Download Chapter 2

CHAPTER
22
2
MANAGING A
HOLISTIC MARKETING
ORGANIZATION
LEARNING OBJECTIVES
After reading this chapter, students should:

Know what are the important trends in marketing practices

Know what are the keys to effective internal marketing

Know how companies can be responsible social marketers

Know how a company can improve its marketing implementation skills

Know what tools are available to help companies monitor and improve their
marketing activities
CHAPTER SUMMARY
The modern marketing department has evolved through the years from a simple sales
department to an organizational structure where marketing personnel work mainly on crossdisciplinary teams.
Modern marketing departments can be organized in a number of ways. Some companies are
organized by functional specialization, although others focus on geography and
regionalization. Still others emphasize product and brand management or market-segment
management. Some companies establish a matrix organization consisting of both product and
market managers. Finally, some companies have strong corporate marketing, others have
limited corporate marketing, and still others place marketing only in the divisions.
Effective modern marketing organizations are marked by a strong cooperation and customer
focus among the company’s departments: marketing, R&D, engineering, purchasing,
manufacturing, operations, finance, accounting, and credit.
Companies must practice social responsibility through their legal, ethical, and social words
and actions. Cause marketing can be a means for companies to productively link social
responsibility to consumer marketing programs. Social marketing is done by a non-profit or
government organization to directly address a social problem or cause.
A brilliant strategic marketing plan counts for little if it is not implemented properly.
Implementing marketing plans calls for skills in recognizing and diagnosing a problem,
assessing the company level where the problem exists, implementation skills, and skills in
evaluating the results.
581
Chapter-by-Chapter Instructional Material
The marketing department has to monitor and control marketing activities continuously.
Efficiency control focuses on finding ways to increase the efficiency of the sales force,
advertising, sales promotion, and distribution. Strategic control entails a periodic reassessment
of the company and its strategic approach to the marketplace, using the rolls of the marketing
effectiveness, excellence reviews, and the marketing audit.
OPENING THOUGHT
This chapter sums up the concepts of marketing today—marketing must be involved in all
elements of the company’s operations and work closely with its suppliers, channel partners,
with the understanding that each element or function provides an opportunity to market the
product to the ultimate consumer. In many ways, this chapter focuses on the “management” of
marketing in terms of the ability of the marketing personnel to work with cooperation and to
encourage customer focus by each discipline. Marketers today must also be concerned for the
welfare of society as a whole. Finally, marketers must focus their attention to the
implementation process of solving marketing opportunities.
Students engaged in disciplines outside of marketing may present differing opinions of the
value of their discipline to the overall health of the organization. The instructor’s challenge is
to demonstrate how a holistic approach is preferable or even necessary in today’s (and more
so for the future) competitive environment. Companies that do not/will not adopt such a view
are likely to find that they are not competitive in the future.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester-long marketing plan project, this chapter is the second of two
parts of oral presentations of the student’s projects. Students should emphasize here how
specifically, their marketing plans contain a holistic view of the marketing process.
2. The concept of “internal marketing” is prevalent now in popular books and magazines.
Students should read and review at least four sources from the Web and comment on what
additional information, techniques, and formulas for success they have discovered. How
does this information compare, contrast, or add to the information contained in the
chapter. What is the future of “internal marketing” and why are companies so intent on
succeeding?
3. Sonic PDA Marketing Plan The last step in completing a marketing plan is to provide
for organizing, implementing, evaluating, and controlling the total marketing effort. In
addition to measuring progress toward financial targets and other objectives, marketers
need to plan how to audit and improve their marketing activities.
Sonic has asked you to plan the management of the marketing effort for the PDA product.
Look back at the objectives, strategies, and programs you have developed. Then answer
these questions:

What is the most appropriate organization for Sonic’s marketing and sales
departments?
582
Chapter 22: Managing a Holistic Marketing Organization



What control measures should Sonic incorporate into its marketing plan?
What can Sonic do to evaluate its marketing?
How can Sonic evaluate its level of ethically and socially responsible marketing?
Summarize your answers in a written marketing plan or enter the answers in the
Marketing Organization and Implementation sections of Marketing Plan Pro.
ASSIGNMENTS
Small Group Assignments
1. Successful holistic marketers have integrated relationship marketing, internal marketing,
and social marketing into their organizations. Students should chose three companies that
they believe practice holistic marketing and then defend their choices by outlining the
marketing programs of the selected companies.
2. Some companies like the Newman’s Own Brand, have built a business model on social
responsibility. Students should find three other examples of such socially responsible
firms and comment on whether or not they see “social responsibility” as a need
component for marketing in the future. Specifically, knowing what we now know about
consumer-buying behavior, is “socially responsible” a determinant for future success—is
it a mega-trend? Or just a “trend”?
Individual Assignments
1. In the Marketing Insight, entitled, Fueling Strategic Innovation, the author Professor
Stephen Brown of Ulster University, criticizes marketers that make too much of
researching and satisfying consumers. Knowing what you know now about marketing and
marketing management and citing material from all the chapters of the text, defend and
then refute Professor Brown’s criticisms.
2. In the Marketing Memo entitled, Making a Difference, the authors define a process for
executing and communicating a firm’s CSR program. Research known companies and
identify one in particular that you feel presents a strong corporate social responsibility
message. Discuss how you feel this firm is fulfilling the criteria presented in the Marketing
Memo.
Think-Pair-Share
1. Students should research and find two examples of a successful cause-marketing program
currently available in their area and evaluate whether or not they believe that this causemarketing program is (a) building the firms brand awareness; (b) enhancing brand image;
(c) establishing brand credibility; (d) evoking brand feelings; (e) creating a sense of brand
community; and (f) eliciting brand engagement. Students should be able to defend their
opinions citing financial, market share, stock price growth, and other definitive measures.
2. Drawing a clear line between normal marketing practices and unethical behavior is not
easy. Identify two firms, in your area, that you feel are or have demonstrated unethical
behavior (although not per se illegal). Why do you believe that such practices will be not
583
Chapter-by-Chapter Instructional Material
successful for the firm in the future? Do the other student’s in the class agree with your
assertion? On the other hand, do they believe that the examples offered are just “creative”
marketing?
MARKETING TODAY—CLASS DISCUSSION TOPICS
The chapter defines evolution of the marketing department from a sales department into one
that must be involved in all of the functions of the company to successfully implement a
holistic marketing focus for the firm.
Questions:
Is holistic marketing, as described in this chapter, to mean that the marketing executive be
delegated a (or assume) a more important role in the firm’s hierarchy? For example, should a
firm practicing holistic marketing, have its chief marketing office as Co-CEO?
Can a firm continue to have its functional responsibilities remain the same but still institute a
holistic marketing program?
Is holistic marketing really a management philosophy issue rather than a marketing one?
END-OF-CHAPTER SUPPORT
MARKETING DEBATE—Is Marketing Management An Art or a Science?
Some marketing observers maintain that good marketing is something that is more than
anything an art and does not lend itself to rigorous analysis and deliberation. Others strongly
disagree and contend that marketing management is a highly disciplined enterprise that shares
much in common with other business disciplines.
Take a position: Marketing management is largely an artistic exercise and therefore highly
subjective versus Marketing management is largely a scientific exercise with well-established
guidelines and criteria.
Pro: A well-crafted corporate mission statement reflects the values of the firm as they relate to
the community at large, its stakeholders, its employees, and its customers. Once the firm’s
positions are delineated in the mission statement, marketing can begin the process of setting its
priorities, goals, and objectives derived from the stated priorities of the firm. With the advent
of holistic marketing, what the firm believes about the communities at large and the strategic
direction the firm wishes to take should be defined through its mission statement.
Con: Mission statements are written for public consumption and rarely if ever do they reflect
the actual goals, objectives, and mission of the firm. These statements are for public
consumption and are written to placate the corporate stakeholders, employees, and consumers.
Although most mission statements are written with good intentions, the real direction of the
firm must be found in the application of their business practices. Marketing should not make
the mistake of deriving its goals, objectives, and strategies from these platitudes.
584
Chapter 22: Managing a Holistic Marketing Organization
MARKETING DISCUSSION
How does cause or corporate societal marketing affect your personal consumer behavior? Do
you ever buy or not buy any products or services from a company because of its
environmental policies or programs? Why or why not?
Suggested Response:
Student answers will vary according to their responses.
MARKETING SPOTLIGHT—Microsoft
Discussion Questions:
1) What have been the key success factors for Microsoft?
a. Product innovation.
b. Brand-extension strategy.
c. Heavy advertising.
d. Competitiveness toughness.
e. Product expansion.
f. Product integration.
2) Where is Microsoft vulnerable?
a. Overexposure of their trademarked name.
b. Being the market leader or market innovator invites competition to challenge
their dominance.
c. Use of internal associates to create new products- these people are not the
target market for their products and as a result may not fully understand the
market.
3) What should Microsoft watch out for?
a. Consumer shifts in usage of their products.
b. New and/or cutting edge technology developing around them.
c. Quality and functionality of their products versus key competitors.
4) What recommendations would you make to senior marketing executives going
forward?
a. First, do not rest on past successes—continue your strategic direction of
investing in new products and in the process of creating new products.
b. Look at the potential of products in the far future.
5) What should the company be sure to do with their marketing?
a. Continue to capitalize on their name and develop marketing programs that
cements the name Microsoft in the minds of its consumers with the concept of
innovation.
b. Target innovators and heavy users in product launches for diffusion and
adoption across to the whole market.
585
Chapter-by-Chapter Instructional Material
DETAILED CHAPTER OUTLINE
Healthy long-term growth for a brand requires that the marketing organization be
managed properly. Holistic marketers must embrace the complexity of marketing. They
must engage in a host of carefully planned, interconnected marketing activities
Successful holistic marketing requires effective relationship marketing, integrated
marketing, internal marketing, and social marketing.
TRENDS IN MARKETING PRACTICES
In response to the rapidly changing marketing environment, companies have
restructured their business and marketing practices in some of the following ways:
A) Reengineering.
B) Outsourcing.
C) Benchmarking supplier partnering.
D) Customer partnering.
E) Merging.
F) Globalizing.
G) Flattening.
H) Focusing.
I) Accelerating.
J) Empowering.
K) The role of marketing in the organization is changing.
L) Traditionally, marketers have played the role of middlemen.
M) In a networked enterprise every functional area can interact directly with customers.
N) Marketing in an networked enterprise must integrate all the customer-facing processes
so that the customer sees a single face and hears a single voice when they interact with
the firm.
INTERNAL MARKETING
Internal marketing requires that everyone in the organization buy into the concepts and
goals of marketing and engage in choosing, providing, and communicating customer
value.
A) A company can have an excellent marketing department, yet fail at marketing.
B) Much depends upon how the other company departments view customers..
C) Only when all employees realize that their jobs are to create, serve, and satisfy
customers does the company become an effective marketer.
586
Chapter 22: Managing a Holistic Marketing Organization
D) Many companies are now focusing on key processes rather than departments to serve
the customer.
E) To achieve customer-related outcomes, companies appoint process leaders who
manage cross-disciplinary teams.
Organizing the Marketing Department
Modern marketing departments may be organized in a number of different, sometimes
overlapping ways: functionally, geographically, by product or brand, by market, in a
matrix, and by corporate division.
Functional Organization
The most common form of marketing organization consists of functional specialists
reporting to a marketing vice president, who coordinates their activities.
Figure 22.1 shows five specialists.
A) Additional specialists might include:
1) Customer service manager.
2) Marketing planning manager.
3) Market logistic manager.
4) Direct marketing manager.
5) Internet marketing manager
B) The main advantage of a functional marketing organization is its administrative
simplicity.
C) A functional organization often leads to inadequate planning for specific products and
markets.
Geographic Organization
A company selling in a national market often organizes its sales force along geographic
lines.
A) Several companies are now adding area-marketing specialists (regional or local
marketing managers) to support the sales efforts in high-volume markets.
B) Improved information and marketing research technologies have spurred
regionalization.
C) Some companies have to develop different marketing programs in different parts of
the country out of necessity because their brand developments (and retailers’ request
it) varies so much.
587
Chapter-by-Chapter Instructional Material
Product-or-Brand-Management Organization
Companies producing a variety of products and brands often establish a product (or
brand) management organization.
A) The product management organization does not replace the functional organization
but serves as another layer or management.
B) A product manager supervises product category managers, who in turn supervise
specific product and brand managers.
C) A product-management organization makes sense if the company’s products are quite
different, or if the sheer number of products is beyond the ability of a functional
organization to handle.
D) Product and brand management is sometimes characterized as a hub-and-spoke
system.
Figure 22.2 shows the hub-and-spoke system.
E) Some of the tasks that product or brand managers may perform include:
1) Developing a long-range and competitive strategy for the product
2) Preparing an annual marketing plan and sales forecast.
3) Working with advertising and merchandising agencies.
4) Increasing support of the product among the sales force and distributors.
5) Gathering continuous intelligence on the product’s performance, customer and
dealer attitudes, and new problems and opportunities.
6) Initiating product improvements to meet changing market needs.
F) These tasks are common to both consumer and industrial product managers.
1) Consumer-product managers typically manage fewer products and spend more
time on advertising and sales promotion.
2) Industrial product managers spend more time with customers, laboratory, and
engineering personnel.
G) The product-management organization has several advantages:
1) Product managers can concentrate on developing a cost-effective marketing mix
for the product.
2) He or she can react more quickly to new products in the marketplace.
3) The company’s smaller brands have a product advocate.
H) The product management has some disadvantages also:
1) Product managers and specifically brand managers are not given enough authority
to carry out their responsibilities.
2) Product and brand managers become experts in their product area but rarely
achieve functional expertise.
588
Chapter 22: Managing a Holistic Marketing Organization
3) The product management system often turns out to be costly.
4) Brand managers normally manage a brand for only a short time.
5) The fragmentation of markets makes it harder to develop a national strategy from
headquarters.
6) Product and brand managers cause the company to focus on building marketing
share rather than building the customer relationship.
I) A second alternative is to switch to product teams.
J) There are three types of potential product-team structures:
1) Vertical product teams.
2) Triangular product teams.
3) Horizontal product teams.
Figure 22.3 shows these product teams.
K) The triangular and horizontal product team approaches are favored by those who
advocate brand asset management.
L) They believe that each major brand should be run by a brand asset management team
(BAMT) consisting of key representatives from major functions affecting brand’s
performance.
M) A third alternative for product management organization is to eliminate product
manger positions for minor products and assign two or more products to each
remaining manager.
N) A fourth alternative is to introduce category management in which a company
focuses on product categories to manage its brands.
1) A rationale for category management is the increasing power of the trade who
thinks in terms of category of products not individual product lines.
Review Key Definitions here: area marketing specialists, hub-and-spoke system,
consumer-product managers, industrial product managers, product teams, vertical
product teams triangular product teams, horizontal product teams, brand asset
management team, and category management
Market-Management Organization
When customers fall into different user groups with distinct buying preferences and
practices, a market-management organization is desirable.
A) A market manager supervises several market managers (also called marketdevelopment managers, market specialists, or industry specialists).
B) Market managers are staff people and develop long-range and annual plans for their
markets.
589
Chapter-by-Chapter Instructional Material
C) Market managers are judged by their market’s growth and profitability.
D) Many companies are reorganizing along market lines and becoming market-centered
organizations.
E) In a customer-management organization, companies can organize themselves to
understand and deal with individual customers.
Matrix-Management Organization
Figure 22.4 shows the Product Matrix System.
Companies that produce many products flowing into many markets adopt a matrix
organization.
A) Companies can go one-step further and view the market managers as the main
marketers, and their product managers as suppliers.
B) A matrix organization would seem desirable in a multi-product, multi-market
company.
C) The rub is that this system is costly and often creates conflicts, here are two examples:
1) How should the sales force be organized?
2) Who should set the prices for a particular product or market?
D) Matrix management gained advocates because companies provide the context in
which a matrix can thrive—flat, lean team organizations focused around business
processes that cut horizontally across functions.
Corporate-Divisional Organization
As multi-product, multi-market companies grow, they often convert their larger product
or market groups into separate divisions. The divisions set up their own departments
and services. This raises the question of what marketing services and activities should
be retained at company headquarters. Divisionalized companies have reached different
answers to this question:
A) No corporate marketing.
B) Moderate corporate marketing.
C) Strong corporate marketing.
D) Regardless of how formalized corporate marketing is, certain activities must occur
within the organization in a “top-down” fashion. Webster sees the role of marketing at
the corporate level as:
1) To promote a culture of customer orientations and to be an advocate for the
customer in the deliberations of top management strategy formulation.
2) To assess market attractiveness by analyzing customer needs, wants, and
competitive offerings.
590
Chapter 22: Managing a Holistic Marketing Organization
3) To develop the firm’s overall value proposition, the vision and articulation of how
it proposes to deliver superior value to customers.
Relations with Other Departments
In principle, all business functions should interact harmoniously to pursue the firm’s
overall objectives. In practice, interdepartmental relations are often characterized by
deep rivalries and distrust.
A) In the typical organization, each business function has a potential impact on customer
satisfaction.
B) Under the marketing concept, all departments need to “think customer” and work
together to satisfy customer needs and expectations.
C) The marketing vice president, or CMO, has two tasks:
1) To coordinate the company’s internal marketing activities.
2) To coordinate marketing with finance, operations, and other company functions to
serve the customer.
D) Yet there is little agreement on how much influence and authority marketing should
have over other departments.
E) Typically, the marketing vice president must work through permission rather than
authority.
F) Companies need to develop a balanced orientation in which marketing and other
functions jointly determine what is in the company’s best interests.
G) Perhaps, the best solution is for marketing to periodically propose a function-tofunction meeting with departments where greater understanding and collaboration is
warranted.
Building a Creative Marketing Organization
Many companies are beginning to realize that they are not really market- and customerdriven, they are product-and-sales driven. To transform themselves into true marketdriven companies will require:
A) Developing a companywide passion for customers.
B) Organizing around customer segments instead of around products.
C) Developing a deep understanding of customers through qualitative and quantitative
research.
D) The task is not easy, it will require a change in job and department definition,
responsibilities, incentives, and relationships.
E) The organization must also be creative.
F) The only answer is for the firm to build a capability in strategic innovation and
imagination.
591
Chapter-by-Chapter Instructional Material
G) Companies must watch trends and be ready to capitalize on them.
H) Market leaders tend to miss trends when they are:
1) Risk averse.
2) Obsessed about protecting their existing markets and physical resources.
3) More interested in efficiency than innovation.
SOCIALLY RESPONSIBLE MARKETING
Effective internal marketing must be matched by a strong sense of social responsibility
Companies need to evaluate whether they are truly practicing ethical and socially
responsible marketing.
A) Several forces are driving companies to practice a higher level of corporate social
responsibility:
1) Rising customer expectations.
2) Changing employee expectations.
3) Government legislation and pressure.
4) Investor interest in social criteria.
5) Changing business procurement practices.
B) Business success and continually satisfying the customer and other stakeholders are
closely tied to adoption and implementation of high standards of business and
marketing conduct.
C) Business practices are often under attack because business situations routinely pose
tough ethical dilemmas.
D) Drawing a clear line between normal marketing practice and unethical behavior is not
easy.
E) Certain business practices are clearly unethical or illegal:
1) Bribery or stealing trade secrets.
2) False and deceptive advertising.
3) Exclusive dealing and tying agreements.
4) Quality or safety defects.
5) False warranties
6) Inaccurate labeling.
7) Price-fixing or undue discrimination.
8) Barriers to entry and predatory competition.
592
Chapter 22: Managing a Holistic Marketing Organization
F) Today companies that do not perform ethically or well are at a greater risk of being
exposed, thanks to the Internet.
Corporate Social Responsibility
Raising the level of socially responsible marketing calls for a three-pronged attack that
relies on proper legal, ethical, and social responsibility behavior.
Legal Behavior
Society must use the law to define those practices that are illegal, antisocial, or
anticompetitive.
A) Organizations must ensure that every employee knows and observes all relevant laws.
Ethical Behavior
Companies must adopt and disseminate a written code of ethics, build a company
tradition of ethical behavior, and hold its people fully responsible for observing ethical
and legal guidelines.
Social Responsibility Behavior
Individual marketers must practice a “social conscience” in specific dealing with
customers and stakeholders. Increasingly, people say that they want information about
a company’s record on social and environmental responsibility to help decide which
companies to buy from, invest in, and work for.
Table 22.1 lists companies who receive high marks for social responsibility.
A) Deciding how to communicate corporate attitudes and behaviors towards social
responsibility can be difficult.
Socially Responsible Business Models
The future holds a wealth of opportunities for companies. Many companies are giving
social responsibility a more prominent role.
Cause-Related Marketing
Many firms are blending their corporate social responsibility initiatives with their
marketing activities.
A) 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.
B) Cause marketing has also been called a part of corporate societal marketing (CSM).
593
Chapter-by-Chapter Instructional Material
C) Cause-related marketing comes in many forms.
Review Key Definitions here: cause-related marketing, corporate societal marketing
Cause Marketing Benefits and Costs
A) A successful cause marketing program can produce a number of benefits:
1) Improving social welfare.
2) Creating differentiated brand positioning.
3) Building strong consumer bonds.
4) Enhancing the company’s public image with government and other decisionmakers.
5) Creating a reservoir of good will.
6) Boosting internal morale and galvanizing employees.
7) Driving sales.
B) By humanizing the firm, consumers may develop a strong, unique bond with the firm
that transcends normal marketplace transactions.
C) Some of the specific means by which cause marketing programs can build brand
equity with consumers include:
1) Building brand awareness.
2) Enhancing brand image.
3) Establishing brand credibility.
4) Evoking brand feelings.
5) Creating a sense of brand community.
6) Eliciting brand engagement.
D) The danger is that the promotional efforts behind a cause-related marketing program
could backfire if cynical consumers question the link between the product and the
cause and see the firm as being self-serving and exploitative.
E) A number of decisions must be made in designing and implementing a causemarketing program, such as how many, and which cause(s) to choose, and how to
brand the cause program.
Choosing a Cause
Some experts believe that the positive impact on a brand from cause-related marketing
may be lessened by sporadic involvement with numerous causes
A) Many companies choose to focus on one or a few main causes to simplify execution
and maximize impact.
594
Chapter 22: Managing a Holistic Marketing Organization
B) Limiting support to a single cause may limit the pool of consumers or other
stakeholders who could transfer positive feelings from the cause to the firm.
C) Most firms tend to choose causes that fit their corporate or brand image and matter to
their employees and shareholders.
Branding the Cause Marketing Program
There are three potential options for branding a cause-marketing program.
A) Self-branded: create own cause program.
B) Co-branded: link to existing cause program.
C) Jointly-branded: link to existing cause program.
Review Key Definitions here: self-branded, co-branded, and jointly-branded
Social Marketing
Some marketing is conducted to directly address a social problem or cause.
A) Cause-related marketing is done by a company to support a cause.
B) Social marketing is done by a nonprofit or government organization to further a
cause.
C) Social marketing is a global phenomenon that goes back for years.
D) A number of different types of organizations conduct social marketing in the United
States.
E) Literally hundreds of nonprofit organizations are involved with social marketing.
F) Choosing the right goal or objective for a social marketing program is critical.
G) Social marketing campaigns may have objectives related to changing people’s
cognitions, values, actions, or behaviors.
1) Cognitive campaigns.
2) Action campaigns.
3) Behavioral campaigns.
4) Value campaigns.
H) The social marketing planning process follows many of the same steps as for
traditional products and services.
Table 22.2 lists these steps
I) Given the complexity and challenges of the issues involved with social marketing, it is
important to take a long-run view.
J) The actual success of the social marketing program must be evaluated in terms of the
program objectives.
595
Chapter-by-Chapter Instructional Material
K) Criteria might include the following:
1) High incidence of adoption.
2) High speed of adoption.
3) High continuance of adoption.
4) Low cost per unit of adoption.
5) No major counterproductive consequences.
a. Corporate culture defined as “the shared experiences, stories, beliefs, and
norms that characterize an organization.”
Review Key Definitions here: social marketing
MARKETING IMPLEMENTATION
Table 22.3 summarizes the characteristics of a great marketing company
A marketing company is great not by “what it is,” but by “what it does.”
A) Marketing implementation is the process that turns marketing plans into action
assignments and ensures that such assignments are executed in a manner that
accomplishes the plan’s stated objectives.
B) A brilliant strategic marketing plan counts for little if it is not implemented properly.
C) Strategy addresses the what and why of marketing activities.
D) Implementation addresses the who, where, when, and how.
E) Thomas Bonoma identified four sets of skills for implementing marketing programs:
1) Diagnostic skills.
2) Identification of company level.
3) Implementation skills.
4) Evaluation skills.
F) Companies today are striving to make their marketing operations more efficient and
their return on marketing investment more measurable.
G) Companies use information technology to improve the management of their marketing
resources.
H) Certain repetitive processes can be automated. This drive is going under such names
as:
1) Marketing resource management (MRM).
2) Enterprise marketing management (EMM).
3) Marketing automation systems (MAS).
596
Chapter 22: Managing a Holistic Marketing Organization
I) Marketing resource management (MRM) software provides a set of Web-based
applications that automate and integrate such activities as:
1)
Project management.
2)
Campaign management.
3)
Budget management.
4)
Asset management.
5)
Brand management.
6)
Customer-relationship management.
7)
Knowledge management.
J) These software packages are Web-based and add up to what some have called desktop
marketing in that marketers can find whatever information and decision structures
they need on their computers.
EVALUATION AND CONTROL
In spite of the need to monitor and control marketing activities, many companies have
inadequate control procedures
Table 22.4 lists four types of marketing control needed by companies.
Annual-Plan Control
A) Annual-plan control aims to ensure that the company achieves the sales, profits, and
other goals established in its annual plan
1) The heart of annual-plan control is management by objectives
2) Four steps are involved
Figure 22.5 shows the control process.
a. Management sets monthly or quarterly goals.
b. Management monitors its performance in the marketplace.
c. Management determines the causes of serious performance deviations.
d. Management takes corrective action to close the gaps between goals and
performance.
B) This control model applies to all levels of the organization.
Efficiency Control
A) Some companies have established a marketing controller position to improve
marketing efficiency.
B) Marketing controllers work out of the controller’s office but specialize in the
marketing side of the business.
597
Chapter-by-Chapter Instructional Material
Sales-Force Efficiency
A) Sales managers need to monitor the following key indicators of efficiency in their
territories:
1) Average number of calls per salesperson per day.
2) Average sales call time per contact.
3) Average revenue per sales call.
4) Average cost per sales call.
5) Entertainment cost per sales call.
6) Percentage of orders per 100 sales calls.
7) Number of new customers per period.
8) Number of lost customers per period.
9) Sales-force cost as a percentage of total sales.
B) When a company starts investigating sales-force efficiency, it often finds areas for
improvement.
Advertising Efficiency
Many managers believe it is almost impossible to measure what they are getting for their
advertising dollars; but they should try to keep track of at least the following statistics:
1) Advertising cost per thousand target buyers reached by media vehicle
2) Percentage of audience who noted, saw, or associated and read most of each print
ad
3) Consumer opinions on the ad’s content and effectiveness.
4) Before and after measures of attitude toward the product.
5) Number of inquiries stimulated by the ad.
6) Cost per inquiry.
A) Management can take a number of steps to improve advertising efficiency, including:
1) Better job in positioning the product.
2) Defining objectives.
3) Pretesting messages.
4) Using computer technology to guide the selection of media.
5) Looking for better media buys.
6) Posttesting.
598
Chapter 22: Managing a Holistic Marketing Organization
Sales-Promotion Efficiency
Sales promotion includes dozens of devices for stimulating buyer interest and product
trial.
A) To improve sales-promotion efficiency, management should record the costs and sales
impact of each promotion and watch the following statistics:
1) Percentage of sales sold on deal.
2) Display costs per sales dollar.
3) Percentage of coupons redeemed.
4) Number of inquiries resulting from a demonstration.
Distribution Efficiency
Management needs to search for distribution economies on inventory control,
warehouse locations, and transportation modes. It should track such measures as:
A) Logistics costs as a percentage of sales.
B) Percentage of orders filled correctly.
C) Percentage of on-time deliveries.
D) Number of billing errors.
E) One problem is that distribution efficiency declines when the company experiences
strong sales increase.
Figure 22.6 describes Peter Senge’s situation in which strong sales surge causes the
company to fall behind in meeting delivery dates.
Strategic Control
From time to time, companies need to undertake a critical review of overall marketing
goals and effectiveness. Each company should periodically reassess its strategic
approach to the marketplace with marketing effectiveness reviews and marketing
audits.
The Marketing Effectiveness Review
A company’s or divisions marketing effectiveness is reflected in the degree to which it
exhibits the five major attributes of a marketing orientation.
A) Customer philosophy.
B) Integrated marketing organization.
C) Adequate marketing information.
599
Chapter-by-Chapter Instructional Material
D) Strategic orientation.
E) Operational efficiency.
The Marketing Audit
The average U.S. corporation loses half of its customers in five years, half of its
employees in four years, and half of its investors in less than one year. Clearly, this
points to some weaknesses. Companies that discover weaknesses should undertake a
thorough study known as a marketing audit.
A) A marketing audit is a comprehensive, systematic, independent, and 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.
B) The marketing audit has four characteristics:
1) Comprehensive.
2) Systematic.
3) Independent.
4) Periodic.
C) A marketing audit starts out with a meeting between the company officer(s) and the
marketing auditor(s) to work out an agreement on the audits:
1) Objectives.
2) Coverage.
3) Depth.
4) Data sources.
5) Report format.
6) Time frame.
D) The cardinal rule of the marketing audit is not to rely solely on company mangers for
data and opinions.
E) Customers, dealers, and other outside groups must also be interviewed.
F) The marketing audit examines six major components of the company’s marketing
situation.
Table 22.5 lists the major questions in a marketing audit.
Review Key Definition here: marketing audit
600
Chapter 22: Managing a Holistic Marketing Organization
The Marketing Excellence Review
Companies can use another instrument to rate their performance in relation to the best
practices of high-performing business. Management can check its perception of where
its business stands in relation to these others.
Table 22.6 shows poor, good, and excellent business and marketing practices.
THE FUTURE OF MARKETING
Top management has recognized that past marketing has been highly wasteful and is
demanding more accountability from marketing
A) Going forward, there are a number of imperatives to achieve marketing excellence:
1) Marketing must be “holistic” and less departmental.
2) Marketers must achieve larger influence in the company if they are to be the main
architect of business strategy.
3) Marketers must continuously create new ideas if the company is to prosper in a
hyper-competitive economy.
4) Marketers must strive for customer insight and treat customers differently but
appropriately.
5) Marketers must build their brands through performance, more than through
promotion.
6) Marketers must go electronic and win through building superior information and
communication system.
B) In the coming years we will see:
1) The demise of the marketing department and the rise of holistic marketing.
2) The demise of free-spending marketing and the rise of ROI marketing.
3) The demise of marketing intuition and the rise of marketing science.
4) The demise of manual marketing and the rise of automated marketing.
5) The demise of mass marketing and the rise of precision marketing.
C) To accomplish these changes, a new set of skills and competencies is needed.
Proficiency will be demanded in areas such as:
1) Customer relationship management (CRM).
2) Partner relationship management (PRM).
3) Database marketing and data mining.
4) Contact center management and telemarketing.
5) Public relations marketing (including event and sponsorship marketing).
6) Brand building and brand asset management.
601
Chapter-by-Chapter Instructional Material
7) Experiential marketing.
8) Integrated marketing communications.
9) Profitability analysis by segment, customer, and channel.
602