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 In this chapter, we focus on the following
questions:
 What are the trends in company organization?
 How are marketing and sales organized in
companies?
 What steps can a company take to build a stronger
customer focused culture?
 How can a company improve its marketing-
marketing-
implementation skills?
 What tools are available to help companies
monitor and improve their marketing activities?


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 ˜ain responses of companies to a
changing environment
 Reengineering  ˜erging
 Outsourcing  Globalizing
 Benchmarking  Flattening
 Supplier partnering  Focusing
 Customer partnering  Empowering


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Outsourcing can save companies money by
passing on to another firm the overhead
involved with maintaining specialized staff
positions, or eliminating the need to maintain
specialized equipment that does not directly
support their core business.
What are the potential risks
associated with outsourcing?


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 ëhe Evolution of the
˜arketing Department

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 Simple Sales Department
 Sales Department With Ancillary
˜arketing Functions
 Separate ˜arketing Department
 ˜odern ˜arketing Department /
Effective ˜arketing Company
 Process
Process--And Outcome-
Outcome-Based Company

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 Organizing the ˜arketing Department
 Functional Organization
 Field sales
 Customer service
 Product management
 Geographic Organization
 Area market specialist

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Organizing a marketing organization
geographically can allow marketing managers
to focus on regional and cultural differences in
their market segments. What are the reasons
why geographical segmentation might be a bad
idea? What could be done to
minimize these problems in
geographically organized
marketing departments?


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 Product
Product-- or Brand-
Brand-˜anagement Organization
 Product and brand managers have these tasks:
 Develop a long-
long-range and competitive strategy for the
product
 Preparing an annual marketing plan and sales forecast
 Working with advertising and merchandising agencies to
develop copy, programs, and campaigns
 Stimulating support of the product among the sales force and
distributors
 Gathering continuous intelligence on the product¶s
performance, customer and dealer attitudes, and new
problems and opportunities
 Initiating product improvements to meet changing market
needs


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 Pearson and Wilson¶s five steps to make the
product--management system work better
product
 Clearly delineate the limits of manager¶s role
 Build a strategy-
strategy-development-
development-and- and-review process
 ëake into account areas of potential conflict
 Set up a formal process that forces to the
top all conflict-
conflict-of
of--interest situations
 Establish a system for measuring results


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 A Second Alternative is to switch from
product managers to product teams
 Vertical product team
 ëriangular product team
 Horizontal product team
 ëhird Alternative: Brand Asset
˜anagement ëeam (BA˜ë

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 ˜arket-
˜arket-˜anagement/Customer
˜anagement Organization
 ˜arket
˜arket--management Organization
 ˜arkets manager
 Customer
Customer--management Organization
 Product-
Product-˜anagement/
˜arket--˜anagement Organization
˜arket


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 Corporate
Corporate--Divisional Organization
 No corporate marketing
 ˜oderate marketing
 Strong corporate marketing
 ˜arketing Relations With Other
Departments
 R&D
 Engineering and Purchasing
 ˜anufacturing and Operations
 Finance
 Accounting and Credit


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 Building a Companywide ˜arketing
Orientation
 ëransforming into a true market-
market-driven
firm requires:
 Developing a companywide passion for customers
 Organizing around customer segments
instead of around products
 Developing a deep understanding of customers
through qualitative and quantitative research


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 What steps can a CEO take to create a market
and customer focused company?
1. Convince senior management of the need
2. Appoint a senior marketing officer and
a marketing task force
3. Get outside help and guidance
4. Change the company¶s reward measurement and system
5. Hire strong marketing talent
6. Develop strong in-
in-house marketing training programs
7. Install a modern marketing planning system
8. Establish an annual marketing
excellence recognition program
9. Shift from a department focus to a
process--outcome focus
process
10. Empower the employees



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 Injecting ˜ore Creativity
Into the Organization



 
 
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 ëhomas Bonoma¶s four sets of skills for
implementing marketing programs
 Diagnostic skills
 Identification of company level
 Implementation skills
 Evaluation skills

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I. Annual-
Annual-plan Top management To examine Sales analysis
control Middle whether the Market
Market--share
management planned results analysis
are being Sales
Sales--to
to--expense
achieved ratios
Financial analysis
Market
Market--based
scorecard analysis

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 Annual
Annual--Plan Control
 Sales Analysis
 Sales variance analysis
 ˜icrosales analysis

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 ˜arket
˜arket--Share Analysis
 Overall market share
 Served market share
 Relative market share
 ˜arketing Expense-
Expense-ëo
ëo--Sales Analysis



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 Financial Analysis



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 ˜arket
˜arket--Based Scorecard Analysis
 Customer-
Customer-performance scorecard
 Stakeholder
Stakeholder--performance scorecard
 Profitability Control
 ˜arketing
˜arketing--Profitability Analysis



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2 ( -
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 8,9:999
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 8:999

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 85:'99
1  ':999
 ':+99
+:499
6  8+:99


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 Step 1: Identifying Functional Expenses


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Salaries $9,300 $5,100 $1,200 $1,400 $1,600

Rent 3,000 ² 400 2,000 600
Supplies 3,500 400 1,500 1,400 200
$15,800 $5,500 $3,100 $4,800 $2,400


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 Step 2: Assigning Functional Expenses to
˜arketing Entities

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áardware 200 50 50 50
Garden Supply 65 20 21 21
Department stores 10 30 9 9
275 100 80 80
Functional expense $5,500 $3,100 $4,800 $2,400
% No. of Units 275 100 80 80
Equals $ 20 $ 31 $ 60 $ 30

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 Step 3: Preparing a Profit-
Profit-and-
and-Loss Statement
for Each ˜arketing Entity

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Sales $30,000 $10,000 $20,000 $60,000

Cost of goods sold 19,500 6,500 13,000 39,000

Gross margin $10,500 $ 3,500 $ 7,000 $21,000

Expenses

Selling ($20 per call) $ 4,000 $ 1,300 $ 200 $ 5,500

Advertising ($31 per
advertisement) 1,550 620 930 3,100
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 Determine Corrective Action
 Direct Versus Full Costing
 Direct costs
 ëraceable common costs
 Nontraceable common cost
 Activity
Activity--based Cost Accounting (ABC
 Efficiency control
 ˜arketing Controller
 Sales--Force Efficiency
Sales
 Advertising Efficiency
 Sales--Promotion Efficiency
Sales
 Distribution Efficiency


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 Strategic control
 ëhe ˜arketing Effectiveness Review
 ëhe ˜arketing Audit
 ˜arketing audit¶s four
characteristics:
 Comprehensive
 Systematic
 Independent
 Periodic


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2
(
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   2

    
A. Demographic What major demographic developments and trends pose
opportunities or threats to this company? What actions has
the company taken in response to these developments and
trends?
B. Economic What major developments in income, prices, savings, and
credit will affect the company? What actions has the
company been taking in response to these developments
and trends?
C. Environmental What is the outlook for the cost and availability of natural
resources and energy needed by the company? What
concerns have been expressed about the company¶s role
in pollution and conservation, and what steps has the
company taken?

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 ëhe ˜arketing Excellence Review


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3 

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1&0(

(  ;  / 
uroduct--Driven
uroduct Market
Market--Driven Market
Market--Driven

Mass--Market Oriented
Mass Segment Oriented Niche Oriented and
Customer Oriented
uroduct Offer Augmented uroduct Offer Oriented

Average uroduct Quality Better Than Average Customer Solutions

Offer
Average Service Quality Better Than Average Legendary

End--uroduct Oriented
End Core
Core--uroduct Oriented Legendary

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 ëhe Ethical and Social Responsibility

Review


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