55. Implementation and Controlling in the Marketing Planning Process
Learning Objectives
After studying the section about organizing and implementing the marketing plan you should be able to do the following:
describe the structure in the marketing planning process•
describe the objectives of marketing implementation and change•
describe and evaluate different ways of organizing the marketing •
department
understand the important issues in implementing the marketing plan•
After studying the section about budgeting and control you should be
able to do the following:
understand why customer profitability is important.•
describe the key elements of the marketing control system.•
list the most important measures for marketing performance.•
explain how a marketing budget is established.•
After studying the section about ethical, social and environmental
aspects of marketing planning you should be able to do the following:
understand why ethical issues are important for the firm’s marketing •
planning
explain how ethical marketing is related to relationship building•
discuss the nature of corporate social responsibility•
differentiate among various levels of ‘green marketing’•
After studying the section about developing and managing customer
relationships you should be able to do the following:
discuss loyalty, satisfaction and perception of value as determinants •
for development of the CRM strategy.
explain how Customer Lifetime Value (CLV) can be measured•
describe the major trends and forces that are changing the marketing •
landscape in this age of relationships.
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5.1 Organizing and Implementing the Marketing Plan
We have described and analysed each of the ingredients of a typical marketing mix. In
developing a marketing plan an organisation will need to give careful consideration to
each of these elements, whilst at the same being cautious not to fall into the trap of viewing each ingredient in isolation. As already stated in the first chapter, marketing and the
marketing tools must constantly be viewed as a collective whole and opportunities for
synergy will only be exploited if it is regarded accordingly. Each ingredient of the mix
should consistently reinforce the ‘message’ being conveyed by the others. To ensure that
the plan does represent a coherent whole, it is of key importance that the organisation’s
approach to each of the marketing elements is presented in the plan in a clear and easy
to read format. It should then become obvious whether ambiguities are present and corrective action can be taken.
5.1.1 The Process of Developing the International Marketing Plan
The intention of this section is to summarize earlier chapters.
Basically, marketing planning is a rational sequence and a series of activities leading
to the setting of marketing objectives and the formulation of plans for achieving them.
Companies generally undergo a management process in developing marketing plans.
In SMEs this process is usually informal. In larger, more diversified organisations, the
process is often systematized.
5.1.2 Deciding on the International Marketing Mix
Companies that operate in one or more foreign markets have to decide how much, if at
all, to adapt their marketing mixes to local conditions. At one extreme are international
companies that use a standardised marketing mix, selling largely the same products and
services and applying the same marketing approaches world-wide. At the other end is
an adapted marketing mix. In the latter case, the company adjusts the marketing mix elements to each target market, bearing more costs but aiming at a larger market share and
return due to a more sophisticated and tailored marketing mix.
As we have already stated in previous sections, the question of whether to adapt or
standardise the marketing mix has been much debated in recent years. On the one hand,
some global marketers believe that technology is making the world a smaller place, and
that customer needs around the world are becoming increasingly similar. This paves the
ground for global brands and standardised global marketing.
On the other hand, the marketing concept states that marketing strategies will be more
effective if tailored to the unique needs of each targeted consumer group. Despite global convergence, customers in different countries still have widely varied cultural and
personal backgrounds and still differ significantly in their needs and wants, spending
power, product preferences, and buying behaviour. Because these differences are hard
to change, most marketers adapt their products, prices, channels, and promotions to fit
customer desires in each country targeted.
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Ultimately, global standardization is a matter of degree. Numerous international marketers suggest that companies should ‘think globally but act locally’ – that they should
seek a balance between standardization and adaption. These marketers advocate a ‘glocal’ strategy in which the company standardizes certain core marketing elements and
localizes others. The corporate management level provides global strategic direction and
local operating units focus on the individual consumer differences across international
markets.
We shall now summarize and describe the international marketing mix and its implications (Kotler and Armstrong, 2009).
Product
Basically, five strategies allow for adapting product and promotion to a global market
(Keegan, 2002). We will first examine the three product strategies and then turn to the
two promotion strategies (see Figure 5.1).
Straight product extension implies marketing a product in a foreign market without any
adaption and change. This approach has been successful in some cases and problematic
in others. Gillette razors, Heineken beer and Rolex watches are all sold successfully in
about the same form all over the world. But Philips began to make a profit in Japan
only after it reduced the size of its coffeemakers to fit into smaller Japanese kitchens.
Straight extension is attractive because it involves no additional product development
costs, manufacturing changes, or new promotion. However, it can be very expensive in
the long run if products fail to satisfy foreign customers.
Product adaption entails changing the product to meet local conditions. For example,
Procter & Gamble’s Vidal Sassoon shampoos contain a single fragrance world-wide, but
the amount of scent varies by country.
Product invention consists of creating something new for a specific country market. This
approach might take two forms. It might imply maintaining or reintroducing earlier
product forms that happen to be well adapted to the specific needs of a given country. Or
a company might create a new product to meet a particular demand in a given country.
For example, Sony added the ‘U’ model to its VAIO personal computer line to meet the
unique wants of Japanese customers.
Source: Adapted from Kotler and Armstrong, 2009, modified
Product
Do not change
product Adapt product
Develop new
product
Promotion
Do not change
promotion
Straight
extension
Product
adaption Product
inventionAdapt
promotion
Communication
adaption Dual adaption
Figure 5.1: International product and promotion strategies
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Promotion
Organisations can either adopt the same promotion strategy used in their home market
or change it for each market targeted. Some multinational firms use a standardized advertising theme around the globe. Obviously, even in highly standardized advertising
campaigns, small changes are required to adjust for language and minor cultural differences. Colours, for example, are changed to avoid taboos in other countries. Purple is
associated with death in most Latin American countries and white is a mourning colour
in Japan.
Other enterprises follow a strategy of communication adaption, completely adjusting
their advertising messages to local markets. Kellogg ads in the United States, for example, promote the taste and nutrition of Kellogg’s cereals versus competitors’ brands.
In France, where customers drink little milk and eat small portions for breakfast, Kellogg’s ads try to convince consumers that cereals are a tasty and healthful breakfast.
Media also need to be adapted internationally because media availability varies significantly from country to country. TV advertising time is very limited in Europe, for
instance, ranging from a few hours a day in France to none in Scandinavian countries.
Consequently, marketers must buy time months in advance, and they eventually have
little control over airtimes. Magazines also differ in effectiveness. For example, magazines are a major medium in Italy and a minor one in Austria (Clegg, 2002).
Price
Companies also face multiple challenges in setting their international prices. For example, how might Black & Decker price its power tools globally? Of course, a company
might set a uniform price all around the globe, but this amount could be a price too high
in poor countries and not high enough in rich ones. Enterprises could charge what customers in each country would bear, but this approach ignores differences in the actual
costs from country to country. Finally, the company could use a standard mark-up of its
costs everywhere, but this strategy might price the company out of the market in some
countries where costs are high.
In addition, the Internet also makes global price differences more obvious. When companies sell their products and services over the Internet, customers can immediately
see how much products sell for in different countries. They might even order a given
product directly from the company location or dealer offering the lowest price. This will
force companies toward more standardized international pricing.
We will discuss the effect of the internet on the international marketing later in this
chapter in a separate section.
Place
The multinational company has to adapt a whole-channel view of distributing products
to the final customers. This involves designing international channels that take into account all the necessary links in distributing the seller’s products to final buyers, including the seller’s headquarters organisation, channels among nations, and channels within
nations (Kotler and Armstrong, 2009).
Channels of distribution within countries vary substantially from nation to nation. There
are large differences in the numbers and types of intermediaries serving each foreign
market. For example, companies marketing in China must operate through a network of
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state-controlled wholesalers
and retailers. Chinese distributors often carry competitors’ products and frequently
refuse to share even basic
sales and marketing information.
Another difference lies in the
size and character of retail
units abroad. Whereas largescale retail chains dominate
the scene in the United States,
much retailing in other countries is done by many small,
interdependent retailers. In
India, for example, millions
of retailers operate tiny shops
or sell in open markets. Their mar-ups are quite high, but the actual price is lowered
through bargaining. Supermarkets could offer lower prices, but supermarkets are difficult to build and open because of many economic and cultural barriers. Average income
is low, and people lack storage and refrigeration to keep food for several days. These factors have kept large-scale retailing from spreading rapidly in developing countries.
5.1.3 E-Marketing and its Effect on the International Marketing Mix
Evans and Wurster (1997, 1999 and 2000) have argued that the Internet has given rise
to a new economics of information, with the ‘blowing up’ of the trade-off between the
richness of information involved in a transaction and the number of people that it could
reach. The Internet has made it is possible for companies to reach an extensive audience,
while at the same time doing so with richness of information through the enhanced
volume, design and interactivity of content that is feasible on a Web site. The authors
identified three bases of competitive advantage: reach (referring to access and connection), richness (referring to detail and depth of information provided to customers), and
affiliation (referring to whose interests the business represented).
The internet has made inroads into both the business to consumer (B2C) and business
to business (B2B) segments and online business is likely to be one of the biggest growth
areas in the years ahead. Traditional companies, the so-called ‘brick and mortars’ (B&M),
are being pressured to respond to the competitive threats by new e-business upstarts.
The so-called internet ‘pure players’ have been able to create strong online brand recognition, provide good customer service, and are open 24 hours a day, seven days a week,
and 365 days a year. Some organisations even give customers the option of customization and allow them to communicate with other customers through communities or
discussion forums. The ability to customize service allows customers to build a relationship with the company while also being able to purchase products that they like. Physical stores can provide customers with good service but they cannot provide customers
with the convenience and easy accessibility of purchasing online. In order for B&Ms to
remain competitive and regain market share in their industries they have to make sense
of how to best utilize the Internet.
Example 37:
Black & Decker power tool print ad
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Why should B&Ms go Online? The reason is quite simple: to remain competitive, to increase profits and to increase market share. However, the road to becoming a successful
online company for B&Ms is not uncomplicated.
There are important issues that B&Ms have to tackle in order to ensure a smooth and
successful transition to an online business. First and foremost, B&Ms have to develop
a strategic vision for their online business and how it integrates with their established
business. One sort of strategic vision is to focus on cost leadership. Web based transactions usually save the company some capital. For instance, the cost of internet based
banking transactions is lower than the cost of a human teller transaction. Many companies that do not take advantage of this strategy may lose significant market share to
those that compete on low cost. Another type of strategic vision is that of enhancing
differentiating services. For example, car companies such as Toyota have developed personalized interactions with potential customers through customized navigation paths
on their web sites.
B&Ms need to think about why a customer would buy online from them. Some reasons
include: superior functionality of the website, personalized interactions, streamlined
transactions, security and privacy. These are all features that will draw customers to the
dotcom world and encourage them to continue to use the web as a key way of buying
products and services.
Creating an informational or e-commerce site is an additional issue that B&Ms must
address. An informational site is a much easier mission than an e-commerce site because there is no concern with the channels that are necessary for delivery of products,
taxation, and/or contracts with distributors. An informational site is used primarily to
inform consumers and other stakeholders about the company and offer a place to inquire about its products and services. The main requirement is whether the company
has the technology or know how to create, implement and maintain its website or has to
outsource this task to another corporation.
Creating an e-commerce site poses greater challenges. A company must consider all the
affected channels, which marketplace to enter, required technologies, etc. A major issue
facing all e-commerce businesses is fulfilling the right order at the right time. Customer
satisfaction in the digital era involves delivering the right product when, where, and how
the customer wants it delivered, and answering customer inquiries fast and accurately.
As already mentioned above, international Internet marketing has substantially changed
some elements of the marketing mix. Marketing on the Internet is a very different process from conventional marketing. The key to a more successful marketing effort on
the Internet will be an interactive relation marketing approach. However, this section
focuses on marketing mix dimensions that may be facilitated through the use of the
Internet (Hollensen, 2006).
Product
A product is anything that can be offered to a market for attention, acquisition, use, or
consumption. The management of the product mix refers to the development and commercialization of new products, as well as to decisions, which determine the length of
their cycles, namely, product rejuvenation and renewal, or elimination decisions. The Internet leads to faster discovery of customer needs, greater customization of the products,
quicker product testing, and shorter product life cycles. The international marketers who
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use the Internet should have comprehensive understanding of the foreign marketing
environment to assess the relative advantages of their own products and services.
Delivering a good product is not enough to gain customer loyalty. Manufacturers also
need to provide online and offline after-sales service, which constitutes a new activity
in the value chain. Therefore, they need to employ and train customer service staff to
service their customers on- and offline. Bulletin boards, user groups and virtual communities can also aid customers to solve problems online, reducing the manufacturer’s
time and effort while strengthening the producer’s virtual community. The rapidly developing virtual communities and social networks that provide the connections to allow customers to form strong relationships can influence consumer buying behaviour
substantially. Consequently, relationships develop between those who contribute to the
discussions within a forum (Stroud, 2008). The development of relationships between
customers within social networks results in social and sometimes even emotional bonds
being formed (Harridge-March et al., 2009).
The Internet can considerably improve the entire product development process. This is
especially the case if the product being offered can be transformed into a digital product.
For example, time zone differences provide a driver for software development. By using
the Internet, development work on software or engineering prototypes can continue
24 hours a day through a relay of contractors working in different time zones.
Price
The Internet has numerous influences on the price strategy; however, its use will lead
to increasing standardization of prices across borders, or to a narrowing of price differentials as customers become further aware of prices in different countries. For example, an international marketer’s country-specific intermediates that advertise services
locally (for the international marketer) have to recognize that there are international
consequences to their strategies. For example if an international publisher were to offer a
substantial discount on some products to its customers, readers all over the world could
perceive this deal; but in some countries where the publisher already has distributors or
does not have to discount to increase business, the special offer might be a problem. Additionally, Smart agents (software programs that make meta-searches of the Internet for
products meeting pre-specified criteria) may further combat attempts at price discrimination by revealing different prices. In summary, these factors imply that the Internet
will lead to increased standardization of prices across borders, or at least, diminished
price spreads across country markets.
In the Business-to-Business arena, it is likely that the bargaining power of customers
is probably increasing since they will become aware of alternative products and services. Moreover, the ease of use of the Internet channel makes it easier for customers to
exchange suppliers. However, there are still barriers to swapping since once a customer
invests time in understanding how to use a Web site to select and purchase products, he
or she may not want to learn how to use another service.
The Internet has also enabled new pricing schemes, and these have encouraged start-ups
to adopt pricing structures that depart a long way from traditional industry practice.
The most famous example is the Priceline ‘name-your-own- price’ (C-t-B) model, which
many people believed would become the dominant model for pricing but is now seen as
another variation on well-established pricing formulas. The approach works well with
airline tickets because accurate, timely information about the best prices is hard to get
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and the seats must be sold before the flight. But customers must be willing to put up with
the inconvenience of not being able to choose their airline or time of day they will fly.
Within this narrow niche Priceline has a loyal and potentially profitable
The final issue in the price dimension is the currency rates. Shopping on the Internet
needs to be convenient. This involves trading in local currencies. Therefore, consumers
are unlikely to search for information on currency conversion rates. Companies who
wish to market their products internationally have to evaluate adding a link from their
web pages to a currency converter or provide a conversion rate for each country to which
they are prepared to make sales
Place
Physical distribution is the place aspect of the marketing mix. The marketing channel can
be defined as interdependent organisations involved in the process of making a product
available for use or consumption. The Internet, by connecting end-users and producers
directly, reduce the importance of traditional intermediaries in international marketing
(i.e. agents and distributors). To survive, such intermediaries need to commence offering
a different range of services. Their value-add will no longer be principally in the area of
physical distribution of products but rather in the collection, interpretation and dissemination of an immense amount of information.
If intermediaries can perform a different mix of services, they will continue to play critical roles and extract value. The distribution system of the company must have some
capabilities and competences, for example, 24-hour order taking and customer service
response capability, and regulatory and customer-handling expertise to ship globally.
Companies should consider providing information on how the products are shipped
and precautions taken to ensure their quality on arrival. Quality guarantees and/or special consideration for international returns or refunds may also be necessary.
Unquestionably, the Internet has reduced many distribution issues. The opportunity to
sell over the net in a standardized way eliminates many natural barriers to entry. Furthermore, any business connected to the Internet can retrieve other businesses products
by ordering them from their websites. Companies no longer have to devise long and
expensive distribution channels to bring their products to the customer.
Promotion
Promotion refers to all the various ways an organisation undertakes to communicate its
products’ qualities and to persuade target customers to buy from it.
The use of the Internet permits sales departments to have an interactive communication with the customers. Global advertising costs, as a barrier to entry, will be significantly reduced as the Internet makes it feasible to reach a global audience inexpensively.
However, there are several online promotion techniques. Paying to place links on pages
with audiences that mirror or include a company’s target customers is less expensive
than conventional media. In addition, ‘free’ advertising on other sites can regularly be
exchanged for mutual links. Postings on Internet discussion groups on topics relevant
for specific products or markets are another way for marketers to attract visitors to their
sites. Although there are many offline promotion techniques in order to attract potential
customers to websites, such as traditional forms of advertising (e.g. magazine advertising or word of mouth).
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However, there is a critical issue for the international marketers who use the Internet:
the new challenge facing companies is the management of a global brand and corporate
logo. Consumers may become confused if a company and its subsidiaries have different
Web sites, each communicating a different format, image, message, and content. Consequently, a company should visibly define its policies about branding on the Internet.
Szmigin et al. (2005) suggest that the modern networked society offers multiple opportunities for organisations to develop relationships with customers. The Internet and
appropriate outline communities enhance relationship marketing by providing an opportunity for interaction with the relevant group and by understanding the nature and
content of communities, organisations can better meet the needs and wants of those
members.
The above mentioned changes in the 4Ps have been the result of the interactivity nature of the Internet, which requires a shift in the marketing paradigm, toward a more
relation-oriented approach, as will be discussed later in this Chapter.
5.1.4 Writing the Marketing Plan Document
Marketing planning is widely adopted by organisations from all sectors. The process of
marketing planning integrates all elements of marketing management: marketing analysis, development of strategy and the implementation of the marketing mix. Marketing planning can, therefore, be regarded as a systematic process for assessing marketing
opportunities and matching them with own resources and competences. In this respect,
the process aids businesses to effectively develop, coordinate and control marketing activities.
Basically, the major functions of the marketing plan are to determine where the company is, where it wants to go, and how it can get there. Marketing planning is able to
fulfil these functions by driving the business through three sorts of activities: (a) analyses of the internal and external situations, (b) development of marketing strategy, and (c)
design and implementation of marketing programmes (Hollensen, 2006).
The marketing planning process is linked to planning in other functional areas and to
overall corporate strategy. It takes place within the larger strategic marketing management process of the business. To survive and flourish, the business marketer must properly balance the firm’s resources with the objectives and opportunities of the environment. Marketing planning is a continuous process that involves the active participation
of other functional areas.
The marketing plan itself is the written document that businesses develop to record the
output of the marketing planning process. This document provides details of the analysis and strategic thinking that have been undertaken and outlines the marketing objectives, marketing mix and plan for execution and control. As such, the plan plays a key
role in informing organisational members about the plan and any roles and responsibilities they possibly have within it. The plan also provides details of required resources
and should highlight potential obstacles to the planning process, so that steps can be
taken to overcome them. The marketing plan is a kind of road map, providing direction
to help the business implement its strategies and achieve its objectives: the plan guides
top management and all functional areas within the organisation.
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Once the core marketing analyses are complete, the strategy development process follows. The key during this phase is to base any decisions on a detailed and objective
view from the analyses. The most appropriate target markets will be identified, basis
for competing and positioning strategies determined and detailed marketing objectives
presented. As these choices will affect how the business proceeds in relation to its customers and competitors, there must be consistency with the company‘s general corporate strategy. The marketing strategy must also be realistic and sufficiently detailed to
form the basis for the marketing programmes which follow.
The final stage of the marketing planning process involves the determination of marketing mix programs and their implementation. A detailed explanation is needed of precisely what marketing tasks must be undertaken, how, by whom and when. There needs
to be a comprehensive rationale connecting these marketing mix recommendations with
the analyses and strategy preceding them.
Assuming that appropriate attention has been devoted to the marketing analyses and
marketing strategy that guide the marketing programs, managers must next ensure that
adequate detail is provided to make the marketing mix genuinely implementable. This
means that each component of the marketing program – product, price, promotion, distribution and people – must be discussed separately and the tasks required to action it
are fully explored.
Those involved in planning will usually prepare some form of written marketing plan
document in which to explain the outputs of the process. The marketing plan provides
a useful framework for the analytical and strategic thinking undertaken, the detailed
marketing objectives and marketing programs, their implementation and control. Managers are able to refer back to the document for guidance and should regularly update it
to ensure that a full record of the marketing planning activities is available. The document helps focus the views of senior management and explain the required marketing
activities and target market strategy to other functional areas within the business, such
as operations and finance (Dibb, 2002).
The key components of the marketing plan are the following:
1. Title page
2. Table of contents
3. Executive summary
4. Introduction and problem statement
5. Situational analysis
6. Marketing objectives
7. Marketing strategies
8. Marketing programmes/action plans
9. Budgets
10. Implementation and control
11. Conclusion.
We shall now examine each section of the marketing plan structure in further detail
(Hollensen, 2006).
1. Title Page
The title page is an identification document that provides the reader with the following
essential information:
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legal name of business•
name of document (‘Marketing Plan for …’) •
date of preparation or modification of the document•
name, address, e-mail and phone number of the business or contact person•
name, address, e-mail and phone number of the individual or business who prepared •
the plan
the planning period.•
2. Table of Contents
This is the list of subjects covered in the marketing plan and where to find them.
3. Executive Summary
This gives busy executives and managers a rapid overview, in form of a concise summary of the key points in the marketing plan. This section encompasses a one-page summary of the basic factors involving the marketing of the product or service along with
the results expected from implementing the plan.
4. Introduction and Problem Statement
The identification and clear presentation of the problem(s) or issue(s) facing the company
is the most critical part of the introduction. Only a problem properly defined can be addressed. The marketer should shortly address the main problem in the marketing plan.
The marketer needs to be on alert for symptoms parading as key issues and underlying
problems. Strategic marketing problems are long-term, involve large sums of money,
and affect multiple aspects of the firm.
5. Situational Analysis
Based on a comprehensive audit of the market environment, competitors, the market,
products, and the company itself, this section provides a condensed view of the market
(size, structure, and dynamics), prior to a detailed analysis of individual market segments, which form the heart of the marketing plan.
The process is based upon market segmentation – that is, homogeneous groups of customers with characteristics that can be exploited in marketing terms. This approach is
taken because it is the one that is most valuable for managers in developing their businesses. The alternative product-oriented approach is hardly ever appropriate, given the
varying requirements of the different customer groups in the market in which most
organisations compete.
It is necessary to summarize the unit‘s present position in its major markets, in the form
of a SWOT analysis for each major market segment, product, or business group. The
word SWOT derives from the initial letters of the words strengths, weaknesses, opportunities, and threats. The analysis includes the following issues:
The Firm and its Market
Identification and evaluation of the competences in the company (key personnel, ex-•
perience, skills and capabilities, and resources), in comparison with competitors.
The structure of the marketing organisation (lines of authority, functions and respon-•
sibilities).
Description of the total potential market (i.e. potential customers).•
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How does the company’s product/service satisfy the needs of the market? •
Description of the particular customers to be targeted. •
Size of (a) total potential market (number of potential customers), and (b) the target •
market. Estimates should be supported with factual data.
Growth potential of (a) total potential market, and (b) the target market. The marketer •
needs to look at local, national and international markets. Estimates should be supported with factual data.
The company’s market share (firm's sales divided by the total market sales in per •
cent)
Competitive Environment
Major competitors: name, location, and market share. •
Comparison of the company’s product/service with that of the major competitors •
(brand name, quality, image, price, etc.).
Comparison of the company with that of the major competitors (reputation, size, dis-•
tribution channels, location, etc.).
How easy is it for new competition to enter this market? •
What has the company learned from watching competition? •
Are competitors' sales increasing, decreasing, steady? Why? •
Technological Environment
How is technology affecting the product/service? •
How soon can it be expected to become obsolete? •
Is the company equipped to adapt quickly to changes?•
Socio-Political Environment
Description of the changing attitudes and trends. How flexible and responsive is the •
firm?
New laws and regulations that may affect the business. What might be the financial •
impact?
From the SWOT analyses, key issues that must be addressed. Marketers should summarize the company’s internal and external assessment in form of a SWOT-matrix with the
key points from the situation analysis.
6. Marketing Objectives
Within this section, the marketing objectives in terms of sales volume, market share, return on investment, or other objectives or goals should be stated precisely (e.g. ‘To obtain
a sales volume of 3.000 units equal to an increase in market share from 10 per cent to
15 per cent of total market, by the by the end of the next fiscal year.’).
7. Marketing Strategies
The question addressed within this part is how to reach the company’s objectives and
goals? Which strategic models should be used (new market penetration, penetration,
market development, etc.).
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8. Marketing Programs/Action Plans
Marketing programs are the actionable means of achieving desired ends. They outline
what needs to be done, how it will be done, when it will be done, and who will do it.
How will the company implement the above strategy? •
Product/service: quality, branding, packaging, modifications, location of service, etc. •
Pricing: How will the firm price its product/service so that it will be competitive, yet •
profitable?
Promotion/advertising: How, where, when, etc. •
Selling methods: Personal selling, mail-order, etc. The marketer must also include •
number of salespersons, training required, etc.
Distribution methods •
Servicing of product •
Other: the marketer is supposed to add any other relevant information•
9. Budgets
Having detailed the steps that will be necessary to achieve the marketing objectives,
the writer of the plan should then be in a position to cost the various proposals and to
derive an overall marketing budget for the planning period. Of course, in reality, this
is not uncomplicated. Cost will certainly have been in the minds of marketing planners
even before they commenced the marketing planning process. At the very least, the development of a suitable budget is likely in practice to have been an iterative process, with
proposals being re-evaluated in the light of budgetary constraint.
There are a variety of ways of determining the marketing budget (see section 4.4.3). Irrespective of the method actually used, in practice it would be usual to specify how the
eventual budget has been allocated and to include such a specification in the marketing
plan itself. It would also be typical for an allowance to be made for contingencies in the
event that monitoring by the organisation suggests that the objectives will not be met.
Sufficient resources should then exist for some form of corrective action to be taken.
A budget of cash flows should also be prepared. It identifies whether a company will
have enough money to meet its cash requirements on a monthly basis. Some sales will be
made in cash while others may be made on credit. Because sales made on credit will not
result in the receipt of cash until a later date, they must not be recorded until the month
in which the cash will actually be received. Therefore, the percentage of sales to be made
in cash and the percentage to be made on credit must be estimated. The percentage of
credit sales should be further broken down according to the business’ different collection periods (30 days, 60 days, etc.).
10. Implementation and Control
As soon as the plan has been implemented, the management will then have to take responsibility for monitoring the progress of the organisation towards the goals specified.
Managers will also need to concern themselves with the costs that have been incurred
at each stage of implementation and monitor these against the budget. Thus, control
mechanisms need to be put into place to monitor:
the actual sales achieved, against the budget•
the actual costs incurred against those budgeted•
the performance of individual services against budget•
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5. Implementation and Controlling in the Marketing Planning Process358
the overall strategic direction that the organisation is taking – i.e. will the overall •
corporate objectives be achieved in a manner commensurate with the organisation's
mission?
If variances are detected in any of these areas, corrective action should be initiated, if
necessary by utilizing resources allocated for contingency in the budget.
11. Conclusion
This section briefly concludes the problems stated in the beginning of the report, based
on the analysis in the marketing plan. The conclusion is not a summary. The executive
summary will normally also include the key results of the market analysis
5.1.5 Implementation and the Management of Change
Marketing strategy concerns the issues and challenges of what should happen and why
it should happen. Implementation focuses on actions: who is responsible for different
activities, how precisely the strategy should be carried out, where things will happen
and when action will occur (Jobber, 2010). No matter how well conceived a strategy and
marketing plan might be, it will definitely fail if people are incapable of carrying out the
necessary tasks to make the strategy actually work in the market. Consequently, implementation capability is an integral part of strategy formulation.
The implementation of a new strategy potentially entails profound effects on people in
organisations. Unfortunately, most people most of the time are not open to change. It
represents risk, uncertainty and more effort than the regular day job. Therefore, the implementation of a strategic move is usually associated with the need for people to adapt
to change. Therefore, the management of change is an essential ingredient in effective
planning and implementation.
Against this background it is useful to understand the emotional stages that people pass
through when confronted with difficult change. These stages are comprised in the transition curve and are shown in Figure 5.2.
We shall now look at the different stages in more detail (Wilson, 1993):
Numbness •
The first reaction is typically shock. The scale of the consequences leads to emotions of
being overwhelmed, despair and numbness. The outward symptoms include silence
and lack of overt response and interaction.
Denial and disbelief •
The second sage is usually associated with denial and disbelief, leading to trivialising
the change implications, denying it or joking about it. The aim is to reduce or minimise the psychological impact of the change.
Self-doubt and emotion •
As the certainty of the change becomes increasingly evident, personal feelings of uncertainty arise. The over reigning feeling is one of powerless, of being out of control.
Acceptance and letting go •
Acceptance is characterised by tolerating the new reality and letting go of the past.
This is more likely to occur at an emotional low point but is the start of an upward
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5.1 Organizing and Implementing the Marketing Plan 359
surge as comfortable attitudes and behaviours are severed, and the necessity to cope
with the change is finally recognised.
Adapting and testing •
As people adapt to the changes they become more energetic, and they begin testing new
behaviours and approaches to work, and alternatives are explored and evaluated.
Construction and searching for meaning •
As most people’s emotions become much more positive and they feel they have got to
grips with the change, they strive for a clear understanding of the new.
Internalisation •
The final stage is where feelings reach a new high. The change is fully accepted by
most of the people. The adaption is complete and behaviours alter too.
Most people pass through all of the stages outlined above, although the movement from
one stage to the next is rarely smooth. The implication for managing marketing implementation is that the acceptance of fundamental change will take time for people to
accept. The venting of anger and frustration is an accompanying behaviour to this transition for the old to the new, and has to be accepted as such.
The overriding objective of marketing implementation and change from a strategic perspective is the successful execution of the marketing plan. This may include (Jobber,
2010):
gaining the support of key stakeholders in the company for the proposed plan and •
overcoming the opposition of others
gaining the required sources (e.g. people and money) to be able to implement the •
plan
gaining the commitment of individuals and departments in the company who are •
involved in frontline implementation (e.g. marketing, sales, service and distribution
staff)
Source: Adapted from Wilson, 1993
Time
Numbness
Reaction
to change
Denial and
disbelief
Self-doubt
and emotion
Acceptance and
letting go
Adaption
and testing
Construction and
searching for meaning
Internalisation
Figure 5.2: The transition curve
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5. Implementation and Controlling in the Marketing Planning Process360
gaining the cooperation of other departments needed to implement the pan (e.g. pro-•
duction and R&D).
For some people, the objectives and execution of the plan are in line with their personal –
career – objectives, interests and viewpoints and gaining their support is relatively easy.
But there are likely to be others that resist change and implementation of the marketing
plan.
In the next section we shall discuss various barriers impeding the implementation of
marketing plans and effective ways of overcoming resistance to change.
5.1.6 Barriers Impeding the Implementation of Marketing Plans
Even though the benefits of adopting marketing planning are well established, the effectiveness of the process is not definite. A range of barriers to successful marketing planning have been highlighted in the literature. Consequently, careful attention is essential
to ensure that marketing planning is effectively implemented. The starting point should
be an appreciation of the probable barriers, so that preventative and remedial action can
be taken. The following list is an amalgamation of the key issues raised by researchers
in the marketing planning literature (Dibb, 2002; Simkin, 2002):
Lack of marketing competence in the organisation• : insufficient marketing knowledge
or skills, poor appreciation of the marketing concept in general, poor understanding
of the distinction between the marketing planning process and its outputs, management’s failure to see across individual market sectors or brands to grasp the ‘integrated picture’
Isolation of marketing planning from other areas of the business• : unfortunate involvement of functions, lack of enthusiasm for planning amongst non-marketers, no
authority for marketers to talk to other functions and the need to understand them
better, are all aspects of one underlying problem in much marketing planning – nonmarketers have a wealth of knowledge and insights to bring to marketing planning.
Organisational barriers• : a lack of acknowledged corporate value given to planning
plus personal clashes, are facets of corporate life. The process of planning, however,
requires sharing of information and ideas, effective communications, a focus on the
market rather than internal politics.
Too much short-term marketing planning• : too much emphasis on a one year planning time frame, leading to plenty short-term detail but little long term vision. This is
fuelled by the increasing shareholder-value orientation in many organisations which
fails to incorporate a more stakeholder driven sustainable approach to strategic management.
Marketing plans developed in isolation rather than on marketing analyses• : insufficient
marketing intelligence and/or lack of a marketing intelligence system (MIS), reduced
sharing of marketing intelligence, deficient marketing analyses of customers, competitors and the wider trading environment, leading to an inappropriate understanding of these areas
Lack of managers’ time resources for thorough marketing planning• : managers have
difficulties balancing planning activities with the rest of their work load, so that the
process is not entirely implemented.
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5.1 Organizing and Implementing the Marketing Plan 361
The need for a plainly defined process is fundamental to successful marketing planning.
This process should incorporate the required analyses, strategic thinking and marketing
program development. However, if such a process is to be effectively put into practice
and the barriers are to be avoided, businesses must also address certain infrastructure,
processes and implementation requirements.
The recommendation is that marketers should use the following three solutions (Hollensen, 2006):
Solution 1• : provide the necessary infrastructure and resources for marketing planning activities
Solution 2• : use a robust analytical process that is objective and complete in terms of
the inclusion of the essential ingredients of marketing planning
Solution 3• : devote managerial time and attention to the on-going management of the
resulting plan’s implementation
Solution 1: Infrastructure Requirements
The infrastructure requirements for marketing planning can be conceptualized as a series of pre-requisites which companies should address at the outset of the process.
The must to manage internal communication extends far beyond the marketing function. A well-conceived program to manage inter-functional co-ordination is supreme. It
is vital to ensure that communication of the planning exercise and its outcomes extends
throughout organisational hierarchies and right down the distribution channels.
In addition, any marketing initiative requires purpose, process and vigorous propositions. Busy personnel cannot be expected to take ‘time out’ from routine operations to
undertake strategic thinking and develop marketing plans without being provided with
the resources for tackling such tasks. Too often senior managers expect a few line managers to undertake additional cumbersome tasks without being provided with necessary additional resources.
Solution 2: Robust Processes
There is no point determining tactical marketing mix programs if no analysis of the marketplace has been undertaken or if the target market strategy has not been up-dated to
reflect these results. An effective marketing planning process should include a coherent
and integrated process of analysis, strategizing and tactical program recommendation.
The skills to undertake marketing analyses aid a strategic review and to accordingly
modify often entrenched marketing tactics must be inherent or bought-in from external
agencies.
Solution 3: Facilitation of Implementation
Strategy and planning activities must be managed and will not take place by chance:
schedules, reviews, performance assessments and remedial actions, with praise and critics from senior management in the on-going evaluation process are important elements
in this respect. Without attention to these requirements, fine marketing thinking eventually fails to result in actionable recommendations being implemented.
The output from planning is usually summarized in the form of a detailed marketing plan document. The robustness of this document is a key factor in determining the
success of the process. To be effective, the marketing plan document must explain the
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5. Implementation and Controlling in the Marketing Planning Process362
background analyses undertaken during the planning process before specifying all aspects of the proposed strategy and marketing and sales programs. The required marketing strategy elements should include information of target segments, explanation of the
basis for competing and identification of product and brand positioning strategies. The
marketing and sales programs should encompass issues to do with the product range,
pricing terms, promotional tactics, methods and channels of distribution and sales force
planning. These recommendations must be seen to match the fixed marketing objectives
and arise out of the analyses of the market, customers, competitors and the wider trading environment which have been undertaken. That is, there has to be a close relationship between the desires, characteristics and buying behaviour of the company’s target
markets and the proposed marketing mix recommendations.
Three areas which are particularly vital to implementation, but which are sometimes
overlooked in the marketing plan, require specific analysis: communicating planning
outputs, specifying the required implementation resources, and last but not least managing resistance to change in the organisation.
Communicating Planning Outputs
The importance of effective communication does not cease once the marketing planning
recommendations have been completed. Instead, the emphasis shifts to ensuring clarity
within and across functional areas, so that the newly designed marketing programs can
be consistently and systematically implemented. A detailed plan of communication activity is required that specifies how this can be achieved and who needs to be involved.
This plan should extend beyond the organisation itself to include all parts of the distribution structure.
Specifying the Required Implementation Resources
A suitable level of detail is needed to ensure sufficient financial, personnel and time are
allocated to each of the marketing activities required. A weakness of many businesses’
marketing plans is that they fail to provide these compulsory implementation details,
with the result that not all planned activities are put into practice. A key message is
that marketing planning does not end when the marketing plan document has been
prepared. At this stage, it is crucial that all aspects of the implementation details are attended to. Even once this part of the process is complete, the marketing plan document
should continue to be continuously updated.
Managing Resistance to Change in the Organisation
Recognizing that planning may lead to organisational disruption and change is an important infrastructure pre-requisite. This is because change is often considered to be a
threat to people in the organisation as already outlined above. Organisations can build
up inertia that motivates people to resists changing their status quo, even though change
might be beneficial (Robbins and Coulter, 2005). Why do people resist change? An individual is likely to resist change for the following reasons: uncertainty, habit, concern
over personal loss, and the belief that the change is not in the company’s best interest
(Strebel, 1996):
Uncertainty •
Change replaces the known with ambiguity and uncertainty. For example, when
quality control methods based on statistical models are to be introduced into man-
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5.1 Organizing and Implementing the Marketing Plan 363
ufacturing plants, many quality control managers have to learn the new methods.
Some people may fear that they will be unable to do so and develop a negative attitude toward the change. In addition, they may be afraid that increased effectiveness
and efficiency will potentially make them redundant.
Habit •
Another cause of resistance is that people do things out of habit. As business life is
extremely complex people do not consider the full range of options for the multiple
decisions they make every day. To cope with this complexity, people rely on habits or
programmed response. But when confronted with change, this tendency to respond
in their accustomed ways becomes a source of resistance.
Concern over personal loss •
The third cause of resistance to change is the fear of losing something already possessed. Change threatens the investment people have already made in the status quo.
Naturally, the more that people have invested in the current plan or system, the more
the resist change. They fear the loss of status, compensation, authority, relationships,
personal convenience, or other benefits that they value. This explains why older employees tend to resist change more than younger workers as they have generally invested more in the current system.
Belief that the change is not in the company’s best interest •
A final cause of resistance is a person’s belief that the change is incompatible with the
objectives and interests of the organisation. For instance, an employee who believes
that a proposed new job procedure will reduce product quality or productivity can be
expected to resist the change.
Faced with the likelihood of resistance from vested interests, marketing managers
should act as change agents and develop an implementation strategy that can deliver
the required change. A change agent is a person who is responsible for driving through
change within an organisation. In general, a manager can use any of the following six
techniques for reducing resistance and implementing the change. These actions, listed
in Figure 5.3, include education and communication, participation, facilitation and support, negotiation, manipulation, and coercion (Kotter and Schlesinger, 1993):
Education and communication •
In order to ensure that change happens in practice, the marketing plan must be
communicated to employees with the aim of making them perceive the logic of the
change. Employees can be educated through one-on-one discussions, memos, group
meetings, or reports. In order to be effective, mutual trust and credibility between
managers and employees is paramount.
Participation •
Another technique to reduce resistance to change involves allowing those who oppose a change to participate in the decision. The pre-requisite is, of course, that the
employees have the expertise to make meaningful contributions. Involvement can
substantially reduce resistance, obtain commitment to seeing change succeed, and
increase the quality of change decision.
Facilitation and support •
Management might also provide supportive efforts such as employee counselling,
new skills training, or paid leave of absence. This can be quite time-consuming and
expensive.
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5. Implementation and Controlling in the Marketing Planning Process364
Negotiation •
Another managerial technique in this framework is negotiation. This involves exchanging something of value to reduce resistance. This is especially feasible if resistance comes from a powerful stakeholder. This approach is associated with high costs
and the likelihood of having to negotiate with other resisters.
Manipulation •
Manipulation is covert attempts to influence such as twisting or distorting facts,
withholding damaging information, or creating false rumours. Although technically
an option this approach practically is not applicable for ethical reasons and given the
fact that it is potentially most damaging.
Coercion •
Finally, using direct threats and force may also reduce resistance to change. Although
it is an inexpensive and eventually easy way of getting support it may be illegal and
– like manipulation – should practically not been taken into consideration because of
the likelihood of detrimental consequences.
Throughout the change management process along the transition curve (see Figure 5.2)
management has to continuously support employees in order to successfully implement
the marketing plan and manage resistance to change (Owen, 2009).
When implementing the marketing plan, marketers and management is advised not to
ask people to do too much too soon. Instead, commitments should be staged. It is instrumental to start with something effortless for them to do. This has two effects: it builds
Education
and
communication
Actions to
reduce
resistance
to change
Negotiation
ParticipationCoercion
Manipulation
Facilitation
and
support
Figure 5.3: Managerial actions to reduce resistance to change
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5.1 Organizing and Implementing the Marketing Plan 365
people’s confidence and they perceive that they can succeed. In addition, it creates a sense
of obligation: having started, they will feel obliged to see the whole process through.
In addition, management should set expectations early and identify some early wins. A
few symbolic acts will often help convince employees that management is serious about
the change and that there is real momentum.
Another important aspect is to challenge but not to break people. Fundamental change
takes people outside their comfort zone. This can lead to increased performance if they
are well managed. But if people are overwhelmed with tasks and responsibilities, they
become too stressed and eventually resist change.
The marketer should also focus on the positives which involves recognising and reinforcing the right behaviours and performance. It is of central importance to find something that each stakeholder in the change process is doing well, recognise it and build
their confidence accordingly.
5.1.7 Deciding on the Marketing Organisation
Marketing organisation provides the framework in which marketing implementation
takes place. The firm’s organisational structure is a critical variable for the implementation of the company’s marketing plans. The following summary highlights the main
reasons for this (Hollensen, 2006):
There may be difficulties in coordinating and controlling operating units of different •
sizes and levels of complexity.
Personnel in different markets will have diverse abilities and expectations, and or-•
ganizing such a heterogeneous group can be challenging.
There may be excessive head-office control.•
Effective marketing planning only comes about when the marketing strategy and organisational structure correspond. The elementary question ‘Do we have the right organisation for our strategy?’ is one that all chief executives should be asking. This question
can be broken down into four ‘basic’ parts, the first two of which are concerned with
the division of responsibilities amongst the labour force, whilst the remaining questions
focus on coordination and control:
What tasks are required to put the strategies into operation?•
To whom should these tasks be assigned?•
How interdependent are these tasks?•
How can the organisation be sure that the tasks assigned will be performed?•
There is nothing like the correct answers, and consequently there are accurate structures
for all organisations, but successful firms are those that tend to have organisational
structures that fluently fit their specific needs in terms of corporate objectives, strategies, corporate culture, etc.
There are many ways in which a multinational company and marketing can be organised.
The most relevant are the following organisational structure archetypes (Jobber, 2010):
no marketing department•
functional structure•
international division structure•
product-based structure•
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5. Implementation and Controlling in the Marketing Planning Process366
geographic structure•
matrix structure•
No Marketing Department
It is quite common that some – usually small – companies have no marketing department. In small enterprises, the owner-manager may carry out some of the functions of
marketing, such as developing customer relationships, providing market feedback and
product development. In larger organisations, which may use the traditional production,
finance, personnel and sales division, the same task may be undertaken by those departments, especially sales (e.g. customer feedback, sales forecasting). The classic example of
a company that refused to set up a marketing department was the Body Shop although
the company is based on many of the essentials of marketing (e.g. a clearly differentiated
product range, consistent positioning and effective PR).
Functional Structure
As small firms grow, the most likely emergence of a formal marketing structure is a section within a sales department. At this early stage of internationalization, the company
has no international marketing specialist and the domestic marketing department may
have the responsibility for the global marketing activities.
The export department may be a sub department of the sales and marketing department (see Figure 5.4). The export department is the first real step in internationalizing
the organisational structure. It is particularly suitable for SMEs, having low product and
area diversities.
Functionalism bring the benefit of specialisation of task and a clear definition of responsibilities, and it still the most common form of marketing organisation (Workman et
al., 1998). However, as the product range widens and the number of markets served increases, the structure may become unwieldy with insufficient attention being attributed
to specific products and markets since no one has full accountability for a particular
product or market.
ProductionSales &Marketing
Research &
Development Finance
Domestic
Export
Source: Adapted from Hollensen, 2006, modified
Managing
Director
Figure 5.4: Example of the functional structure
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5.1 Organizing and Implementing the Marketing Plan 367
International Division Structure
As international sales grow, at some point an international division structure may
emerge.
In Figure 5.5, the company’s activities are separated into domestic and international divisions, with a major objective being to develop the firm’s international business interests.
This structure is most suited for firms which:
wish to develop international business and greater international expertise•
do not have adequately trained executives to manage an international organisation.•
However, there are drawbacks to this structure which will be exposed as the firm expands, bringing problems of coordination as the business becomes too diverse. In addition, as the domestic and international spheres develop, conflict may emerge in the areas
of product development and research and development (R&D).
Product-Based Structure
The need to give sufficient care and attention to individual products has led numerous
companies to move to a product-based structure. A common structure is for a product
manager to overlook a group of brands within a product field (e.g. shampoos) supported
by brand managers who manage specific brands. Their role is to coordinate the business
Product
Division B
Product
Division A
International
Division
North AmericaEurope ChinaJapan
Country
organisations
Managing
Director
Corporate
staff
Germany
United Kingdom
Domestic divisions
Source: Adapted from Hollensen, 2006, modified
Figure 5.5: Example of the international division structure
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5. Implementation and Controlling in the Marketing Planning Process368
management of their brands. This entails dealing with advertising, promotion and marketing research agencies, and function areas within the firm. Their dilemma stems from
the fact that they have accountability for the commercial success of their brands without
the power to force through their decisions as they have no authority over other functional areas such as sales and finance. The product structure is suitable for companies
with more international business experience and with diversified product lines.
Under the product-based structure the major focus is on product lines. The firm is divided along product lines and each division becomes a cost centre. A key feature is the
decentralization of the structure which allows local managers greater freedom in their
decision-making.
This structure suits companies which have:
a diversified product line•
the products have potential for worldwide standardization•
a wide variety of final customers•
production sites in many locations.•
Corporate
staff
CEO
Product
Division C
world-wide
Product
Division B
world-wide
Product
Division A
world-wide
Product
Division A
Europe
R&D
Marketing
Personnel
Source: Adapted from Hollensen, 2006, modified
Figure 5.6: Example of the product structure
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5.1 Organizing and Implementing the Marketing Plan 369
The advantages of this structure are that adequate attention is given to developing a coordinated marketing mix for each brand, and assigning particular responsibility means
that speed of response to market is quicker than relying on a committee of functional
specialists. In addition, this structure is likely to enable a highly motivated group of
divisional heads.
However, there are also several drawbacks. First, this structure might eventually promote rivalry and counter-productive competition between product managers. Furthermore, certain product areas may be overlooked, particularly minor ones. Finally, when
division heads move up the corporate ladder, there is a danger that they may bias policies in favour of their former networks and ultimately product areas.
In response to these difficulties some enterprises are introducing category management
to provide a focus on a category of brands. Category management is the management of
brands in a group, portfolio or category. Companies such as Unilever and L’Oréal have
moved to category management to provide greater clarity in strategy across brands.
Geographic Structure
If product acceptance and operating conditions vary substantial across world markets,
then the geographical structure is likely to be the most favourable. This structure is
especially useful for enterprises that have a homogeneous range of products, but at the
same time need speedy and efficient adaptation to local market conditions. Typically, the
world is divided into regions, as illustrated in Figure 5.7.
There are mainly two reasons for dividing into different regions:
Asia/
Pacific
Africa/
Middle EastNorth AmericaLatin AmericaEurope
Country
subsidiaries
Country
subsidiaries
Country
subsidiaries
Country
subsidiaries
Country
subsidiaries
Corporate
staff
CEO
Production Production Production Production Production
Marketing Marketing Marketing Marketing Marketing
Source: Adapted from Hollensen, 2006, modified
Figure 5.7: Example of the geographical structure
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5. Implementation and Controlling in the Marketing Planning Process370
1. When sales volume in a particular region becomes significant there need to be some
specialized staff to focus on that specific region, to better exploit the potential of an
already growing market.
2. Homogeneity within regions and heterogeneity between them require treating each
important region separately. Therefore a regional management centre becomes an appropriate organisational feature.
Parallel to a regional centre, each country has its own organisational unit. Countrybased subsidiaries are characterized by a high degree of adaptation to local conditions.
Since each subsidiary develops its own unique activities and its own autonomy, it is
sometimes relevant to combine local subsidiaries with an RMC: for example, to utilize
opportunities across European countries.
Firms may also organize their operations using a customer (Key Account or Global Account) structure, especially if the customer groups they serve are very dissimilar: for
example, businesses and governments. Marketing to these diverse groups may require
the concentration of specialists in particular divisions. The product may be the same, but
the buying processes of the various customer groups may differ.
An advantage of this type of structure is a clear demonstration of authority. In addition,
the coordination of different functional areas of management is enhanced and resources
could be pooled.
However, to work efficiently, the structure depends on a small group of highly effective
managers. Furthermore, there is the likelihood that certain product lines will be ignored
as there is no overall responsibility for a specific product
Matrix Structure
For companies with a wide product range selling in various and diverse markets, a matrix
structure may be most feasible. The product structure tends to offer better opportunities
to rationalize production across countries, thus gaining production cost efficiencies. On
the other hand, the geographical structure is more responsive to local market trends and
needs. In the matrix organisation product and market managers are employed to give
attention to both facets of marketing activity (see Figure 5.8).
The strength of this structure is that it can respond to different political and economic
environments because it incorporates the elements of product-based and geographic
management. For example, the product manager would have world-wide responsibility for Product X, whilst the geographic managers would be responsible for all product
lines, including Product X, in the market. Thus both managers would overlap and this
is a good basis from which to make major decisions. Another feature of matrix Structures is the duality that exists – in dual budgeting, dual personnel evaluation systems,
etc. This could be seen as positive in that interdependence of opinion and contributions
would be the outcome.
However, the matrix structure is a resource-extensive method of organisation. Besides,
the possibility of a power struggle as a result of the dual command structure: As illustrated in Figure 5.8, the sales manager for product Z in Argentina would have two
superiors to refer to. As communication becomes more complicated clear lines of decision-making authority need to be drawn up in order for the system to work effectively.
Finally, uncertainty exists in determining who decides what in certain circumstances.
For example, who decides the price of the product?
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5.1 Organizing and Implementing the Marketing Plan 371
Marketing organisation and implementation are inevitably intertwined as the former
affects the day-to-day activities of marketing executives. The structures adopted by enterprises tend to reflect their management outlook, experience and history; organisations can even adapt the three basic types to produce hybrid models. The main point to
bear in mind, however, is that the best organisational structure is the one which fits the
organisation’s environment and internal characteristics. If the strategy changes or the
firm makes further internationalization moves, this has to have some effect on the organisation structure. Also, the organisation structure might change if the management
experiences problems with its existing structure (Hollensen, 2006).
CEO
Product W Europe
North America
Africa /
Middle East
South America
Product X
Product Y
Product Z
Corporate
staff
G
eographical m
anagers
W
or
ld
w
id
e
pr
od
uc
t m
an
ag
er
s
Sales manager
for product Z
in Argentina
Sublevel example
Source: Adapted from Hollensen, 2006, modified
Figure 5.8: Example of a matrix structure
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5. Implementation and Controlling in the Marketing Planning Process372
5.1.8 The Role of Internal Marketing
As more companies come to understand the importance of people in the implementation process, they are becoming disillusioned with traditional approaches to marketing
implementation. These forces for change have been caused by several factors: High rates
of employee turnover and its associated costs, and continuing problems in the implementation of marketing strategy. These problems have led many organisations to adopt
alternative approaches to marketing implementation. One of these alternatives is internal marketing (Hollensen, 2006).
The Internal Marketing Approach
The concept of internal marketing originates primarily from service organisations
where it was first practiced as a strategy for making all employees aware of the need for
customer satisfaction. Generally speaking, internal marketing refers to the managerial
actions necessary to make all members of the organisation understand and accept their
individual roles in implementing marketing strategy. This means that all employees,
from the chief executive officer to frontline marketing personnel, must realize how each
individual job assists in implementing the marketing strategy.
Under the internal marketing approach, every employee has two sets of customers: external and internal. Ultimately, successful marketing implementation results from an accumulation of individual actions where all employees are responsible for implementing
the marketing strategy.
The Internal Marketing Process
In the case of service organisations, the 4Ps marketing mix is felt to be insufficient. Some
authors have suggested extending it to the so-called 7Ps approach which includes people,
process and physical evidence (Booms and Bitner, 1981). In services, people often are the
service itself; the process of how the service is delivered to the customer is usually a key
part of the service, and the physical evidence – the design of a shop, for example – is so
critical to success that it should be considered as a separate element in the services marketing mix. Figure 5.9 contrasts the 4Ps and the 7Ps approach.
Ensuring that all staff, whatever their status, deliver a service of the highest quality to
both internal and external customers is a key issue for all organisations. The inseparability of services makes it impossible to distinguish between service production and service delivery and it is the people of the organisation who are, ultimately, responsible for
both. In this section of the marketing plan the organisation must, therefore, give consideration to the people skills that it will need to provide its service and, indeed, to deliver
every component of the marketing plan. This can then be matched against the profile of
the existing human resource and appropriate gaps identified. The organisation can then
ensure that those ‘gaps’ are represented in the staff recruitment programme and that the
appropriate person specifications are in place.
The interaction between the internal and external marketing programmes is illustrated
in Figure 5.10.
Certainly it is typically much easier to develop and retain existing staff than it is to attain
new ones. The second focus of this section of the plan is therefore to identify what steps
need to be taken to retain existing personnel. By far the easiest way of achieving this
is probably to survey those who decide to leave and having discovered the reasons for
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5.1 Organizing and Implementing the Marketing Plan 373
dissatisfaction implement any changes that may be necessary to ensure that problems
are corrected. One can also ensure that an ongoing dialogue is maintained with existing
staff so that they do not feel compelled to leave in the first place.
Contrasting the 4Ps and the 7Ps model, there is no reason the – useful – extensions of the
latter cannot be integrated within the 4Ps framework (Buttle, 1989; Jobber, 2010). People,
process and physical evidence can be discussed under ‘product’, for example. The important issue is not to neglect them, whether the 4Ps approach or some other method is
used to conceptualise the decision-making areas of marketing.
4 Ps of classical
consumer goods marketing
7 Ps of
service marketing
Promotion Product
Personnel
Physical
Facilities
Process
Management
Price
Place
Place
Promotion
Product
Price
Figure 5.9: The 4Ps and 7Ps model
Marketing
strategy
Marketing
implementation
External
marketing
programme
(4 x Ps)
Internal
marketing
programme
External
customer
? Higher perceived
value
Internal
customer
? Higher loyalty
Better
marketing
performance
Source: Adapted from Hollensen, 2006, modified
Figure 5.10: Internal marketing – a framework
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5. Implementation and Controlling in the Marketing Planning Process374
Summary
Success of a company mainly depends upon its marketing activities and the effectiveness of
these activities. In order to know if the marketing function of the company is effective all
aspects need to be analyzed. With this information a strategic marketing planning can be
created and applied in the years to come.
By analyzing the current marketing data flaws in the planning and weaknesses in the company’s (or the competitor’s) products or strategies can be discovered. Proper action can
then be taken to ensure a better functioning of the weak parts of the marketing engine or
to make better use of the competition’s weaknesses and flaws.
This can best be done by performing a marketing analysis before writing a marketing plan.
If you have the marketing data readily available this is not necessary.
The marketing plan has the following framework:
I Title Page
II Table of Contents
III Executive Summary
IV Introduction and problem statement
V Situational Analysis
VI Marketing Objectives and Goals
VII Marketing strategies
VIII Marketing programmes/action plans
IX Budgets
X Implementation and Control
XI Conclusion
In the implementation of the international marketing plan one of the following organisational structures may be used:
Functional structure, international division structure, product structure, geographic structure and matrix structure
The success of a marketing plan depends on three areas:
The process that is followed; –
The infrastructure that is established prior to and throughout the process; –
The implementation controls that are put in place. It is self-evident that effective market- –
ing planning must be based on a clearly structured and well-articulated process. Those
involved in planning must understand the expectations, which are being placed upon
them and be provided with clear guidance as to what they must do. However, putting
this process in place is not enough in its own right to ensure success.
No matter how sound the analysis undertaken during the process or the strategy and marketing programs determined, insufficient attention at this final stage can lead to implementation breakdown. Care must also be taken to ensure adequate implementation resources are made available and also to fully communicate the outcomes of the plan to all
interested parties. Finally, the planning process and the resulting implementation of the
plan’s recommendations must be closely monitored so that remedial action may be quickly
carried out to rectify any problems and to remove obstacles to the successful implementation of the plan.
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5.2 Budgeting and Control 375
Questions for discussion
1. What kind of market information would be necessary for international marketing
planning, and how might it be obtained?
2. What are the major challenges faced by marketers in developing and implementing international marketing plans?
3. What are the practical internal issues to be addressed by marketers when developing an international marketing plan?
4. What are the main problems associated with the links between international marketing strategy and organisational structure?
5. What are the principal issues to be considered in organisational design?
6. How does a firm’s size at home and abroad influence the organisational structure?
7. Outline the main organisational structure types that are used by international
organisations
8. What are the advantages and disadvantages in adopting a matrix approach in
terms of organisational structure?
5.2 Budgeting and Control
An organisation needs to budget in order to ensure that its expenditure does not exceed
its planned income. Accordingly this section discusses how to use rational process for
developing budgets and allocating resources.
Marketing control is an essential element of the marketing planning process because it
provides a review of how well marketing objectives have been achieved. Consequently,
this section will outline the need for a control system to supervise the marketing operations of the company.
5.2.1 Marketing Productivity and Economic Results
The productivity of an operation is related to how effectively input resources in a process are transformed into economic results for the service provider and value for its customers. The traditional productivity conception has been developed for manufacturers
of physical goods as a production efficiency concept. Existing productivity models and
measurement instruments are also geared to the context of manufacturers. Moreover,
they are based on assumptions that production and consumption are separate processes
and that customers do not participate in the production process (Hollensen, 2006).
High productivity is commonly assumed to be a primary goal in so much as a productive
operation is more likely to have lower costs. It is the close connection with the cost performance of an operation of process that accounts for the interest in understanding and
measuring productivity. Although the definition of productivity appears straightforward, productivity can be difficult to deal with for different reasons, but first of first of
all the outputs are usually expressed in different forms to the inputs. Outputs are often
measured in physical terms such as units (e.g. cars produced), tonnes (of paper), kilowatts
(of electricity), or value (Euros), for example. However, the inputs are usually physically
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References
Zusammenfassung
Marketing – A Relationship Perspective
Moderne Grundlange zum Marketing
Das Lehrbuch behandelt eines der wichtigsten und aktuellsten Themenfelder des modernen Marketings. Der Ansatz verbindet dabei den klassischen Ansatz der strategischen Marketingplanung und seiner Instrumente mit dem neuen Ansatz des Relationship Marketing. Der ganzheitliche Ansatz des Buches umfasst dabei die aktuellen Marketing-Grundlagen, Praxisbeispiele sowie anwendungsorientierte Fallstudien und eignet sich somit ideal sowohl für Manager und Entscheidungsträger im Marketing-Bereich, Studenten in Bachelor- und Materstudiengängen sowie Dozenten und Trainer.