© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-7

MARKETING BASICS:DOING WHAT WORKS AND ALLOCATING RESOURCES

• Finding and Using What Really Works

Strategy: Focused

Execution: Flawless Operations

Culture: Performance-Oriented

Structure: Fast, Flexible, and Flat

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-9

MARKETING BASICS:DOING WHAT WORKS AND ALLOCATING RESOURCES

• Allocating Marketing Resources Using Sales Response Functions

Sales Response Function

Maximizing Incremental Revenue Minus Incremental Cost

A Numerical Example of Resource Allocation

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-10

FIGURE 22-1 FIGURE 22-1 Sales response function showing the situation for two different years

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-12

MARKETING BASICS:DOING WHAT WORKS AND ALLOCATING RESOURCES

• Allocating Marketing Resources Using Sales Response Functions

Allocating Marketing Resources in Practice

• Share Points

Resource Allocation and the Strategic Marketing Process

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-13

FIGURE 22-2 FIGURE 22-2 The strategic marketing process: actions and information

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-14

FIGURE A FIGURE A The strategic marketing phases and corresponding output reports

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-15

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

Long-Range Marketing Plans

Annual Marketing Plans

• The Variety of Marketing Plans

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

FIGURE 22-3 FIGURE 22-3 Steps a large consumer packaged goods firm takes in developing its annual marketing plan

Slide 22-16

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-21

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

Porter’s Generic Business Strategies

• Marketing Planning Frameworks:The Search for Growth

• Generic Business Strategy

• Cost Leadership Strategy

• Differentiation Strategy

• Cost Focus Strategy

• Differentiation Focus Strategy

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-22

FIGURE 22-4 FIGURE 22-4 Porter’s four generic business strategies

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-23

Wal-Mart and Volkswagen Which of Porter’s generic business strategies

do these firms use?

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-24

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

• Marketing Planning Frameworks:The Search for Growth

• Market Penetration

• Product Development

• Market Development

• Diversification

Profit Enhancement Option: Increase Revenues

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-25

FIGURE 22-5 FIGURE 22-5 Profit enhancement options for increasing a firm’s profits

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-26

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

Profit Enhancement Option: Decrease Costs

• Marketing Planning Frameworks:The Search for Growth

• Economies of Scale/Experience Curve

• Other Ways: Layoffs, Training, and/or Quality

Profit Enhancement Option: Do Both

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-27

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

Market-Product Synergies

• Marketing Planning Frameworks:The Search for Growth

• Marketing Synergies (Rows)

• R&D–Manufacturing Synergies (Columns)

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-28

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

Market-Product Synergies

• Marketing Planning Frameworks:The Search for Growth

• Market-Product Concentration

• Market Specialization

• Product Specialization

• Selective Specialization

• Full Coverage

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

MARKETING NEWSNET

The Strategy Issue for theNew Millennium—Finding Synergies

Slide 22-29

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

FIGURE 22-6 FIGURE 22-6 Market-product grid of alternative strategies for a lawnmower manufacturer

Slide 22-30

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

FIGURE 22-7 FIGURE 22-7 An ideal merger for Great States to obtain full market-product coverage

Slide 22-31

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-37

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

• One-Handedness Convenience

• Joint Ventures

• Some Planning and Strategy Lessons

Big G plus Pillsbury: Synergies, Segments, and Partners

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

MARKETING NEWSNET

Slide 22-38

Keeping Planning Simple at Big G: “One-Handed” Convenience

Plus Cover All the Bases

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-41

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS

• Value-Based Planning

• Value-Driven Strategies

• Some Planning and Strategy Lessons

Balancing Value and Values in Strategic Marketing Plans

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-42

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

• Is Planning or Implementation the Problem?

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-44

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

• Increasing Emphasis on Marketing Implementation

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

MARKETING NEWSNET

Slide 22-45

GE’s Implementation Strategies—How Neutron Jack Became One of the Most Acclaimed CEOs of the 20th Century

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-46

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

• Product or Program Champion

• Improving Implementation of Marketing Programs

Communicate Goals and the Means of Achieving Them

Have a Responsible Program Champion Willing to Act

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-47

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

• Improving Implementation of Marketing Programs

Foster Open Communication to Surface Problems

Reward Successful Program Implementation

Take Action and Avoid Paralysis by Analysis

• Avoid the “NIH Syndrome”

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-50

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

• Improving Implementation of Marketing Programs

Schedule Precise Tasks, Responsibilities, and Deadlines

• Action Item List

• Program Schedules

• Gantt Chart Sequentially Concurrently

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-51

FIGURE 22-E FIGURE 22-E Tasks to complete a term project

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-52

FIGURE 22-8 FIGURE 22-8 Gantt chart for scheduling the term project

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-56

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

Line versus Staff and Divisional Groupings

• Staff Positions

• Organizing for Marketing

• Line Positions

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

FIGURE 22-9 FIGURE 22-9 Organization of a business unit in a typical consumer packaged goods firm, showing two product or brand groups

Slide 22-57

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-58

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

Line versus Staff and Divisional Groupings

• Organizing for Marketing

• Product Line Groupings

• Functional Groupings

• Geographical Groupings

• Market-Based Groupings

Matrix Organization Category Manager

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-59

THE IMPLEMENTATION PHASEOF THE

STRATEGIC MARKETING PROCESS

Role of the Product Manager

• Organizing for Marketing

• Product Manager

• Brand Manager

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-60

FIGURE 22-10 FIGURE 22-10 Units with which the product manager and product group work

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-61

• The Marketing Control Process

THE CONTROL PHASE OF THE STRATEGIC MARKETING PROCESS

Management by Exception

Measuring Results

Taking Marketing Actions

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-62

FIGURE 22-11 FIGURE 22-11 The control phase of the strategic marketing process

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-64

• Sales Analysis

THE CONTROL PHASE OF THE STRATEGIC MARKETING PROCESS

Sales Analysis

Profitability Analysis

ROI Marketing

Sales Component (Microsales) Analysis

• Profitability Analysis and ROI Marketing