Strategic Marketing

Implementation and
Control
Chapter 15

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
• The strategic role of the chief marketing
officer
• The strategic marketing planning process
• Implementing the strategic marketing plan
• Strategic marketing evaluation and control
• Marketing performance measurement
• Global issues for planning, implementation,
and control

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The Strategic Role of the Chief
Marketing Officer
• Strategic CMO capabilities
• Core CMO tasks
• Planning, implementation, and accountability

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Strategic CMO Capabilities
• Priorities include:
• Enhancing the capabilities and fl exibility of
organizations
• Emphasizing portfolios rather than single brands
• Promoting consistency across the marketing
organization

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Core CMO Tasks
• Establishing the role of marketing in the firm
• Owning the voice of the market
• Responsibility for marketing strategy
• Coordinating marketing with other areas of
the firm
• Running the marketing organization
• Identifying and leading the marketing
transformation effort
• Establishing a marketing scorecard and
performance metrics

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Planning, Implementation, and
Accountability
• Strategic marketing planning process a
mechanism for:
• Implementing strategy and marketing metrics for
performance measurement
• Meeting new pressures for greater marketing
accountability in the firm

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The Strategic Marketing Planning
Process
• Marketing plans guide implementation
• Contents of the marketing plan
• Managing the planning process

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The Strategic Marketing Planning
Process
• The strategic marketing plan:
• Indicates:
• Marketing objectives
• Strategy and tactics for accomplishing the objectives
• Guides implementation and control

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Exhibit 15.1 - Strategy and Planning
Relationships

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Contents of the Marketing Plan
• Planning activities include:
• Making a situation assessment
• Identifying market targets
• Setting objectives
• Developing targeting and positioning strategies
• Deciding action programs for the marketing-mix
components
• Preparing supporting financial statements

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Managing the Planning Process
• Planning is an organizational process
• Interactions and discussions between executives
shape outcomes
• Planning involves more than analytical
techniques and computation

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 Exhibit 15.2 - Dimensions of
Marketing Planning Process

Source: Adapted from Nigel F. Piercy, Market-Led Strategic Change: Transforming the Process of Going to Market, 4th ed. (Oxford: Elsevier, 2009), 461.

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Implementing the Strategic Marketing
Plan
• Implementation process
• Building implementation effectiveness
• Internal marketing
• A comprehensive approach to improving
implementation
• Internal strategy-organization fit

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Implementation Process
• Influence of two sets of factors on marketing
strategy implementation:
• Structural issues including the company’s:
• Marketing functions
• Control systems
• Policy guidelines
• Behavioral issues concerning marketing managers’
skills in:
• Bargaining and negotiation
• Resource allocation
• Developing informal organizational arrangements

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Exhibit 15.3 - The Implementation
Process

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Building Implementation
Effectiveness
• Desirable implementation skills include:
• Ability to understand how others feel, and good
bargaining skills
• Strength to be tough and fair in putting people and
resources where they will be most effective
• Effectiveness in focusing on the critical aspects of
performance in managing marketing activities
• Ability to create a necessary informal organization
or network to match each problem with which they
are confronted

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Building Implementation
Effectiveness
• Factors facilitating the implementation
process:
• Organizational design
• Incentives
• Effective communications

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 Exhibit 15.4 - Internal Marketing

Source: Reprinted from Market-Led Strategic Change: A Guide to Transforming the Process of Going to Market, Nigel F. Piercy, Copyright 2009, with permission from Elsevier.

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A Comprehensive Approach to
Improving Implementation
• Employ the balanced scorecard method
• A formalized management control system that
implements a given business unit strategy by
means of activities across four areas:
• Financial
• Customer
• Internal business process
• Learning and growth (or innovation)

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A Comprehensive Approach to
Improving Implementation
• Benefit of employing the balanced scorecard
method
• An often aggregate, broadly defined strategy is
translated to very specific actions

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Internal Strategy-Organization Fit
• Important that the organization’s competitive
and marketing strategy is compatible with the
internal structure of the business
• Organizational stretch - To execute strategy
should be considered
• It is the degree to which structures, capabilities,
systems, processes, and resource allocation may
require adjustment to deliver the strategy

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Internal Strategy-Organization Fit
• The role of external organizations - The
implementation of marketing strategy is
affected by external organizations such as:
• Strategic alliance partners
• Marketing consultants
• Advertising and public relations firms
• Channel members
• Other organizations participating in the marketing
effort

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Strategic Marketing Evaluation and
Control
• Customer relationship management
• Overview of control and evaluation activities
• The strategic marketing audit

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Customer Relationship Management

• Adoption of customer relationship

management (CRM) systems offers several
new and powerful resources for strategic
evaluation and control

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Customer Relationship Management

• CRM systems have the potential to:

• Greatly expand the measures of performance used
• Take a more fine-grained look at marketing
effectiveness related to:
• Customer acquisition and defection rates
• Customer tenure
• Customer value and worth
• Proportion of inactive customers
• Cross-selling

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Overview of Control and Evaluation
Activities
• Consume a high proportion of marketing
executives’ time and energy
• Evaluation may seek to:
• Find new opportunities or avoid threats
• Keep performance in line with management’s
expectations
• Solve specific problems that exist

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Exhibit 15.5 - Strategic Marketing
Evaluation and Control

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The Strategic Marketing Audit
• Useful when initiating a strategic evaluation
program
• The audit can be used to:
• Initiate a formal strategic marketing planning
program
• May be repeated on a periodic basis
• Results of the audit provide the basis for:
• Selecting performance criteria
• Choosing relevant marketing metrics to assess actual
performance against plans and strategic intent

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Marketing Performance Measurement

• The importance of marketing metrics

• The use of marketing metrics
• Types of marketing metrics
• Selecting relevant metrics
• Designing a marketing management
dashboard
• Interpreting performance measurement
results

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The Importance of Marketing Metrics

• Impacts the professional standing of the

marketing organization within the firm
• Ability to measure marketing performance is
related to:
• Company performance
• Profitability
• Stock returns
• Marketing’s stature within the organization

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The Use of Marketing Metrics
• Questions to consider in developing a metrics-
based reporting system:
• Does what we report to management actively probe end-
user behavior and why consumers behave that way?
• Are the results of end-user research routinely reported
and in a format integrated with financial metrics?
• In these reports, are results compared with levels
previously forecast in business plans?
• Are the results compared with the levels achieved by
competitors on the same indicators?
• Is short-term performance adjusted according to the
change in brand equity?

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Types of Marketing Metrics
• Several ways of grouping marketing metrics:
• Some measures are associated with assessing:
• Competitive position
• Effectiveness with the customer
• Others address:
• Product profitability
• Product and portfolio performance
• Customer profitability
• Sales and channel effectiveness
• Pricing
• Promotion
• Advertising and Web activities
• Financial performance

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Selecting Relevant Metrics
• Guidelines suggest that choices should be
made in the light of the need to:
• Measure performance relative to strategy
• Track performance relative to competitors
• Track performance relative to customers
• Track performance over time
• Model performance

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Designing a Marketing Management
Dashboard
• May be a conventional report or a software
product
• Requires that senior management agree to
• A restricted set of key marketing metrics to
• Communicate and evaluate the company’s marketing
performance
• Facilitates:
• Control of short-term activities
• Longer-term planning

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Interpreting Performance
Measurement Results
• Actual results achieved are compared with
planned results
• Corrective actions may be required if performance
gaps are too large

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Interpreting Performance
Measurement Results
• Opportunities and performance gap
• Initiate actions to take advantage of the
opportunities or to correct existing and pending
problems
• Problem/opportunity definition
• Should be clear since it will be needed to guide
whatever strategic action may be taken
• Interpreting information
• Management must separate normal variations in
performance from significant gaps in performance

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Interpreting Performance
Measurement Results
• Determining normal and abnormal variability
• Important to recognize that operating results and
metrics are likely to display normal up- and down-
fluctuations
• Deciding what actions to take
• Many corrective actions are possible, depending on
the situation
• Exiting from a product-market
• New-product planning
• Changing the target-market strategy
• Adjusting marketing strategy
• Improving efficiency

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Global Issues for Planning,
Implementation, and Control
• Global marketing planning
• Implementation globally
• Performance measurement and control
globally

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Global Marketing Planning
• Must accommodate more substantial
variation in marketing strategies and
programmes than is the case domestically
• Information regarding global markets is not
available in the same quantity or quality that
would be expected in the domestic market

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Implementation Globally
• Must address issues related to:
• Market differences in national culture
• Economic development
• Political characteristics

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Performance Measurement and
Control Globally
• Follows the same general principles
• But in the global market situation must additionally
consider market differences in:
• Local marketing arrangements
• Product or market life cycle stage
• The availability of information
• The strength of the relationships between local and
central management

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