Marketing Planning

Session 10: Implementation &

Control
 Objectives
• To understand the key tools through which a
marketing plan can be implemented

• To appreciate the importance of internal

marketing in the control of marketing
planning
 The marketing control system
Decide marketing
Alter objectives
objectives

Set performance
Alter standards
standards

Locate
responsibility Praise
reward
promote
Evaluate performance advise
train
against standards punish

Take corrective/
supportive action
When execution doesn’t happen
Question

Is it really a coherent Reason

and complete
strategy? No The strategy does not
tell us what to do. -
--We don’t know
Is the strategy what to do.
capable of being No Lip service - we may
implemented by this agree with the strategy,
company at this time? but we cannot implement.
We can’t do it.

Have we No The strategy is not

communicated the accepted - counter
strategy, adapted it, implementation. -
won support for it? We don’t want to.
Implementation
 So how do we fix the problem?

Screen strategies for implementation problems early

Isolate and evaluate implementation problems in detail

Identify and evaluate key players early

Develop credible implementation strategies

 Strategic Control Systems
Types of control systems

Financial Output Behaviour Organisational

Controls Controls Controls Culture

Share price Divisional goals Budgets Values

ROI Functional goals Standardisation Norms

Individual goals Rules and Socialisation

procedures
 (R)eturn (O)n (I)nvestment
• A ratio that compares profit with the amount
of investment required to generate the profit
• Return on Equity (ROE) = Net profit ÷ Equity
• Return on Asset (ROA) = Net profit ÷ Total
assets
• Return on capital employed (ROC) = Net
profit ÷ Net assets

Hollensen, S. (2003) Marketing Management: A Relationship Approach, Prentice Hall, Harlow

 Example (I):
Net Profit of £13 million
Profit and Loss Account £m
Sales 330
Variable costs 235
Contribution 95
Fixed costs
Manufacturing 28
Selling & Admin _53
Operating profit _14
Net interest payable __1
Net profit before tax _13

Hollensen, S. (2003) Marketing Management: A Relationship Approach, Prentice Hall, Harlow

 Example (II)
Balance £m £m
Sheet
Current asset 200 Current 105
liabilities
Stocks 80 Long-term debt 55
Debtors 70
Other 50 Equity 150
Fixed assets 110 ___
Total assets 310 Total liabilities 310

ROE = 8.7%
ROA = 4.2%
ROCE = 6.3%
Hollensen, S. (2003) Marketing Management: A Relationship Approach, Prentice Hall, Harlow
Culture in Four Layers
Values

Beliefs

Behaviours

Set of
Assumptions
 Influence of Culture

Development Corporate
Culture Implementation
of strategy Performance

Step 1: Tighter
control If unsatisfactory

Step 2: Reconstruct/
Develop new
strategy

Step 3: Abandon
paradigm and
adopt new one
 Strategic Drift

Environmental
change
Amount
of
Change

Phase 1 Phase 2 Phase 3 Phase 4

Incremental Strategic FLUX Transformational change
Change Drift or Death
 Implementing and controlling the plan
• Forecast
– Estimate the specific level of sales (by
product or market) and costs for a
specific time period covered by the
marketing plan
• Budgets
– Time defined allotments of financial
resources for specific programs,
activities and products. i.e a 12
month advertising budget.

Wood, M. B. (2004) Marketing planning: principles into practice, Harlow: Essex, FT

Prentice-Hall.
 Implementing and controlling the plan

• Schedules
– Time defined plans for coordinating and
accomplishing tasks relating to a specific program
or activity such as new product development

Wood, M. B. (2004) Marketing planning: principles into practice, Harlow: Essex, FT

Prentice-Hall.
 Implementing and controlling the plan
Tool Description Use Example
Forward looking Projected level of Forecast of product
Forecast expressed in unit or
monetary terms
sales or costs against
which to measure
sales

actual results

Funding allotment for Guideline for spending Budget for advertising

Budget specific program or
activity
against which to
measure actual
expenditures

Series of target dates Guideline for Schedule for launching

Schedule for tasks related to a
particular program or
anticipated timing
against which to
new product

activity measure actual timing

Specific numerical Target for interim Metric for customer

Metric standard measuring an
outcome that
achievement against
which to measure
retention

contributes to actual outcome

performance

Wood, M. B. (2004) Marketing planning: principles into practice, Harlow: Essex, FT

Prentice-Hall.
 Classification of
Testing Methods
Pretests
Laboratory Methods
Consumer juries, Portfolio tests, Physiological measures, Theater
tests, Rough tests, Concept tests, Readability tests, and
Comprehension and Reaction tests
Field Methods
Dummy advertising vehicles and On-air tests
Posttests
Field Methods
Recall tests, Single-source systems, Recognition tests,
Association measures, Inquiry tests and Tracking studies
 Some approaches to forecasting

• Jury of executive opinion

– Judgemental
• Delphi method
– Uses panels including independent experts
• Survey of buyers
– Relies on buyers knowing their own markets
• New product test
– Trial launch & projection
• Time series analysis
– Using quantitative historical data protectively
 Sales Forecasting Methods
Methods Advantages Disadvantages Best Used
Executive Quick, easy, and simple Subjective For new products
Opinion Lacks analytical rigor

Sales force Relatively simply Salespeople are sometimes When reps are of a high caliber
composite Usually fairly accurate overly optimistic When each rep has a small number
Involves those people who are Salespeople may sandbag of customers
responsible for the results (estimate low) to look better
Time consuming

Survey of Done by those who will buy the Time consuming For new products
buyers product, so accuracy should be High cost When there are a small number of
intentions good. customers
Customer may not cooperate

Trend Objective and inexpensive No consideration for major For established products
projections: Use historical data product or market changes When market factors are
-moving average
Require some statistical analysis predictable
-exponential
smoothing For aggregate company forecasts
-regression analysis

Analysis of Objective Unforeseen changes in the When market factors are stable and
market Fairly accurate and simple market can lead to inaccuracy predictable
factors

Test markets Very accurate Time consuming For new products which do not
Cost require large investments
 Budgets
• The objective and task method (floor up)
– Needs to relate specific tasks to specific performance
outcomes
• Econometric modelling method (floor up)
– Complex models of competitive and environmental
variables
• Affordability method (top down)
• Percentage of budget method (top down)
– Percentage of the previous years annual turnover
• Competitive parity budget method (top down)
– At least thought to be equal to that of the competition
 Schedules
• Disaggregate the plan into its constituent
parts
• Understand the critical path to keep the plan
on schedule
• Plot where each task is to begin and when it is
due to end
• Understand the implications of late
performance on other tasks
• Useful to represent the relationship between
the tasks visually
A Gantt chart
 A simple Gantt chart

http://www.ganttchart.com/
Follow link for more information
 Marketing metrics
Type of measurement
Measurement In-process End-result metrics
perspective metrics
Product defects Net profit/earnings
Internal Late deliveries Return on sales
Billing errors Profit margin per unit
(in-company) Accounts receivable Return on assets
Inventory turnover Asset turnover

Customer satisfaction Market share

External Relative product quality Customer retention
Relative service quality Relative new product sales
(in-market) Intentions to purchase Revenue per customer
Product awareness Market growth rate

Wood, M. B. (2004) Marketing planning: principles into practice, Harlow: Essex, FT

Prentice-Hall.
Applying the marketing concept inside the organisation

INTERNAL MARKETING
Interrelationships between Internal and
External Markets

Marketing Function

6 5 1 2

3
Internal Market External Market
4

Source: Flipo (1986: p. 7)

 IM and RM
Relationship Marketing
(e.g. Loyalty schemes,
Key Account Management)
Organisation
Internal Marketing
(Motivation, Customer Orientation,
Co-ordination, Integration)
External Marketing
(Brand name, distribution,
Promotion, price, warranties)

Employees Customers
Interactive Marketing
(e.g. Up-selling, Cross-selling, Customisation)

Ahmed and Rafiq (2002: p. 8)

 Service Profit Chain

Greater
Internal service Satisfied and service value:
quality: productive Satisfied and
service More effective Healthy service
loyal customers: profits and
Superior employee employees: and efficient
selection and training, customer value Satisfied growth:
a quality work More satisfied, creation and customers who Superior service
environment, and loyal and hard service delivery remain loyal, from performance
strong support for working
repeat purchase,
those dealing with employees
customers and refer other

Source: Heskett et al (1994)

 Internal Service Quality
• Every employee and every department have
roles as internal customers and internal
suppliers
• Every individual and every department must
provide and receive excellent service
• Ensures the best possible service to external
customers
• Employees deserve the same treatment that
management want its customers to receive
 Internal Marketing: Marketing-Like
Activities
Internal Customers

Internal Market Segmentation

Target Group 1 (e.g. Target Group 2 (e.g. Target Group 3 (e.g.

Supporters): Neutrals): Opposers):
Internal Marketing Mix Internal Marketing Mix Internal Marketing Mix
1 2 3
•Product •Product •Product
•Price •Price •Price
•Communications •Communications •Communications
•Distribution •Distribution •Distribution
The Ladder of Support
Commitment

Acceptance

Compliance

Resistance

Opposition
The Link between Internal and External
Marketing Programmes
Missions,
Objectives,
Strategic audit
Marketing tactics

Internal Marketing External Marketing

Programme Programme
Product Product
Price Price
Communications Communications
Distribution Distribution

Key Target Groups Key Customers

In the Company Segments
Adapted from: Piercy and Morgan (1991)
 Key Elements in IM
• 1. Employee motivation and satisfaction
• 2. Customer orientation and satisfaction
• 3. Inter-functional co-ordination and integration
• 4. Marketing-like approach to the above
• 5. Implementation of specific corporate or
functional strategies

(Rafiq and Ahmed, 2002: p. 9)

 The marketing control system
Decide marketing
Alter objectives
objectives

Set performance
Alter standards
standards

Locate
responsibility Praise
reward
promote
Evaluate performance advise
train
against standards punish

Take corrective/
supportive action
Jobber, D. (2001) Principles and Practice of Marketing, (3rd ed.), Maidenhead,
McGraw-Hill.