Marketing Chapter 23 Homework Companies must practice social responsibility through their

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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 socially responsible marketers?

4. What tools are available to help companies monitor and improve their marketing activities?

5. What do marketers need to do to succeed in the future?

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

5. A brilliant strategic marketing plan counts for little unless implemented properly,

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 analysis,

C H A P T E R

MANAGING A

HOLISTIC MARKETING

ORGANIZATION FOR THE

LONG RUN

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

additional information, techniques, and formulas for success they have discovered. How

does this information compare, contrast, or add to the information contained in the

chapter. What is the future of “internal marketing” and why are companies so intent on

succeeding?

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

• What is the most appropriate organization for Sonic’s marketing and sales

departments?

• What control measures should Sonic incorporate into its marketing plan?

• What can Sonic do to evaluate its marketing?

• How can Sonic evaluate its level of ethically and socially responsible marketing?

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.

Some companies like the Newman’s Own Brand, have built a business model on social

responsibility. Students should find three other examples of such socially responsible firms

and comment on whether or not they see “social responsibility” as a need component for

Have the students read Michael F. Porter and Mark R. Kramer, “Strategy & Society,”

Harvard Business Review, December 2006, pp. 78–82; Clayton M. Christense, Heiner

Baumann, Rudy Ruggles, and Thomas M. Stadtler, “Disruption Innovation for Social Change,

Harvard Business Review, December 2006, pp. 94-101 and report on their findings. In

particular, ask the students to comment on the sustainability of these concepts into the 21st

Century.

Students should research and find two examples of a successful cause-marketing program

currently available in their area and evaluate whether or not they believe that this cause–

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.

Take a position: Marketing management is largely an artistic exercise and therefore highly

subjective versus marketing management is largely a scientific exercise with well-established

guidelines and criteria.

Pro: Marketing is an art because, in spite of a greater emphasis on measurement, there are

elements of marketing that tap into the ethos of a culture and are difficult to define, which

MARKETING DISCUSSION

How does cause or corporate societal marketing affect your personal consumer behavior? Do

you ever buy or not buy any products or services from a company because of its

environmental policies or programs? Why or why not?

Marketing Excellence: Starbucks

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? How much of its annual budget should go toward these

programs? How much time should employees focus on them? Which programs

should it support?

3) How do you measure the results of Starbucks’ socially responsible programs?

Suggested Answer: Student answers will vary. Measures may include waste reductions,

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

scientists, entrepreneurs, and environmental enthusiasts consult with Virgin about what it

2. Discuss the contradiction between Virgin’s negative environmental impact (via air

and rail) and the green message and communication efforts behind endeavors such as

the Earth Challenge.

DETAILED CHAPTER OUTLINE

Opening vignette: Holistic marketers must engage in a host of carefully planned,

interconnected marketing activities and satisfy an increasingly broader set of constituents as

they pursue success as measured by short-term and long-term metrics. Some firms, like

Patagonia, have embraced a new vision of corporate enlightenment, which embraces social

responsibility and sustainability, and made it the very core of what they do.

I. Trends in Marketing Practices

A. Important Shifts in Marketing and Business Practices

i. Reengineering

ii. Outsourcing

iii. Benchmarking

iv. Supplier partnering

v. Customer partnering

vi. Merging

vii. Globalizing

viii. Flattening

ix. Focusing

x. Justifying

xi. Accelerating

xii. Empowering

xiii. Broadening

xiv. Monitoring

II. Internal Marketing requires that everyone in the organization accept the concepts and

goals of marketing and engage in identifying, providing, and communicating customer

value

A. In a networked enterprise, every functional area can interact directly with

customers.

B. Characteristics of Company Departments That Are Truly Customer Driven

i. R&D listens to consumers and solicits their reactions and suggestions,

iii. Manufacturing invites customers on tours, visits customers’ factories,

work overtime to keep promised delivery schedules, search for ways to

produce goods faster, at lower costs, with fewer adverse environmental

knowledgeable and friendly customer service

vii. Accounting prepares reports and invoices that relate to customer needs and

segments

viii. Finance understands and supports marketing investments and tailors

financial packages to customers’ financial requirements

C. Organizing the Marketing Department

i. Functional Organization—the most common form

2. Challenge to develop smooth working relationships

ii. Geographic Organization—area marketing specialists by region

iii. Product- or Brand-Management Organization—serves as another layer of

management in a functional organization

1. Makes sense if products are different or there are more products

than a functional organization can handle

3. Lets the product manager concentrate on developing a cost-

4. Gives the company’s smaller brands a product advocate

5. Disadvantages:

a. Product and brand managers may lack authority to carry

out their responsibilities.

7. There are three types: vertical, triangular, and horizontal

a. Triangular and horizontal product-team approaches let

each major brand be run by a brand-asset management

team

b. An alternative eliminates product manager positions for

minor products and assign two or more products to each

c. Another alternative, category management, a company

focuses on product categories to manage its brands.

i. Means to better manage the development of

premium brands

ii. Helps firms address the plight of under–performing

brands

iii. Fosters internal competition among brand

iv. Marketing-Management organization is desirable when customers fall into

different user groups with distinct buying preferences and practices

1. Market managers supervise several market-development

2. Market managers are staff (not line) people, who develop long-

3. Many companies are reorganizing along market lines and

becoming market-centered organizations

4. Customer-management organizations deal with individual

customers rather than the mass market or even market segments,

v. Matrix-Management Organization is appropriate for companies that

produce many products for many markets

2. Some corporate marketing groups assist top management with

overall opportunity evaluation, provide divisions with consulting

assistance on request, help divisions that have little or no

marketing, and promote the marketing concept throughout the

company

D. Relationships with Other Departments

i. Departments define company problems and goals from their own

viewpoints, so conflicts of interest and communications problems are

unavoidable.

E. Building a Creative Marketing Organization

i. Many companies are product and sales driven (not market and customer

driven)

ii. Transforming into a true market-driven company requires:

1. Developing a company-wide passion for customers

3. Understanding customers through qualitative and quantitative

research

iii. What steps can a CEO take to create a market- and customer-focused

company?

1. Convince senior management of the need to become customer

focused.

3. Get outside help and guidance

5. Hire strong marketing talent.

7. Install a modern marketing planning system.

9. Shift from a department focus to a process-outcome focus.

10. Empower the employees.

iv. Although it’s necessary to be customer oriented, it’s not enough. The

organization must also be creative: build a capability in strategic

innovation and imagination.

2. Put together inspiring work spaces that help to stimulate new ideas

and foster imagination

4. Market leaders can miss trends when they are risk averse, obsessed

about protecting their existing markets and physical resources, and

more interested in efficiency than innovation

III. Socially Responsible Marketing

A. Internal marketing must be matched by a strong sense of ethics, values, and social

responsibility

i. Taking a more active, strategic role in corporate social responsibility is

thought to benefit not just customers, employees, community, and the

B. Corporate Social Responsibility: a three-pronged attack that relies on proper legal,

ethical, and social responsibility behavior

i. Legal Behavior: Organizations must ensure every employee knows and

observes relevant laws

ii. Ethical Behavior: Business practices come under attack because business

situations routinely pose ethical dilemmas

1. Certain business practices are clearly unethical or illegal: bribery,

theft of trade secrets, false and deceptive advertising, exclusive

2. Companies must adopt and disseminate a written code of ethics,

build a company tradition of ethical behavior, and hold their

people fully responsible for observing ethical and legal guidelines

iii. Social Responsibility Behavior: Marketers must exercise their social

conscience in specific dealings with customers and stakeholders

iv. Sustainability: The ability to meet humanity’s needs without harming

future generations

1. Triple bottom line—people, planet, and profit—and the people

part of the equation must come first.

3. Greenwashing gives products the appearance of being

environmentally friendly without living up to that promise

5. They are also unwilling to sacrifice product performance and

quality, nor are they necessarily willing to pay a price premium for

green products

C. Socially Responsible Business Models: companies that innovate solutions and

values in a socially responsible way are most likely to succeed

D. Cause-Related Marketing links the firm’s contributions toward a designated cause

to customers’ engaging directly or indirectly in revenue-producing transactions

with the firm.

i. Part of corporate societal marketing (CSM), or marketing efforts “that

iii. Consumers may develop a strong, unique bond with the firm that

transcends normal marketplace transactions.

1. Builds brand awareness

3. Establishes brand credibility

5. Creates a sense of brand community

6. Elicits brand engagement

iv. Backfires if consumers question the link between the product and the

cause or see the firm as self-serving and exploitive or if consumers do not

think a company is consistent and sufficiently responsible in all its

behavior

E. Designing a Cause Program: Tips

i. Select a focus area that aligns with your mission, goals, and

organization.

ii. Evaluate your institutional “will” and resources

vi. To create a sustainable and effective program, start by developing a

cross-functional strategy team

vii. Leverage both your assets and those of your partner(s) to bring the

program to life

viii. Communicate through every possible channel

ix. Go local and Innovate

F. Some experts believe the positive impact of cause-related marketing is diluted if a

company is only occasionally engaged in a number of causes.

i. Limiting support to a single cause, however, may limit the pool of

consumers or other stakeholders who can transfer positive feelings from

G. Social Marketing by a nonprofit or government organizations furthers a cause,

such as “say no to drugs” or “exercise more and eat better

i. Choosing the right goal or objective for a social marketing program is

critical

1. Who Are We?

2. Where Do We Want to Go?

3. How Will We Get There?

4. How Will We Stay on Course?

2. Promote a single, doable behavior in clear, simple terms

4. Make it easy to adopt the behavior.

6. Consider an education-entertainment approach.

IV. Marketing Implementation and Control

A. Characteristics of a Great Marketing Company

i. The company selects target markets in which it enjoys superior advantages

and exits or avoids markets where it is intrinsically weak.

ix. Flexible in meeting customers’ varying requirements

B. Marketing Implementation is the process that turns marketing plans into action

assignments and ensures they accomplish the plan’s stated objectives

i. Implementation addresses the who, where, when, and how of marketing

activities

ii. Companies today are striving to make their marketing operations more

efficient and their return on marketing investment more measurable

C. Marketing Control is the process by which firms assess the effects of their

marketing activities and programs and make necessary changes and adjustments.

i. Four types of control

1. Annual-plan control

3. Efficiency control

4. Strategic control

ii. Metrics include sales metrics, customer readiness to buy metrics, customer

1. View to determining problem areas and opportunities and

3. Components: Macroenvironment, Task Environment, Marketing

Strategy Audit, Marketing System Audit, Marketing Productivity

Audit, Marketing Function Audit

iv. A Marketing Excellence Review highlights where changes could help the

firm become a truly outstanding player in the marketplace.

V. The Future of Marketing requires more accountability than in the past.

A. To succeed in the future, marketing must be more holistic and less departmental.

B. Marketers must achieve wider influence in the company, continuously create new

ideas, and strive for customer insight by treating customers differently but

appropriately.

C. They must build their brands more through performance than promotion.

D. They must go electronic and win through building superior information and

communication systems.