MARKETING BASICS: DOING WHAT WORKS AND ALLOCATING RESOURCES Finding and Using What Really Works

Strategy: Focused Execution: Flawless Operations Culture: Performance-Oriented Structure: Fast, Flexible, and Flat

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Slide 22-7

MARKETING BASICS: DOING WHAT WORKS AND ALLOCATING RESOURCES Allocating Marketing Resources Using Sales Response Functions
Sales Response Function Maximizing Incremental Revenue Minus Incremental Cost A Numerical Example of Resource Allocation

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-1 Sales response function showing the situation for two different years

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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MARKETING BASICS: DOING WHAT WORKS AND ALLOCATING RESOURCES Allocating Marketing Resources Using Sales Response Functions
Allocating Marketing Resources in Practice
Share Points

Resource Allocation and the Strategic Marketing Process

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Slide 22-12

FIGURE 22-2 The strategic marketing process: actions and information

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE A The strategic marketing phases and corresponding output reports

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS The Variety of Marketing Plans
Long-Range Marketing Plans Annual Marketing Plans

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-3 Steps a large consumer packaged goods firm takes in developing its annual marketing plan

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Marketing Planning Frameworks: The Search for Growth
Porters Generic Business Strategies
Generic Business Strategy Cost Leadership Strategy Differentiation Strategy Cost Focus Strategy Differentiation Focus Strategy
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-21

FIGURE 22-4 Porters four generic business strategies

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Wal-Mart and Volkswagen

Which of Porters generic business strategies do these firms use?

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Marketing Planning Frameworks: The Search for Growth
Profit Enhancement Option: Increase Revenues
Market Penetration Product Development Market Development Diversification
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-24

FIGURE 22-5 Profit enhancement options for increasing a firms profits

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Marketing Planning Frameworks: The Search for Growth
Profit Enhancement Option: Decrease Costs
Economies of Scale/Experience Curve Other Ways: Layoffs, Training, and/or Quality

Profit Enhancement Option: Do Both

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Slide 22-26

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Marketing Planning Frameworks: The Search for Growth
Market-Product Synergies
Marketing Synergies (Rows) R&DManufacturing Synergies (Columns)

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Slide 22-27

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Marketing Planning Frameworks: The Search for Growth
Market-Product Synergies
Market-Product Concentration Market Specialization Product Specialization Selective Specialization Full Coverage
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-28

MARKETING NEWSNET The Strategy Issue for the New MillenniumFinding Synergies

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-6 Market-product grid of alternative strategies for a lawnmower manufacturer

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-7 An ideal merger for Great States to obtain full market-product coverage

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Some Planning and Strategy Lessons
Big G plus Pillsbury: Synergies, Segments, and Partners
One-Handedness Convenience Joint Ventures

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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MARKETING NEWSNET Keeping Planning Simple at Big G: One-Handed Convenience Plus Cover All the Bases

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Some Planning and Strategy Lessons
Balancing Value and Values in Strategic Marketing Plans
Value-Based Planning Value-Driven Strategies

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Is Planning or Implementation the Problem?

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Increasing Emphasis on Marketing Implementation

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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MARKETING NEWSNET GEs Implementation StrategiesHow Neutron Jack Became One of the Most Acclaimed CEOs of the 20th Century

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Improving Implementation of Marketing Programs
Communicate Goals and the Means of Achieving Them Have a Responsible Program Champion Willing to Act
Product or Program Champion
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-46

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Improving Implementation of Marketing Programs
Reward Successful Program Implementation Take Action and Avoid Paralysis by Analysis Foster Open Communication to Surface Problems
Avoid the NIH Syndrome
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-47

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Improving Implementation of Marketing Programs
Schedule Precise Tasks, Responsibilities, and Deadlines
Action Item List Program Schedules Gantt Chart
Sequentially Concurrently
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FIGURE 22-E Tasks to complete a term project

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-8 Gantt chart for scheduling the term project

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Organizing for Marketing
Line versus Staff and Divisional Groupings
Line Positions Staff Positions

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-9 Organization of a business unit in a typical consumer packaged goods firm, showing two product or brand groups

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Organizing for Marketing
Line versus Staff and Divisional Groupings
Product Line Groupings Functional Groupings Geographical Groupings Market-Based Groupings
Matrix Organization Category Manager
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-58

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Organizing for Marketing
Role of the Product Manager
Product Manager Brand Manager

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-10 Units with which the product manager and product group work

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE CONTROL PHASE OF THE STRATEGIC MARKETING PROCESS The Marketing Control Process
Management by Exception Measuring Results Taking Marketing Actions

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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FIGURE 22-11 The control phase of the strategic marketing process

2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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THE CONTROL PHASE OF THE STRATEGIC MARKETING PROCESS Sales Analysis

Sales Analysis Sales Component (Microsales) Analysis

Profitability Analysis and ROI Marketing

Profitability Analysis ROI Marketing
2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-64