adverse environmental consequences. R&D Purchasing Manufacturing Marketing Sales
- 16. INTERNAL MARKETING • Marketing studies customer needs and wants in well-defined market segments, allocates profit potential, develops winning offerings for target segment, measures company image and customer satisfaction and loyalty on a continuous basis. • Sales acquires specialize knowledge of the customer’s industry, gives solutions and makes promises it can keep, informs product development about customer needs, serves the same customers for a long period of time R&D Purchasing Manufacturing Marketing Sales
- 17. INTERNAL MARKETING • Logistics sets high standards for service delivery and meets them, provides knowledgeable and friendly customer service. • Accounting prepares reports and invoices that relate to customer needs and segments • Finance understands and supports marketing investments and tailors financial packages to customers’ financial requirements Logistics Accounting Finance Public relations Customer contact employees
- 18. INTERNAL MARKETING • Public relations disseminates favorable news about the company and handles damage control for unfavorable news, advocates for better company policies and practices • Customer contact employees are competent, courteous, cheerful, credible, reliable and responsive Logistics Accounting Finance Public relations Customer contact employees
- 19. ORGANIZING THE MARKETING DEPARTMENT • Functional Organization is the most common form i.e. administrative simplicity and challenge to develop smooth working relationships • Geographic Organization is the area marketing specialists by region. • Product- or Brand-Management Organization which serves as another layer of management in a functional organization Functional Organization Product- or Brand- Management Organization Geographic Organization
- 20. ORGANIZING THE MARKETING DEPARTMENT • Category management is a retailing concept purchased or sold by a retailer is broken down into discrete groups these groups are known as product categories (grocery categories might be: tinned fish, washing detergent, toothpastes) • Market-Management Organization- Market managers supervise several market- development managers, market specialists, or industry specialists. • Matrix-Management Organization is appropriate for companies that produce many products for many markets Category management Market- Management Organization Matrix- Management Organization
- 24. TASKS PERFORMED BY BRAND MANAGERS Brand Manager’s Tasks 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 intelligence on product performance, customer attitudes Initiate product improvements
- 25. TYPES OF PRODUCT TEAMS There are three types: vertical, triangular, and horizontal • Triangular and horizontal product-team approaches let each major brand be run by a brand-asset management team • An alternative eliminates product manager positions for minor products and assign two or more products to each remaining manager. This is feasible when two or more products appeal to a similar set of needs. • Another alternative, category management, a company focuses on product categories to manage its brands.
- 26. TYPES OF PRODUCT TEAMS
- 27. RELATIONSHIPSWITHOTHERDEPARTMENTS • Departments define company problems and goals from their own viewpoints, so conflicts of interest and communications problems are unavoidable. • Many companies now focus on key processes rather than on departments because departmental organization can be a barrier to smooth performance. • All areas of the organization need to work effectively together and cross- functional teams are often created
- 28. BUILDING A CREATIVE MARKETING ORGANIZATION Many companies are product and sales driven (not market and customer driven) therefore transforming into a true market-driven company requires: • Developing a company-wide passion for customers • Organizing around customer segments instead of products • Understanding customers through qualitative and quantitative research
- 29. 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 Customer focused Marketing force Outside guidance Reward system Marketing talent
- 31. SOCIALLY RESPONSIBLE MARKETING • Internal marketing must be matched by a strong sense of ethics, values, and social responsibility. • Strategic role in corporate social responsibility is thought to benefit not just customers, employees, community, and the environment but also shareholders. • The most admired and most successful companies in the world abide by high standards of business and marketing conduct that dictate serving people’s interests, not only their own.
- 32. SOCIALLY RESPONSIBLE MARKETING • Corporate Social Responsibility: a three-pronged attack that relies on proper legal, ethical, and social responsibility behavior •Employee knows and observes relevant lawsLegal •Principles of honesty, fairness, equality, dignity, diversity and individual rights. Ethical •Exercise social conscience with customers and stakeholders Social responsibility behavior
- 33. SUSTAINABILITY • The ability to meet humanity’s needs without harming future generations Triple bottom line- people, planet, and profit. The people must come first. Eco-friendly and long haul Greenwashing products Healthy skepticism Pay a price premium for green products
- 34. SOCIALLYRESPONSIBLEBUSINESSMODELS • Companies that innovate solutions and values in a socially responsible way are most likely to succeed
- 35. CAUSE-RELATED MARKETING • Cause-Related Marketing links the firm’s contributions toward a designated cause to customers’ engaging directly or indirectly in revenue- producing transactions with the firm. •Marketing efforts for social welfare Corporate societal marketing •Enhance the company’s public image and goodwill Differentiated brand positioning •Builds brand awareness Strong unique bond •Consumers don’t think a company sufficiently responsible in all its behavior Backfires question •firms take a soft-sell approach to their cause marketing Avoid backlash
- 36. CAUSE-MARKETING BENEFITS • Build brand awareness • Enhance brand image • Establish brand credibility • Evoke brand feelings • Create a sense of brand community • Elicit brand engagement
- 37. BRANDING A CAUSE MARKETING PROGRAM • Self-branded: Create Own Cause Program:. • The newly created self-branded cause could be branded with the parent brand or an individual product brand. • The Ronald McDonald House Charities and the Avon Breast Cancer Crusade are examples of self branded cause entities. Self-branded Co-branded Jointly branded
- 38. BRANDING A CAUSE MARKETING PROGRAM • Co-branded: Link to Existing Cause Program: The firm partners with an existing cause only in the form of its designation as a sponsor or supporter the actual involvement is not branded as a program. • Sealyâ sponsorship of NASCAR victory Junction Gang Camp, which involves the donation of beds to an auto racing themed camp for children with life-threatening illnesses. Self-branded Co-branded Jointly branded
- 39. BRANDING A CAUSE MARKETING PROGRAM • Jointly Branded: Link to Existing Cause Program: In this hybrid approach, firms partner with an existing cause but explicitly brand the program that links to the cause. • An example of this is The Rocky Mountain Challenge, an organized three-day benefit bike ride, which is sponsored by the bike retailer Colorado Cyclist to provide funds for the Tyler Hamilton Foundation for MS, a charity established by the Tour de France cyclist. Self-branded Co-branded Jointly branded
- 40. SOCIAL MARKETING CAMPAIGNS • Social marketing by nonprofit or government organizations furthers a cause, such as “say no to drugs” or “exercise more and eat better.” • Choosing the right goal or objective for a social marketing program is critical. • Social marketing campaigns may try to change people’s cognitions, values, actions, or behaviors. The objectives are:- Cognitive Action Behavioral Value
- 42. KEY SUCCESS FACTORS FOR SOCIAL MARKETING PROGRAMS • 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 Ready to respond Promote clear & simple term Easy to adopt Attention-grabbing messages Education-entertainment approach
- 43. Social MarketingPlanningProcess • Where are we? • Where do we want to go? • How will we get there? • How will we stay on course?
- 45. SOCIALLY RESPONSIBLE MARKETING Virgin Group- Questions • How is Virgin unique in its quest to be a socially responsible and sustainable company? • Discuss the contradiction between Virgin’s negative environmental impact (via air and rail) and the green message and communication efforts behind endeavors such as the Earth Challenge.
- 46. SOCIALLY RESPONSIBLE MARKETING Virgin Group- Answers 1. How is Virgin unique in its quest to be a socially responsible and sustainable company? • The nonprofit foundation Virgin Unite has started to tackle global, social, and environmental problems with an entrepreneurial approach. A team of scientists, entrepreneurs, and environmental enthusiasts consult with Virgin about what it needs to do on a grassroots and global level. • The goal is to change the way “businesses and the social sector work together— driving business as a force for good.” That’s why he recently made corporate responsibility and sustainable development (CR/SD) a key priority for every one of his companies. Each must act socially responsible and lessen its carbon footprint. • Virgin categorizes its businesses into six socially responsible and sustainable groups: Flying High, We’re all going on a summer holiday, Staying in touch, Watching the Pennies, My body is a Temple, Out of this world, and Just get out and relax. Each is to do exceptionally good things in its industry as well as help to alleviate the bad things that come with the category. In 2006, he announced that all dividends from Virgin’s rail and airline businesses “will be invested into renewable energy initiatives to tackle emissions related to global warming.” That effort has evolved into the Virgin Green Fund, which invests in renewable energy opportunities from solar energy to water purification and is estimated to reach $3 billion in value by 2016.
- 47. SOCIALLY RESPONSIBLE MARKETING Virgin Group- Answers 2. Discuss the contradiction between Virgin’s negative environmental impact (via air and rail) and the green message and communication efforts behind endeavors such as the Earth Challenge. • Student answers will vary, but should include recognition of concerns about greenwashing, discussion of the trade-offs between profitability and social responsibility, and should identify the challenges associated with holistic marketing, in general.
- 48. SOCIALLY RESPONSIBLE MARKETING VideoTime–“Thesocialresponsibilityofbusiness” “Alex Edmans talks about the long- term impacts of social responsibility and challenges the idea that caring for society is at the expense of profit” Alex Edmans is a Professor of Finance at London Business School. Alex’s research interests are in corporate finance, behavioural finance, CSR, and practical investment strategies. He has been awarded the Moskowitz Prize for Socially Responsible Investing and the FIR-PRI prize for Finance and Sustainability https://www.youtube.com/watch?v= Z5KZhm19EO0&t=601s
- 49. MARKETING IMPLEMENTATION AND CONTROL Section 4
- 50. TYPES OF MARKETING CONTROL • Annual plan control is the monitoring of current marketing efforts and results to ensure that the annual sales and the profit goals are achieved. • It is the responsibility of the top and middle management and the purpose is to examine whether planned results are being achieved in terms of sales, profits, costs, finance, attitudes of participants in marketing operations. Annual Plan Control Profitability Control Efficiency Control Strategic Control
- 51. TYPES OF MARKETING CONTROL • Profitability control is to determine the actual profitability of the firm’s products, territories, market segments and trade channels. • Profitability control is exercised to examine whether the company is making and losing the money. Annual Plan Control Profitability Control Efficiency Control Strategic Control
- 52. TYPES OF MARKETING CONTROL • Efficiency control is the task of improving the efficiency of such marketing activities as personal selling, advertising, sales- promotion and distribution. • Efficiency control is undertaken to evaluate and improve the spending efficiency and impact of marketing expenditures on the marketing operations. Annual Plan Control Profitability Control Efficiency Control Strategic Control
- 53. TYPES OF MARKETING CONTROL • Strategic control is the crucial task of making sure that the company’s marketing objectives, strategies and systems are optimally adapted to the current and forecasted marketing environment. • Strategic control refers to the in- depth study undertaken to examine whether the company is pursuing its best opportunities with respect to markets, products and channels. Annual Plan Control Profitability Control Efficiency Control Strategic Control
- 54. THE FUTURE OF MARKETING Section 5
- 55. THE FUTURE OF MARKETING The Future of Marketing requires more accountability than in the past. • To succeed in the future, marketing must be more holistic and less departmental. • Marketers must achieve wider influence in the company, continuously create new ideas, and strive for customer insight by treating customers differently but appropriately. • They must build their brands more through performance than promotion. • They must go electronic and win through building superior information and communication systems.
- 56. THE FUTURE OF MARKETING VideoTime–“HowChinaischangingthefutureofshopping” “China is a huge laboratory of innovation, says retail expert Angela Wang, and in this lab, everything takes place on people's phones. What will this transformation mean for the future of shopping?” Angela Wang is a core member of The Boston Consulting Group’s retail sector in Greater China. Angela’s projects have included helping a leading Chinese regional retailer develop an omnichannel strategy for its grocery and department store businesses and redesign its organization, processes, and KPIs. https://www.youtube.com/watch?v= dOt4NkcmIUg