CHAPTER 22

MANAGING A HOLISTIC
MARKETING ORGANIZATION
 IN THIS CHAPTER, WE WILL ADDRESS THE
FOLLOWING QUESTIONS:
1. What are important trends in marketing practices?
2. What are the keys to effective internal marketing?
3. How can companies be responsible social
marketers?
4. How can a company improve its marketing
implementation skills?
5. What tools are available to help companies monitor
and improve their marketing activities?
 Trends in Marketing Practices
Chapters 1 and 3 describe some important changes in the marketing macroenvironment,
such as globalization, deregulation, technological advances, customer empowerment,
and market fragmentation.
In response to this rapidly changing environment, companies have restructured their
business and marketing practices in some of the following ways:
1. Reengineering. Appointing teams to manage customer-value-building processes and
break down walls between departments.
2. Outsourcing. Greater willingness to buy more goods and services from outside
domestic or foreign vendors.
3. Benchmarking. Studying "best practice companies" to improve performance.
4. Supplier partnering. Increased partnering with fewer but better value-adding suppliers.
5. Customer partnering. Working more closely with customers to add value to their
operations.
6. Merging. Acquiring or merging with firms in the same or complementary industries to
gain economies of scale and scope.
7. Globalizing. Increased effort to "think global" and "act local."
8. Flattening. Reducing the number of organizational levels to get closer to the customer.
9. Focusing. Determining the most profitable businesses and customers and focusing on
them.
10. Accelerating. Designing the organization and setting up processes to respond more
quickly to changes in the environment.
11. Empowering. Encouraging and empowering personnel to produce more ideas and take
more initiative.
 :: : Internal Marketing
• Internal marketing requires that everyone
in the organization buy into the concepts
and goals of marketing and engage in
choosing, providing, and communicating
customer value.
• Let's look at how marketing departments
are being organized, how they can work
effectively with other departments, and
how firms can foster a creative marketing
culture within the entire organization.
 Organizing the Marketing Department
Modern marketing departments may be organized in a number of
different, sometimes overlapping ways: functionally, geographically,
by product or brand, by market, in a matrix, by corporate/division.

1. FUNCTIONAL ORGANIZATION
2. GEOGRAPHIC ORGANIZATION
3. PRODUCT OR BRAND-MANAGEMENT ORGANIZATION
4. MARKET-MANAGEMENT ORGANIZATION
5. MATRIX-MANAGEMENT ORGANIZATION
6. CORPORATE-DIVISIONAL ORGANIZATION
 1. FUNCTIONAL ORGANIZATION
• FUNCTIONAL ORGANIZATION The most common form of marketing
organization consists of functional specialists reporting to a marketing
vice president, who coordinates their activities. Figure 22.1 shows five
specialists. Additional specialists might include a customer service
manager, a marketing planning manager, a market logistics manager, a
direct marketing manager, and an Internet marketing manager.
• The main advantage of a functional marketing organization is its
administrative simplicity. It can be quite a challenge to develop smooth
working relations, however, within the marketing department. This form
also can lose its effectiveness as products and markets increase. A
functional organization often leads to inadequate planning for specific
products and markets. Products that are not favored by anyone are
neglected. Then, each functional group competes with others for budget
and status. The marketing vice president constantly has to weigh the
claims of competing functional specialists and faces a difficult
coordination problem.
Figure 22.1 Marketing Vice President and five
specialists
 2. GEOGRAPHIC ORGANIZATION
• A company selling in a national market often organizes its sales force (and
sometimes other functions, including marketing) along geographic lines.
• The national sales manager may supervise four regional sales managers, who each
supervise six zone managers, who in turn supervise eight district sales managers,
who supervise ten salespeople.
• Several companies are now adding area market specialists (regional or local
marketing managers) to support the sales efforts in high-volume markets. One such
market might be Miami, Florida, where 46 percent of the households are Latino. The
Miami specialist would know Miami's customer and trade makeup, help marketing
managers at headquarters adjust their marketing mix for Miami, and prepare local
annual and long-range plans for selling all the company's products in Miami.
• Improved information and marketing research technologies have spurred
regionalization. Data from retail-store scanners allow instant tracking of product
sales, helping companies pinpoint local problems and opportunities. Retailers
themselves strongly prefer local programs aimed at consumers in their cities and
neighborhoods. To keep retailers happy, manufacturers now create more local
marketing plans.
• Companies that have shifted to a greater regional marketing emphasis are
McDonald's, which now spends about 50 percent of its total advertising budget
regionally; American Airlines, which realized that the travel needs of Chicagoans and
Southwesterners are very different in the winter months; and Anheuser-Busch,
which has subdivided its regional markets into ethnic and demographic segments,
with different ad campaigns for each. Some companies have to develop different
marketing programs in different parts of the country out of necessity because their
brand development varies so much.
 3. PRODUCT OR BRAND-MANAGEMENT
ORGANIZATION
• Companies producing a variety of products and brands often establish a product- (or brand-)
management organization. The product-management organization does not replace the
functional organization, but serves as another layer of management. A product manager
supervises product category managers, who in turn supervise specific product and brand
managers.
• A product-management organization makes sense if the company's products are quite different,
or i f the sheer number of products is beyond the ability of a functional organization to handle.
Kraft has used a product-management organization in its Post division, with separate product
category managers in charge of cereals, pet food, and beverages. Within the cereal-product
group, Kraft has had separate subcategory managers for nutritional cereals, children's
presweetened cereals, family cereals, and miscellaneous cereals.
• Product and brand management is sometimes characterized as a hub-and-spoke system. The
brand or product manager is figuratively at the center with spokes emanating out to various
departments (see Figure 22.2). Some of the tasks that product or brand managers may perform
include:
• Developing a 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.
– Increasing 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.
The product-management organization has several advantages. The product
manager can concentrate on developing a cost-effective marketing mix for the
product; he or she can react more quickly to new products in the marketplace;
the company's smaller brands have a product advocate. However, this
organization has some disadvantages too:
– Product managers and specifically brand managers are not given enough
authority to carry out their responsibilities. They have to rely on persuasion to
get the cooperation of other departments.
– Product and brand managers become experts in their product area but rarely
achieve functional expertise. They vacillate between acting as experts and
having to defer to real experts.
– The product management system often turns out to be costly. One person is
appointed to manage each major product or brand and soon managers are
appointed to manage even minor products and brands.
– Brand managers normally manage a brand for only a short time. Short-term
involvement leads to short-term planning and plays havoc with building long-
term strengths.
– The fragmentation of markets makes it harder to develop a national strategy
from headquarters. Brand managers must increasingly please regional and
local sales groups, resulting in a transfer of power from marketing to sales.
– Product and brand managers cause the company to focus on building market
share rather than building the customer relationship. Yet the customer
relationship, not the brand, may be the primary lever for value creation.
• A second alternative with a product-management organization is to switch from
product managers to product teams. There are three types of potential
product-team structures: vertical product team, triangular product team, and
the horizontal product team (see Figure 22.3).
• The triangular and horizontal product-team approaches are favored by those
who advocate brand-asset management. They believe that each major brand
should be run by a brand-asset management team (BAMT) consisting of key
representatives from major functions affecting the brand's performance. The
company is comprised of several BAMTs which periodically report to a BAMT
Directors Committee, which itself reports to a Chief Branding Officer. This is
quite different from the way brands have traditionally been handled.
• A third alternative for product-management organization is to eliminate
product manager positions for minor products and assign two or more products
to each remaining manager. This is feasible where two or more products appeal
to a similar set of needs. A cosmetics company does not need separate product
managers for each product because cosmetics serve one major need—beauty.
A toiletries company needs different managers for headache remedies,
toothpaste, soap, and shampoo, because these products differ in use and
appeal.
• A fourth alternative for product-management organization is to introduce
category management, in which a company focuses on product categories to
manage its brands. Procter & Gamble, pioneers of the brand-management
system, and several other top firms have made a significant shift in recent years
to category management.
 Figure 22.2.
The Product Manager's Interactions
Three Types of Product Teams
 4. MARKET-MANAGEMENT ORGANIZATION
• Many companies sell their products to different
markets. Canon sells its fax machines to consumer,
business, and government markets.
• U.S. Steel sells its steel to the railroad, construction,
and public utility industries. When customers fall into
different user groups with distinct buying preferences
and practices, a market-management organization is
desirable. A market manager supervises several
market managers (also called market-development
managers, market specialists, or industry specialists).
The market managers draw on functional services as
needed. Market managers of important markets might
even have functional specialists reporting to them.
• Market managers are staff (not line) people, with duties
similar to those of product managers. Market managers
develop long-range and annual plans for their markets.
Their performance is judged by their market's growth
and profitability. This system carries many of the same
advantages and disadvantages of product-management
systems. Its strongest advantage is that the marketing
activity is organized to meet the needs of distinct
customer groups rather than being focused on
marketing functions, regions, or products. Many
companies are reorganizing along market lines and
becoming market-centered organizations. Xerox has
converted from geographic selling to selling by industry,
as have IBM and Hewlett-Packard.
• In a customer-management organization, companies can
organize themselves to understand and deal with
individual customers rather than with the mass market
or even market segments.
 5. MATRIX-MANAGEMENT ORGANIZATION
Companies that produce many products flowing into
many markets may adopt a matrix organization. DuPont
was a pioneer in developing the matrix structure:
Product-Market-Management Matrix System
6. CORPORATE-DIVISIONAL ORGANIZATION
•As multiproduct, multimarket companies grow, they often convert
their larger product or market groups into separate divisions. The
divisions set up their own departments and services. This raises the
question of what marketing services and activities should be
retained at company headquarters. Divisionalized companies have
reached different answers to this question:
• No Corporate Marketing. Some companies lack a corporate
marketing staff. They do not see any useful function for marketing
at the corporate level. Each division has its own marketing
department.
• Moderate Corporate Marketing. Some companies have a small
corporate marketing staff that performs a few functions, primarily
(1)assisting top management with overall opportunity evaluation,
(2)providing divisions with consulting assistance on request,
(3)helping divisions that have little or no marketing, and
(4)promoting the marketing concept throughout the company.
• Strong Corporate Marketing. Some companies have a corporate
marketing staff that, in addition to the preceding activities, also
provides various marketing services to the divisions, such as
specialized advertising services, sales promotion services,
marketing research services, and sales administration services.
• Regardless of how formalized corporate marketing is,
certain activities must occur within the organization in a
"top-down" fashion. Webster sees the role of marketing
at the corporate level as:
1.To promote a culture of customer orientation and to
be an advocate for the customer in the deliberations
of top-management strategy formulators.
2.To assess market attractiveness by analyzing customer
needs and wants and competitive offerings.
3.To develop the firm's overall value proposition, the
vision and articulation of how it proposes to deliver
superior value to customers.
 Relations with Other Departments
• In principle, all business functions should interact harmoniously
to pursue the firm's overall objectives. In practice, however,
interdepartmental relations are often characterized by deep
• rivalries and distrust. Some conflict stems from differences of
opinion as to what is in the company's best interests, some
from real trade-offs between departmental well-being and
company well-being, and some from unfortunate stereotypes
and prejudices.
• In the typical organization, each business function has a
potential impact on customer satisfaction. Under the marketing
concept, all departments need to "think customer" and work
together to satisfy customer needs and expectations. The
marketing department must drive this point home. The
marketing vice president, or CMO, has two tasks:
(1)to coordinate the company's internal marketing activities, and
(2)to coordinate marketing with finance, operations, and other
company functions to serve the customer.
Yet, there is little agreement on how much influence and authority marketing
should have over other departments. Typically, the marketing vice president must
work through persuasion rather than authority. Other departments often resist
changing their ways of working to fulfill the customer's interests. Inevitably,
departments define company problems and goals from their viewpoint, so conflicts
of interest are unavoidable. Breakdowns in communication further exacerbate the
problem. Consider the following potential negative reactions that marketing can
receive from different functional groups.
• Engineering comes into conflict with marketing executives when the latter want
several models produced, often with product features requiring custom
components. Engineers often think of marketing people as inept technically, as
continually changing priorities, and as not fully credible or trustworthy.
• Purchasing Executives see marketing executives pushing for several models in a
product line, which requires purchasing small quantities of many items rather
than large quantities of few items. They think that marketing insists on too high a
quality for materials and components. They also dislike marketing's forecasting
inaccuracy, which causes them to place rush orders at unfavorable prices or to
carry excessive inventories.
• Financial Executives suspect that marketing forecasts are self-serving. They think
marketers are too quick to slash prices to win orders, instead of pricing to make a
profit. They claim that marketers "know the value of everything and cost of
nothing."
• Accountants see marketing people as lax in providing sales reports on time. They
dislike the special deals salespeople make with customers because these require
special accounting procedures. Credit officers evaluate potential customers'
credit standing and deny or limit credit to the more doubtful ones. They think
marketers will sell to anyone, including those from whom payment is doubtful.
Building a Creative Marketing Organization
• Many companies are beginning to realize that they are not
really market- and customer driven—they are product-and-
sales driven. Companies such as Baxter, General Motors,
Shell, and J.R Morgan are attempting to transform
themselves into true market-driven companies. This will
require:
1. Developing a company-wide passion for customers.
2. Organizing around customer segments instead of around
products.
3. Developing a deep understanding of customers through
qualitative and quantitative research.
• The payoffs are considerable. Two researchers recently
concluded: "We found that the more aggressive a company's
customer-focused strategy, the higher its productivity. Those
with a customer focus were almost 7 percent more
productive than their competitors."
 Socially Responsible Marketing
• Effective internal marketing must be matched by a strong sense of social
responsibility.
• Companies need to evaluate whether they are truly practicing ethical and
socially responsible marketing. Several forces are driving companies to
practice a higher level of corporate social responsibility: rising customer
expectations, changing employee expectations, government legislation
and pressure, investor interest in social criteria, and changing business
procurement practices.
• Business success and continually satisfying the customer and other stake-
holders are closely tied to adoption and implementation of high standards
of business and marketing conduct. The most admired companies in the
world abide by a code of serving people's interests, not only their own.
• Business practices are often under attack because business situations
routinely pose tough ethical dilemmas. The issues are complicated: It is
not easy to draw a clear line between normal marketing practice and
unethical behavior. At the same time, certain business practices are clearly
unethical or illegal. These include bribery or stealing trade secrets; false
and deceptive advertising; exclusive dealing and tying agreements; quality
or safety defects; false warranties; inaccurate labeling; price-fixing or
undue discrimination; and barriers to entry and predatory competition.
 Corporate Social Responsibility
Raising the level of socially responsible marketing calls for a three-pronged
attack that relies on proper legal, ethical, and social responsibility behavior.
•LEGAL BEHAVIOR. Society must use the law to define, as clearly as possible, those
practices that are illegal, antisocial, or anticompetitive. Organizations must ensure
that every employee knows and observes any relevant laws. For example, sales
managers can check that sales representatives know and observe the law, such as
the fact that it is illegal for salespeople to lie to consumers or mislead them about
the advantages of buying a product. Under US law, salespeople's statements must
match advertising claims. In selling to businesses, salespeople may not offer bribes
to purchasing agents or others influencing a sale. They may not obtain or use
competitors' technical or trade secrets through bribery or industrial espionage.
Finally, salespeople must not disparage competitors or competing products by
suggesting things that are not true. Every sales representative must understand
these laws and act accordingly.
•ETHICAL BEHAVIOR. Companies must adopt and disseminate a written code of
ethics, build a company tradition of ethical behavior, and hold its people fully
responsible for observing ethical and legal guidelines. A 1999 poll by Environics
Int., a public opinion research firm, found that 67 percent of North Americans are
willing to buy or boycott products on ethical grounds. In response to heightened
consumer sensitivity on the topic, KPMG's 1999 survey of 1,100 global companies
found that 24 percent produce annual "sustainability" reports.
•SOCIAL RESPONSIBILITY BEHAVIOR. Individual marketers must practice a "social
conscience" in specific dealings with customers and stakeholders. Increasingly,
people say that they want information about a company's record on social and
environmental responsibility to help decide which companies to buy from, invest
in, and work for.
• Table 22.1 lists companies who receive high marks for social responsibility. Fetzer
Vineyards is one company that has fully embraced social responsibility.
 Socially Responsible Business Models
• The future holds a wealth of opportunities for companies.
Technological advances in solar energy, online networks, cable
and satellite television, biotechnology, and telecommunications
promise to change the world as we know it. At the same time,
forces in the socioeconomic, cultural, and natural environments
will impose new limits on marketing and business practices.
Companies that are able to innovate new solutions and values in a
socially responsible way are the most likely to succeed.
• Many companies such as The Body Shop, Stonyfield Farms, and
Smith and Hawken are giving social responsibility a more
prominent role. Actor Paul Newman's homemade salad dressing
has grown to a huge business.
• The Newman's Own brand is on additional products such as pasta
sauce, salsa, popcorn, and lemonade, and is sold in eight
countries. The company has given away all its profits—$150
million—to educational and charitable programs such as the Hole
in the Wall Gang camps Newman created for children with serious
illnesses. Another example of a company with social responsibility
at the core of its business model is Working Assets.
 Cause-Related Marketing
• Many firms are blending their corporate social responsibility
initiatives with their marketing activities. Cause-related marketing
is marketing that links the firm's contributions to a designated
cause to customers' engaging directly or indirectly in revenue-
producing transactions with the firm.
• Cause marketing has also been called a part of corporate societal
marketing (CSM) which Drumwright and Murphy define as
marketing efforts "that have at least one non-economic objective
related to social welfare and use the resources of the company
and/or of its partners."
• They also include other activities such as traditional and strategic
philanthropy and volunteerism as part of CSM. Cause-related
marketing began in earnest in the 1980s. Many observers credit
American Express with raising awareness of the mutual benefits of
cause-related marketing through its 1983 campaign to help restore
the Statue of Liberty. By donating a penny for every credit card
transaction and a dollar for each new card issued, American Express
gave $1.7 million to the Statue of Liberty—Ellis Island Foundation.
In the process, transactions for American Express rose 30 percent,
and new cards issued increased by 15 percent during this period.
 CAUSE MARKETING BENEFITS AND COSTS
• A successful cause marketing program can produce a number of
benefits: improving social welfare; creating differentiated brand
positioning; building strong consumer bonds; enhancing the company's
public image with government officials and other decision makers;
creating a reservoir of goodwill; boosting internal morale and
galvanizing employees; and driving sales.
• By humanizing the firm, consumers may develop a strong, unique bond
with the firm that transcends normal marketplace trans-actions. Some
of the specific means by which cause marketing programs can build
brand equity with consumers include:
(1)building brand awareness, (2)enhancing brand image,
(3)establishing brand credibility, (4)evoking brand feelings, (5)creating
a sense of brand community, and
(6)eliciting brand engagement.
• Liz Claiborne has exhibited strong commitment to its cause.
 CHOSING A CAUSE
• Some experts believe that the positive impact on a brand
from cause-related marketing may be lessened by sporadic
involvement with numerous causes.
• For example, Cathy Chizauskas, Gillette's director of civic
affairs, states: "When you're spreading out your giving in
fifty-dollar to one-thousand-dollar increments, no one
knows what you are doing... It doesn't make much of a
splash."
• Many companies choose to focus on one or a few main
causes to simplify execution and maximize impact. One of
the more focused cause marketers is McDonald's. Ronald
McDonald Houses in more than 20 countries offer more
than 5,000 rooms each night to families needing support
while their child is in the hospital. Ronald McDonald House
program has provided a "home away from home" for
nearly 4 million family members since its beginning in
1974.
 BRANDING THE CAUSE MARKETING PROGRAM
There are three potential options for branding a cause marketing program:
• 1. Self-branded: Create Own Cause Program. The firm takes ownership of
a cause and develops an entirely new organization to deliver benefits
associated with the cause. The newly created self-branded cause could
be branded with the parent brand or an individual product brand. The
Ronald McDonald House Charities and the Avon Breast Cancer Crusade
are classic examples of self-branded cause entities.
• 2. Co-branded: Link to Existing Cause Program. The firm partners with an
existing cause. Typically, the identification of the brand affiliation with the
cause is only in the form of its designation as a sponsor or supporter—
the actual involvement is not branded as a program in anyway. Currently,
co-branding relationships with causes are the most popular type of
activity. An example is Sealy's sponsorship of NASCAR's Victory Junction
Gang Camp, which involves the donation of beds to an auto-racing-
themed camp for children with life-threatening illnesses.
• 3. Jointly Branded: Link to Existing Cause Program. In this hybrid
approach, firms partner with an existing cause but explicitly brand the
program that links to the cause. An example of this is The Rocky
Mountain Challenge, an organized three-day benefit bike ride, which is
sponsored by the bike retailer Colorado Cyclist to provide funds for the
Tyler Hamilton Foundation for MS, a charity established by the Tour de
France cyclist (and University of Colorado graduate).
 Social Marketing
• Some marketing is conducted to directly address a social
problem or cause. Causerelated marketing is done by a
company to support a cause. Social marketing is done by a
nonprofit or government organization to further a cause,
such as "say no to drugs" or "exercise more and eat better."
• The need for social marketing is evident: Consider the
following recent facts and figures from 2002.
– An estimated 1 million teens became pregnant.
– 5-10 million adolescent girls and women struggled with
eating disorders.
– More than 16,000 people were killed in alcohol-related
crashes.
– More than 3,000 children and teens died from gunshot
wounds.
– More than 5,000 people on waiting lists for organ
transplants died.
Some notable global social marketing successes include these:
– Oral rehydration therapy in Honduras significantly decreased
deaths from diarrhea in small children under the age of 5.
– Social marketers created booths in marketplaces where
Ugandan midwives sold contraceptives at affordable prices.
– Population Communication Services created and promoted
two extremely popular songs in Latin America, "Stop" and
"When We Are Together," to help young women "say no."
– The National Heart, Lung, and Blood Institute successfully
raised awareness about cholesterol and high blood pressure,
which helped to significantly reduce deaths.
•A number of different types of organizations conduct social
marketing in the United States. Government agencies include
the Centers for Disease Control and Prevention, Departments
of Health, Social and Human Services, Department of
Transportation, and the U.S. Environmental Protection Agency.
Literally hundreds of nonprofit organizations are involved with
social marketing, including the American Red Cross, the World
Wildlife Fund, and the American Cancer Society.
• Choosing the right goal or objective for a
social marketing program is critical.
–Should a family planning campaign focus
on abstinence or birth control?
–Should a campaign to fight air pollution
focus on ride-sharing or mass transit?
• Social marketing campaigns may have
objectives related to changing people's
cognitions, values, actions, or behaviors.
The following examples illustrate the range
of possible objectives.
• Cognitive campaigns
– Explain the nutritional
value of different foods.
– Explain the importance
of conservation.
• Action campaigns
– Attract people for mass
immunization.
– Motivate people to vote
"yes" on a certain issue. • Value campaigns
– Motivate people to
donate blood.
– Motivate women to
take a pap test.
• Behavioral campaigns
– Demotivate cigarette
smoking.
– Demotivate hard-drug
usage.
– Demotivate excessive
consumption of alcohol.
–Alter ideas about abortion
– Change attitudes of
bigoted people.
 Social Marketing (cont.)
• Social marketing may employ a number of different tactics to
achieve its goals. The social marketing planning process follows
many of the same steps as the process for traditional products and
services (see Table 22.2). Some key success factors in developing
and implementing a social marketing program include:
– Study the literature and previous campaigns.
– Choose target markets that are most ready to respond.
– Promote a single, doable behavior in clear, simple terms.
– Explain the benefits in compelling terms.
– Make it easy to adopt the behavior.
– Develop attention-grabbing messages and media.
– Consider an education-entertainment approach
 MARKETING IMPLEMENTATION
• Table 22.3 summarizes the characteristics of a great marketing
company. A marketing company is great not by "what it is," but by
"what it does."
• Marketing implementation is the process that turns marketing
plans into action assignments and ensures that such assignments
are executed in a manner that accomplishes the plan's stated
objectives.
• Thomas Bonoma identified four sets of skills for implementing
marketing programs:
– 1. Diagnostic skills -When marketing programs do not fulfill expectations, was
it the result of poor strategy or poor implementation? If implementation,
what went wrong?
– 2. Identification of company level - Implementation problems can occur in
three levels: the marketing function, the marketing program, and the
marketing policy level.
– 3. Implementation skills - To implement programs successfully, marketers
need other skills: allocating skills for budgeting resources, organizing skills to
develop an effective organization, and interaction skills to motivate others to
get things done.
– 4. Evaluation skills - Marketers also need monitoring skills to track and
evaluate marketing actions.
 EVALUATION AND CONTROL
In spite of the need to monitor and control marketing activities, many
companies have inadequate control procedures. A study of 75 companies
turned up these findings:
– Smaller companies do a poorer job of setting clear objectives and
establishing systems to measure performance.
– Less than half the companies studied knew their individual products'
profitability. About one-third had no regular review procedures for spotting
and deleting weak products.
– Almost half of the companies failed to compare their prices with those of
the competition, to analyze their warehousing and distribution costs, to
analyze the causes of returned merchandise, to conduct formal evaluations
of advertising effectiveness, and to review their sales forces' call reports.
– Many companies take four to eight weeks to develop control reports,
which are occasionally inaccurate.
The Control Process • Annual-plan control aims to ensure that the
company achieves the sales, profits, and
other goals established in its annual plan.
The heart of annual-plan control is
management by objectives.
• Four steps are involved: (1)management sets
monthly or quarterly goals, (2)management
monitors its performance in the
marketplace, (3)management determines
the causes of serious performance
deviations, and (4)management takes
corrective action to close the gaps between
goals and performance.
• This control model applies to all levels of the
organization. Top management sets annual
sales and profit goals that become specific
goals for lower levels of management. Each
product manager is committed to attaining
specified levels of sales and costs; each
regional district and sales manager and each
sales representative is also committed to
specific goals. Each period, top management
reviews and interprets the results.
 THE FUTURE OF MARKETING
• Top management has recognized that past marketing has been highly
wasteful and is demanding more accountability from marketing.
"Marketing Memo: The Major Marketing Weaknesses" summarizes the
major deficiencies that companies have in marketing, how to spot these
deficiencies, and what to do about them. Going forward, there are a
number of imperatives to achieve marketing excellence.
• Marketing must be "holistic" and less departmental. Marketers must
achieve larger influence in the company i f they are to be the main
architects of business strategy. Marketers must continuously create new
ideas if the company is to prosper in a hypercompetitive economy.
Marketers must strive for customer insight and treat customers differently
but appropriately. Marketers must build their brands through performance,
more than through promotion. Marketers must go electronic and win
through building superior information and communication systems.
• In these ways, modern marketing will continue to evolve and confront new
challenges and opportunities. As a result, the coming years will see:
– The demise of the marketing department and the rise of holistic marketing
– The demise of free-spending marketing and the rise of ROI marketing.
– The demise of marketing intuition and the rise of marketing science,
– The demise of manual marketing and the rise of automated marketing.
– The demise of mass marketing and the rise of precision marketing.
• To accomplish these changes and become truly holistic with
marketing, a new set of skills and competencies is needed.
Proficiency will be demanded in areas such as:
–Customer relationship management (CRM).
–Partner relationship management (PRM).
–Database marketing and data-mining.
–Contact center management and telemarketing.
–Public relations marketing (including event and sponsorship marketing),
–Brand-building and brand-asset management.
–Experiential marketing.
–Integrated marketing communications.
–Profitability analysis by segment, customer, channel.
• It is an exciting time for marketing. In the relentless pursuit of
marketing superiority and dominance, new rules and practices are
emerging. The benefits of successful twentyfirst-century marketing
are many, but will only come with hard work, insight, and
inspiration. The words of nineteenth-century American author Ralph
Waldo Emerson may never have been more true: "This time like all
times is a good one, if we but know what to do with it."
 SUMMARY
1. The modern marketing department has evolved through the years from a simple
sales department to an organizational structure where marketing personnel
work mainly on cross-disciplinary teams.
2. Modern marketing departments can be organized in a number of ways. Some
companies are organized by functional specialization, while others focus on
geography and regionalization. Still others emphasize product and brand
management or market-segment management. Some companies establish a
matrix organization consisting of both product and market managers. Finally,
some companies have strong corporate marketing, others have limited corporate
marketing, and still others place marketing only in the divisions.
3. Effective modern marketing organizations are marked by a strong cooperation
and customer focus among the company's departments: marketing, R&D,
engineering, purchasing, manufacturing, operations, finance, accounting, and
credit.
4. Companies must practice social responsibility through their legal, ethical, and
social words and actions. Cause marketing can be a means for companies to
productively link social responsibility to consumer marketing programs. Social
marketing is done by a nonprofit or government organization to directly address
a social problem or cause.
5. A brilliant strategic marketing plan counts for little if it is not implemented
properly. Implementing marketing plans calls for skills in recognizing and
diagnosing a problem, assessing the company level where the problem exists,
implementation skills, and skills in evaluating the results.
6. The marketing department has to monitor and control marketing activities
continuously. Efficiency control focuses on finding ways to increase the efficiency
of the sales force, advertising, sales promotion, and distribution. Strategic
control entails a periodic reassessment of the company and its strategic
approach to the marketplace using the tools of the marketing effectiveness and
marketing excellence reviews, as well as the marketing audit.