Digital Strategy Level 6 Day 2 - marketingtommedia.co.uk

Marketing and Digital Strategy

CIM LEVEL 6

Course ContentDay 1

● 10-12: Session 1:○ Introductions○ Situation Analysis 1

● 12-13: Lunch Break ● 13-15: Session 2○ Situational Analysis 2

● 15-15.15: Break● 15.15-17:Session 3○ Planning 1

● Q&A Recap

Day 2

● 10-12: Session 1:○ Planning 2

● 12-13: Lunch Break ● 13-15: Session 2○ Implementation & Control 1

● 15-15.15: Break● 15.15-17:Session 3○ Implementation & Control 2

● Q&A Recap

Session 1: Planning (Session 2)

Learning outcomes:

● 4: Develop a strategic marketing plan and a supporting marketing mix to deliver marketing objectives

4.1.1 Frameworks and tools for developing strategic marketing plans


● The CIM likes three main strategic planning process models which you can pick from:

○ MOST: Mission, Objectives, Strategy, Tactics○ APIC: Audit and Analysis, Planning, Implementation, and Evaluation and

Control. ○ SOSTAC: Situation Analysis, Objectives, Strategy, Tactics, Actions and Control


MOST: Mission, Objectives, Strategy, Tactics

1

2

3


APIC: Audit and Analysis, Planning, Implementation, and Evaluation and Control


SOSTAC: Situation Analysis, Objectives, Strategy, Tactics, Actions and Control


RACE: Reach > Act > Convert > Engage

4.1.2. Brand strategies

A brand strategy is an integral element of any marketing plan. It defines what a brand is, who it is targeting, how it is differentiating itself from its competition and how it is positioned.

Brand positioning usually combines a mix of both rational and emotional elements to create a long term, lasting connection with the target audience.

Brand Continuum with rational and emotional positioning (Brand Insider)


To define the external voice of your brand and to ensure it is consistent with other brand aspects, you can use the brand pyramid, Customer-Based Brand Equity model (CBBE) (Keller, 2001).

The model provides a framework that can guide the development of the brand, its proposition, promise, personality and story.


A major branding question is whether to have a single umbrella/master/overarching brand (branded house) or a portfolio of brands (house of brands) - this relates to the concept of ‘brand architecture’.

● Branded House / One-firm brand strategy

● House of brands

● Hybrid


● What approach to brand architecture is used by your organisation?

● How are the brand guidelines managed for the approach adopted?

4.1.4 Profit and sales projections

Where there is a need for a significant investment, either up front or during the early part of a campaign, as marketers, we need to demonstrate that our initiative will be financial viable and will generate positive ROI. CIM steps to creating a sales/profit forecast:

● Step one: Estimate the size of the target market● Step two: Estimate the number of new customers to be attracted each year/period● Step three: Estimate the ongoing loyalty of the customer base

○ Existing customer numbers - customers lost + new customers acquired = customer base

● Step four: Reality check against forecast market penetration○ Brand penetration = 50,000/1,000,000 = 5%

● Step five: Estimate average purchase volume, average price and unit costs● Step six: Calculate sales revenue and gross profit contribution

○ Size of the customer base (from step four)○ Average purchase quantity per consumer (from step five)○ Average unit price (instead five) – to calculate sales revenues○ And/or average unit margin (from step five) – to calculate gross profit contribution

■ Example:● 50,000 customer base X● 10 purchases per year = 500,000 units sold X● $5 average price = $2.5 million sales revenue

4.1.4 Profit and sales projections

● Step seven: Project marketing support costs, and upfront marketing investment● Step eight: Calculate profit contribution per year after marketing expenses● Step nine: Calculate the relevant marketing and financial metrics

○ Profit contribution per year○ Total profit contribution – over 5 years○ Sales revenue per year○ Sales volume (units) per year○ Marketing return on investment (ROMI)○ Net present value (NPV)○ Internal rate of return (IRR)○ Years to pay back

Once you have completed the steps, you can include the sales and profit forecast in the marketing plan and seek budget approval.

Simples!

4.1.5 Relationship/one-to-one marketing

● One-to-one marketing or ‘relationship marketing’ is a strategy that focused on building more personalised and customised customer relationships.

Rogers & Dorf (1999)Harvard Busines Review

4.2.2 Evaluation matrices

Evaluation matrices can be found under many different names (to name a few!)● The Idea Evaluation Matrix (IEM)● The Decision Matrix● The Decision Alternative Matrix● The Importance vs. Performance Matrix● The Opportunity Analysis ● The Cost-Benefit Matrix

Idea Evaluation Matrix (adapted from Hietikko, 2013)

IEM is a screening process for evaluating and prioritising products/services/new ideas, to identify issues that might need addressing.

The matrix evaluates them on a market assessment and the likelihood of the innovation being realised.

Dimensions: value to the customer (divided into usefulnes & economic efficiency) & value to the producer (marketability and productivity)

4.2.3 Suitability, feasibility and acceptability

Another framework to score strategic options is the ‘Suitability, Acceptability, Feasibility’ (SAF) method (Johnson et al’s, 2011):

Suitability: ● Does the strategy exploit the company strengths?● How far does the strategy overcome the difficulties identified in the strategic analysis

(resource weaknesses and environmental threats)? ● Does it fit in with the organisation’s purposes?

Feasibility:● Can the strategy be funded?● Is the organisation capable of performing to the required level (e.g., quality level, service

level)?● Can the necessary market position be achieved, and will the necessary marketing skills be

available?● Will the technology (both product and process) be available to compete effectively?● Can the necessary materials and services be obtained?

Acceptability:● What will be the financial performance of the company in profitability terms? The parallel in

the public sector would be cost/benefit assessment.● How will the financial risk (e.g., liquidity) change?

4.2.4 Associated risk

Businesses face all kinds of risks, some of which can lead to loss of profit or even reputational damage or bankruptcy. There are different types of risk to take into account:

● Strategic Risk: Strategic risks are risks that affect or are created by an organization's business strategy and strategic objectives. Technological changes, a new powerful competitor, shifts in customer demand, spikes in raw materials, etc. (macro-forces)

● Compliance Risk: Each country have their own regulations, rules and taxes. It is your responsibility to comply with them as a business. e.g. GDPR, food compliance rules, etc.

● Operational Risk: Operational risks are major risks that affect an organization's ability to carry out its operations. Technical failures, human error, natural disasters, power cuts, problems with your server, etc.

● Financial Risk: All risks can have a financial impact, but financial risks relate to money flowing in and out of your business and the possibility of a sudden loss. Increased cost of borrowing, unpaid customer debts, etc.

● Reputational Risk: lawsuits, product recalls, negative PR, bad reviews, etc.

5.2.5. Risk assessment and contingency planning

*(Jumping a bit ahead but it makes more sense here!)

Risk can be further divided into six categories:● Political● Social● Physical● Technical● Labour● Legal

4 Steps to creating a risk plan:● Identify the risks● Prioritise them● Create a risk schedule

○ Timeframes for undertaking any necessary actions● Define the risk management process

○ Contingency plans, proactive management, Plan A, Plan B, etc.

4.2.5 Return on marketing investment

● Return on marketing investment or ROMI is a metric used in online marketing to measure the effectiveness of a marketing campaign.

● It examines results in relation to the specific marketing objective. ● ROMI is a subcategory of return on investment or ROI, because here the cost is incurred

on marketing.

One basic formula for calculating the return on marketing investment is:

(Gross Profit – Marketing Investment )/ Marketing Investment

ROMI is not used often as it presents quite a few issues:● Labour intensive to calculate for each campaign● It can take a long time for some campaigns to yield results● Large corporations have too many variables in terms of profit and investment across

departments● How do you factor repeat sales? How do you attribute them?

The rule of thumb for marketing ROI is typically a 5:1 ratio, with exceptional ROI being considered at around a 10:1 ratio. Anything below a 2:1 ratio is considered not profitable, as the costs to produce and distribute goods/services often mean organizations will break even with their spend and returns.

4.2.6 Stakeholder expectations

A stakeholder is anyone, as an individual or a collective such as organisation that has an interest or is concerned with the actions of a business to the extent they are affected by or they can influence it.

4.2.6 Stakeholder expectations

4.2.3 Suitability, feasibility and acceptability

4.2.7 Strategic logic

Strategic logic is about the fit of a strategy with the mission and values of the organisation, taking into account key abilities/competencies of the company and its staff.

The MCC Matrix (Mission and Core Competencies) combines two elements:1) How well does it fits with the firm’s

mission?2) How well does it use and further

develop the firm’s core competencies?

4.3.2 Different types of marketing and communications plans - traditional and digital

McDonald & Wilson 10 Steps Marketing Plan (2016)

Session 1 - RECAP

● What does SOSTAC stand for and what it is used for?

● What about RACE?● What are two common elements

of brand strategy? ● What are the different types of

brand architecture?● What is one-to-one marketing?● What do we use the Mendelow’s

Matrix for?

Lunch Break: 12.00-13.00

Session 2: Implementation & Control (Session 1)

Learning outcomes: ○ Develop a realistic plan for the online and offline

implementation of a marketing strategy○ Determine key variables and resources required for

the successful implementation of a marketing strategy

5.1. Implementation and control

5.1.1. Detailed action plan using established frameworks

A common challenge facing organisations when developing marketing plans is the transition from objective and strategy setting to the implementation of the plan.

There are some key requirements that should be in place when managing this transition:

● Organisation alignment● Cross-functional teams● Clear communication of business marketing objectives & strategy● Clear communication of key priorities● A project management mindse● Application of the RACI framework (next slide)


● A responsibility assignment matrix, also known as RACI matrix or linear responsibility chart, describes the participation by various roles in completing tasks or deliverables for a project or business process.

● The RACI acronym stands for “Responsible, Accountable, Consulted, and Informed.”

● Here is what your project delegation looks like with the acronym RACI:○ Responsible: Person who is completing the task○ Accountable: Person who is making decisions and taking actions on the task(s)○ Consulted: Person who will be communicated with regarding the

decision-making process and specific tasks○ Informed: Person who will be updated on decisions and actions during the

project


● Creating a RACI Matrix (step-by-step)○ Identify all the tasks involved in delivering the project and list them on the

left-hand side of the chart in completion order.○ Identify all the project roles and list them along the top of the chart.○ Complete the cells of the chart identifying who has the responsibility, the

accountability and who will be consulted and informed for each task.○ Ensure every task has a role responsible and a role accountable for it.○ No tasks should have more than one role accountable. Resolve any conflicts

where there is more than one for a particular task.○ Share, discuss and agree on the RACI Matrix with your stakeholders before your

project starts.



● You need identify a critical path to be able to achieve your marketing goals. A Critical Path Analysis (CPA) is a calendar from which to plan all activities in the development stages all the way through to implementation.

● A CPA includes:○ Specify the individual activities - a list of all activities required to complete the

project○ The time/duration that each activity will take to complete○ The dependencies between the activities○ Logical end points such as milestones or deliverables○ The “path of least slack time” - the critical path


Or an easier alternative might be a GANTT chart!

5.2.1 Resource and capability requirements, allocation and attainment

The final stage of developing the marketing strategy should be to state clearly what resources the plan needs to be successfully implemented:

● Financial Resources (aka budget)● Human Resources - hands on deck● Expertise (social media? performance marketing? )● Organisational systems (CRMs, marketing/analytics platforms, etc.)

Here’s where McKinsey’s 7-S Framework comes into play! (Waterman et al, 1980)

*Will share a separate document on the framework

5.2.1 Resource and capability requirements, allocation and attainment

Other considerations:5.2.2. Outsourcing and agencies

CIM also asks you to consider the pros and cons of outsourcing part or all of your marketing implementation/execution.

What do you think might be some pros or cons?

Other considerations:5.1.2. Relevant legislative, regulatory and code of conduct considerations

Please ensure you are compliant with respective industry regulations, and wider marketing/communication frameworks:● GDPR● CAP Code (UK Code on Non-broadcast Advertising and Direct & Promotional

Marketing)● Unfair Commercial Practices Directive 2006 (EU)

Even if you outsource, you are still liable!

Session 2 - RECAP

If you had to highlight one concept/framework/idea from this session, what would it be?

Coffee/tea Break: 15.00-15.15

Session 3: Implementation & Control (Session 2)

Learning outcomes: ○ Apply the results of monitoring and measurements,

and adapt the marketing plan for continuous improvement

6.1.1 Definitions

“Marketing performance depends largely on uncontrollable factors such as customers and

competitors, making direct linkage between cause-and-effect difficult.” Clark (2007)

6.1.1 Finance measures/control ratios

Marketing plans require substantial resources, so we need to justify the investment in regards to the outputs, or what we promised in the forecast.

Measurement and monitoring are done at various level/stages, using many different metrics and methods.

CIM likes a few different ratios/measurements to be considered as part of the finance control section:● Porter’s value-chain analysis: looking at costs and outputs in comparison with

competitors ● Shareholder value added (SVA) - measure of the operating profits that a company

has produced in excess of its funding costs, or cost of capital. ○ It is calculated by subtracting the net capital employed, multiplied by the cost of

capital (%) from profit after tax. ○ This measures the organisation’s ability to earn more than its total cost of

capital. ● Customer value

○ Customer satisfaction○ Loyalty

● Accounting value○ Results from annual accounts and quarterly updates


● Sales:○ The turnover of the organisation or the income it

generates from producing goods or delivering services○ Sales trends as indicators of growth (turnover is vanity,

profit is sanity!)● Market share

○ Dividing the sales generated by the organisation by the sales of all the organisations supplying the market being analysed

● Profits: different ratios that show the return the organisation has made on the assets it has invested. ○ Net profit margin: Shows profit per currency unit of

sales - you need it to be higher than competitors! ■ Net profit (profit after tax) / Sales (Revenues)

○ Return on capital employed (ROCE): Shows how well the organisation is using the capital invested in its operations. ■ Profit before taxation / Capital employed

○ Liquidity: How solvent the organisation is ○ Inventory (stock) turnover: Measure of asset utilisation

■ Inventory turnover = Cost of sales / Inventory (stock)


Recommendation:● Activity 6.1 in ebook - simplified profit and loss account and balance sheet for you to

play with!

5.2.3. Critical success factors*(moved this here, a bit later in the day!)

Critical Success Factors (CSFs), also known as Key Results Areas, are the areas of your business or project that are vital to its success. Identifying and communicating CSFs within your organization helps to ensure that your business or project is focused on its aims and objectives.

You probably already know your CSFs from preparing your Resource Based View, SWOTs, PESTLE… But examples could be:

● Increased customer satisfaction.● Quality service.● Increased customer feedback.● Best portfolio/offering range

CSFs will be often linked to Key Performance Indicators (KPIs) - next slide!

If you struggle to identify CSFs, ask yourself: ● What elements of the customer value prop are essential? ● What are the assets or capabilities that we need in order to be successful?● What are our strengths?

6.1.2 Operational measures and KPIs

● KPIs are used to measure the CSFs that underpin the objectives in a marketing plan.

● By allocating a specific KPI to each CSF you can monitor them to make sure you are on track

● Monitoring performance on a regular basis will allow you to optimise if needed

● But don’t get KPI paralysis either!

● CIM suggests you consider CFS and potential KPIs for measurement by using the framework on the right.

I personally prefer RACE to establish KPIs across each stage of the conversion funnel!


Here's an example of recommended measures in a simpler summary of RACE KPIs. You could add in a column for change through time, and even value generated.



● Potential marketing measures can be divided into categories (Cravens and Piercy, 2012) (might lead to analysis paralysis?)

● Orgs should use no more than 10 KPIs in combination with 10 key result indicators (Parmenter 2007)

● Balanced Score card can also be used to generate/specify KPIs

Improvement plans:6.2.1 Appropriate theories and frameworks

● Total Quality Management (TQM)○ Focuses on two main areas: producing quality goods and meeting customer

satisfaction standards○ Total Quality Management concept aptly uses strategy, data, and effective

communication channels to integrate the required quality principles into the organization’s work activities and the overall culture.

○ It takes at least 6 months for implementation results to deliver benefits○ It requires change management

● Kaizen Theory○ Concept referring to business activities that continuously improve all functions

and involve all employees ○ Kaizen also applies to processes, such as purchasing and logistics, that cross

organizational boundaries into the supply chain.○ Focus is on the employees to find opportunities for improvement

Both systems can be implemented through the: PDCA Cycle (next slide)

*CIM also mentions Six Sigma and Lean Management techniques as potential options for improvement and optimisation.

Improvement plans:6.2.1 Appropriate theories and frameworks

PDCA Cycle

6.2.4 After-action and post-implementation reviews

● Last step in your project cycle

● After-action (AAR) and post-implementation reviews (PIR) are processes used to evaluate whether the objectives of a project have been met

● In these we evaluate:■ Project performance

● Were the objectives met?■ Lessons Learned

● What went well and why?● What could have gone better?● What are the key lessons you could share?

■ Team member appraisals■ Recommendations for future projects

Session 3 - RECAP

● How are we feeling?● What are the frameworks/theories we feel most

comfortable using?

Next: Assignment Workshop next week!

I will be emailing you a few bits in the upcoming days (e.g. extra resources, exemplars, etc.)

Have a lovely rest of your weekend!

Documents

Digital Strategy Level 6 Day 2 - marketingtommedia.co.uk