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
Slide 22-9
FIGURE 22-1 Sales response function
showing the situation for two different years
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-10
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
Slide 22-13
FIGURE A The strategic marketing phases
and corresponding output reports
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-14
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
Slide 22-15
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
Slide 22-16
THE PLANNING PHASE OF THE
STRATEGIC MARKETING PROCESS
• Marketing Planning Frameworks:
The Search for Growth
 Porter’s 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 Porter’s four generic business
strategies
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-22
Wal-Mart and Volkswagen
Which of Porter’s generic business strategies
do these firms use?
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-23
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 firm’s profits
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-25
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&D–Manufacturing 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 Millennium—Finding Synergies
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-29
FIGURE 22-6 Market-product grid of
alternative strategies for a lawnmower
manufacturer
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-30
FIGURE 22-7 An ideal merger for Great
States to obtain full market-product
coverage
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-31
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
Slide 22-37
MARKETING NEWSNET
Keeping Planning Simple at Big G:
“One-Handed” Convenience
Plus Cover All the Bases
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-38
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
Slide 22-41
THE IMPLEMENTATION PHASE
OF THE
STRATEGIC MARKETING PROCESS
• Is Planning or Implementation the
Problem?
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-42
THE IMPLEMENTATION PHASE
OF THE
STRATEGIC MARKETING PROCESS
• Increasing Emphasis on Marketing
Implementation
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-44
MARKETING NEWSNET
GE’s Implementation Strategies—How
Neutron Jack Became One of the Most
Acclaimed CEOs of the 20th Century
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-45
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
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-50
FIGURE 22-E Tasks to complete a term
project
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-51
FIGURE 22-8 Gantt chart for scheduling the
term project
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-52
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
Slide 22-56
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
Slide 22-57
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
Slide 22-59
FIGURE 22-10 Units with which the product
manager and product group work
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-60
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
Slide 22-61
FIGURE 22-11 The control phase of the
strategic marketing process
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 22-62
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