LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. What are important trends in marketing practices?
2. What are the keys to effective internal marketing?
3. How can companies be responsible social marketers?
4. How can a company improve its marketing skills?
5. What tools are available to help companies monitor and improve their marketing
activities?
SUMMARY
1. The modern marketing department has evolved through the years from a simple sales
2. Some companies are organized by functional specialization; others focus on
3. Effective modern marketing organizations are marked by customer focus within and
4. Companies must practice social responsibility through their legal, ethical, and social
words and actions. Cause marketing can be a means for companies to productively
5. A brilliant strategic marketing plan counts for little unless implemented properly,
C H A P T E R
22
2
MANAGING A
HOLISTIC MARKETING
ORGANIZATION FOR THE
LONG RUN
6. The marketing department must monitor and control marketing activities
continuously. Marketing plan control ensures the company achieves the sales, profits,
and other goals in its annual plan. The main tools are sales analysis, market share
7. Achieving marketing excellence in the future will require a new set of skills and
competencies.
OPENING THOUGHT
This chapter sums up the concept of marketing in today’s environment. Marketing must be
involved in all elements of the company’s operations and work closely with its suppliers,
channel partners, with the understanding that each element or function provides an
opportunity to market the product to the ultimate consumer. In many ways, this chapter
focuses on the “management” of marketing in terms of the ability of the marketing personnel
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester-long marketing plan project, this chapter is the second of two
2. The concept of “internal marketing” is prevalent now in popular books and magazines.
Students should read and review at least four sources from the Web and comment on what
3. Sonic PDA Marketing Plan: The last step in completing a marketing plan is to provide for
organizing, implementing, evaluating, and controlling the total marketing effort. In
addition to measuring progress toward financial targets and other objectives, marketers
need to plan how to audit and improve their marketing activities.
Sonic has asked you to plan the management of the marketing effort for the PDA product.
Organization and Implementation sections of Marketing Plan Pro.
ASSIGNMENTS
Successful holistic marketers have integrated relationship marketing, internal marketing, and
social marketing into their organizations. Students should chose three companies that they
believe practice holistic marketing and then defend their choices by outlining the marketing
programs of the selected companies.
In the Marketing Memo entitled “Fueling Strategic Innovation,” Professor Steven Brown of
Ulster University claims that marketers are spending too much of their time in research and
not enough in marketing imagination and producing products with significant consumer
impact. Split the class into two sections: pros and cons and have them defend/attack Professor
Brown’s assumption.
community; and (f) eliciting brand engagement. Students should be able to defend their
opinions citing financial, market share, stock price growth, and other definitive measures.
END–OF–CHAPTER SUPPORT
MARKETING DEBATE—Is Marketing Management an Art or a Science?
Some marketing observers maintain that good marketing is something that is more than
anything an art and does not lend itself to rigorous analysis and deliberation. Others strongly
disagree and contend that marketing management is a highly disciplined enterprise that shares
much in common with other business disciplines.
Con: Mission statements are written for public consumption and rarely if ever do they reflect
the actual goals, objectives, and mission of the firm. These statements are for public
consumption and are written to placate the corporate stakeholders, employees, and consumers.
Although most mission statements are written with good intentions, the real direction of the
firm must be found in the application of their business practices. Marketing should not make
the mistake of deriving its goals, objectives, and strategies from these platitudes.
MARKETING DISCUSSION
How does cause or corporate societal marketing affect your personal consumer behavior? Do
Suggested Response:
Student answers will vary according to their responses. Be prepared for some “heated”
discussions and opinions!
Marketing Excellence: STARBUCKS
Questions:
1) Starbucks has worked hard to act ethically and responsibly. Has it done a good job
communicating its efforts to consumers? Do consumers believe Starbucks is a
responsible company? Why or why not?
Suggested Answer: Student answers will vary and call for opinions and conjecture. Good
2) Where does a company like Starbucks draw the line on supporting socially
responsible programs? For example, how much of its annual budget should go towards
these programs? How much time should employees focus on them? Which programs
should it support? Discuss.
3) How do you measure the results of Starbucks’ socially responsible programs?
Marketing Excellence: VIRGIN GROUP
Questions:
1) How is Virgin unique in its quest to be a socially responsible and sustainable
company?
Suggested Answer: The nonprofit foundation Virgin Unite has started to tackle global,
social, and environmental problems with an entrepreneurial approach. A team of
2) Discuss the pros and cons of Virgin’s “green” message. How do you feel about the
company’s having such a negative environmental impact on the world (via air and rail)
and the message it communicates through efforts like the Earth Challenge.
3) If you were Richard Branson, what would you do with Virgin’s holistic marketing
strategy?
Suggested Answer: Student answers will vary. Good students will, however, start off by
DETAILED CHAPTER OUTLINE
Healthy long-term growth for a brand requires that the marketing organization be managed
properly. Holistic marketers must engage in a host of carefully planned, interconnected
marketing activities and satisfy an increasingly broader set of constituents. They must also
TRENDS IN MARKETING PRACTICES
In response to the rapidly changing marketing environment, companies have restructured their
business and marketing practices in some of the following ways: (Table 22.1).
1. Reengineering
2. Outsourcing
7. Globalizing
8. Flattening
9. Focusing
10. Justifying
A) Recently, marketers have had to operate in a slow-growth economic environment
characterized by discriminating consumers, aggressive competition, and a turbulent
marketplace.
B) As consumers become more disciplined in their spending and adopt a “less is more”
attitude, it is incumbent on marketers to create and communicate the true value of their
products and services.
E) Businesses will continue to use social media more and traditional media less. The
Web allows unprecedented depth and breadth in communications and distribution,
and its transparency requires companies to be honest and authentic.
F) Marketers also face ethical dilemmas and perplexing tradeoffs. Consumers may
value convenience, but how to justify disposable products or elaborate packaging
in a world trying to minimize waste? Increasing material aspirations can defy the
need for sustainability.
INTERNAL MARKETING
The role of marketing in the organization is changing.
A) Traditionally, marketers have played the role of middlemen.
the firm.
Internal marketing requires that everyone in the organization buy into the concepts and goals
of marketing and engage in choosing, providing, and communicating customer value.
A) A company can have an excellent marketing department, yet fail at marketing.
Marketing Memo: Characteristics of company departments that are truly customer-
driven
Lists the characteristics that make functional departments customer-driven and responsive.
Organizing the Marketing Department
Modern marketing departments may be organized in a number of different, sometimes
Functional Organization
In the most common form of marketing organization consists of functional specialists
reporting to a marketing vice president, who coordinates their activities.
A) Additional specialists might include:
1) Customer service manager
markets.
Geographic Organization
A company selling in a national market often organizes its sales force along geographic lines.
A) Some companies are now adding area-marketing specialists (regional or local
marketing managers) to support the sales efforts in high-volume markets.
Product or Brand Management Organization
Companies producing a variety of products and brands often establish a product (or brand)
management organization.
A) The product-management organization does not replace the functional organization
but serves as another layer of management.
The brand or product manager is figuratively at the center, with spokes leading to various
departments representing working relationships. The manager may:
1) Developing a long-range and competitive strategy for the product
2) Preparing an annual marketing plan and sales forecast
D) The product management also has some disadvantages:
1) Product and brand managers may lack authority to carry out their responsibilities.
share rather than building the customer relationship
E) A second alternative in a product-management organization is product teams.
There are three types: vertical, triangular, and horizontal (see Figure 22.3).
F) The triangular and horizontal product-team approaches let each major brand be
run by a brand-asset management team (BAMT) consisting of key representatives
from functions that affect the brand’s performance.
1) A rationale for category management is the increasing power of the trade who
thinks in terms of category of products, not individual product lines.
Market-Management Organization
When customers fall into different user groups with distinct buying preferences and practices,
a market-management organization is desirable.
A) Market manager supervises several market managers (also called market development
managers, market specialists, or industry specialists).
Matrix-Management Organization
Companies that produce many products flowing into many markets adopt a matrix
organization employing both product and market managers.
A) The rub is that this system is costly and often creates conflicts, here are two examples:
A) How should the sales force be organized?
B) Who should set the prices for a particular product or market?
Relations with Other Departments
Under the marketing concept, all departments need to “think customer” and work together to
satisfy customer needs and expectations. Yet departments define company problems and goals
from their viewpoint, so conflicts of interest and communications problems are unavoidable.
A) The marketing vice president, or CMO, has two tasks:
1) To coordinate the company’s internal marketing activities.
2) To coordinate marketing with finance, operations, and other company functions to
serve the customer.
B) Yet there is little agreement on how much influence and authority marketing should
have over other departments.
F) Many companies now focus on key processes rather than departments, because
departmental organizations can be a barrier to smooth performance.
G) They appoint process leaders, who manage cross-disciplinary teams that include
marketing and salespeople.
Building a Creative Marketing Organization
A) Many companies realize they’re not yet really market and customer driven—they
are product and sales driven. Transforming into a true market-driven company
requires:
1. Developing a company-wide passion for customers
B) Although it’s necessary to be customer oriented, it’s not enough.
C) The organization must also be creative.
D) Companies today copy each others’ advantages and strategies with increasing
speed, making differentiation harder to achieve and lowering margins as firms
become more alike.
Marketing Insight: The Marketing CEO
SOCIALLY RESPONSIBLE MARKETING
Effective internal marketing must be matched by a strong sense of ethics, values, and social
responsibility.
A number of forces are driving companies to practice a higher level of corporate social
responsibility:
1) Rising customer expectations
2) Changing employee expectations
5) Changing business procurement practices
A) Virtually all firms have decided to take a more active, strategic role in corporate social
responsibility, carefully scrutinizing what they believe in and how they should treat
their customers, employees, competitors, community, and the environment.
Corporate Social Responsibility
Raising the level of socially responsible marketing calls for a three-pronged attack that relies
on proper legal, ethical, and social responsibility behavior.
Legal Behavior
Organizations must ensure every employee knows and observes relevant laws.
Ethical Behavior
A) Business practices come under attack because business situations routinely pose
ethical dilemmas: It’s not easy to draw a clear line between normal marketing practice
and unethical behavior.
Social Responsibility Behavior
Individual marketers must exercise their social conscience in specific dealings with customers
and stakeholders.
A) Increasingly, people say that they want information about a company’s record on
social and environmental responsibility to help decide which companies to buy from,
invest in, and work for.
Sustainability
A) Sustainability, the ability to meet humanity’s needs without harming future
generations, now tops many corporate agendas.
B) Major corporations outline in great detail how they are trying to improve the long-term
impact of their actions on communities and the environment.
Marketing Insight: The Rise of Organic
Covers organic products and their presence in many food and beverage categories.
Socially Responsible Business Models
The future holds a wealth of opportunities, yet forces in the socioeconomic, cultural, and
natural environments will impose new limits on marketing and business practices. Companies
that innovate solutions and values in a socially responsible way are most likely to succeed.
Cause-Related Marketing
Many firms blend corporate social responsibility initiatives with their marketing activities.
Cause Marketing Benefits and Costs
A successful cause-marketing program can improve social welfare; create differentiated
brand positioning; build strong consumer bonds; enhance the company’s public image;
create a reservoir of goodwill; boost internal morale and galvanize employees; drive
sales; and increase the firm’s market value.
Consumers may develop a strong, unique bond with the firm that transcends normal
marketplace transactions.
Specifically, from a branding point of view, cause marketing can:
1) Build brand awareness
A) Cause-related marketing programs could backfire if cynical consumers question the
link between the product and the cause and see the firm as being self-serving and
exploitative.
Designing a Cause Program
Some experts believe that the positive impact on a brand from cause-related marketing may be
lessened by sporadic involvement with numerous causes.
A) Many companies choose to focus on one or a few main causes to simplify execution
and maximize impact.
Marketing Memo: Making a Difference: Top 10 Tips for Cause Branding
Lists the 8 ways Boston’s Cone, Inc. feels that cause marketing should best be practiced:
define CSR for your company; build a diverse team; analyze your current CSR-related
activities and revamp them if necessary; forge and strengthen NGO relationships; develop a
cause–branding initiative; walk your talk; don’t be silent; beware …
Social Marketing
Cause-related marketing supports a cause.
A) Social marketing is done by a nonprofit or government organization to further a cause.
F) Social marketing campaigns may have objectives related to changing people’s
cognitions, values, actions, or behaviors.
1) Cognitive campaigns
G) The social marketing planning process follows many of the same steps as for
traditional products and services.
H) Social marketing programs are complex; they take time and may require phased
programs or actions.
5) No major counterproductive consequences
MARKETING IMPLEMENTATION AND CONTROL
Great marketing companies know the best marketers thoughtfully and creatively devise
marketing plans and then bring them to life. Marketing implementation and control are
critical to making sure marketing plans have their intended results year after year.
Marketing Implementation
A) Marketing implementation is the process that turns marketing plans into action
assignments and ensures that such assignments are executed in a manner that
accomplishes the plan’s stated objectives.
F) Marketing costs can amount to as much as a quarter of a company’s total
operating budget. Marketers need better templates for marketing processes, better
management of marketing assets, and better allocation of marketing resources.
G) Marketing resource management (MRM) software provides a set of Web-based
applications that automate and integrate project management, campaign
management, budget management, asset management, brand management,
customer relationship management, and knowledge management.
Marketing Control
A) Marketing control is the process by which firms assess the effects of their marketing
activities and programs and make necessary changes and adjustments.
1. Annual–plan control
Annual-Plan Control
A) Annual-plan control aims to ensure that the company achieves the sales, profits, and
other goals established in its annual plan.
1) The heart of annual-plan control is management by objectives.
2) Four steps are involved:
a. Management sets monthly or quarterly goals.
Profitability Control
Companies should measure the profitability of their products, territories, customer groups,
Efficiency Control
Some companies are establishing a position of marketing controller to specialize in improving
marketing efficiency.
Strategic Control
Each company should periodically reassess its strategic approach to the marketplace with
a good marketing audit. Companies can also perform marketing excellence reviews and
ethical/social responsibility reviews.
The Marketing Audit
The average U.S. corporation loses half of its customers in five years, half of its employees in
four years, and half of its investors in less than one year. Clearly, this points to some
weaknesses. Companies that discover weaknesses should undertake a thorough study known
as a marketing audit.
situation.
The Marketing Excellence Review
Management can place a checkmark to indicate its perception of where its business stands.
marketplace.
THE FUTURE OF MARKETING
Top management recognizes that marketing requires more accountability than in the past.
Marketing Memo: Major marketing weaknesses
Lists the 10 “deadly sins” that signal that a marketing program is in trouble and offers some
solutions to help companies change their ways.
A) To succeed in the future, marketing must be more holistic and less departmental.
The coming years will see:
1) The demise of the marketing department and the rise of holistic marketing.
2) The demise of free-spending marketing and the rise of ROI marketing.
To accomplish these changes and become truly holistic, marketers need a new set of
skills and competencies in:
1) Customer relationship management (CRM)
2) Partner relationship management (PRM)
