2. Modern marketing departments can be organized in a number of ways. Some companies are organized by functional specialization; others focus on geography and regionalization. Still others emphasize product and brand-management or marketsegment management. Some companies establish a matrix organization consisting of both product and market managers. Some companies have strong corporate marketing, others have limited corporate marketing, and still others place marketing only in the divisions. 3. Effective modern marketing organizations are marked by a strong cooperation and customer focus among the company’s departments: marketing, R&D, engineering, purchasing, manufacturing, operations, finance, accounting, and credit. 4. A brilliant strategic marketing plan counts for little if it is not implemented properly. Implementing marketing plans calls for skills in recognizing and diagnosing a problem, assessing the company level where the problem exists, implementation skills, and skills in evaluating the implementation results. 5. The marketing department has to monitor and control marketing activities continuously. The purpose of annual-plan control is to ensure that the company achieves the sales, profits, and other goals established in its annual plan. The main tools of annual-plan control are sales analysis, market-share analysis, marketing expense–to–sales analysis, financial analysis, and market-based scorecard analysis. 6. Profitability control seeks to measure and control the profitability of various products, territories, customer groups, trade channels, and order sizes. An important part of controlling for profitability is assigning costs and generating profit-and-loss statements. 7. Efficiency control focuses on finding ways to increase the efficiency of the sales force, advertising, sales promotion, and distribution. 8. Strategic control entails a periodic reassessment of the company and its strategic approach to the marketplace, using the tools of the marketing-effectiveness review and the marketing audit. Companies should also undertake ethical–social responsibility reviews. CONCEPTS 1. Rewrite the questions in the Components of a Marketing Audit (Table 6.11) in such a way that they reflect the individual problems and terminology associated with your industry. Be as specific and as detailed as you can when writing the questions. If you are not presently employed, rewrite the questions for either a company you have worked for or one for which you would like to work in the future. 2. A large manufacturer of industrial equipment has a salesperson assigned to each major city. Regional sales managers supervise the sales representatives in several cities. The chief marketing officer wants to evaluate the profit contribution of the different cities. How might each of the following costs be allocated to each of the cities: (a) the aggregate costs of sending bills to customers; (b) district sales manager’s expenses; (c) national magazine advertising; and (d) marketing research? 3. NAPLCO (North American Phillips Lighting Corporation) wanted to put Norelco bulbs on supermarket shelves as a third national brand (GE had 60 percent of the market and Westinghouse had 20 percent of the market). Lightbulb purchases had been slowly declining over the last five years. Lightbulbs were the grocer’s most profitable store item per linear foot of goods stocked. NAPLCO concluded that the strong Norelco name, proven capability at making quality lightbulbs, and profits for supermarkets would make this project very successful. After conducting consumer research, it created a new and clever gravity-fed display and novel transparent and protective package for the bulbs themselves. The display held 12 of the most popular lightbulb types. (Most supermarkets carried 50 types of lightbulbs, part five Managing and Delivering Marketing Programs 714 APPLICATIONS
and double that number constituted a full line.) Norelco decided not to do any consumer advertising, but to rely more heavily on push money. It also decided to use a broker rather than hire its own sales force. After two and a half years, gross sales of Norelco’s bulbs were $1.1 million against a projected $7.5 million. Why do you think the project failed from an implementation standpoint? chapter 22 Managing the Total Marketing Effort 715
part five Managing and Delivering Marketing Programs 716 NOTES 1. See Frederick E. Webster Jr., “The Changing Role of Marketing in the Corporation,” Journal of Marketing, October 1992, pp. 1–17. Also see Ravi S. Achrol, “Evolution of the Marketing Organization: New Forms for Turbulent Environment,” Journal of Marketing, October 1991, pp. 77–93; and John P. Workman Jr., Christian Homburg, and Kjell Gruner, “Marketing Organization: An Integrative Framework of Dimensions and Determinants,” Journal of Marketing, July 1998, pp. 21–41.
2. See Frank V. Cespedes, Concurrent Marketing: Integrating Product, Sales, and Service (Boston: Harvard Business School Press, 1995), and Managing Marketing Linkages: Text, Cases, and Readings (Upper Saddle River, NJ: Prentice Hall, 1996). 3. Robert E. Lineman and John L. Stanton Jr., “A Game Plan for Regional Marketing,” Journal of Business Strategy, November–December 1992, pp. 19–25. 4. Scott Hume, “Execs Favor Regional Approach,” Advertising Age, November 2, 1987, p. 36; “National Firms Find that Selling to Local Tastes Is Costly, Complex,” Wall Street Journal, February 9, 1987, P. B1; Paul A. Herbig, Handbook of Cross-Cultural Marketing (New York: International Business Press, 1998), pp. 45–46. 5. “ . . . and Other Ways to Peel the Onion,” The Economist, January 7, 1995, pp. 52–53. 6. Andrall E. Pearson and Thomas W. Wilson Jr., Making Your Organization Work (New York: Association of National Advertisers, 1967), pp. 8–13. 7. Dyan Machan, “Soap? Cars? What’s the Difference?” Forbes, September 7, 1998; Bill Vlasic, “Too Many Models, Too Little Focus,” Business Week, December 1, 1997, p. 148. 8. Michael George, Anthony Freeling, and David Court, “Reinventing the Marketing Organization,” The McKinsey Quarterly no. 4 (1994): 43–62. 9. For further reading, see Robert Dewar and Don Schultz, “The Product Manager, an Idea Whose Time Has Gone,” Marketing Communications, May 1989, pp. 28–35; “The Marketing Revolution at Procter & Gamble,” Business Week, July 25, 1988, pp. 72–76; Kevin T. Higgins, “Category Management: New Tools Changing Life for Manufacturers, Retailers,” Marketing News, September 25, 1989, pp. 2, 19; George S. Low and Ronald A. Fullerton, “Brands, Brand Management, and the Brand Manager System: A Critical-Historical Evaluation,” Journal of Marketing Research, May 1994, pp. 173–90; and Michael J. Zenor, “The Profit Benefits of Category Management,” Journal of Marketing Research, May 1994, pp. 202–13. 10. Stanley F. Slater and John C. Narver, “Market Orientation, Customer Value, and Superior Performance,” Business Horizons, March–April 1994, pp. 22–28. See also Frederick E. Webster, Market-Driven Management: Using the New Marketing Concept to Create a Customer-Oriented Company (New York: John Wiley, 1994); John C. Narver and Stanley F. Slater, “The Effect of a Market Orientation on Business Profitability,” Journal of Marketing, October chapter 22 Managing the Total Marketing Effort 717 1990, pp. 20–35; Bernard Jaworski and Ajay K. Kohli, “Market Orientation: Antecedents and Consequences,” Journal of Marketing, July 1993, pp. 53–70; and Rohit Deshpandé and John U. Farley, “Measuring Market Orientation,” Journal of Market-Focused Management 2 (1998): 213–32. 11. Richard E. Anderson, “Matrix Redux,” Business Horizons, November–December 1994, pp. 6–10. 12. For further reading on marketing organization, see Nigel Piercy, Marketing Organization: An Analysis of Information Processing, Power and Politics (London: George Allen & Unwin, 1985); Robert W. Ruekert, Orville C. Walker, and Kenneth J. Roering, “The Organization of Marketing Activities: A Contingency Theory of Structure and Performance,” Journal of Marketing, Winter 1985, pp. 13–25; Tyzoon T. Tyebjee, Albert V. Bruno, and Shelby H. McIntyre, “Growing Ventures Can Anticipate Marketing Stages,” Harvard Business Review, January–February 1983, pp. 2–4; and Andrew Pollack, “Revamping Said to be Set at Microsoft,” New York Times, February 9, 1999, C1. 13. Gary L. Frankwick, Beth A. Walker, and James C. Ward, “Belief Structures in Conflict: Mapping a Strategic Marketing Decision,” Journal of Business Research, October–November 1994, pp. 183–95. 14. Askok K. Gupta, S. P. Raj, and David Wilemon, “A Model for Studying R&D–Marketing Interface in the Product Innovation Process,” Journal of Marketing, April 1986, pp. 7–17. 15. See William E. Souder, Managing New Product Innovations (Lexington, MA: D. C. Heath, 1987), ch. 10 and 11; and William L. Shanklin and John K. Ryans Jr., “Organizing for High-Tech Marketing,” Harvard Business Review, November– December 1984, pp. 164–71; and Robert J. Fisher, Elliot Maltz, and Bernard J. Jaworski, “Enhancing Communication Between Marketing and Engineering: The Moderating Role of Relative Functional Identification,” Journal of Marketing, July 1997, pp. 54–70. 16. David J. Morrow, “Struggling to Spell R-E-L-I-E-F,” New York Times, December 29, 1998, pp. C1, C18; “JAMA Study Shows Merck-Medco’s Partners for Healthy Aging Program Significantly Reduces the Use of Potentially Harmful Medication by Seniors,” Business Wire, October 12, 1998. 17. See Robert J. Fisher, Elliot Maltz, and Bernard J. Jaworski, “Enchancing Communication Between Marketing and Engineering,” Journal of Engineering, July 1997, pp. 54–70.
18. See Benson P. Shapiro, “Can Marketing and Manufacturing Coexist?” Harvard Business Review, September–October 1977, pp. 104–14. Also see Robert W. Ruekert and Orville C. Walker Jr., “Marketing’s Interaction with Other Functional Units: A Conceptual Framework and Empirical Evidence,” Journal of Marketing, January 1987, pp. 1–19. 19. Edward E. Messikomer, “DuPont’s ‘Marketing Community,’” Business Marketing, October 1987, pp. 90–94. For an excellent account of how to convert a company into a market-driven organization, see George Day, The Market-Driven Organization: Aligning Culture, Capabilities and Configuration to the Market (New York: Free Press, 1999). 20. For more on developing and implementing marketing plans, see H. W. Goetsch, Developing, Implementing & Managing an Effective Marketing Plan (Chicago: American Marketing Association; Lincolnwood, IL: NTC Business Books, 1993). 21. Thomas V. Bonoma, The Marketing Edge: Making Strategies Work (New York: Free Press, 1985). Much of this section is based on Bonoma’s work. 22. Emily Denitto, “New Steps Bring Alvin Ailey into the Business of Art,” Crain’s New York Business, December 7, 1998, pp. 4, 33. 23. See Alfred R. Oxenfeldt, “How to Use Market-Share Measurement,” Harvard Business Review, January–February 1969, pp. 59–68. 24. There is a one-half chance that a successive observation will be higher or lower. Therefore, the probability of finding six successively higher values is given by ( 1 2 ) 6 6 1 4 . 25. Alternatively, companies need to focus on factors affecting shareholder value. The goal of marketing planning is to increase shareholder value, which is the present value of the future income stream created by the company’s present actions. Rateof-return analysis usually focuses on only one year’s results. See Alfred Rapport, Creating Shareholder Value, rev. ed. (New York: Free Press, 1997). 26. For additional reading on financial analysis, see Peter L. Mullins, Measuring Customer and Product Line Profitability (Washington, DC: Distribution Research and Education Foundation, 1984). 27. See Robert S. Kaplan and David P. Norton, The Balanced Scorecard (Boston: Harvard Business School Press, 1996). part five Managing and Delivering Marketing Programs 718 28. Richard Whiteley and Diane Hessan, Customer Centered Growth (Reading MA: Addison Wesley, 1996), pp. 87–90; and Adrian J. Slywotzky, Value Migration: How to Think Several Moves Ahead of the Competition (Boston: Harvard University Press, 1996), pp. 231–35. 29. The MAC Group, Distribution: A Competitive Weapon (Cambridge, MA: MAC Group, 1985), p. 20. 30. See Robin Cooper and Robert S. Kaplan, “Profit Priorities from Activity-Based Costing,” Harvard Business Review, May–June 1991, pp. 130–35. 31. Sam R. Goodman, Increasing Corporate Profitability (New York: Ronald Press, 1982), ch. 1. Also see Bernard J. Jaworski, Vlasis Stathakopoulos, and H. Shanker Krishnan, “Control Combinations in Marketing: Conceptual Framework and Empirical Evidence,” Journal of Marketing, January 1993, pp. 57–69. 32. See Peter M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization (New York: Doubleday Currency, 1990), ch. 7. 33. For further discussion of this instrument, see Philip Kotler, “From Sales Obsession to Marketing Effectiveness,” Harvard Business Review, November–December 1977, pp. 67–75. 34. See Philip Kotler, William Gregor, and William Rodgers, “The Marketing Audit Comes of Age,” Sloan Management Review, Winter 1989, pp. 49–62. For an interesting alternative approach, see the Copernican Decision Navigator, available from Copernican at (617) 630-8705. 35. Useful checklists for a marketing self-audit can be found in Aubrey Wilson, Aubrey Wilson’s Marketing Audit Checklists (London: McGraw-Hill, 1982); and Mike Wilson, The Management of Marketing (Westmead, England: Gower Publishing, 1980). A marketing audit software program is described in Ben M. Enis and Stephen J. Garfein, “The Computer-Driven Marketing Audit,” Journal of Management Inquiry, December 1992, pp. 306–18. 36. Kotler, Gregor, and Rodgers, “The Marketing Audit.” 37. Howard R. Bowen, Social Responsibilities of the Businessman (New York: Harper & Row, 1953), p. 215. Also N. Craig Smith and Elizabeth Cooper-Martin, “Ethics and Target Marketing: The Role of Product Harm and Consumer Vulnerability,” Journal of Marketing, July 1997, pp. 1–20.
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