Managing the total Marketing effort

Chapter 6

The goal of this chapter is to examine how firms organize, implement, evaluate, and control marketing activities.

Organizing the Marketing Department

• If a company can have an excellent marketing department, and even then fails in marketing, why?

• It depends how other departments of the company views customers. If they are pointing to the marketing department and say “ they do the marketing”. Its mean the company has not implemented effective marketing.

• Effecting marketing can only be possible when all employees realize their job is to create, serve, and satisfy customer.

Organizing the Marketing Department

• Modern marketing departments can be organized in a number of different ways:

• Functional Organization• Geographic Organization• Product or Brand management Organization• Market Management Organization.

Organizing the Marketing Department

• Functional Organization: The most common form of marketing organization consists of functional specialist reporting to a marketing vice president, who coordinates their activities.

• You must have the appropriate organization to effectively execute the four Ps of the marketing mix. When a company is small, multiple functions are often assigned to one person (i.e., PR and Advertising, etc.). Later, as the company grows there becomes too much work for one person and the company must attain a team of specialist to manage the greater efficiency. At this point the organization must either train existing staff or hire externally.

Functional Organization

Functional Organization• Marketing Administration Managers: • Updates the status of sales orders and coordinates deliveries from the point of

production and distribution. Directs preparation of accounting records. Recommends budgets to management. May confer (talk) with customers and customer representatives to evaluate and promote possibilities for improved and expanded marketing.

• Advertising and Sales Promotion Manager: • Plan and prepare advertising and promotional material to increase sales of

products or services, working with customers, company officials, sales departments and advertising agencies.Inspect layouts (out come) and advertising copy and edit scripts, audio and video tapes, and other promotional material.

Functional Organization

• Sales Manager: sales managers direct a company's sales program. They assign sales territories, set goals, and establish training programs for their sales representatives. Sales managers may also advise their sales representatives on ways to improve their sales performance, achieve goals and obtain expected quotas (targets).

• Marketing Research Manager: Market researchers collect and analyze information. They analyze consumer opinions and collect data from a variety of sources to enable organizations to make informed decisions.

Functional Organization• Selecting the most appropriate research methodology and techniques• Designing qualitative and quantitative research plans for products in all

stages of the Product Life Cycle • Designing research questionnaires.• Interpreting data, writing reports, and making actionable

recommendations

• Quantitative research focuses on gathering and analyzing information using techniques such as questionnaires and electronic data collection. Qualitative research focuses on people's attitudes and motivation, using methods such as focus groups and in-depth interviews.

Functional Organization• New products Manager• The Product Manager is responsible for the product planning and

execution throughout the product lifecycle, including: gathering and prioritizing product and customer requirements, defining the product vision, and working closely with engineering, sales, and support to ensure revenue and customer satisfaction goals are met. The Product Manager's job also includes ensuring that the product supports the company's overall strategy and goals.

Organizing the Marketing Department

• Geographic Organization: • A company selling in the national market often organize its

sales force on geographic lines. Such as the national sales manager may supervise regional sales manager, who each supervise a few zonal/branch managers, supported by sales officers, sales supervisors and sales persons.

Geographic Organization:

Organizing the Marketing Department

• Product Management Organization: • Companies producing a variety of products often establish a product

management organization. The product-management organization does not replace the functional management organization, but serves as another layer of management.

• A product manager supervises product category managers, who in turn supervise specific product managers.

Organizing the Marketing Department

• Market- Management Organization: Many companies sell their product to many different markets.

• Canon sells its fax machines to consumers, business, and government markets.

• When customers fall into different user groups with distinct buying preferences and practices, a market management organization is desirable.

• Customer-management Organization: Companies can organize themselves to understand and deal with individual customers rather than with mass-market.

Marketing Implementation, Evaluation and control

• Marketing implementation: is the process of turning plans into action describing who does what, when, and how. Effective implementation requires skills in allocating, monitoring, organizing, and interacting at all levels of the marketing effort.

• A brilliant strategic marketing plan counts for little if not implemented properly.

• Strategy addresses the what, and why of marketing activities, implementation addresses the who, where, when and how.

• Evaluation and control: Markets have the altering behavior , its means the needs and wants of target customers changes rapidly.

• After successfully implementation of companies marketing plans, it must be evaluated and controlled.

Marketing Implementation, Evaluation and control

• The proper control procedures calls for • Annual plan control• Profitability control• Efficiency control• Strategic control

Marketing Implementation, Evaluation and control

• Annual-Plan Control: Annual plan control ensures the company achieves the sales analysis, market share analysis, sales to expense ratios, financial analysis.

• Sales analysis: planned sale against the actual sale.• For example, if you planned the first quarter sale and that is

4000 units each price RS 1. but at the end of that quarter the actual sale is like 3000 units sold / each price 0.80 Rs

• The company should look closely at why it failed to achieve expected sales volume.

Marketing Implementation, Evaluation and control

• Market share analysis: indicates how well a firm is doing in the marketplace compared to its competitors.

• Market share is the percentage or proportion of the total available market or market segment that is being serviced by a company.

• It can be expressed as a company's sales revenue (from that market) divided by the total sales revenue available in that market.

• It can also be expressed as a company's unit sales volume (in a market) divided by the total volume of units sold in that market.

Marketing Implementation, Evaluation and control

• Marketing expense-to-sales analysis• Annual plan control requires making sure the company isn’t overspending

to achieve goals. The key ratio to watch is marketing expense-to-sales.

• Financial Analysis:• It is performed by professionals who prepare reports using ratios that

make use of information taken from Financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Based on these reports, management may:

• Continue or discontinue its main operation or part of its business;• Make or purchase certain materials in the manufacture of its product;• Acquire or rent/lease certain machineries and equipment in the

production of its goods;

Marketing Implementation, Evaluation and control

• For example: we have gross profit (GP)=10,000, Net profit = 1000 Sales=100,000

• Gross profit margin=gross profit/sales=10000/100000=0.10=10%• Net Profit margin= net profit/sales=1000/100000=0.01=1%• The company gross margin is 10 % and net profit margin is only

1%, which shows that the remaining 9% are expenses (salaries, advertising, packaging). In annual-plan control the company can control the un necessary expenses in order to increase the net profit margin.

Marketing Implementation, Evaluation and control

• Profitability control: Companies can benefit from deeper financial analysis and should measure the profitability of their product, territories, customer groups, and segments.

• This information can help the management determine whether to expand, reduce, or eliminate any product or marketing activities.

• Efficiency Control: Suppose a profitability analysis reveals the company is earning poor profits in certain products, territories, or markets. The company will search for efficient ways to manage the sales force, advertising, sales promotion and distribution.

Marketing Implementation, Evaluation and control

• Strategic Control: Each company should periodically (regular time intervals) reassess its strategic approach to the marketplace with a good marketing audit.

• Marketing audit is a fundamental part of the marketing planning process. It is conducted not only at the beginning of the process, but also at a series of points during the implementation of the plan. The marketing audit considers both internal and external influences on marketing planning, as well as a review of the plan itself.

• There are a number of tools and audits that can be used, for example SWOT analyses for the internal environment, as well as the external environment. Other examples include PEST and Five Forces Analyses, which focus solely on the external environment