cim professional pg diploma managing marketing performance

CIM PROFESSIONAL PG DIPLOMA MANAGING MARKETING PERFORMANCE

1MANAGING MARKETING PERFORMANCEWeekend ProgrammeDay 2

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2CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING PERFORMANCE

Welcome back

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3What we're doing today? - am9.30am startReview of Day 1Syndicate activitiesImplementing Business StrategyReputation and CSRCoffeeService qualityCommunications and relationshipsManaging the marketing function Quality and process managementLunch at 1pm

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4What we're doing today? pmManaging the marketing function Project managementCreativity and innovationManaging external resourcesTeaMeasurement, evaluation and controlMeasurement and controlMeasuring the value of marketingManaging marketing performanceDay 2 Review4.30pm - Close

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5Review of Day 1

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SyndicatesExam groupAssignment group6

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MANAGING MARKETING PERFORMANCESession 7IMPLEMENTING BUSINESS STRATEGYReputation and corporate social responsibility

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8Learning outcomesAt the end of the session, you will be able to:Build sustainability into business and marketing activities (including the mix) through planning, the instillation of values and day-to-day management.Build ethics into business and marketing activities (including the mix) through planning, the instillation of values and day-to-day management.Propose a contingency plan and procedures to be taken in the event of a crisis or threat to the reputation of the brand or the organisation (including communications with the press and stakeholders).

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9Ethics and the organisation; why are they important?Ethics are about right and wrongCultural differences have an impactEthics dictate a companys policies and standards of behaviour

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10Corporate ethics operate at 3 levelsThe companys relationships with society at large;The impact of the companys operations on the communities within which it operates and the people it employs; andThe behaviour of the companys people

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11Organisations must take an ethical stanceEthical stance: the extent to which a company will exceed its minimum obligation to stakeholders on ethical grounds.Johnson and ScholesShort term stakeholder interestLong term stakeholder interestMultiple stakeholder interestShaper of society

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12Corporate ethics are visible in corporate behaviourCorporate ethics can be managed in two ways:Compliance based: bureaucratic controlIntegrity based: cultural control

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13The two approaches are quite differentComplianceIntegrityEthosKnuckle underChoose standardsObjectiveKeep to the lawEnable legal and responsible conductOriginatorsLawyersManagement and othersMethodsReduced discretionLeadership Behavioural assumptionsSelf interestSocial conscienceStandardsLawCompany valuesStaffingLawyersManagers tooEducationLaw, complianceValues tooActivitiesRulesValues and engagement

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14Corporate ethics are visible in corporate behaviourCorporate governance is the conduct of an organisations senior officers.

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15What does social responsibility mean for marketing?Consumer oriented marketingInnovative marketingValue marketingSense of mission marketingResponsible marketing

Societal marketing is a management orientation in a way that preserves or enhances consumers and societys well being. - Kotler

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16Why is corporate social responsibility (CSR) relevant?Value-based marketing (VBM) addresses the expectations of customers and shareholders/ownersCSR addresses the expectations of the other stakeholders:Society at largeCommunityThe environmentInterest groups

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CSR A cause for concern and action?17

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18Useful web addressesCIM Code of Professional standardswww.cim.co.uk/mediastore/constitution_2003.pdfUK government gateway to CSRwww.societyandbusiness.gov.ukBusiness in the community, 700 companies committed to CSRwww.bitc.org.ukThe tobacco companies (BAT, Phillip Morris) have extensive CSR material on their websites. See also the Portman Group. http://www.portman-group.org.uk

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19Portman Group"Just as people should show personal responsibility when drinking alcohol, companies must demonstrate responsibility in the way that they conduct their business.We work with the drinks industry to raise standards of alcohol marketing. We challenge companies to be socially responsible and inspire them to achieve best practice."David PoleyChief Executive, the Portman Group

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Crises1984 Union Carbide1987 - Townsend Thoreson1988 Perrier1989 Exxon1991 Ratners

1995 Pepsi1995 Intel1995 Persil2000 Ford/ Firestone2003 SARS2004 Coca- Cola20

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Crisis Management phasesSignal DetectionPreparationDamage Containment/limitationRecoveryLearning

Source : Pearson et al (1997)21

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Individual retaliationTry

www.untied.comEnjoy!22

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23SummaryEthical approaches are fundamentally .doing what you said you would do and not hurting anyone!!Corporately, CSR takes a stakeholder approach and considers all participants in the businessCSR can be a good idea for small & large business alikeCSR can be a strategic goal e.g. Waitrose, Bodyshop, Co-oP bank etc.

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MANAGING MARKETING PERFORMANCESession 8IMPLEMENTING BUSINESS STRATEGYService quality

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26Learning outcomesAt the end of the session, you will be able to:Identify moments of truth in delivering a service and activities that may add further value and assess their likely impact on customers and intermediaries;Propose and implement appropriate improvements to customer service by developing and enhancing customer care; andEstablish and apply techniques for managing and monitoring service quality, including the use of specific measures.

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27 Moments of truthAt Scandinavian Airlines (SAS) it is estimated that each year staff come into contact, for an average of 15 seconds, with 10 million customers around 5 times. As their President reflects:Thus, SAS is created in the minds of our customers 50 million times a year, 15 seconds at a time. They are the moments when we must prove to our customers that SAS is the best alternative.

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Types of service encountersRemote encountersCustomer contact through impersonal means. Eg computer interaction (ATMs, web)Phone encountersCalling for information, placing orders and arranging for serviceFace to face encountersDirect personal contacts for any purpose eg sales or service deliveryShostack (1985)28

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29Why is service quality so important?Enormous growth of service sector since WW2Harder to define and judge than product qualityIntangibilityProviders must do their utmost to identify the expectations of target customers with respect to each specific service being offered

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30The customer journeyIdentifies key processes at the customer interfaceUnderstanding of these processes can enable improvements to be made to ensure positive experiencesHelps clarify customer needs and preferencesInformation is gathered and stored feeds into:Development of processesStaff trainingProduct/service development

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31Customer care programmesIdentifies customersEstablishes needsIdentifies what they want in terms of serviceSets standardsMonitors service regularly against standardsTakes action to improve

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32Service qualityCompetitive advantage can be obtained by delivering consistently higher quality service than competitorsCustomer service expectations must be exceededInternal marketing essentialNeeds top management commitmentStandards must be setPerformance must be monitored

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33Syndicate workIn groups of two, discuss and then comment on your companys customer service strategy and performance. Does it meet and exceed customers expectations?Is it imbued within the organisational culture?Does your company leader drive thisforward?

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34Service quality modelsGrnroos(1984)The Gap model (Parasuraman et al 1985 and Zeithaml et al 1990)SERVQUAL (Parasuraman et al 1988, Zeithaml et al 1990, Parasuraman et al 1991)

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35Grnrooss service quality modelTechnical qualityWhat customer receives the outcome of the processFunctional qualityHow the customer receives the technical outcome the expressive performance of a service.

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36Grnroos perceived service quality

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37The Gap modelA set of key discrepancies or gaps exists regarding executive perceptions of service quality and the tasks associated with service deliveries to consumers. These gaps can be major hurdles in attempting to deliver a service which consumers would perceive of being of high qualityParasuraman et al 1985

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38Service quality gaps model(Parasuraman, Zeithaml and Berry, 1985)

CUSTOMERPROVIDERWord-of-mouthCommunications

Personal needsPast experienceExpected servicePerceived serviceServicedeliveryService qualityspecificationsManagement perceptionsof customer expectationsExternalcommunications tocustomers

Gap 5

Gap 4Gap 1Gap 3Gap 2

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39Reasons for service quality gapsGAP 1 not knowing what customers expectGAP 2 the wrong service quality standardsGAP 3 the service performance gapGAP 4 when promises do not match actual deliveryGAP 5 the difference between customer perception and expectation

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40Determinants of service qualityTangiblesReliabilityResponsivenessCommunicationCredibilityCompetenceCourtesyUnderstanding customers needsAccessParasuraman et al 1985

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41Determinants of perceived service quality

10 Dimensions of quality TangiblesReliability ResponsivenessCompetence Courtesy Credibility Security AccessCommunicationKnowledge Word of Past Buyers Advertising mouth experience needsExpectedservicePerceivedservicePerceived servicequalityParasuraman et al 1985

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42SERVQUAL Model

Service Quality DimensionsReliabilityAssuranceTangiblesEmpathyResponsivenessUnderstanding customer expectations Marketing researchOpen communication with employeesService quality specificationsService goalsManagement commitment to service quality Employee performanceEmployee trainingEvaluation and compensation schemesManaging service expectationsAdvertisingGood internal communicationsDibb, Simkin, Pride & Ferrell, 2001Adapted from Parasuraman, Berry &Zeithaml - 1991

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43SERVQUAL (Ziethaml and Bitner, 1988) tries to quantify serviceReliability: ability to perform the promised service dependably and accuratelyAssurance: knowledge and courtesy of employees and their ability to convey trust and confidenceTangibles: physical facilities, equipment, appearance of personnelEmpathy: caring individualised attentionResponsiveness: willingness to help customers and to provide prompt service

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44Usage of SERVQUALService industries to understand perceptions of needs and to measure quality of deliveryInternal to understand employees perceptions of service quality to achieve service improvement

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45The processCustomer survey to determineThe relative importance of each attributeA measurement of performance expectations that would relate to an excellent companyA measurement of performance for the company in question

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46SERVQUALBENEFITSProvidesA benchmark created by your customersPerformance levels as perceived by themSuggestionsImpressions from employees regarding customer expectations and satisfactionLIMITATIONSIncludeValidity of the 5 dimensionsApplicability to all sectorsRisk in using difference scoresMeasures in assessing the quality of information services

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47The linksExcellence Tom Peters 1982Market OrientationRelationship Marketing

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48Common practices in excellent service companiesA strategic conceptA history of top management commitment to qualityThe setting of high standardsSystems for monitoring service performanceSystems for satisfying complaining customersSatisfying employees as well as customersSource : Kotler

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Service blueprint framework49

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Mystery shopping programme50

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51Useful web-sites

The Institute of Customer Servicewww.instituteofcustomerservice.com The Service Quality Institutewww.customer-service.com

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MANAGING MARKETING PERFORMANCESession 9IMPLEMENTING BUSINESS STRATEGYCommunications and relationships

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53Learning outcomesAt the end of the session, you will be able to:Develop and manage integrated marketing and communications programmes to establish and build relationships appropriate to the needs of customers or clients.Develop and manage integrated marketing and communications programmes to establish and build relationships appropriate to the needs of intermediaries.Develop support for relationships with customers, clients and intermediaries using appropriate information systems and databases.Adhere to relevant privacy and data protection legislation when using the above mentioned systems.

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NoiseModel of communication

Source

Receiver

MediumCodedMessageDecodedMessageFeedback

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55How Marketing Communications works AwarenessKnowledgeLikingPreferenceConvictionPurchase

(Kotler & Armstrong, 2001)1.2.SalesPersuasionInvolvementSaliency3.

AwarenessTrialReinforcementNudge (Ehrenberg, 1997)

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56AIDA is old fashioned (but not dead)Attention, Interest, Desire, Action. AIDA is sequential.Sales, Persuasion, Involvement, Saliency are alternative frameworks.Awareness, Trial, Reinforcement, Nudge is Ehrenbergs view.

There is no best model.

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57The communications context

ENVIRONMENTAL CONTEXTSTAKEHOLDER CONTEXTBUSINESS CONTEXTCUSTOMER CONTEXTORGANISATIONCONTEXTSuppliers Employees Partners ShareholdersInvestors CityLocal and National CommunityEthical and Moral StanceLocal and National GovernmentCompetitive positioningMarket dynamicsBusiness ObjectivesCustomer ProfilingAcquisitionRetention

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58Evaluating alternative approachesKeller (2001)Coverage: breadth and depthContribution: effectiveness on its ownCommonality: synergy with other approachesComplementarity: power to show, emphasise or develop different associationsRobustness: effectiveness across the audienceCost consider cost to determine value in IMC programme

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59Building relationships

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60Taking communications further: building relationshipsSupplier-customer bondsTechnological bondsLegal bondsFinancial bondsCultural bondsSocial bonds

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Relationship marketing orientation61

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62Characteristics of relationship marketingLong-term orientation or horizonCommitment and fulfilment of promisesCustomer share, not market shareCustomer lifetime valueTwo-way dialogueCustomisationLittle & Marandi2003

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63The benefits to the organisation: the relationship marketing ladderEmphasis ondeveloping andenhancingrelationships(Customer keeping)

Emphasis onwinning customers(Customercatching)PARTNER

SUPPORTER

CLIENT

CUSTOMER

PROSPECTADVOCATE

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Direct and database marketingTargeting who are the targets for the offer?Interaction How and what should we communicate?Control what is the return on the investment?Continuity How can we build the relationship?

Source: McCorkell (1999)64

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65IT in developing relationshipsInformation can be made readily available to targeted audiences Internet corporate stakeholdersIntranet internal marketExtranet suppliers and key customersCan be instantly updatedCan support sales personnel and provide a personalised service

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66The six market modelChristopher et al., 1994CustomermarketsInfluencemarketsReferralmarketsInternalmarketsEmployeemarketsSuppliermarkets

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67Networks & stakeholdersPower over the actions of the organisation - formal, economic, politicalMap stakeholder relationships and assess impact of marketing communications strategyVertical Marketing Systems - attempt to achieve economies of scale and maximise market impact through collaborative partnerships

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68SummaryExtended marketing mix for servicesbut beware in professional services traditional marketing techniques are still being developedService quality = satisfaction = more customers = more loyalty = more salesRelationship marketing (RM) & focus on the individual (precision marketing)People & their behaviour are key to RM

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MANAGING MARKETING PERFORMANCESession 10MANAGING THE MARKETING FUNCTIONQuality, process and project management

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70Learning outcomesAt the end of the session, you will be able to:Assess the relevance of the key concepts of quality management, including structured approaches to continuous improvement and problem solving, and their use in conducting marketing activities.Develop a plan for compliance of a marketing functions activities with an organisations quality management system.Assess the relevance to the marketing function of the concept of process and techniques for process management, and develop a plan for their use in conducting marketing activities.Assess the relevance of the key concepts and techniques of project (or programme) management, and develop plans for their use in conducting marketing and other business activities.

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71First lets get a few definitions clear!Quality management is an organisation-wide approach focused on continuous improvement which ensures that the organisations activities meet or exceed customer expectationsProcess management refers to analysing, monitoring and defining business processes for effectiveness and efficiencyProject management is the process of managing non-repetitive activities to ensure that they achieve time, cost and performance objectives

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72Benchmarking is often the startBenchmarking is the establishment of targets through whose use relative levels of performance can be identified. These are the baseline at which improvement programs can be targeted.Benchmarking may be:StrategicPerformance basedProcessInternalExternalInternational

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73There are different approaches to qualityInspection: traditional quality controlDesign: product and processDesign for qualityZero defects; right first timeQuality circlesQuality assurance and standardsSupplier guarantees qualityIS0 9000 focuses on systems not outputs

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74Quality gurusJuran: fitness for useQuality of design and quality of conformanceCrosby: zero defects and right first timeIshikawa: quality circlesTaguchi: quality cost modelOakland: total quality managementAnd Deming

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75Continuous improvement (the Deming cycle)

ACTDOPLANCHECK

Adapt, implement & monitorDirect contact & secondary dataWhat and whoAnalyse findings & assign causeSource: Drummond & Ensor

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76Total quality managementA way of managing a business to ensure complete customer satisfaction both internally and externallyNot a one-off process but a continual examinationContinuous improvement (Kaizen)Employee involvementFocus on the customerNew relationship with suppliersDiscipline and standardisationLong term commitment

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77Quality systems & marketingQuality management standards and systemsSix Sigma is a standardDMAIC and DMADV processesISO 900x is a systemProcesses needed to ensure marketings compliancePositive or negative impact?

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78The European Foundation for Quality Management has led the excellence movement in Europe

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MANAGING MARKETING PERFORMANCEMANAGING THE MARKETING FUNCTIONProcess management

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80Whats a process?A set of logically related tasks performed to achieve a desired business outcome (Davenport and Short, 1990)Processes go across functions

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81Marketing is a business process It can be measured and it can be managedMore important though: as a consequence of this it can be improved.

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82And heres one I prepared earlier

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83Business process re-engineering (BPR)Business process re-engineering is the redesign of business processes to achieve dramatic improvements

(Hammer and Champy)

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84TQM and BPR comparedTQM: improvementBPR: innovationLevel of changeIncrementalRadicalStarting pointExisting processClean slateFrequency of changeContinuousOne-timeTime requiredShortLongParticipationBottom-upTop-downTypical scopeNarrowBroadFunctional focusWithinAcrossRiskModerateHighPrimary enablerStatisticsITType of changeCulturalStructural

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85Process management and marketingNeed to understand the customers purchasing processesMap the customer journey processes involved at customer interaction pointsBenefits and disadvantages of process management for marketingProcess management is fundamental in services (think about the 7 Ps)

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86SyndicatesIn groups of two, map the customer journey within your company and comment on its effectiveness.Could it be improved, if so, how?

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87LUNCH!

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MANAGING MARKETING PERFORMANCEMANAGING THE MARKETING FUNCTIONProject management

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89Whats a project?A project is an undertaking that has a beginning and an end and is carried out to meet established goals within cost, schedule (delivery) and quality objectives (Haynes, Project Management).

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90The Role of the Project ManagerOutline planningDetailed planningTeambuildingCommunicationCo-ordinationMonitoring & controlProblem resolutionQuality control

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91Project Life CyclePhases

Resources requiredDefiningPhase

PlanningPhaseImplementingPhaseControllingPhaseCompletingPhaseStartTimeFinish

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92Project Life CycleCompleting & evaluating the project.Analyse problemDefine projectFinal objectiveSuccess criteriaAlternativesEvaluateSelect & assess.Manageable unitsEstimate resourcesSchedule & plan resources & timingsReview progressMonitor performanceTake corrective actionDid the end result meet the clients expectations?Was the project management successful?

Conceiving &defining the project.Planning The project.Implementing the plan.

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93Tools are available for project managementGantt chartsTimes based bar chartsEasy but simpleCritical path analysis (CPA)Well developed and universally acceptedDefines the critical path and determines resource needs

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94Project management criteria for successCustomer satisfaction expectations need to be managedOrganisation satisfaction e.g. profit, development of capabilityTeam learning can lessons be learned and taken forward to other projects

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95Project management reasons for failureLack of appropriate expertise and approach from Project Leader need to provide developmentLack of support from project sponsor need to communicate resources needed and reasonsLack of ability/necessary expertise of team members need to select carefullyLack of buy-in from end-users need to involve them in the project

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96Project management post-project evaluationCustomer & stakeholder evaluationReviewing final status report with project teamRecording lessons learnedReviewing final report with sponsorCelebrating success

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Project management skills and problems97

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98Useful web-siteswww.dti.gov.uk/qualityDTI site with information about quality processeswww.apm.org.ukThe Association for Project Managementwww.pmforum.org and www.4pm.com US project management siteswww.efqm.orgThe European quality forumwww.deming.org and www.juran.com The Deming and Juran Instituteswww.kaizen-institute.com

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MANAGING MARKETING PERFORMANCESession 11MANAGING THE MARKETING FUNCTIONInstilling creativity and innovation

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100Learning outcomesAt the end of the session you will be able to:Assess the capabilities of an organisation to exploit innovation and creativity in its products/services and processes.Develop and nurture processes and techniques within marketing teams to exploit innovations in marketing

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101SyndicatesInviting customers in to the creativeprocess.

BMW designed an online toolkit that facilitated the involvement of their customersin the innovation process. Customers were delighted to be invited to engage in the creative process, and some visited engineers for direct input into new product and service ideas. This creative process has the advantage of engaging customers and acquiring successful ideas at little cost.

In groups of two, describe a similar process that your companyhas undertaken or discuss how this could work in your own organisation.

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103The innovation auditA critical assessment of the firms innovations record, the internal obstacles to innovation and how performance can be enhanced.

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104SyndicatesP.180/181 Palmer, Cockton,CooperCemex, Mexico has 9 innovation days per year which have led to 250 ideas being generated.Think of your own company. Would this work? If so, how would you introduce and manage it? If not, what are the barriers to innovation?

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105The innovation audit should cover ...Organisational climateRate of NPDCustomer satisfaction ratingsThe innovation/value matrixBalance of cognitive styles of senior managers

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106The nature of strategic innovationMost strategic innovations come from outsiders, rarely from established players (Markides)The challenge is to foster creativity and innovation at a strategic level within organisations (Ensor)Fostering creativity & innovation:individual leveloperational levelstrategic level

Strategic Marketing: Planning and Control Drummond, Ensor, Ashford

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107Conditions required for innovation

Innovation

Moderate environmental uncertainty

Cohesive workgroups

Exchange ofinformation

Supportive structure &systems

Low people turnoverAdapted from Drummond & Ensor (2001)

Resources for innovation

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108Useful web-siteswww.mycoted.comA list of creativity techniqueswww.gocreate.comwww.thinksmart.comwww.3dthinkers.comArticles and ideas from consultantswww.balancedscorecard.orgUS based balanced scorecard gurus

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109SyndicatesIn groups of two, consider your own organisation and comment on how youundertake innovation.

What is your system for NPD?Has it been successful?

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110SyndicatesSky plus case.In groups of two, looking at Rogers Framework which classifies characteristics of new products under 5 headings (relative advantage, compatibility, complexity, divisibility, and communicability) consider how your own organisation meets these criteria or not as the case may be.

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111Creative Leadership and InnovationThe creation and nurturing of an innovative culture relies heavily on the kind of leadership that can release passions, imaginations and energy in a company. This type of creative leader has the following qualities:-They design cultures that support innovationPeople are encouraged to adapt to changing circumstances, challenge the status quo, and operate in a productive discomfort zone

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112Creative Leadership and InnovationThey inspire peopleThey have a clear vision for the future and know how to motivate people to achieve the corporate visionThey provide insights, not solutionsIn a complex environment, they recognize that there is a need to give form to what is unfolding by asking important questions.They maintain focus, not controlRather than tight control, they encourage a healthy disequilibrium, and show in their actions how to tolerate uncertainty and live with paradox.

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113SyndicatesIn groups of two select an example either from your own company or an external one and comment on the 4 qualities of creative leadership mentioned in the previous two slides

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MANAGING MARKETING PERFORMANCESession 12MANAGING THE MARKETING FUNCTIONManaging external resources

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115Learning outcomesAt the end of the session, you will be able to:Establish a mechanism, which is consistent with organisational policy, for deciding the activities to be undertaken by external suppliers.Carry out cost benefit analysis of the options available, including agencies and outsourcing.Gain approval for the relevant expenditure.

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116Its not just about marketing servicesopportunities to outsourceMarketing researchSpecialised aspects of communications PRAdvertisingDirect marketingSales promotionsField marketingNew mediaSalesManufacturingResearch & developmentITHRDiscrete processesEtc etc

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117When to outsource: it all depends

uniqueness of business process or functionproprietary nature of process or functionnot proprietaryprofit model is proprietaryprocess is proprietarydata are proprietarymedium priority: outsourcing opportunities dependant on industry and company dynamicsunique to selfcommon across industrieslow priority: captive sourcing candidateshigh priority: strong outsourcing candidates

(Gottfredson et al, 2005)

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118Take a hard look at capability and costsbe open-minded

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119Outsourcing: bewareAllowing somebody else to do a part of your business because they are better or cheaper.You surrender control and you acquire a major relationship management issue.Never, never do it for a core competenceAnd always be very objective about costs, quality, delivery and agility issues.

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120Cost/benefit analysisIdentify all costs and benefits using principle of opportunity costMeasure the costs and benefits in monetary termsConduct sensitivity analysis the likelihood of the cost or benefit occurringTake account of the timing of costs or benefits (discounting)

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MANAGING MARKETING PERFORMANCESession 13MEASUREMENT, EVALUATION AND CONTROLMeasurement and control

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123Learning outcomesAt the end of the session, you will be able to:Develop and use accounting measures of performance of marketing activities against objectives.Define and use customer related and innovation measures as part of the organisations balanced scorecard.Measure the financial returns achieved on specific investments in marketing activities and programmes and compare them with the original business case or investment appraisal.Propose measures of the value generated by developing a position based on sustainability or ethics and of the progress of the organisation in achieving the desired position.

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124Effective control depends on feedbackThis is no more than our old friend the Deming cycle (plan, do, check and adjust) applied to a basic process model (input-process-output)Remember that output is a consequence, you can only control inputs and process.Remember also that there is generally a time lag between input and output

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125Focus on the critical performance parametersStrategy drives critical success factors (CSFs we must be able to )Action are initiated to drive performance towards the CSFs (we will )Critical performance parameters track progress.Critical performance parameters are more often sign posts and not end results.

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126Short/long term balance is the premier management challengePressure to deliver short term results can easily stimulate counter strategic activityBut sometimes tactical success is a pre-requisite for strategic freedom!Set realistic short term goalsEnsure good control information is in placeCombine patience with persistenceBehave right

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127Techniques for evaluating performanceBalanced scorecardMeasures (or metrics) of marketing performance, including marketing assetsFinancial techniques and ratios, e.g. shareholder value analysisOther structured techniques, e.g. value chain analysis, innovation audit, portfolio analysis, and cultural web

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128Kaplan and Norton (1992, 1993)the balanced scorecard

..gives managers a fast but comprehensive view of the business

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129Measures within the balanced scorecard have a causal relationshipcustomer and marketemployee skillslearning and growthprocess cycle timeprocess qualityinternal/business processesROCEcustomer loyaltyon-time deliveryfinancial

Source: Kaplan and Norton 1992,1993

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130The balanced score card takes a broader view of performanceSingle measures have a habit of encouraging counter strategic behaviourThe balanced score card is a set of measures that gives managers a comprehensive view of the businessCustomer related measuresFinancial measuresInternal business measuresInnovation and learning measures

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Service Balanced Scorecard131

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132Value chain analysis

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133Innovation audit

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134Portfolio analysis

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135Budgeting is a formal and collective processEveryone does it at the same timeIt is used for co-ordination, communication and control and typically addresses a one year periodRegard it as a tactical implementation of strategyIts a bit like democracy: not perfect but theres nothing better.Variance vs. budget is a form of check

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136Some questions to be answered when evaluating performanceWhat are the key strategic decisions facing the organisation?What are the owners expectations?How well are we meeting them now? Where are we strong and weak/vulnerable?How can we meet or exceed them in future in the light of known opportunities and threats? What do we need to do?

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137Targets, Budgets & RatiosBudgetsPurpose, preparing, period, & forecastsSales budget v marketing expensesSetting the marketing budget (methods)Variance analysisHow much does each measure vary from the budget?Ratio analysisOne year to the next, one business to another

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138Ratio analysis (1/3)Sources of informationManagement accountsPublished financial accountsData and records held by marketing, operations and finance Marketing/competitor information systemMarket research reportsPrimary researchIntelligence (in both senses of the word!)

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Sources of financial dataFinancial statements (with notes):Profit & loss accountBalance sheetSource & application of fundsManagement accounts:BudgetsManagement accounts/reports

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140Profitability & PerformanceProfit margin (PBIT/turnover)Asset turnover (turnover/net assets)ROCE (PBIT/net assets)Ratio analysis (2/3)

PBITTurnoverCapital EmployedProfit MarginAsset TurnoverRoCE

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141Ratio Analysis (3/3)OperationalDebtor days (debtors/sales)x365Stock T/over period (closing stock/cogs)x365CorporateProfitabilityRoCEMarketing SpecificFinancial (sales, profits, margins etc.)Non-financial (orders, leads, personnel)

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Financial ratiosProfitability ratiosLiquidity ratios - short term riskSolvency (or capital structure) ratios - longer term riskInvestment ratios shareholdersValue added ratios performance of resources or inputsTo revise go to www.bized.ac.uk/compfact/ratios/index.htm

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MANAGING MARKETING PERFORMANCESession 14MEASUREMENT, EVALUATION AND CONTROLMeasuring the value of marketing

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144Learning outcomesAt the end of the session, you will be able to:Assess the value that marketing activities generate and contribute to shareholder value, as appropriate working with colleagues from other disciplines, using appropriate models and techniques.Identify key areas for measurement.Develop appropriate metrics for those key areas.

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145The marketing audit should cover ...marketing environmentmarketing strategymarketing organisationmarketing systemsmarketing productivitymarketing functions

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146Marketing activities that generate valueIncreasing customer retentionGrowing share of customerWinning new customersDeveloping new products and servicesEntering new marketsDeveloping new distribution channelsGrow internationallyAcquisitions and alliancesDiversification

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Marketing Activity impact on balance sheet - 1147

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Marketing Activity impact on balance sheet - 2148

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149SummaryControl systems need to be in place, and appropriate feedback systems are key to success.Balanced scorecard offers a way of looking at the whole businessBudgets are important as limits and targetsThe importance and relevance of both financial & non-financial ratios must be understood by marketers.

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MANAGING MARKETING PERFORMANCESession 15MEASUREMENT, EVALUATION AND CONTROLManaging marketing performance

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151Learning outcomesAt the end of the course, you will be able to:Create an appropriate climate for the achievement of strategic objectives through marketing teams.Implement the business strategy through marketing activities.Use appropriate management techniques in managing the marketing function.Initiate and critically evaluate systems for the control of marketing activities undertaken as part of business and marketing plans.

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152Strategic management processStrategicanalysisStrategyformulationStrategyimplement-ation

ExternalenvironmentCulture, expectations& powerCapabilities & resourcesGenerationof optionsEvaluationof optionsSelectionof strategyResourceplanningPeople &systemsStructure & culture

Adapted fromJohnson & Scholes

152Example of a more detailed strategic planning process from Johnson & Scholes (1989).

Look for 4 basic stages: evaluation strategy formulation detailed planning implementation & review

Good features: analysis concept of generating options, leading to choice starts to look at elements of detailed planning & implementation

Strategic direction153

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Linkages!154

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155Weve covered a lot of groundTeams and leadershipManaging changeImplementing business strategyStrategic marketing orientationEthical considerationsIntegrated marketing communicationsManaging servicesManaging the marketing functionQuality, process and project managementMeasurement, evaluation and control

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156This course is about managementMarketing at the centre of the organisationIs the font of all knowledgeProvides the engine of growthOrchestrates company wide marketing activityBut fundamentally its about people

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MANAGING MARKETING PERFORMANCE

Thank you and good luck!

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what?how?imagefunctional qualitytechnical qualityexpected serviceperceived serviceperceived service qualitykey performance resultsenablersresultsinnovation and learningprocessespeople resultscustomer resultssociety resultspeoplepolicy and strategypartnerships and resourcesleadershipprocessinputoutputrepeatbuyquotelong termprospectsinstall equipmentbuild awarenessgenerate suspectdevelop prospectbuild relationshipsuspectordersecure orderservice customersource to reduce costsacrifice capability if necessaryconsider creating a new business(if adjacent to core business)source to increase capabilityeven at higher cost if necessarysource to reduce costsource to increase capability at lower costabove industry medianat industry medianbelow industry mediancost per transactionbetter than it needs to be!sufficientnot good enoughcompany's ability to perform functionPioneersvalue innovationsMigratorsvalue improvementsSettlersme-too businessesthe innovation/value matrixKim and Mauborgne (1998)

current portfolioplanned portfolio

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cim professional pg diploma managing marketing performance