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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:
(1) Globalization
(2) Deregulation
(3) Technological advances
(4) Customer empowerment
(5) Market fragmentation
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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 departments
2) Outsourcing – buying goods & services from outside domestic & foreign markets
3) Benchmarking – studying “best practice companies” to improve performance
4) Supplier Partnering – partnering with fewer but value-adding suppliers
5) 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 scope
7) Globalizing – increasing effort to “think global” & “act local”
8) Flattening – reducing the number of organizational level to get closer to the customer
9) Focusing – determining the most profitable businesses & customers & focusing on them
10) Accelerating – designing the organization & setting up processes to respond more quickly to changes in the environment
11) Empowering – encouraging & empowering personnel to produce more ideas & take more initiative
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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:
I. Functionally
II. Geographically
III. By product or brand
IV. By market
V. In a matrix
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I. Functional Organization
The main advantage is administrative simplicity.
VP Marketing
Marketing AdministrationManager
Advertising & Sales PromotionManager
SalesManager
MarketingResearchManager
NewProductsManager
II. Geographical Organization
They 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.
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Some task of brand manager include:
(1) Develop long-range & competitive strategy for the product
(2) Prepare an annual marketing plan & sales forecast
(3) Work w/ advertising & merchandising agencies to develop copy, programs & campaigns
(4) Increasing support of the product among the sales force & distributors
(5) Gathering continuous intelligence on the products performance, customer & dealer attitudes & new problems & opportunities
(6) Initiating product improvements to meet changing market needs
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Disadvantage of Product Management Organization include:
(1) They lack ebough authority to carry out responsibility
(2) They become expert in product areas but rarely achieve functional expertise
(3) This systems is costly
(4) They only manage a product/brand for a short time
(5) Fragmentation of markets makes it harder to develop a national strategy
(6) They focus the company on building market share rather than the customer relationship
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3 Types of Product Teams
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Product Manager
Associate ProductManager
Product Assistant
ProductManager
CR
Vertical Product Team
Triangular Product Team
Product Manager
R EFDSC
Horizontal Product Team
IV. Market-Management OrganizationMarket-management organization – when customers
fall into different user groups w/ distinct buying preferences & practices
Customer-management organization – companies organize themselves to understand & deal w/ individual customers rather than w/ mass market or even market segments
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V. Matrix-Management Organization
Companies that produce many products for many markets
Relations w/ Other Deparments
2 task of CMO or VP-Marketing:
(1) To coordinate companies internal marketing activities
(2) To coordinate marketing w/ finance, operations & other company functions to serve the customer
Requirement to Build a Creative Marketing Org.
(1) Developing company-wide passion for customers
(2) Organizaing around customer segments instead of products
(3) Understanding customers through qualitative & quantitative research
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Socially Responsible MarketingCorporate Social Responsibility
3 pronged attack:
(1) Legal behavior
(2) Ethical behavior
(3) Social responsibility behavior
Sustainability – the importance of meeting humanity's needs without harming future generations
Cause-Related Marketing – links the firms contributions to a designated cause to customers engaging directly or indirectly in revenue-producing transactions with the firm
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A successful Cause Marketing Program can:
(1) Improve social welfare
(2) Create differentiated brand positioning
(3) Build strong consumer bonds
(4) Enhance the company's public image w/ government officials & other decision makers
(5) Create a reservoir of goodwill
(6) Boost internal morale & galvanizing employees
(7) Drive sales
(8) Increase market value of firms
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Advantages of Cause Marketing:
(1) Build brand awareness
(2) Enhance brand image
(3) Establish brand credibility
(4) Evoke brand feelings
(5) Create a sense of brand community
(6) Elicit brand engagement
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Social Marketing programs possible objectives:
1) Cognitive Campaigns
(1) Expalin the nutritional value of different foods
(2) Explain the improtance of conservation
2) Action Campaigns
(1) Attract people for mass immunization
(2) Motivate people to vote “yes” on certain issues
(3) Motivate people to donate blood
(4) Motivate women to take the pap test
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3) Behavioral Campaigns
(1) Demotivate cigarette smoking
(2) Demotivate usage of hard drugs
(3) Demotivate excessive consumption of alcohol
4) Value Campaigns
(1) Alter ideas about abortion
(2) Change attitudes of bigoted people
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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:
(1) Selects target markets in which it enjoys superioirs advantages & exits/avoid markets where it is intrinsically weak
(2) Employees & departments are customer & market minded
(3) Good working relationship between marketing, R&D & manufacturing
(4) Good working relationship between marketing, sales & customer service
(5) Have incentives to lead to the right behaviors
(6) Builds & tracks customers satisfaction & loyalty
(7) Skilled in building brand names & image
(8) Flexible in meeting customers varying requirements
(9) Manages value delivery system
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Evaluation & ControlTypes of Control Prime Responsibility Purpose of Control Approaches
Annual Plan Control Top MangementMiddle Management
Examine whether planned results are being achieved
Sales analysis Market share analysisSales-to-expense ratios
Profitability Control Marketing controller Examine whether the company is making & losing money
Efficiency Control Line & staff managementMarketing controller
Evaluate & improve the spending efficiency & impact marketing expenditures
Strategic control Top managementMarketing Auditor
Examine whether the company is pursuing its best opportunities w/ respect to markets, products & channels
Types of Control
Prime Responsibility
Purpose of Control Approaches
Annual Plan Control
Top MangementMiddle Management
Examine whether planned results are being achieved
Sales analysis Market share analysisSales to expense ratiosFinancial analysis Market based scorecard analysis
Profitability Control
Marketing controller
Examine whether the company is making & losing money
Profitability by: Product Territory Customer Segment Trade channel Order size
Efficiency Control
Line & staff managementMarketing controller
Evaluate & improve the spending efficiency & impact marketing expenditures
Efficiency by: Sales force Advertising Sales promotion Distribution
Strategic control
Top managementMarketing Auditor
Examine 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 Marketing1) The demise of marketing department & the rise
of holistic marketing
2) The demise of free spending marketing & the rise of ROI marketing
3) The demise of marketing intuition & the rise of marketing science
4) The demise of manual marketing & the rise of automated marketing
5) The demise of mass marketing & the rise of precision marketing
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New set of skills & competencies:
1) Customer Relationship Management
2) Partner Relationship Management
3) Database marketing & datamining
4) Contact center management & telemarketing
5) Public relations marketing (including event & sponsorship marketing)
6) Brand building & brand asset management
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