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

12. INTERNAL MARKETING
Section 2

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

21. Functional Organization

23. THE PRODUCT-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

30. SOCIALLY RESPONSIBLE MARKETING
Section 3

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?

44. THE CONTROL PROCESS

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