Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
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
23
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.
