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 22-9 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 Slide 22-10 FIGURE 22-1 Sales response function showing the situation for two different years 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-12 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 22-13 FIGURE 22-2 The strategic marketing process: actions and information 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-14 FIGURE A The strategic marketing phases and corresponding output reports 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-15 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Long-Range Marketing Plans Annual Marketing Plans The Variety of Marketing Plans 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 22-3 Steps a large consumer packaged goods firm takes in developing its annual marketing plan Slide 22-16 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-21 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Porters Generic Business Strategies Marketing Planning Frameworks: The Search for Growth Generic Business Strategy Cost Leadership Strategy Differentiation Strategy Cost Focus Strategy Differentiation Focus Strategy 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-22 FIGURE 22-4 Porters four generic business strategies 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-23 Wal-Mart and Volkswagen Which of Porters generic business strategies do these firms use? 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-24 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Marketing Planning Frameworks: The Search for Growth Market Penetration Product Development Market Development Diversification Profit Enhancement Option: Increase Revenues 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-25 FIGURE 22-5 Profit enhancement options for increasing a firms profits 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-26 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Profit Enhancement Option: Decrease Costs Marketing Planning Frameworks: The Search for Growth 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 22-27 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Market-Product Synergies Marketing Planning Frameworks: The Search for Growth Marketing Synergies (Rows) R&DManufacturing Synergies (Columns) 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-28 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Market-Product Synergies Marketing Planning Frameworks: The Search for Growth Market-Product Concentration Market Specialization Product Specialization Selective Specialization Full Coverage 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin MARKETING NEWSNET The Strategy Issue for the New MillenniumFinding Synergies Slide 22-29 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 22-6 Market-product grid of alternative strategies for a lawnmower manufacturer Slide 22-30 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 22-7 An ideal merger for Great States to obtain full market-product coverage Slide 22-31 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-37 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS One-Handedness Convenience Joint Ventures Some Planning and Strategy Lessons Big G plus Pillsbury: Synergies, Segments, and Partners 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin MARKETING NEWSNET Slide 22-38 Keeping Planning Simple at Big G: One-Handed Convenience Plus Cover All the Bases 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-41 THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS Value-Based Planning Value-Driven Strategies Some Planning and Strategy Lessons Balancing Value and Values in Strategic Marketing Plans 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-42 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Is Planning or Implementation the Problem? 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-44 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Increasing Emphasis on Marketing Implementation 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin MARKETING NEWSNET Slide 22-45 GEs Implementation StrategiesHow Neutron Jack Became One of the Most Acclaimed CEOs of the 20th Century 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-46 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Product or Program Champion Improving Implementation of Marketing Programs Communicate Goals and the Means of Achieving Them Have a Responsible Program Champion Willing to Act 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-47 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Improving Implementation of Marketing Programs Foster Open Communication to Surface Problems Reward Successful Program Implementation Take Action and Avoid Paralysis by Analysis Avoid the NIH Syndrome 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-50 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 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-51 FIGURE 22-E Tasks to complete a term project 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-52 FIGURE 22-8 Gantt chart for scheduling the term project 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-56 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Line versus Staff and Divisional Groupings Staff Positions Organizing for Marketing Line Positions 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 22-9 Organization of a business unit in a typical consumer packaged goods firm, showing two product or brand groups Slide 22-57 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-58 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Line versus Staff and Divisional Groupings Organizing for Marketing Product Line Groupings Functional Groupings Geographical Groupings Market-Based Groupings Matrix Organization Category Manager 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-59 THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS Role of the Product Manager Organizing for Marketing Product Manager Brand Manager 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-60 FIGURE 22-10 Units with which the product manager and product group work 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-61 The Marketing Control Process THE CONTROL PHASE OF THE STRATEGIC MARKETING PROCESS Management by Exception Measuring Results Taking Marketing Actions 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-62 FIGURE 22-11 The control phase of the strategic marketing process 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 22-64 Sales Analysis THE CONTROL PHASE OF THE STRATEGIC MARKETING PROCESS Sales Analysis Profitability Analysis ROI Marketing Sales Component (Microsales) Analysis Profitability Analysis and ROI Marketing