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In this chapter, we focus on the following
questions:
What are the trends in company organization?
How are marketing and sales organized in
companies?
What steps can a company take to build a stronger
customer focused culture?
How can a company improve its marketing-
marketing-
implementation skills?
What tools are available to help companies
monitor and improve their marketing activities?
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ain responses of companies to a
changing environment
Reengineering erging
Outsourcing Globalizing
Benchmarking Flattening
Supplier partnering Focusing
Customer partnering Empowering
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Outsourcing can save companies money by
passing on to another firm the overhead
involved with maintaining specialized staff
positions, or eliminating the need to maintain
specialized equipment that does not directly
support their core business.
What are the potential risks
associated with outsourcing?
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ëhe Evolution of the
arketing Department
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Simple Sales Department
Sales Department With Ancillary
arketing Functions
Separate arketing Department
odern arketing Department /
Effective arketing Company
Process
Process--And Outcome-
Outcome-Based Company
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#
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Organizing the arketing Department
Functional Organization
Field sales
Customer service
Product management
Geographic Organization
Area market specialist
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Organizing a marketing organization
geographically can allow marketing managers
to focus on regional and cultural differences in
their market segments. What are the reasons
why geographical segmentation might be a bad
idea? What could be done to
minimize these problems in
geographically organized
marketing departments?
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$%
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Product
Product-- or Brand-
Brand-anagement Organization
Product and brand managers have these tasks:
Develop a long-
long-range and competitive strategy for the
product
Preparing an annual marketing plan and sales forecast
Working with advertising and merchandising agencies to
develop copy, programs, and campaigns
Stimulating support of the product among the sales force and
distributors
Gathering continuous intelligence on the product¶s
performance, customer and dealer attitudes, and new
problems and opportunities
Initiating product improvements to meet changing market
needs
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$
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Pearson and Wilson¶s five steps to make the
product--management system work better
product
Clearly delineate the limits of manager¶s role
Build a strategy-
strategy-development-
development-and- and-review process
ëake into account areas of potential conflict
Set up a formal process that forces to the
top all conflict-
conflict-of
of--interest situations
Establish a system for measuring results
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A Second Alternative is to switch from
product managers to product teams
Vertical product team
ëriangular product team
Horizontal product team
ëhird Alternative: Brand Asset
anagement ëeam (BAë
*
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arket-
arket-anagement/Customer
anagement Organization
arket
arket--management Organization
arkets manager
Customer
Customer--management Organization
Product-
Product-anagement/
arket--anagement Organization
arket
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Corporate
Corporate--Divisional Organization
No corporate marketing
oderate marketing
Strong corporate marketing
arketing Relations With Other
Departments
R&D
Engineering and Purchasing
anufacturing and Operations
Finance
Accounting and Credit
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Building a Companywide arketing
Orientation
ëransforming into a true market-
market-driven
firm requires:
Developing a companywide passion for customers
Organizing around customer segments
instead of around products
Developing a deep understanding of customers
through qualitative and quantitative research
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What steps can a CEO take to create a market
and customer focused company?
1. Convince senior management of the need
2. Appoint a senior marketing officer and
a marketing task force
3. Get outside help and guidance
4. Change the company¶s reward measurement and system
5. Hire strong marketing talent
6. Develop strong in-
in-house marketing training programs
7. Install a modern marketing planning system
8. Establish an annual marketing
excellence recognition program
9. Shift from a department focus to a
process--outcome focus
process
10. Empower the employees
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Injecting ore Creativity
Into the Organization
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ëhomas Bonoma¶s four sets of skills for
implementing marketing programs
Diagnostic skills
Identification of company level
Implementation skills
Evaluation skills
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( (
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1
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2
I. Annual-
Annual-plan Top management To examine Sales analysis
control Middle whether the Market
Market--share
management planned results analysis
are being Sales
Sales--to
to--expense
achieved ratios
Financial analysis
Market
Market--based
scorecard analysis
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Annual
Annual--Plan Control
Sales Analysis
Sales variance analysis
icrosales analysis
3
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(
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arket
arket--Share Analysis
Overall market share
Served market share
Relative market share
arketing Expense-
Expense-ëo
ëo--Sales Analysis
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Financial Analysis
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5
1
6%
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arket
arket--Based Scorecard Analysis
Customer-
Customer-performance scorecard
Stakeholder
Stakeholder--performance scorecard
Profitability Control
arketing
arketing--Profitability Analysis
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2 (
- -7
8,9:999
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'5:999
;
8:999
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85:'99
1 ':999
':+99
+:499
6
8+:99
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Step 1: Identifying Functional Expenses
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6/
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6 (
0
2
2
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Step 2: Assigning Functional Expenses to
arketing Entities
*0
2
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áardware 200 50 50 50
Garden Supply 65 20 21 21
Department stores 10 30 9 9
275 100 80 80
Functional expense $5,500 $3,100 $4,800 $2,400
% No. of Units 275 100 80 80
Equals $ 20 $ 31 $ 60 $ 30
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Step 3: Preparing a Profit-
Profit-and-
and-Loss Statement
for Each arketing Entity
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- -7
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; ! %
<&
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Expenses
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Determine Corrective Action
Direct Versus Full Costing
Direct costs
ëraceable common costs
Nontraceable common cost
Activity
Activity--based Cost Accounting (ABC
Efficiency control
arketing Controller
Sales--Force Efficiency
Sales
Advertising Efficiency
Sales--Promotion Efficiency
Sales
Distribution Efficiency
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9
! )
0&
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Strategic control
ëhe arketing Effectiveness Review
ëhe arketing Audit
arketing audit¶s four
characteristics:
Comprehensive
Systematic
Independent
Periodic
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2
()
2
A. Demographic What major demographic developments and trends pose
opportunities or threats to this company? What actions has
the company taken in response to these developments and
trends?
B. Economic What major developments in income, prices, savings, and
credit will affect the company? What actions has the
company been taking in response to these developments
and trends?
C. Environmental What is the outlook for the cost and availability of natural
resources and energy needed by the company? What
concerns have been expressed about the company¶s role
in pollution and conservation, and what steps has the
company taken?
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3
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1&0(
(
;
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uroduct--Driven
uroduct Market
Market--Driven Market
Market--Driven
Mass--Market Oriented
Mass Segment Oriented Niche Oriented and
Customer Oriented
uroduct Offer Augmented uroduct Offer Oriented
End--uroduct Oriented
End Core
Core--uroduct Oriented Legendary
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