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: Globalization Deregulation Technological advances Customer empowerment Market fragmentationplp

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 departments2) Outsourcing buying goods & services from outside domestic & foreign markets3) Benchmarking studying best practice companies to improve performance4) Supplier Partnering partnering with fewer but value-adding suppliers5) 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 scope7) Globalizing increasing effort to think global & act local8) Flattening reducing the number of organizational level to get closer to the customer9) Focusing determining the most profitable businesses & customers & focusing on them10) Accelerating designing the organization & setting up processes to respond more quickly to changes in the environment11) Empowering encouraging & empowering personnel to produce more ideas & take more initiativeplp

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: Functionally Geographically By product or brand By market In a matrixplp

I. Functional Organization

The main advantage is administrative simplicity. VP Marketing

Marketing AdministrationManagerAdvertising & Sales PromotionManagerSalesManagerMarketingResearchManagerNewProductsManager

II. Geographical OrganizationThey 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. plp

Some task of brand manager include: Develop long-range & competitive strategy for the product Prepare an annual marketing plan & sales forecast Work w/ advertising & merchandising agencies to develop copy, programs & campaigns Increasing support of the product among the sales force & distributors Gathering continuous intelligence on the products performance, customer & dealer attitudes & new problems & opportunities Initiating product improvements to meet changing market needs

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Disadvantage of Product Management Organization include: They lack ebough authority to carry out responsibility They become expert in product areas but rarely achieve functional expertise This systems is costly They only manage a product/brand for a short time Fragmentation of markets makes it harder to develop a national strategy They focus the company on building market share rather than the customer relationshipplp

3 Types of Product Teams

plpProduct ManagerAssociate ProductManagerProduct AssistantProductManager CRVertical Product TeamTriangular Product TeamProduct ManagerREFDSCHorizontal Product Team

IV. Market-Management OrganizationMarket-management organization when customers fall into different user groups w/ distinct buying preferences & practicesCustomer-management organization companies organize themselves to understand & deal w/ individual customers rather than w/ mass market or even market segmentsplpV. Matrix-Management OrganizationCompanies that produce many products for many markets

Relations w/ Other Deparments2 task of CMO or VP-Marketing: To coordinate companies internal marketing activities To coordinate marketing w/ finance, operations & other company functions to serve the customerRequirement to Build a Creative Marketing Org. Developing company-wide passion for customers Organizaing around customer segments instead of products Understanding customers through qualitative & quantitative researchplp

Socially Responsible MarketingCorporate Social Responsibility3 pronged attack: Legal behavior Ethical behavior Social responsibility behaviorSustainability the importance of meeting humanity's needs without harming future generationsCause-Related Marketing links the firms contributions to a designated cause to customers engaging directly or indirectly in revenue-producing transactions with the firmplp

A successful Cause Marketing Program can: Improve social welfare Create differentiated brand positioning Build strong consumer bonds Enhance the company's public image w/ government officials & other decision makers Create a reservoir of goodwill Boost internal morale & galvanizing employees Drive sales Increase market value of firmsplp

Advantages of Cause Marketing: Build brand awareness Enhance brand image Establish brand credibility Evoke brand feelings Create a sense of brand community Elicit brand engagementplp

Social Marketing programs possible objectives:1) Cognitive Campaigns Expalin the nutritional value of different foods Explain the improtance of conservation2) Action Campaigns Attract people for mass immunization Motivate people to vote yes on certain issues Motivate people to donate blood Motivate women to take the pap test

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3) Behavioral Campaigns Demotivate cigarette smoking Demotivate usage of hard drugs Demotivate excessive consumption of alcohol4) Value Campaigns Alter ideas about abortion Change attitudes of bigoted peopleplp

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: Selects target markets in which it enjoys superioirs advantages & exits/avoid markets where it is intrinsically weak Employees & departments are customer & market minded Good working relationship between marketing, R&D & manufacturing Good working relationship between marketing, sales & customer service Have incentives to lead to the right behaviors Builds & tracks customers satisfaction & loyalty Skilled in building brand names & image Flexible in meeting customers varying requirements Manages value delivery system plp

Evaluation & Control

Types of ControlPrime ResponsibilityPurpose of ControlApproachesAnnual Plan ControlTop MangementMiddle ManagementExamine whether planned results are being achieved Sales analysis Market share analysisSales-to-expense ratiosProfitability ControlMarketing controllerExamine whether the company is making & losing moneyEfficiency ControlLine & staff managementMarketing controllerEvaluate & improve the spending efficiency & impact marketing expendituresStrategic controlTop managementMarketing AuditorExamine whether the company is pursuing its best opportunities w/ respect to markets, products & channels

Types of ControlPrime ResponsibilityPurpose of ControlApproachesAnnual Plan ControlTop MangementMiddle ManagementExamine whether planned results are being achieved Sales analysis Market share analysisSales to expense ratiosFinancial analysis Market based scorecard analysisProfitability ControlMarketing controllerExamine whether the company is making & losing moneyProfitability by: Product Territory Customer Segment Trade channel Order sizeEfficiency ControlLine & staff managementMarketing controllerEvaluate & improve the spending efficiency & impact marketing expendituresEfficiency by: Sales force Advertising Sales promotion Distribution Strategic controlTop managementMarketing AuditorExamine 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 Marketing The demise of marketing department & the rise of holistic marketing The demise of free spending marketing & the rise of ROI marketing The demise of marketing intuition & the rise of marketing science The demise of manual marketing & the rise of automated marketing The demise of mass marketing & the rise of precision marketingplp

New set of skills & competencies: Customer Relationship Management Partner Relationship Management Database marketing & datamining Contact center management & telemarketing Public relations marketing (including event & sponsorship marketing) Brand building & brand asset managementplp