MARKETING MANAGEMENT12th edition

22 Managing a Holistic

Marketing Organization

Kotler Keller

22-2

Chapter Questions

What are important trends in marketing practices?

How are marketing organizations structured for effectiveness

How can a company improve its marketing implementation skills?

What tools are available to help companies monitor and improve their marketing activities?

22-3

Trends in Marketing Practices

Empowering

Accelerating

Focusing

Flattening

Globalizing Merging

Customer

Partnering

Supplier

Partnering

Benchmarking

Outsourcing

Reengineering

Trends

Teams to build value

Source functions and

products from outside

Best practices

standards

Strategic

sources

Customer

value

delivery

Joining of

complementary

players

Global vs

restricted

strategies

Ownership

and

accountability

Enhanced

proactive

and reactive

capacities

Segmentation

and targeting

Reducing

layers of

bureaucracy

Evolving Corporate and Marketing PracticesEvolving Corporate and Marketing Practices

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– Simple Sales Department

– Sales Department With Ancillary Marketing Functions

– Separate Marketing Department

– Modern Marketing Department /

Effective Marketing Company

– Process-And Outcome-Based Company

Marketing Organization Evolution

Stage Five Organizations Most Common Today Corporate - Customer Culture - Customer Advocate - Market Attractiveness - Vision & Value Proposition VP Sales & Distribution VP Marketing - Outbound Direct Sales - Market Research & Analysis > General Territory > Specialists (overlay): - Strategy Development application, industry, product, new business - Product Planning > Strategic Accounts and Management - Inbound Telemarketing - Advertising- Channels & Distribution - Programs & Promotions - Service & Tech Support - Measurements & Operations

Consumer Commodity Enterprises

Industrial Enterprises

Organizing the Marketing Department

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FUNCTIONAL GEOGRAPHIC

PRODUCT OR BRAND MANAGEMENT

MARKET OR CUSTOMERMANAGEMENT

PRODUCT OR MATRIXMANAGEMENT

CORPORATE AND DIVISIONAL

COMPANYATTRIBUTES

- Small to medium size companies- Centralized sales management of field sales

- Medium to large size companies- National Decentralized Regional Sales Management

- Medium to large companies- National Decentralized Regional Sales Management

- Large companies- National centralized field sales

specialist groups by market type

- Large companies- National centralized field sales

specialist groups by market type

- Mega companies- Product groups=

IBUs & divisions- Geographic, product & market sales specialists

MARKET ATTRIBUTES

- Single or limited target markets- Market enough to justify separate group

- Single or multiple target markets- Large target markets

- Limited or multiple large target markets

- Multiple large target markets

- Multiple target markets

- Multiple target markets

PRODUCTATTRIBUTES

- Single product or limited product lines

- Single product or limited product lines

- Multiple brands & differentiated product lines

- Single or limited product lines

- Multiple product lines

- Multiple large, differentiated product lines

MARKETINGORGANIZATION

- Centralized VP Managers / Staff - Research - Strategy Development - Advertising - Programs and Promotions - Product Management - Measurement & Operations

- Centralized VP Managers / Staff - Research - Strategy - Product management - Measurements -National Brand

Advertising - Measurements- Decentralized:

Regional Market Managers - Programs and Promotions - Advertising -Regionalizationn

- Centralized VP- See Functional Marketing Org.-Product manage-

ment by multiple product managers of product groups, teams, categories

(see product management and BAMT concepts)

under marketing group product executive

- Centralized VP- Market Execs

own target market performance and functionalgroups: - Research - Strategy - Advertising - Programs and Promotions - Measurements and operations - Product

Management owned by key market executive or VP Marketing

- Centralized VP- Market Execs

own target market performance and functional groups: - Research - Strategy - Advertising - Programs and Promotions - Measurements and operations -Product manage-

ment by multiple product managers

under marketing group product exc

- Corporate VP owns brand and integrated pro- oduct / market strategy w IBUs &product divisions

- Decentralized: Product divisions & Independent Business Units with centralized product and market manage- ment marketing organizations - see previous

MARKETING ORGANIZATIONS

Marketingorganizationsshould bestructured tooptimize functional performance &effectivenessat minimumexpense

Organizing the Marketing Department

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Develop long-range and competitive strategy for each product

Prepare annual marketing plan and sales forecast Work with advertising and merchandising agencies to

develop campaigns Increase support of the product among channel members Gather continuous intelligence on product performance,

customer attitudes Initiate product improvements

• PM = Product Manager

• APM = Associate PM

• PA = Product Assistant

• PM = Product Manager• R = Market Researcher• C = Communication

Specialist

• PM = Product Manager• R = Market Researcher• C = Communication Specialist• S = Sales Manager• D = Distribution Specialist• F = Finance Specialist• E = Engineer

Product or Brand Management Organization

Triangular

Product Team

Horizontal

Product Team

Product and Brand Managers Have These TasksProduct and Brand Managers Have These Tasks

Marketing Maximized Through Relations Marketing Maximized Through Relations

with Other Departmentswith Other Departments■ R&D, Manufacturing and Procurement

■ Finance, Accounting and Operations

■ Sales

Integrated Planning with Other DepartmentsIntegrated Planning with Other Departments PDT (Product Development Team)PDT (Product Development Team) IPMT (Integrated Product Management Team)IPMT (Integrated Product Management Team) BAMT (Brand Asset Management Team)BAMT (Brand Asset Management Team) Structured Roles, Formal Action Plans, GroupStructured Roles, Formal Action Plans, Group Executive Reviews and Performance Measurements Executive Reviews and Performance Measurements

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Evaluation and Control

Annual-Plan ControlAnnual-Plan Control Sales AnalysisSales Analysis

• Sales variance analysisSales variance analysis

• Microsales analysisMicrosales analysis Market-Share AnalysisMarket-Share Analysis

Overall market shareOverall market share Served market shareServed market share Relative market shareRelative market share

Marketing Expense-To-Sales AnalysisMarketing Expense-To-Sales Analysis Financial AnalysisFinancial Analysis Market-Based Scorecard AnalysisMarket-Based Scorecard Analysis

Customer-performance scorecardCustomer-performance scorecard Stakeholder-performance scorecardStakeholder-performance scorecard

Profitability ControlProfitability Control Marketing-Profitability AnalysisMarketing-Profitability Analysis

Determine Corrective ActionDetermine Corrective Action Direct Versus Full CostingDirect Versus Full Costing

Direct costs Direct costs Traceable common costsTraceable common costs Nontraceable common costNontraceable common cost

Activity-based Cost Accounting (ABC)Activity-based Cost Accounting (ABC)

Efficiency ControlEfficiency Control

Marketing ControllerMarketing Controller

Sales-Force EfficiencySales-Force Efficiency

Advertising EfficiencyAdvertising Efficiency

Sales-Promotion Sales-Promotion

EfficiencyEfficiency

Distribution EfficiencyDistribution Efficiency

Strategic ControlStrategic Control The Marketing Effectiveness ReviewThe Marketing Effectiveness Review The Marketing AuditThe Marketing Audit

Marketing audit’s four Marketing audit’s four characteristics:characteristics:

ComprehensiveComprehensive SystematicSystematic IndependentIndependent PeriodicPeriodic

Top & MiddleManagementValidate ResultsRelative to Plan

MarketingControllerDetermineWhere MoneyIs lost & Made

Marketing Controller,Line & StaffManagementMeasure andImproveEffectivenessOf MarketingExpenditures

Top Management& MarketingAuditor Validate Pursuit ofBest Market, Product, and Channel Opportunities

The Control ProcessThe Control ProcessTYPES OF MARKETING CONTROLTYPES OF MARKETING CONTROL

AUDITS: Comprehensive Systematic Independent Periodic AUDITS: Comprehensive Systematic Independent Periodic

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Marketing Organization

To Create a Market and Customer Focused Enterprise:

Create an organizational infrastructure that supports the enterprise’s market strategy through integrated functional planning

Implement structured planning processes that focus on target markets, product management and strategic customer needs

Base group executive compensation on achievement of enterprise marketing objectives

Require customer contact by all enterprise function executives

Implement process control and performance measurements for all marketing functions, programs and integrated function activities

Provide recognition and bonus offerings for integrated marketing team successes