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LO2 Describe two marketing planning frameworks: Porter’s generic business strategies and synergy analysis. Explain what makes an effective marketing plan. LO3 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 22, YOU SHOULD BE ABLE TO: Explain how marketing managers allocate their limited resources. LO1 22-2

LO5 Describe the alternatives for organizing a marketing department and the role of a product manager. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 22, YOU SHOULD BE ABLE TO: Use a Gantt chart to schedule a series of tasks. LO4 LO6 Explain how marketing ROI, metrics, and dashboards relate to evaluating marketing programs. 22-3

“BREAKING THE RULES” AT GENERAL MILLS TO REACH TODAY’S ON-THE-GO CONSUMER 22-4

MARKETING STRATEGY AT GENERAL MILLS: NOT JUST A CEREAL COMPANY ANYMORE!  Cereal Industry Facts of Life Decline in RTE Cereals 1 of 4 Brands Succeeds High New-Product Risk 22-5

MARKETING STRATEGY AT GENERAL MILLS: NOT JUST A CEREAL COMPANY ANYMORE!  Creative Initiatives Outside Cereals Single Portions Eat-on-the-Go Products Healthier Eating Cooking Convenience 22-6

 Strategy: Clearly Stated and Focused  Execution: Flawless Operations Kaizen MARKETING BASICS: DOING WHAT WORKS AND ALLOCATING RESOURCES FINDING AND USING WHAT REALLY WORKS  Culture: Performance-Oriented  Structure: Fast, Flexible, and Flat 22-7

MARKETING BASICS: DOING WHAT WORKS AND ALLOCATING RESOURCES USING SALES RESPONSE FUNCTIONS  Sales Response Function Sales Response Function  A Numerical Example of Resource Allocation LO1  Maximizing Incremental Revenue Minus Incremental Cost Year 1 Year

FIGURE 22-1 FIGURE 22-1 A sales response function shows the impact on sales at various levels of marketing effort on annual sales revenue 22-9

MARKETING BASICS: DOING WHAT WORKS AND ALLOCATING RESOURCES USING SALES RESPONSE FUNCTIONS LO1  Allocating Marketing Resources in Practice Revenues  Share Points—Need Estimates of: Share Points—Need Estimates of: Market Share Cannibalization Gross Margin 22-10

FIGURE 22-2 FIGURE 22-2 The actions in the strategic marketing process are supported and directed by detailed reports, studies, and memos 22-11

MARKETING BASICS: ALLOCATING RESOURCES USING SALES RESPONSE FUNCTIONS LO1  Resource Allocation and the Strategic Marketing Process  Output Reports 22-12

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS THE IMPORTANCE OF METRICS IN MARKETING PLANNING LO1  Innovation Metrics  “If You Don’t Where You’re Going, Any Road Will Get You There.” Input Metric Output Metric 22-13

FIGURE 22-3 FIGURE 22-3 Metric ranked No. 1 by respondents from organizations using more than three innovation metrics 22-14

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS THE VARIETY OF MARKETING PLANS LO1  Annual Marketing Plans  Long-Range Marketing Plans 22-15

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS MARKETING PLANNING FRAMEWORKS LO2  Cost Leadership Strategy Cost Leadership Strategy  Porter’s Generic Business Strategies Porter’s Generic Business Strategies  Differentiation Strategy Differentiation Strategy  Cost Focus Strategy Cost Focus Strategy  Differentiation Focus Strategy Differentiation Focus Strategy 22-16

FIGURE 22-4 FIGURE 22-4 Porter’s four generic business strategies involve combinations of competitive scope and costs vs. product differentiation 22-17

Campbell’s Soup and IKEA Which of Porter’s generic business strategy does each use? LO

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS SYNERGY ANALYSIS LO2  Synergy Analysis Synergy Analysis Marketing Synergy R&D-Manufacturing Synergy 22-19

MARKETING MATTERS A Test of Your Skills: Where are the Synergies? 1. Where are the marketing synergies? 2. Where are the R&D-manufacturing synergies? 3. What is the ideal market-product grid for a merger? LO

FIGURE 22-5 FIGURE 22-5 Market-product grids show alternative strategies for a lawnmower manufacturer 22-21

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS SYNERGY ANALYSIS LO2  Market Specialization  Market-Product Concentration  Product Specialization  Selective Specialization  Full Coverage 22-22

FIGURE 22-6 FIGURE 22-6 The ideal merger for Great Lakes to obtain full market-product coverage 22-23

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS MARKETING PLANNING AND STRATEGY LESSONS LO3  Guidelines for an Effective Marketing Plan Have Complete and Feasible Plans Set Measurable, Achievable Goals Use a Base of Facts and Assumptions Use Simple, but Clear and Specific Plans 22-24

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS MARKETING PLANNING AND STRATEGY LESSONS LO3  Guidelines for an Effective Marketing Plan Make Plans Controllable and Flexible Find the Right Person to Implement Work Toward Concensus-Building 22-25

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS MARKETING PLANNING AND STRATEGY LESSONS LO3  Marketing Planning and Strategy Problems Bad News Gets Filtered Out as Information Proceeds Upward to Top Management Plans Based on Poor Assumptions Planners Lost Sight of Customer Needs Too Much Time and Effort on Collecting Data and Writing Plans Line Operating Managers Have No Ownership in Implementing Plans 22-26

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS BIG G STRATEGIES LO3  Global Market-Product Initiatives Reaching New Global Markets New Product Ideas from Anyone, Anywhere Around the World 22-27

THE PLANNING PHASE OF THE STRATEGIC MARKETING PROCESS BALANCING VALUE AND VALUES LO3  Value-Based Planning  Value-Driven Strategies 22-28

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS IS PLANNING OR IMPLEMENTATION THE PROBLEM? LO3  The Plan and Strategy  The Plan’s Implementation  Both Poor Excellent 22-29

FIGURE 22-A FIGURE 22-A Results of good and bad marketing planning and implementation 22-30

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS EMPHASIZING MARKETING IMPLEMENTATION LO3  Move Some Planning Activities From Planners to Line Managers  Find Ways to Convert New Marketing Opportunities to Completed Projects  Be Winners: No. 1 or No. 2 in Industry in Revenues and Profits 22-31

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS IMPROVING IMPLEMENTATION OF MARKETING PROGRAMS LO3  Communicate Goals and the Means to Achieve Them Product or Program Champion  Have a Responsible Program Champion Willing to Act  Reward Successful Program Implementation 22-32

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS IMPROVING IMPLEMENTATION OF MARKETING PROGRAMS LO3  Take Action and Avoid Paralysis of Analysis “Do It, Fix It, Try It” Approach “Bias for Action” 22-33

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS IMPROVING IMPLEMENTATION OF MARKETING PROGRAMS LO3  Take Action and Avoid Paralysis of Analysis Avoid Paralysis of Analysis Make Prompt Decisions 22-34

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS IMPROVING IMPLEMENTATION OF MARKETING PROGRAMS LO3 Get Help—Don’t Keep Problems to Yourself Surface Problems Immediately  Foster Open Communications to Surface Problems Avoid the “NIH” Syndrome 22-35

MARKETING MATTERS Implementation Lessons From IBM: Converting Tough Global Problems into Results LO

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS IMPROVING IMPLEMENTATION OF MARKETING PROGRAMS LO4 Program Schedules Action Item List  Schedule Precise Tasks, Responsibilities, and Deadlines Gantt Chart 22-37

FIGURE 22-B FIGURE 22-B Tasks and time needed to complete a term project 22-38

FIGURE 22-7 FIGURE 22-7 Gantt chart for scheduling a term project that distinguishes sequential and concurrent tasks 22-39

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS ORGANIZING FOR MARKETING LO5  The Evolving Role of the CMO Understand Global Consumer Segments Understand Multichannel Marketing Has High Job Turnover 22-40

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS ORGANIZING FOR MARKETING LO5 Staff Positions Line Positions  Line vs. Staff and Divisional Groupings Category Manager  Role of the Product/Brand Manager 22-41

THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS ORGANIZING FOR MARKETING LO5  Line vs. Staff and Divisional Groupings Functional Groupings Functional Groupings Product Line Groupings Product Line Groupings Geographical Groupings Geographical Groupings Market-Based Groupings Market-Based Groupings  Matrix Organization 22-42

FIGURE 22-8 FIGURE 22-8 The organization of a business unit in a typical consumer packaged goods firm shows two product or brand groups 22-43

FIGURE 22-C FIGURE 22-C Entities which/whom the product or brand group works with 22-44

 Identifying Deviations From Goals Actual Results Fall Short of Goals Actual Results Exceed Goals THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS THE MARKETING EVALUATION PROCESS LO6  Acting on Deviations From Goals 22-45

FIGURE 22-9 FIGURE 22-9 The evaluation phase of the strategic marketing process ties results and actions to goals, often using marketing metrics and dashboards 22-46

 Marketing ROI Marketing ROI THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS MARKETING ROI, METRICS, AND DASHBOARDS LO6  Marketing Metrics  Marketing Dashboards 22-47

 The Distribution Challenge with Warm Delights Minis THE IMPLEMENTATION PHASE OF THE STRATEGIC MARKETING PROCESS METRICS AND DASHBOARDS AT GENERAL MILLS LO6  The Findings for Warm Delights Minis  The Actions for Warm Delights Minis 22-48

FIGURE FIGURE The marketing dashboard for the distribution channels for General Mills’ Warm Delights Minis (WDM) 22-49

FIGURE 22-10A FIGURE 22-10A The marketing dashboard for General Mills’ Warm Delights Minis (WDM): Monthly unit sales by channel 22-50

FIGURE 22-10B FIGURE 22-10B The marketing dashboard for General Mills’ Warm Delights Minis (WDM): Channel stores carrying WDM 22-51

FIGURE 22-10CD FIGURE 22-10CD The marketing dashboard for General Mills’ Warm Delights Minis (WDM): Nov/Dec sales by channel 22-52

FIGURE 22-10E FIGURE 22-10E The marketing dashboard for General Mills’ Warm Delights Minis (WDM): Average number of flavors carried 22-53

GENERAL MILLS WARM DELIGHTS ™ : INDULGENT, DELICIOUS, AND GOOEY! VIDEO CASE

VIDEO CASE 22 WARM DELIGHTS 1. What is the competitive set of desserts in which Warm Delights is located? 22-55

VIDEO CASE 22 WARM DELIGHTS 2. (a) Who is the target market? (b) What is the point of difference on the positioning for Warm Delights? (c) What are the potential opportunities and hindrances of the target market and positioning? 22-56

VIDEO CASE 22 WARM DELIGHTS 3. (a) What marketing research did Vivian Callaway execute? (b) What were the critical questions that she sought research and expert advice to get answers to? (c) How did this affect the product’s marketing mix price, promotion, packaging, and distribution decisions? 22-57

VIDEO CASE 22 WARM DELIGHTS 4. (a) What initial promotional plan directed to consumers in the target market did Callaway use? (b) Why did this make sense to Callaway and her team when Warm Delights was launched? 22-58

VIDEO CASE 22 WARM DELIGHTS 5. If you were a consultant to Vivian Callaway, what product changes would you recommend to increase sales of Warm Delights? 22-59

Sales Response Function A sales response function relates the expense of marketing effort to the marketing results obtained

Share Points Share points are an analysis that uses percentage points of market share as the common basis of comparison to allocate marketing resources effectively for different product lines within the same firm

Generic Business Strategy A generic business strategy is a strategy that can be adopted by any firm, regardless of the product or industry involved, to achieve a competitive advantage

Cost Leadership Strategy A cost leadership strategy is one of Porter’s generic business strategies that focuses on reducing expenses and, in turn, lowers product prices while targeting a broad array of market segments

Differentiation Strategy A differentiation strategy is one of Porter’s generic business strategies that requires products to have significant points of difference to charge a higher price while targeting a broad array of market segments

Cost Focus Strategy A cost focus strategy is one of Porter’s generic business strategies that involves controlling expenses and, in turn, lowering product prices targeted at a narrow range of market segments

Differentiation Focus Strategy A differentiation focus strategy is one of Porter’s generic business strategies that requires products to have significant points of difference to target one or only a few market segments

Synergy Analysis Synergy analysis seeks growth opportunities by finding the optimum balance between marketing efficiencies versus R&D-manufacturing efficiencies

Product or Program Champion A product or program champion is a person who is able and willing to cut red tape and move the program forward

Action Item List An action item list is an aid to implementing a marketing plan, consisting of four columns: (1) the task; (2) the person responsible for completing that task; (3) the date to finish the task; and (4) what is to be delivered

Line Positions Line positions consist of managers who have the authority and responsibility to issue orders to the people who report to them

Staff Positions Staff positions consist of people who have the authority and responsibility to advise people in line positions but cannot issue direct orders to them

Product Line Groupings Product line groupings are organizational groupings in which a unit is responsible for specific product offerings

Functional Groupings Functional groupings are organizational groupings that represent the different departments or business activities within a firm

Geographical Groupings Geographical groupings are organizational groupings in which sales territories are subdivided according to geographical location

Market-Based Groupings Market-based groupings are organizational groupings which utilize specific customer segments

Marketing ROI Marketing ROI is the application of modern measurement technologies to understand, quantify, and optimize marketing spending