11/23/2022

Marketing planning, Session 11.2

implementation & control – Chapter 2
Marketing organization

Learning Objectives

1. How is marketing planned?

2. How do marketers implement the plan and track
marketing performance?
3. How is marketing organized?

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1. Marketing planning

COMPANY MISSION, VISION

Corporate objectives & strategy

SBU 1 SBU 2 SBU 3 SBU 4

A strategic business unit (SBU) is a part of an organisation for which

there is a distinct external market for goods or services that is
different from other SBUs

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Corporate level SBU level

Defining
Setting Designing
the Planning
company the
company marketing
objectives business
mission & strategies
and goals portfolio
vision

CORPORATE MARKETING
STRATEGY STRATEGY

CORPORATE strategic planning

• Defining the corporate mission

• Establishing strategic business units

• Assessing growth opportunities

• Assigning resources to each strategic business unit

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Corporate strategy and objectives concerned with the overall

long-term growth and profitability OF THE COMPANY and are
most often expressed in financial terms

1. Growth, expansion

2. Financial performance Example:

 To achieve a 15% return on equity
3. Innovation  To increase operating profits by 20%
4. etc  To achieve a return on investment of 25%
 To achieve a return of 20% of capital employed
(ROCE)
 To achieve growth of 10% in earning per share (EPS)

For each SBU, marketing strategy and objectives usually refer to

• Sales targets
• Market share
• Brand awareness Example:
• Customer satisfaction  To increase overall sales by 15% by 2020
• Customer loyalty  To increase customer retention by 25% by 2020
• Market coverage /penetration  To increase the number of new products per year from
•… 2 to 5 by 20
 To increase market share from the 10% to 15% by 2020
 To increase awareness of brand X in the target market Z
from 20% to 45% in 2020

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Marketing planning is …
…a set of procedures and decisions for:
 Selecting, attracting the target customer to a business and
to retain them profitably
 Achieving marketing goals and objectives for each SBU

Marketing

Planning, Implementation, and Control Processes

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STRATEGY for SBU X1 … X4

Marketing plan for X1

Period n Implementation
Evaluation
Revision

Marketing plan for X1

Period n+1

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STAGES IN MARKETING
KEY QUESTIONS SPECIFIC TASK
PLANNING
PESTEL
Market and industry analysis
Where are we now and how
Organizational capability (audit) Situation analysis
did we get here? SWOT
….

Where would we like to be? Objective setting Objectives

Market targeting and positioning
Marketing mix decisions Marketing strategy
How do we get there? Action plan
Budgeting
P&L analysis Marketing tactics
….

Are we on course? Performance measurement Implementation & Control

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External Analysis Internal Analysis

Macro environment
Resources, capabilities
Competitor
Product portfolio
Customer
Analysis Marketing resources
Suppliers -
and capability
Intermediaries

Opportunities & Threats Strength & Weaknesses

Competitive advantages

Marketing objectives
Objectives
& Strategy
Marketing strategy: segmentation – targeting - positioning

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Marketing strategy: segmentation – targeting - positioning

Strategy

Marketing Mix decisions Execution plan

Product Organization
Price Resources
Tactics Place Budgeting
Promotion Action plan
Others KPIs

Implementation Implementation, Control and Evaluation

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Marketing Plan: major components

Executive summary
Executive A brief overview of the entire marketing plan.
Summary
Situation analysis
Situation The study of the internal and external
Analysis factors that affect marketing strategies

Objectives
Elements
Objectives Definition of mission, marketing and financial goals,
of a
Marketing Plan Marketing strategies and tactics
Marketing Identification of target markets, decision of
Strategies positioning and marketing mix choices that focus
on those markets
Action plan, budgeting
Action plan
Detailed explanations on what, when, who, how the
and budget
strategic decisions will be implemented. Financial
projections including sales and expenses forecast
Evaluation Control
and Control Procedure to monitor and adjust the plan as it is
implemented. Internal and external measures that
assess progress and suggest possible changes

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Executive Summary

• This section summarizes

the market offerings,
target segments, main
goals, recommendations,
and points as an overview
for senior managers who
will read and approve the
marketing plan.

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Situation analysis
• In this section, marketing
managers discuss the overall
market, identify the market
segments that they will target,
and provide information about
company’s current situation.

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Situation analysis
I. Market analysis:
Describing the market needs, trends, and growth, market
segments…, providing context for the marketing strategies.
II. Product review
III. Competitive review
IV. Channels and logistics review

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Situation analysis

I. Market description
II. Product review:
The product review summarizes the main features for all of the
company’s products, organized by product line, type of customer,
market, or order of product introduction.
III. Competitive review
IV. Channels and logistics review

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Situation analysis
I. Market description
II. Product review
III. Competitive review:
The purpose of a competitive review is to identify key
competitors, describe their market positions, and briefly discuss their
strategies.
IV. Channels and logistics review

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Situation analysis

I. Market description
II. Product review
III. Competitive review
IV. Channels and logistics review:
In this section, marketers list the most important channels,
provide an overview of each channels arrangement, and identify
developing issues in channels and logistics.

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SWOT Analysis
• Strengths:
Internal capabilities that can help the company reach its objectives.
• Weaknesses:
Internal elements that may interfere with the company’s ability to achieve its
objectives.

• Opportunities
External elements that the company may be able to exploit to its advantage.
• Threats
Current or merging external elements that could potentially challenge the
company’s performance.

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Objectives
• The company’s objectives should be defined in specific terms so
management can measure progress and plan corrective action if
needed to stay on track.

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Marketing Strategy and tactics

• Target market
• Positioning: points of difference
• Marketing tools:
• product strategy
• pricing strategy
• distribution strategy
• marketing communication strategy

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Action plan

• Spells out how marketing strategies will be turned into specific action programs that
answer the following questions:
• What will be done?
• When will it be done?
• Who will do it?
• How much will it cost?
• Action plan should be
coordinated with the resources and
activities of other departments,
including production, finance,
purchasing, and so on.

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Financial Forecast (Budgets)

• Managers use budgets to protect profitability and plan for each
marketing program’s expenditures, scheduling, and operations.

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Evaluation & Controls

• Controls help
management assess
result after the plan is
implemented, identify any
problems or performance
variations, and initiate
corrective action.

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Evaluating a Marketing Plan

IMPLEMENT. & CONTROL

Relevant synthesis Consistent with SA Consistent with ST,
SITUATION ANALYSIS

STRATEGY AND TACTICS

Reliable. Updated Specific, clear Clear, detailed,
information decision complete
Overall depth & Overall Overall
pertinence cohesiveness actionability

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Marketing planning: challenges & barriers

1. Confusion between marketing tactics and strategy
2. Isolating the marketing function from operations
3. Organizational barriers
4. Lack of in-depth analysis
5. Lack of knowledge and skills
6. Lack of systematic approach to marketing planning
7. Failure to prioritize objectives
8. Hostile corporate cultures.
9. ….

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2. Marketing implementation
monitoring & control

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Marketing Implementation

• Marketing implementation
• The process that turns
WHEN: Schedule of activities
marketing plans into action
WHO: Job assignments
assignments and ensures they
HOW: Resource allocation
accomplish the plan’s stated
objectives HOW MUCH: Sales forecasts & expenses

WHAT: KPIs

…..

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ACTION PLAN

Company mission Specification of each P,

and vision Budgeting, KPI
Monitoring
and evaluation
Business objectives
Sales
Revenu
Market share
Profit
Product Price Place Promotion

Strategic Marketing mix

objectives decisions
for SBU
4Ps
7Ps

Marketing
strategy

Company products Segmentation

portfolio (SBUs) Targeting
Strategy for growth Positioning
for each SBU

MARKETING STRATEGY FOR SBU IMPLEMENTATION

CORPORATE STRATEGY

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Basic tasks in creating an implementation plan

List of
(1) Identify the activities to be performed actions
to be
(2) Determine the time required to complete each activity executed
Resources
(3) Determine which activities must precede other allocation Time and
activities for action sequence of
to be execution
(4) Assign responsibility executed
Respon-
(5) Arrange the resource needed of all activities sibility
for
execution

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Resource/capability allocation
• Financial resources: budgeting
• Human resources: expertise, knowledge and skills
• Infrastructure: structure and procedure (example CRM software…)

Resources needed Infrastructures

Task
Physical Financial Human Changes

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Expenses and sales forecast

• Estimates of all costs necessary to attain the sales levels and to

deliver the goods to the customer:

 market research expenses

 distribution (commissions to intermediaries)
 marketing communication activities
 sales team (salaries, travel costs, support materials and training)
 customer database management
 ….

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Monitoring and control of marketing activities

Set SMART
The process by objectives

which firms assess

the effects of their Take
Reporting
progress
corrective
marketing action
against
targets
TRACKING
activities and PERFORMANCE
programs and
make necessary
Identify
changes and variations
Monitor
performance
from target
adjustments

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Metrics for monitoring & control

Metrics are the set of measures that helps marketers quantify,
compare, and interpret marketing performance.
Metrics include both financial and nonfinancial data

Marketing metrics • Customer satisfaction metrics

(nonfinancial) • Distribution metrics
• Sales metrics • Communication metrics
• Customer readiness to buy • …
metrics

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MBM6
INTERNAL VIEW OF PERFORMANCE Chapter
EXTERNAL VIEW OF PERFORMANCE 2

Financial Metrics Performance Non financial Metrics (marketing metrics) Performance

Profit Metrics Market Metrics
• Gross Profits 55.0% • Market Growth Rate 22.5%
• Return on Sales 17.0% • Market Share 8.5%
• Return on Assets 17.8% • Market Development Index 40
Expense Metrics Customer Metrics
• Marketing & Sales Expenses 21.0% • Customer Satisfaction 64
• General & Administrative Expenses 8.0% • Customer Retention 65%
• Other Expenses 12.0% • Customer Lifetime Value $45
Asset Management Metrics Competitiveness Metrics
• Sales-to-Assets Ratio 1.05 • Product Performance 11.0
• Accounts Receivable 15.0% • Service Quality -9.0
• Capacity Utilization 67.0% • Customer Value 8.0
Shareholder Metrics Marketing Profitability Metrics
• Return on Equity 15.0% • Net Marketing Contribution $156
• Return on Capital 13.0% • Marketing ROI 162%
• Earnings per Share $2.00 • Marketing ROS (Best 2012) 34.0%

© Palmatier, 2017, Marketing Strategy, Palgrave. ISBN: 9781137526236.

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Marketing Mix Functions Marketing Terms Close Financial Analogs

Customer Delight Metrics Awareness Return on marketing spending

Interest Return on marketing spending
Desire Return on marketing spending
Sales Sales return to marketing spending
Loyalty Projected sales
Market share Sales/total SIC sales
Share of wallet Customer sales/customer total SIC sales
Social influence

Advertising Metrics Impressions/visits/page views Cost per lead

Click-through rate Cost per click
Media impressions Cost per impression
Recall Cost per recall
Pricing Metrics Price premium Unit margin/ margin percentage
Price elasticity Marginal price effort x (price/sales)
Brand equity Revenue premium
Sales Force Leads Cost per lead
Conversions Cost per conversion
Winbacks Cost per winback
Distribution Stock-keeping unit growth Total inventory
Same store sales Sales per store/previous year sales
Passthrough Net margin
© Palmatier, 2017, Marketing Strategy, Palgrave. ISBN: 9781137526236. Note: SIC = Standard Industry Classification

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Key indicators of efficiency in territories:

a. Average calls per salesperson per day
b. Average sales call time per contact
c. Average revenue per sales call
d. Average cost per sales call
Sales force
e. Entertainment cost per sales call
f. % of orders per 100 sales calls
g. Number of new customers per period
h. Number of lost customers per period
i. Sales-force cost as % of total sales

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• Advertising cost reached by media vehicle

• % of audience who noted, saw & read each ad
• Consumer opinion: ad’s content & effectiveness
• Before & after attitude - towards product
• Inquiries stimulated by ad
• Cost per inquiry Advertising

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Customer
satisfaction &
retention

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Benchmark for evaluation

 Consider expected outcomes

 Consider historical results
 Consider competitive/industry results
 Consider environmental factors

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1. What percentage growth has the firm achieved in revenues and in profits over the period above? Has the firm
improved these two metrics each year?
2. Therefore, based on your response in Q1 only, are these generally good growth results?
3. What is the firm’s revenue and profit on a PER store basis for each year? How has this metric been tracking?

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Marketing audit

• A comprehensive, systematic, independent, and periodic

examination of a company’s or business unit’s marketing
environment, objectives, strategies, and activities, with a
view to determining problem areas and opportunities and
recommending a plan of action to improve the company’s
marketing performance

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Marketing Audit

Marketing Marketing
environment strategy

Marketing Marketing
function organization

Marketing Marketing
productivity systems

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Marketing Audit

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The Marketing Excellence Review

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3. Marketing organization

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Top mgt
The Company
Accounting Finance

Marketing
management

Research and
Operations
development

Purchasing

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Marketing’s role in the corporate strategic

planning process

Marketing’s mission Philosophy Input of information Input of information Strategy/tactics

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https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/marketings-moment-is-now-the-c-suite-
partnership-to-deliver-on-growth

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https://hbr.org/2017/07/why-cmos-never-last

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INDUSTRY INSIGHTS: CMOS LOOK AHEAD,

Insider Intelligence, April 2022

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Organizing the Marketing Department

• Functional organization
• Geographic organization
• Product- or brand-management
organization
• Market-management Organization
• Matrix-management Organization

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Functional Organization

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Product/brand management organization

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Brand/Product Manager Tasks

 Develop long-range/competitive
strategy
 Prepare marketing plan/sales forecast
 Work with agencies
 Increase support among sales force
 Gather intelligence
 Initiate product improvements

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Product-/Brand-Management Organization

• Product-Management organization disadvantages

• Managers may lack authority to carry out responsibilities
• Managers rarely achieve functional expertise
• The system often proves costly
• Managers normally manage brand for a short time
• Market fragmentation makes it harder to develop national
strategy
• Managers focus company away from customer relationships

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Bobby J. Calder, "Content Marketing: Using Media Content to Create Brand Value" presented at Marketing
Science Institute webinar, July 13, 2017
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Check your knowledge

1. How is marketing planned?

2. How do marketers implement the plan and track
marketing performance?
3. How is marketing organized?

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