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3. General Mills: Global Strategies to Find Synergies, Segments, and Partners.
a. Competing in today’s global marketplace, General Mills is concerned with:
• Selling its products and brands globally.
• Obtaining great ideas for new products or technologies from anyone,
4. Balancing Value and Values in Strategic Marketing Plans.
Two important trends will influence the strategic marketing process in the future:
a. Value-based planning.
• Combines marketing planning ideas and financial planning.
• Assesses how much a division or strategic business unit (SBU) contributes
to the price of a company’s stock.
b. Value-driven strategies.
• Incorporate:
– Concerns for ethics, integrity, employee health and safety, and
environmental safeguards.
– Concerns with corporate values for growth, profitability, customer
service, and quality.
• Many firms:
– Cite broad corporate values in ads, press releases, and newsletters.
– Have not changed their strategic plans to reflect these stated values.
• U.S. firms are increasingly called on to:
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5. Disruptive Innovations and Long-Range Marketing Plans.
a. Disruptive innovations.
• Create a new market by initially reaching new customers.
• Displace an existing market’s low-end product.
• Cause havoc for the organizations’ long-range marketing plans that
operate in the old, displaced market.
• Don’t simply replace an existing product or technology directly.
– Instead, established firms in the industry initially conclude the
disruptive innovation isn’t worth pursuing because…
b. Examples:
• Wikipedia, which caused Encyclopedia Britannica to stop print production
in 2012 after 244 years.
• Digital media and streaming services which replaced CDs and DVDs.
• Cloud computing which replaced resident networks, servers, storage, and
software.
c. How can marketing managers recognize and incorporate disruptive
innovations in their long-range plans?
• Ask tough, focused, disruptive questions.
• Research shows that:
MARKETING MATTERS
Entrepreneurship: Ask Disruptive Questions to Achieve Disruptive Innovations
Launching a revolutionarily new product or service is incredibly difficult! Research
on disruptive innovations suggests that precise, focused questions can be used in developing
new products or reaching key market segments. This involves invoking powerful questions
“to help see beneath the surface of everyday action and discover what’s never been.”
“Disruptive innovators” often start by exploring what currently is and then moving to
a powerful search for what might be! Rather than simply ask for “any questions” or for “any
suggestions” in a meeting, they often:
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MARKETING MATTERS CONTINUED
2. Ask “what caused” questions. This helps explain why things are the way they are.
be.
4. Ask “what if” questions. This helps suggest and get reactions to new actions.
Using these questions effectively can reveal solutions to a variety of problems, not
just new product innovations. Try asking these questions in your next group-project meeting.
III. THE IMPLEMENTATION PHASE OF THE
STRATEGIC MARKETING PROCESS
It is not enough to have a great marketing plan. The key is to successfully execute it.
A. Is Planning or Implementation the Problem?
• [Figure 22-A] When a marketing plan fails, effective managers determine
whether the failure is due to poor planning, poor implementation, or both.
• Most of the hundreds of failed dot-com firms in the late 1990s had both planning
and implementation problems:
a. Bad planning often resulted from:
• Focusing on getting start-up money from investors.
• Not providing real value to customers.
b. Bad implementation frequently led to:
B. Increasing Emphasis on Marketing Implementation
• The implementation phase of the strategic marketing process involves moving
many planning activities away from planners to line managers.
• Jack Welch made GE more efficient and far better at implementation.
a. GE was bogged down with 25,000 managers and close to a dozen layers
between him and the factory floor.
b. Welch used a “delayering” strategy to:
• Cut GE’s organizational levels in half.
• Speed up decision-making and implementation.
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C. Improving Implementation of Marketing Programs
Effective marketing plan implementation results from good management skills and
practices.
1. Take Action and Avoid Paralysis by Analysis.
a. “Paralysis by analysis” is the tendency to excessively analyze a problem
instead of taking action.
b. To overcome this pitfall:
• Call for a “bias for action.”
c. Perfectionists finish last.
• Get 90 percent perfection, which is good enough.
[Video 22-4: F-35 Lightning II Video]
d. Lockheed Martin’s Skunk Works:
• Has a legendary reputation for achieving:
– Superhuman technical feats with…
– Low budgets and…
– Short deadlines.
• Does this by adhering to these tenets:
– Stress teamwork.
2. Surface Problems with Open Communications.
a. Two more Kelly Johnson axioms from Skunk Works apply here:
• Surface the problem immediately when trouble develops.
• Get help—Don’t keep the problem to yourself.
b. Create a work environment where employees are:
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3. Communicate Goals and the Means of Achieving Them.
a. Those implementing plans need to understand both the goals sought and how
they are to be accomplished.
b. The Toyota design team:
• Encourages a more “emotional” link between buyers and Toyota vehicles.
4. Have a Responsible Program Champion Willing to Act.
a. Successful programs almost always have a program champion, a person who
is able and willing to cut red tape and move the program forward.
b. Program champions:
• Have the ability to move back and forth between:
– The “big–picture” strategy issues and…
5. Reward Success but Don’t Punish Failure.
a. Sara Blakely, founder and owner of Spanx:
• Has a simple mantra—“Failure just leads you to the next great thing.”
• So learn takeaway lessons from your failures!
b. Her vision for her start-up included these activities:
• Eliminate “visible panty lines” when women dressed in stylish outfits by
cutting the feet off her control-top pantyhose.
• Wrote her own patent application.
c. People rewarded for achieving their organization’s goals:
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• Have an incentive to see programs successfully implemented because
they…
• Have personal ownership and a stake in that success.
d. At the same time, many firms owe their success to learning important lessons
from their failures.
MARKETING MATTERS
Entrepreneurship: Learning from Mistakes and Avoiding Traps on the Way to Blue
Oceans
In the book Blue Ocean Strategy, it is suggested that value innovation is most likely
in the “blue oceans” on uncontested market spaces where new demand can be developed.
Sometimes good companies make big mistakes, but they mistakes as “expensive
tuition.” So, in spite of mistakes how can a company thrive?
1. Fanatic discipline.
6. Schedule Precise Tasks, Responsibilities, and Deadlines. [LO 22-4]
a. Successful implementation requires that members of the program team:
• Its goals.
• The tasks they are responsible for to help reach those goals.
• The deadlines for completing them.
b. To implement the thousands of tasks for a new product, organizations should
hold weekly program meetings.
• Is headed by a meeting chairperson who:
• The difficulty with this is that if the critical topic is an agenda item near
the end of the list:
– Meeting members don’t know this and…
– Will waste a lot of the meeting time on earlier agenda items.
c. A better approach would be using a time-based agenda:
• Is a meeting agenda that…
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d. In a time-based agenda, time:
• Is shown as running time (2:00, 2:03, etc.)…
e. A time-based agenda for a marketing department meeting is shown below:
f. In the time-based agenda shown above, everyone knows:
• Topic #5:
– Steve is leading the discussion to agree on the client’s promotion goals
and media to use.
– Is especially critical and is allocated the most time.
• If a topic is for “info” (information), they are to listen and not spend
valuable time discussing it.
• Sharing ideas is only for items with an “×” in the “action” column.
g. An action item list, an aid to implementing a plan consisting of four columns:
• The task.
• The person responsible for completing that task.
h. An action item list for a marketing department meeting is shown below:
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i. In the action item list shown above, Kris knows she has the responsibility for
providing a list of new clients by March 6th.
j. Within hours of completing a program meeting, the action item list:
• Is circulated to those attending.
• Serves as the starting agenda for the next meeting.
k. An action item list:
• Is forward looking.
l. Program schedules.
• Show the relationships through time of the various program tasks.
• Are related to action item lists.
• The Gantt chart is most widely used program schedule (see Chapter 2).
m. Scheduling an action program involves:
• Identifying the main tasks.
• Determining the time required to complete each.
LEARNING REVIEW
22-6. What is the meaning and importance of a program champion?
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LEARNING REVIEW CONTINUED
22-7. Describe one or two lessons from Lockheed Martin’s Skunk Works that can be
applied to implementing marketing programs.
Answer: Examples of lessons from Lockheed’s Skunk Works are: (1) make decisions
22-8. How are (a) a time-based agenda and (b) an action-item list used in a marketing
program meeting?
Answer: : Successful implementation requires that members of the program team
understand its goals, the tasks they are responsible for to help reach those goals, and the
D. Organizing for Marketing [LO 22-5]
• A marketing organization is needed to implement the firm’s marketing plans.
• Basic issues in today’s marketing organizations include understanding:
a. The evolving role of the chief marketing officer (CMO).
b. How line versus staff positions and divisional groupings interrelate to form a
cohesive marketing organization.
c. The role of the product manager.
1. The Evolving Role of the Chief Marketing Officer.
a. [Figure 22-6] A chief marketing officers (CMO) is a senior-level executive
(other than a vice president) responsible for a firm’s marketing activities.
b. The CMO position reflects the broadening role as the inside-the-company
“voice of the consumer” in responding to dynamic marketplace changes.
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c. Today, a CMO must understand:
2. Line versus Staff and Divisional Groupings.
a. Figure 22-6 shows the organization of a typical strategic business unit in a
consumer packaged goods firm like P&G, Kraft, or General Mills.
b. This strategic business unit:
• Highlights the distinction between line and staff positions in marketing.
– Managers in line positions:
* Have the authority and responsibility to issue orders to the people
who report to them.
* Are connected with solid lines in the organizational chart.
– People in staff positions:
c. Most marketing organizations use divisional groupings to implement plans
and achieve their organizational objectives:
• Product line groupings are organizational groupings in which a unit is
responsible for specific product offerings.
• Functional groupings are organizational groupings that represent the
different departments or business activities within a firm.
• Geographical groupings are organization groupings in which:
– Sales territories are subdivided according to geographical location.
• Market-based groupings are organizational groupings that use specific
customer segments.
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• A matrix organization is the combination of a market-based grouping and
product grouping.
d. A category manager in consumer products firms:
• Is a relatively new position in consumer products firms.
e. Procter & Gamble uses category managers to:
• Organize by global business units.
– Cut across country boundaries.
3. Role of the Product Manager.
a. The product manager or brand manager is the key person who heads the
product or brand group.
b. In Figure 22-6, the product manager or brand manager and his/her assistants:
c. [Figure 22-C] The product or brand groups are the basic building blocks in
the marketing department of most consumer and business product firms.
d. The product manager plans, implements, and evaluates the annual and long–
range marketing plans for the products for which he or she is responsible.
e. The benefits of a product manager system are that product managers:
• Are strong advocates for their assigned products.
f. The drawbacks are that product managers:
• Have little direct authority, so they…
• Must use persuasion rather than issue direct orders to get things done.
IV. THE EVALUATION PHASE OF THE
STRATEGIC MARKETING PROCESS [LO 22-6]
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Evaluation, the final phase of the strategic marketing process, describes:
• The elements of the marketing evaluation process.
A. The Marketing Evaluation Process
The essence of evaluation:
• Compare results with planned goals. • Take corrective actions.
• Identify deviations.
1. Identifying Deviations from Goals.
a. [Figure 22-7] In the planning phase, marketing plans:
• Have both quantified goals and a specific marketing metric to…
• Measure whether the goals are actually achieved.
b. In the implementation phase, marketing actions are taken to achieve the goals
established in the planning phase.
c. In the evaluation phase, the quantitative results are:
d. Marketing managers use marketing dashboards to:
• Compare results with goals.
• Take, quick, efficient, and timely marketing actions.
2. Acting on Deviations from Goals.
a. Management by exception.
• Is used to identify results that deviate from plans to:
– Diagnose their causes.
b. The marketing manager looks for two kinds of deviations, each of which
triggers a different kind of marketing action:
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• Actual results exceed goals.
– Exploit unforeseen opportunities.
– Act quickly to identify the reasons for the positive deviations.
3. “Hiring a Milkshake” and Digging Beneath the Numbers.
a. The “goals” used in marketing metrics are almost always quantitative goals.
• Sometimes the numbers can hide what is really happening.
• Digging beneath the surface reveals the insights that lead to better
marketing actions.
b. A product and service example illustrate this issue:
• A fast-food chain asked a team of consultants to beef up sales of its
milkshakes.
• The chain had huge files about the likes of loyal milkshake customers.
• Changing the milkshakes based on those likes had no impact on sales.
• So consultants tried a different approach:
– “What job is a customer trying to do when he hires a milkshake?”
– After looking at the results, the consultants discovered that:
* Half the milkshakes were bought by men in the early morning.
* It was the only thing they bought.
• How to improve the milkshake product became clear by understanding
what job the customers were trying to get done:
– Make the milkshake more viscous.
c. With services, measuring results that lead to marketing actions becomes even
more intangible.
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B. Marketing ROI, Metrics, and Dashboards
• In the past decade, measuring the performance of marketing activities has become
a central focus in many organizations.
• Marketing ROI.
a. Is the application of modern measurement technologies to understand,
quantify, and optimize marketing spending.
b. Is the extension of the return on investment (ROI) metric to measure the
effectiveness of marketing expenditures.
• The evaluation phase of the strategic marketing process tries to improve
marketing ROI through the effective use of:
a. Marketing metrics.
• Depending on the specific objective sought, one or a few key marketing
metrics are chosen, such as:
– Market share. – Cost per click.
b. Marketing dashboards.
• Are displays of marketing metrics on the marketer’s computer.
• Marketing managers face information overload from:
– Syndicated scanner data.
– Website hits.
• The deviations from plans shown in the evaluation phase in Figure 22-2:
a. Become the immediate focus of the marketing manager, who then…
b. Tries to improve the firm’s marketing ROI.
C. Evaluation Using Marketing Metrics and Marketing Dashboards at General
Mills
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• It’s mid-January and you are part of the Warm Delights team at General Mills.
• [Figure 22-8] General Mills uses the data and metrics shown in the dashboard.
• The evaluation step of the strategic marketing process can be summarized using:
b. The three-step Challenge-Findings-Actions format.
1. The Distribution Challenge for Warm Delights Minis.
a. You’re to analyze the distribution channel strategy for Warm Delight Minis.
b. This hypothetical example:
• Is based on the type of scanner data General Mills uses.
• Has been simplified as to the data and analysis presented.
c. The marketing dashboard in Figure 22-8 focuses on:
• The distribution of the six existing Warm Delights Minis flavors.
d. The challenge is to gain distribution on retailers’ shelves.
e. General Mills:
• Uses the marketing metrics shown in Figure 22-8 to…
• Evaluate the five main distribution channels for Warm Delights Minis:
– Grocery stores/supermarkets. – Convenience stores.
2. The Findings for Warm Delights Minis.
The marketing dashboard in Figure 22-8 is divided into four charts, each with
different marketing metrics:
a. Chart A: Monthly Unit Sales by Channel (Millions). Shows:
• The sales revenues for:
– Warehouse clubs and convenience stores are flat or trending down.
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b. Chart B: % of Stores Carrying Warm Delights Minis by Channel. Shows:
• The horizontal bar chart:
– The narrow December bar within the wider November bar…
• That from November to December:
– The percentage of drugstores carrying the Warm Delights Minis…
– Jumped from about 64 percent to 91 percent.
c. Chart C: Sales Contribution % by Channel. Shows:
• The monthly bars total 100 percent.
d. Chart D: Average Number of Flavors Carried by Channel. Shows:
• A clearer picture.
• An important reason for the increased unit and dollar sales from the drug
channel is due to…
• Increasing the average number of flavors carried in a drugstore from
3. The Actions for Warm Delights Minis.
a. Further analysis of marketing dashboard and metrics revealed the jump in
sales individual flavors of Warm Delights Minis in the drugstore channel was
because:
• A major chain (like Walgreens) added the product line.
• Drugstores are embracing the new flavors, making customers more aware
that there are now actively selling many food lines.
b. Additional investigation reveals that:
c. Hot desserts normally experience an increased seasonal demand in winter.
As a result, you decide to:
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• Invest in the Warm Delights brand.
• Schedule additional national TV advertising in late January and
throughout February for the Warm Delights brand.
• Exploit both the seasonal demand and recent trends in the growth of sales
and distribution.
• Research ways to:
LEARNING REVIEW
22-9. What are four groupings used within a typical marketing organization?
22-10. How do marketing metrics tie the goal-setting element of the planning phase of the
strategic marketing process to the evaluation phase?
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APPLYING MARKETING KNOWLEDGE
1. Assume a firm faces an S-shaped sales response function. What happens to the ratio of
incremental sales revenue to incremental marketing effort at the (a) bottom, (b) middle,
and (c) top of this curve?
Answers: For an S-shaped response function, the ratio of incremental sales revenue to
incremental marketing effort changes along the curve:
2. What happens to the ratio of incremental sales revenue to incremental marketing effort
when the sales response function is an upward-sloping straight line?
3. Assume General Mills has to decide how to invest millions of dollars to try to expand its
dessert and yogurt businesses. To allocate this money between these two businesses,
what information would General Mills like to have?