Week XVIII

Managing a Holistic Marketing Organization for the Long Run

Trends in Marketing Practices Internal Marketing Socially Responsible Marketing Marketing Implementation Evaluation & Control The Future of Marketing

Trends in Marketing PracticesImportant changes in marketing macroenvironment:

(1) Globalization

(2) Deregulation

(3) Technological advances

(4) Customer empowerment

(5) Market fragmentation

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How companies restructured their business & marketing practices in response to rapidly changing environment:

1) Reengineering – appointing teams to manage customer-value-building processes & breakdown walls between departments

2) Outsourcing – buying goods & services from outside domestic & foreign markets

3) Benchmarking – studying “best practice companies” to improve performance

4) Supplier Partnering – partnering with fewer but value-adding suppliers

5) Customer Partnering – working more closely with customers to add value to their operations

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6) Merging – acquiring firms in the same or complimentary industries to gain economies of scale or scope

7) Globalizing – increasing effort to “think global” & “act local”

8) Flattening – reducing the number of organizational level to get closer to the customer

9) Focusing – determining the most profitable businesses & customers & focusing on them

10) Accelerating – designing the organization & setting up processes to respond more quickly to changes in the environment

11) Empowering – encouraging & empowering personnel to produce more ideas & take more initiative

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Internal MarketingEveryone in the organization buy into the concepts

& goals of marketing & engage in choosing, providing & communicating customer value.

How marketing departments can be organized:

I. Functionally

II. Geographically

III. By product or brand

IV. By market

V. In a matrix

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I. Functional Organization

The main advantage is administrative simplicity.

VP Marketing

Marketing AdministrationManager

Advertising & Sales PromotionManager

SalesManager

MarketingResearchManager

NewProductsManager

II. Geographical Organization

They usually add an area market specialist to support sales efforts in high volume markets.

NationalSalesManager

RSM – Metro Manila RSM - Luzon RSM - Visayas RSM-Mindanao

District ManagerSouth Luzon

District ManagerNorth Luzon

III. Product or Brand Management Organization

They do not replace the functional organization but they serve as another layer of management.

Product manager supervises product category managers, who in turn surpevises specific product & brand management.

They are a hub-and-spoke system.

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Some task of brand manager include:

(1) Develop long-range & competitive strategy for the product

(2) Prepare an annual marketing plan & sales forecast

(3) Work w/ advertising & merchandising agencies to develop copy, programs & campaigns

(4) Increasing support of the product among the sales force & distributors

(5) Gathering continuous intelligence on the products performance, customer & dealer attitudes & new problems & opportunities

(6) Initiating product improvements to meet changing market needs

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Disadvantage of Product Management Organization include:

(1) They lack ebough authority to carry out responsibility

(2) They become expert in product areas but rarely achieve functional expertise

(3) This systems is costly

(4) They only manage a product/brand for a short time

(5) Fragmentation of markets makes it harder to develop a national strategy

(6) They focus the company on building market share rather than the customer relationship

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3 Types of Product Teams

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Product Manager

Associate ProductManager

Product Assistant

ProductManager

CR

Vertical Product Team

Triangular Product Team

Product Manager

R EFDSC

Horizontal Product Team

IV. Market-Management OrganizationMarket-management organization – when customers

fall into different user groups w/ distinct buying preferences & practices

Customer-management organization – companies organize themselves to understand & deal w/ individual customers rather than w/ mass market or even market segments

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V. Matrix-Management Organization

Companies that produce many products for many markets

Relations w/ Other Deparments

2 task of CMO or VP-Marketing:

(1) To coordinate companies internal marketing activities

(2) To coordinate marketing w/ finance, operations & other company functions to serve the customer

Requirement to Build a Creative Marketing Org.

(1) Developing company-wide passion for customers

(2) Organizaing around customer segments instead of products

(3) Understanding customers through qualitative & quantitative research

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Socially Responsible MarketingCorporate Social Responsibility

3 pronged attack:

(1) Legal behavior

(2) Ethical behavior

(3) Social responsibility behavior

Sustainability – the importance of meeting humanity's needs without harming future generations

Cause-Related Marketing – links the firms contributions to a designated cause to customers engaging directly or indirectly in revenue-producing transactions with the firm

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A successful Cause Marketing Program can:

(1) Improve social welfare

(2) Create differentiated brand positioning

(3) Build strong consumer bonds

(4) Enhance the company's public image w/ government officials & other decision makers

(5) Create a reservoir of goodwill

(6) Boost internal morale & galvanizing employees

(7) Drive sales

(8) Increase market value of firms

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Advantages of Cause Marketing:

(1) Build brand awareness

(2) Enhance brand image

(3) Establish brand credibility

(4) Evoke brand feelings

(5) Create a sense of brand community

(6) Elicit brand engagement

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Social Marketing programs possible objectives:

1) Cognitive Campaigns

(1) Expalin the nutritional value of different foods

(2) Explain the improtance of conservation

2) Action Campaigns

(1) Attract people for mass immunization

(2) Motivate people to vote “yes” on certain issues

(3) Motivate people to donate blood

(4) Motivate women to take the pap test

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3) Behavioral Campaigns

(1) Demotivate cigarette smoking

(2) Demotivate usage of hard drugs

(3) Demotivate excessive consumption of alcohol

4) Value Campaigns

(1) Alter ideas about abortion

(2) Change attitudes of bigoted people

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Marketing ImplementationIs the process that turns marketing planinto

action assignments & ensure that they accomplish the plans stated objectives

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Characrteistics of a Good Marketing Company:

(1) Selects target markets in which it enjoys superioirs advantages & exits/avoid markets where it is intrinsically weak

(2) Employees & departments are customer & market minded

(3) Good working relationship between marketing, R&D & manufacturing

(4) Good working relationship between marketing, sales & customer service

(5) Have incentives to lead to the right behaviors

(6) Builds & tracks customers satisfaction & loyalty

(7) Skilled in building brand names & image

(8) Flexible in meeting customers varying requirements

(9) Manages value delivery system

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Evaluation & ControlTypes of Control Prime Responsibility Purpose of Control Approaches

Annual Plan Control Top MangementMiddle Management

Examine whether planned results are being achieved

Sales analysis Market share analysisSales-to-expense ratios

Profitability Control Marketing controller Examine whether the company is making & losing money

Efficiency Control Line & staff managementMarketing controller

Evaluate & improve the spending efficiency & impact marketing expenditures

Strategic control Top managementMarketing Auditor

Examine whether the company is pursuing its best opportunities w/ respect to markets, products & channels

Types of Control

Prime Responsibility

Purpose of Control Approaches

Annual Plan Control

Top MangementMiddle Management

Examine whether planned results are being achieved

Sales analysis Market share analysisSales to expense ratiosFinancial analysis Market based scorecard analysis

Profitability Control

Marketing controller

Examine whether the company is making & losing money

Profitability by: Product Territory Customer Segment Trade channel Order size

Efficiency Control

Line & staff managementMarketing controller

Evaluate & improve the spending efficiency & impact marketing expenditures

Efficiency by: Sales force Advertising Sales promotion Distribution

Strategic control

Top managementMarketing Auditor

Examine whether the company is pursuing its best opportunities w/ respect to markets, products & channels

Mktg effectiveness rating instrument Mktg audit Mktg excellence review Company ethical & social responsibility review

The Future of Marketing1) The demise of marketing department & the rise

of holistic marketing

2) The demise of free spending marketing & the rise of ROI marketing

3) The demise of marketing intuition & the rise of marketing science

4) The demise of manual marketing & the rise of automated marketing

5) The demise of mass marketing & the rise of precision marketing

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New set of skills & competencies:

1) Customer Relationship Management

2) Partner Relationship Management

3) Database marketing & datamining

4) Contact center management & telemarketing

5) Public relations marketing (including event & sponsorship marketing)

6) Brand building & brand asset management

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