1 managing marketing performance introductions. 2 about david kilburn head of business development,...

1

MANAGING MARKETING PERFORMANCE

INTRODUCTIONS

2

about David Kilburn

• Head of Business Development, Associate Professor and DSGi Marketing Fellow, formerly Barclays Fellow

• DipM, MCIM, Chartered Marketer• Marketing management experience in retail industry- home

improvements, food, and consumer electronics• Worked part time for CMC for 5 years• Marketing Director for BSM Electronics• Store Director – WHSmith Do-It-All • Online marketing tutor/ Dissertation advisor for worldwide

MBA programme - Liverpool University • External Examiner for Marketing/Business University of

Wales in Spain and Italy• Marketing Tutor for ISTUD in Milan, Italy each summer

3

ABOUT YOU!

• Tell us something about yourself– Who you are?– Where you work?– What your role is? – Your marketing experience?– Academic path?– Your involvement with strategic

marketing management issues?

4

SETTING THE SCENE• Assignment or exam?

– Dates, requirements and deadlines

• Use College Web facilities• CIM Learning Zone and EBSCO• Reading• Study Guide – text book• Previous papers and answers• Examiners comments• Tutor Forum – February 2009• Webinars• Revision session – assignment session• Contact me –

[email protected]

5

The 5 elements

1. Creating organisational context for effective implementation of strategy

2. Managing change and internal marketing

3. Implementing strategy through marketing activities

4. Management techniques for managing the marketing function

5. Measurement, evaluation and control

6

Fit with overall pg syllabi

• Strategic marketing• Evaluation of performance• Internal analysis• External analysis• The global marketplace

ANALYSIS & EVALUATIONANALYSIS & EVALUATION

• Organisational context• Internal marketing• Implementing strategy• Managing marketing• Measurement & control

MANAGING MARKETING MANAGING MARKETING PERFORMANCEPERFORMANCE

• Competitive advantage• Innovation/reorientation• SMD in global marketplace• SMD in portfolio management• Investment decisions/control

STRATEGIC MARKETING STRATEGIC MARKETING DECISIONSDECISIONS

Learning outcomes only. No specified

syllabus elements

STRATEGIC MARKETING IN STRATEGIC MARKETING IN PRACTICEPRACTICE

7

Scope of the syllabus

• ‘How to do the job of marketing’– relates to marketing practice

• Tests application rather than knowledge:– extend knowledge into thinking– from ‘what’ to ‘why’ and ‘how’

• Draws on a wide range of resources

• CONTEXT

8

Focus

• The “How” of marketing rather than the “what”

• Delivery emphasis is on “ Listen and Challenge”

• Shift from analysis to critical evaluation

9

MMP ‘AUDIT’

• Discussion with examiner

• Key points

• Tutor forum

• Last ‘diet’

10

MMP Focus Meeting Feedback

• Key issues resulting from the first set of marking– Referencing is important but there is recognition

of the work based nature of the assignments and the increase thereby in Internet based referencing.

– Looking for sound theoretical underpinning– Looking for ‘Trail of evidence’ - linkage between

audit, selection of options and recommendations– Students need to define the boundaries of the

project clearly e.g. 1 or 2 products in 1 or 2 markets is enough

11


• Good practice– Trail of evidence– Support in audit findings– A good audit is: -

• Relevant to the topics• Linked to the report• NOT cut and pasted!

– Numbered report and good structure– Good index – KEY– Do mind maps to sort ideas prior to writing the

report

12


• Good practice more..– Evaluation (acid test is ‘so what?’)– Depth not breadth is critical

13


• Poor practice– Unapplied models (Senior examiner’s

bete noir) – vital to apply in context– Too much description not evaluation –

looking for ability to use data to discriminate in decisions

– Poor referencing – misspelling of authors’ names!

– Poor use of appendices – this is a business report

Grade Descriptors

• Example assignment from last assessment

14

15

MY ASSUMPTIONS!

• You have prior knowledge and some experience of using the theories that apply to this syllabus

• If you are unsure at any stage – SHOUT!

16

CIM PROFESSIONAL PG DIPLOMA


Session 1

The role and practice of leadership

17

CIM Definition of Marketing

Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.

18

Learning outcomes

• At the end of the session you will be able to:– Explain the role of the strategic leader in

managing marketing performance– Explain the role of the strategic leader in

achieving marketing orientation– Explain the role of the strategic leader in

building shareholder value through marketing activities

– Explain the role of the strategic leader in ensuring marketing effectiveness

19

What is leadership?

• Leadership is the process of influencing others to work willingly towards the achievement of organisational goals.

• Leadership can be characterised in terms of traits or characteristics (of leaders) and styles (which are to be adopted).

• Leadership skills can be learnt and improved

20

Manager or leader - differences?

Managers Leaders

Cope with complexity change

Address the present and the short term

the future and the longer term

Performance meets expectations

exceeds expectations

Focus controlling unlocking potential

(John Kotter)

21

Models of leadership style

• Huneryager and Heckman; Likert– Dictatorial, autocratic, democratic, laissez-faire

• Ashridge Management College– Autocratic, persuasive, consultative, democratic

(omits the extremes at each end)– Tells, sells, consults, joins

• McGregor– Theory X and theory Y

• Hersey and Blanchard: situational leadership– Match the style to the development level of the

subordinatehttp://changingminds.org/disciplines/leadership/styles/

situational_leadership_hersey_blanchard.htm

22

Mini Case -Autoglass:- Leadership success factors

• Customer driven• Energy, drive and change• Analytical thinker• Commercial ideas and action• Planner and implementer• Open communicator• Leading and motivating teams• Partnership builder (see handouts)

23


Question one

Think of two successful leaders that you have known, preferably selecting examples that display different approaches. Assess each of them in relation to the various Autoglass success factors.

24


Question two

Now consider a less effective leader. To what extent did he or she demonstrate the various success factors?

25

What guides the organisation?

Strategy

LeadershipCulture

Employees

‘Strategic fit’

Values

Style

26

Leadership skills (Belbin)

• Versatility• Feedback• Charisma• Integrity• Altruism

• Decision making• Problem solving• Initiating action• Fostering linkages• Assisting in

evolution and change

27

What does the leader do?

• Adair identifies 8 leadership activities – Defining the task– Planning– Briefing– Controlling– Evaluation– Motivating– Organising– Setting an example

28

Leaders determine how organisations develop

• Strategic choice theory (Stacey, 2003)

• Formulation and implementation of strategy are different

• It is the role of leaders to formulate strategy and to direct its implementation

• Theory of the learning organisation (Senge, 1990)

• Organisations evolve as a result of high levels of learning by individuals and teams

Marketing Management’s Role

29

Life cycle of marketing

30

Relationship marketing – implications for marketing practice

31

32

Useful web-sites• www.shapetheagenda.com

– Go to ‘past agendas’ then select ‘hard edged marketing’.– The most recent paper on ‘managing marketing people’

is also worth a look

• www.wnim.com– What’s new in marketing

• http://www.thewisemarketer.com/– VERY GOOD!

• www.cim.co.uk• www.excellencenorthwest.co.uk/Resources/

Steve_Kempster_19th_July.ppt– A useful overview

33

Minicase - Leadership

Consider a small manufacturing company, t/over circa £25m p/a, marketing team of 3 – Manager (you), executive and assistant. The corporate objective is to increase sales by 25% over the next 3 years and the marketing objectives are to increase brand awareness by 50% & the number of new prospects by 50%.

You need to increase your team by one, what are the leadership issues to consider?

35



Session 2

Planning the team

36

Learning outcomes

• At the end of the session, you will be able to:– Appraise the requirements of a given set of

tasks and their context, and assess the impact of relevant factors on the creation or development of a team to perform those tasks.

– Determine the skills, characteristics and roles required within a team to carry out specific tasks effectively.

– Prepare a plan showing how the team should be structured, selected, formed and developed to ensure effective performance.

37

A group is a collection of people …• …. who perceive

themselves to be a group!

• In ‘Understanding Organisations’ Charles Handy differentiates a group from a random collection of individuals.

• Members of a group:– have a common sense of

identity and belonging– are loyal to the group and

conform to its standards

38

A group is not a team: teams have synergy

• A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable

• Katzenbach and Smith, The Wisdom of Teams, 1994

39

Groups become teams when they have a sense of purpose

• Needs are complex and multi-layered and need to be managed as such (Adair)

• Their members play particular roles (Belbin)

• They are likely to pass through stages of development (Tuckman)

• Their effectiveness depends on their terms of reference and their conduct (Handy)

• Leadership is key (Ashridge; Belasco & Stayer)

40

6 differences between a team and a group (Belbin)

Teams Groups

Size Limited Medium/large

Selection Critical Limited

Leadership Shared/rotating Solo

Perception Mutual knowledge Focus on leader

Style Role spread Conformism

Spirit Dynamic interaction Togetherness

41

John Adair identified 3 overlapping needs

Task needs

Group needs

Individual needs

Task RolesInitiatingInformation SeekingStrategic planningEvaluatingDecision-making

Individual maintenance rolesObjective settingFeedbackRecognitionTrainingEmpowermentCounselling

Group maintenance rolesEncouragingClarifying visionStandard settingPeace-keeping

www.johnadair.co.uk

42

Team skills, characteristics and roles

• Need for key competences across the team

• Need to achieve a balance of personalities and skills

• Need to consider the tasks to be undertaken, the individuals who make up the team, and the cohesiveness of that team

43

Designing a team

• Meredith Belbin identified 9 distinct management roles– Chairman - presides and has a co-ordinating style– Shaper- team leader with a directive style– Plant- introvert but intellectually dominant/ imaginative– Monitor/ Evaluator - analytically intelligent/ critical– Resource Investigator - source of contacts.– Company Worker / Implementer - getting the job

done– Team Worker - handles personal relationships in the

team– Completer/ Finisher - keeping the team to

its deadlines– (Specialist)

www.belbin.co.uk

44

TEAM DEVELOPMENT (TUCKMAN AND JENSEN)

• STAGE 1 - Forming

• STAGE 2 - Storming

• STAGE 3 - Norming

• STAGE 4 - Performing Tuckman (1965)

• STAGE 5 - Dorming Tuckman and Jensen (1977)

2

3

4

45

Choosing the right people is not always straightforward

eligibilityentry criteria

suitabilityperformance criteria

qualificationsrelvant experience

referencesacceptability(at interview)

aptitudeversatility

assessmentsrole fit

(with others)

46

Forming and developing (marketing) teams

• Teams don’t just ‘happen’

• There is a process

• Leader needs to nurture the team through these stages of development

• Recruit for attitude, train for skill

• Consider motivational and morale issues

• Consider the personal and skill development needs

47

Handy: team effectiveness

The Givens

memberstask

environment

The Intervening Factors

motivationprocesses + procedures

leadership

The Outcomes

productivityteam satisfaction

48

Planning and control is a discipline

• Plan, do, check and adjust (PDCA)– Plan what is to be done– Do it– Check that it has been done right– Adjust: make any changes necessary

49

Types of Teams

• Multi-disciplinary

• Multi-skilled

• Project

• Virtual

• Managers role – prioritisation, planning, control, decision making & problem solving

• Leadership

50

Virtual teams

• No manager: this makes them very democratic

• No meetings: this is enabled by modern technology

• No organisation or structure: members are typically multi-skilled

Case Studies

51

52

Finally: Elton Mayo and the Hawthorne studies

• Performance responds to attention• People perform better if they perceive that

they are a group singled out for attention– Tom Peters….

• Relationships within work are important to employees

• Groups develop spontaneously and can set their own rules, attitudes and standards

• www.accel-team.com/human_relations/hrels_01_mayo.html

53

Useful web-sites

• www.belbin.com– A basic introduction to Belbin ideas

• www.teamtechnology.co.uk– Leadership, management, teamwork and

business

• www.buildingyourteam.com– Free articles and tips for team building

• www.greatplacetowork.com– Does what it says on the tin

• www.johnadair.co.uk– Leadership and management

54



Session 3

Developing and managing teams

55

Learning outcomes

• At the end of the session, you will be able to:– Demonstrate an ability to manage the work of

teams and individuals to achieve objectives and create effective working relationships within the team and with other teams

– Critically evaluate the productivity, satisfaction and effectiveness of teams against their objectives using appropriate techniques.

– Analyse the causes of any sub-optimal performance and recommend how to improve the team’s performance, including plans to improve motivation, commitment and loyalty.

56

Motivation: what is it and what’s the theory?

• Motivation is simply reason(s) for behaviour• There are two types of theories:

– Content theories eg Maslow (hierarchy of needs) and Herzberg (two-factor theory)

– Process theories eg Vroom (expectancy theory) and Handy (motivation calculus)

Action ResultNeed Want

57

Maslow’s hierarchy of needs

Physiological Needs

Safety Needs

Love/Social Needs

Esteem

Self-

actualisation

Fulfilment of potential

Independence

Relationships, affection, belonging

Security, order, predictability, freedom

Food, shelter

58

Maslow

59

Herzberg

• Herzberg identifies two factors which affect motivation at work:

1.1. Hygiene factorsHygiene factors – elements which cause job

dissatisfaction

2.2. The motivatorsThe motivators – elements which cause job satisfaction

60

Handy’s motivational calculus

• Each individual has a motivation calculus which is concerned with:– Energising behaviour;– Direction of behaviour; and– Sustaining behaviour

• Motivation is based on strength of need• E= effort, energy, enthusiasm and

expenditure of time, resources and passion

• http://www.businessballs.com/charleshandy.htm

61

Schein (1965) says that different people are motivated in different ways

• Rational economic: scientific management• Social man: human relations• Self-actualising man: Maslow/Herzberg• Complex man: all of the above

• Schein, E.H. (1965) Organisational Psychology. Prentice-Hall Inc, New Jersey

62

Schein also talks of a psychological contract

• This exists between individuals and their employer:– Coercive: employee feels he/she is being

forced to contribute– Calculative: employee accepts a reward/effort

relationship– Co-operative: employee identifies with the

organisation

• Motivation exists when both the individual and the employer view the contract in the same way.

63

Then the accepted motivators are well known

• Job design, enrichment, enlargement and rotation

• Participation in decision making and empowerment

• Pay and incentive schemes– Individual and group

• Good people management

64

Creating effective working relationships

Nine strategies for creating trust (Robbins & Finley)

• Have clear, consistent goals• Be open, fair and willing to listen• Be decisive – and how to be

decisive• Support all other team members• Take responsibility for team

actions• Give credit to team members• Be sensitive to the needs of

team members• Respect the opinions of others• Empower team members to act

65

Evaluating team performance

• Performance management/performance appraisal systems

• Review achievement to objectives• Discuss progress of the team and of

individuals• Look forward – don’t slip into a ‘blame

culture’ approach• Learn lessons from mistakes and move on• Review regularly• Give recognition and praise where due• Celebrate team success

66

Be sure about 4 key factors

• Goals– must be established at the forming stage

• Roles– Should be established before the

norming stage

• Processes– Often get developed during storming

• Relationships– Critical for performing

67

Management of Peripheral Workers

• What sort of working?

• Benefits

• Challenges

• Management Challenges– Trust– Communication– Measurement & achievement– Involvement

68

Summary

• Forming and developing marketing teams– Teams don’t just ‘happen’– “Forming, storming, norming and performing”– Leader needs to nurture the team through these

stages of development– Recruit for attitude, train for skill– Consider motivational and morale issues– Consider the personal and skill development

69

Minicase – Motivation & Team Management

In your small marketing team of 5 there is a manager, 2 executives and 2 assistants. One of the executives is not performing to full strength and complains a lot!

Taking the role of manager, discuss how you would try to motivate this executive and how you would manage this situation going forward?

Which theories might assist in your management strategy?

70

LUNCH

71


MANAGING MARKETING PERFORMANCE – Managing Change

Session 4

Strategic marketing, culture and change

72

Learning outcomes

At the end of the session, you will be able to:• Recommend how an organisation should

become more strongly market oriented, taking into account the nature of its environment and culture.

• Assess the main pressures on an organisation to change and the initiatives available or being used to respond.

• Critically evaluate the role and content of an internal marketing communications plan and its contribution to managing change in an organisation.

Market Orientation

• Definition 1– ..entails one of more departments engaging in

activities geared towards developing an understanding of customers’ current and future needs and the factors affecting them, sharing of this understanding across departments and the various departments engaging in activities designed to meet select customer needs

(Kohli and Jaworski, 1990)

73

74

Market orientation

An organisational culture where beating the competition through the creation of superior customer value is the paramount objective throughout the business.

– Oriented towards customer– Alert to competitive situation– Co-operation between functions– Emphasis on profit, not turnover– Responsiveness to changes

• (Piercy, Market Led Strategic Change, 2001)

75

Market Led Strategic Management

• Market orientation– ‘…beating the competition through the

creation of superior customer value…’ (Piercy)

• Components– Customers, Competition, Inter-functional,

Culture, Long-term profit focus

• Challenges – New: Customers, Competitors, types of

organisation, ways of doing business

76

Organisational Culture

• The sum total of the beliefs, The sum total of the beliefs, knowledge, attitudes of knowledge, attitudes of mind and customs to which mind and customs to which people are exposed during people are exposed during their interaction with the their interaction with the organisation.organisation.

77

Culture

“ The way we do things around here” – Deal

and Kennedy 1982

“Collective programming of the mind” – Distinguishes one group from another – Hofstede (1991)

Corporate Cultures

78

Speed of feedbackSlow Fast

Attitude to risk

High risk

Low risk

Source: Deal and Kennedy (2000)

‘Bet your company culture’

‘Hard macho culture’

‘Process culture’ ‘Work hard/play hard culture’

79

Changing philosophies and orientationsProduct

OrientatedSales

OrientatedMarket

OrientatedSocietal

Orientated

DEMANDEXCEEDSSUPPLY

DEMANDEQUALSSUPPLY

SUPPLYEXCEEDSDEMAND

CUSTOMERNEEDSEXPAND

Seller’s market -Emphasis is onincreasing output

Supplyincreases

Supplyincreases

Environmentalconcerns

Products are pushedat customers.Emphasis is onadvertising and selling

Buyers’ marketEmphasis is oncustomer needs and allocation of resourcesto satisfy them

Demands are now on quality issues. Management must satisfy long-term interests of society and individual – as well as needs of customers and the organisation’s missionSource: Kotler

A model of market orientation

80

82

• Customers: know them well enough to give superior value

• Competition: what are their short and long-term capabilities?

• Inter-functional: mobilise the entire company to create superior customer value

• Culture: employee behaviour should be managed to ensure customer satisfaction

• Long term profit focus: have a strategic but realistic vision

• Hooley, Sounders and Piercey; 2003

Key components of achieving marketing orientation

83

Role of marketing in strategic management

• Identify and monitor customer needs and market situation

• Link customer needs to organisation’s capabilities

• Contribute to determining competitive positioning

• Implement marketing programmes to deliver value and retain customers

• Measure the effectiveness of marketing activities

84

What’s driving all this? Changes outside

rising expectationssophisticationcynicismfrom other countriesdifferent business modelsoutsourcingcollaborationalliancesstakeholder influencescustomer specific marketingdatabase marketinginternet marketingcustomer co-operatives

new customers

new competitors

new types of organisation

new ways of doing business

Environmental analysis

85

External analysis

86

87

If everyone in the company does marketing what does marketing do?

• It orchestrates the marketing that everyone else does

• It is the font of all knowledge– About customers;– About competitors; and– About the company and its

products/services

• It is the ‘engine’ of growth

88

Marketing and change

“Nothing is permanent except change”

Heraclitus

89

90

Organisation & Change Model

All of these could change!

Effective internal marketingcan help!

McKinsey 7S model

91

Kenichi Ohmae got there first; the strategic triangle

other stakeholders

customer needs

competitorscompanycompetitor focus

company aims to satisfy customer

needs

competitors offer alternative

satisfactions

analyse competitors'

resources and competences

interference with competitors' marketing programs

innovate, differentiate,

imitate?

Key drivers of change?

• ICT– Eg Music marketing

• Globalisation– Wal-Mart?

• Ethical concerns– Fair Trade– Cause related marketing

92

93

The world is changing

External issues (PESTER)

• Political• Economic• Sociological• Technological• Environmental• Regulatoryand• Competitive

Internal issues -• Retention or gain of

competitive advantage• Cost-savings• New senior

management• New owners and other

stakeholders

94

Internal marketing

• Deals with internal customers - an important stakeholder group

• Essential in effecting marketing oriented culture

• Marketing techniques can help to motivate staff and increase level of ‘involvement’

95

Kotler sums it up as a marketing triangle

plans

company

customersemployees

external marketing program

internal marketing program

interactive marketing

(1999)

96

Internal marketing

• Provides communication to help employees identify with corporate objectives - the common goal

• Breaks down ‘them and us’ culture• Competitive advantage can be achieved

through employee knowledge• Product/service innovation can come from

employee ideas• Good customer service needs constant

reinforcement

Internal marketing - 3 phases

1. Employee motivation and satisfaction

2. Customer orientation

3. Strategy implementation and change management

Source : Ahmed and Rafiq (2002)

97

98

First segment the market

Segmentation

• Different levels of management

• Different functions

• Different locations, cultures

• Supporters, opposers, neutrals (Jobber 2001)– It’s not single dimensional

99

Key Players Keep Satisfied

Low InterestHigh Interest

Low Power

High Power

Minimal Effort Keep Informed

Mendelow’s power/interest matrix

STAKEHOLDERS

100

Then use the marketing mix internally

Product• Strategy and process

of change• Job or function may be

internal ‘product’

Price• Psychological price -

loss of status, uncertainty, loss of productivity

Promotion• Clear communication

essential• Noticeboards,

meetings, intranet, newsletters, etc

Place• Information, training

etc - channel providing services to the internal customer

101

Discussion point

• Why do so many organisations fail in their efforts to be truly marketing oriented?

• List the internal cultural barriers that may be frustrating their ambitions and provide suggestions as to ways in which these barriers might be overcome.

• What theories might assist?

102

Useful references

• www.valuebasedmarketingmanagement.net – a useful reference about just about everything

marketing

• www.organisationalchange.co.uk – a consultancy in organisational change

• www.mad.co.uk – delivering business insight

103



Session 5

Change management

104

Learning outcomes

At the end of the session, you will be able to:• Identify and evaluate the sources of and

the techniques for overcoming resistance to change.

• Assess the impact of change in a marketing department.

• Prepare a plan to deal with change in the marketing department, including the development of appropriate skills and capabilities to meet the objectives.

105

Managing Strategic Change

• Styles– Education/comms, collaboration/partic, intervention,

direction (coercion).

• Roles– Leadership/change agent, middle mgt., outsiders

• Levers– Organisational routines– Symbolic processes– Politics/Alliances– Communications

106

What kind of change?The Johnson and Scholes model

nature of change

incremental transformational

managem

ent role

proactive

tuning planned

reactive

adaption forced

107

Change and the individual: people don’t like change

• They resist it because of:– Fear– Uncertainty– Lack of confidence– Dissonance

• It changes them– Physiologically– Circumstantially– Psychologically

108

People respond to change in different ways

• Acceptance– Enthusiastic or otherwise

• Indifference

• Passive resistance

• Active resistance

109

Change is a process: it can be managed

1: determine need for change2: plan the change3: analyse possible reactions4: consider alternatives5: develop final plan6: communicate the plan7: implement, review and evaluate, modify as

appropriate

Put it all into the hands of a change agent but make sure that he gets visible top management support.

110

Force Field Analysis –the three step model

Driving forces(for change)

Current State Restraining forces(resistance)

Ideal Position

A requirement ofNew legislation.

Professional CommitmentTo controlling the organisation.

Requirement to reportTo external agencies

A concern for quality

Cynicism about change‘another fad’

Existing systemsare sufficient

Trade Union concernOver effects on jobWorking conditions

Complexity of producingSuch reviews

Cost of carryingout such reviews

Kurt Lewin

Emergent approach

111

Stable/ predictable environment

Turbulent/ unpredictable environment

Planned change

Emergentchange

The change continuumSource:Adapted from Burnes (1996)

112

John Hunt (Managing People at Work)Unlearning is as important as learning

• Unfreezing requires:– A ‘trigger’ – eg a crisis or event– A champion to challenge

inherited thinking– Buy-in from colleagues– Restructuring

UNFREEZE

Existing behaviour

Attitudinal/behavioural change

REFREEZEnew

behaviour

113

Creating major change (Kotter 1996)

1. Establish sense of urgency

2. Create the guiding coalition

3. Develop a vision and strategy

4. Communicate the change vision

5. Empower broad-based action

6. Generate short term wins

7. Consolidate gains and produce more change

8. Anchor new approaches in the culture

Making time for change

1. Global change

2. Organisational change

3. Personal change

Source: Robbins and Finley (1998)

114

115

The Change Curve

Originally developed by Kubler-RossAnd adapted by Wilson 1993

116

Think about 3 phases in change(Conner and Patterson)

• Preparation– Contact– Awareness

• Acceptance– Understanding– Positive perception

• Commitment– Installation– Adoption– Institutionalisation– Internalisation

117

• Get prepared• Hampden –Turner

– Find the dangers– Bring conflicts into the open– Play out corporate dramas– Reinterpret the corporate myths– Look at symbols, images, rituals– Create a new learning system

• Take it through the entire organisation• Wait 3 (or even 8) years!

Cultural change is the most difficult

118

Don’t forget HR implications

• There may be redundancies. These need to be carried out legally and meet the company’s social responsibility policies;

• Recruitment policy and practice may need to be reviewed; and

• Training is probably going to be a major need to bring everyone up to speed

119

Group discussion point

Overcoming resistance to change through internal marketing. Consider (one of):

• A small B2B machinery supplier looking to become a more market led organisation following recent acquisition

• A national charity looking to change its strategy for attracting donations from local charity shops to national advertising

• A local supermarket chain looking to build alliances with retailers elsewhere

How would you do it?

120

Mini Case – Managing Change

A new marketing director has come in to the business and is making changes in the strategy of the marketing team. This will result in job losses and changes in the structure of the team. To make matters worse their style is very ‘dictatorial’.

What obstacles do you think this person will come up against, and how should they overcome them?

121

Summary

• Change is inevitable, but it is not always welcomed, and often resisted.

• Success with change programmes can be improved by taking people’s fears into account

• May be necessary to have a ‘Change Agent’• You can’t change too much too often – cynicism

sets in and that is the most difficult to overcome• Cultural change is difficult

122



Session 6

Building shareholder value through marketing activities

123

Learning outcomes

At the end of the session, you will be able to:• Explain the link between marketing activities and

shareholder value.• Explain the measurement of economic value added• Determine the contribution to shareholder value of

marketing activities undertaken.• Critically appraise methods available for valuing

brands.• Explain how brand equity can be built and brands

can be valued.• Recommend an appropriate approach for the

organisation.

124

Strategic decisions are concerned with …

• The long term direction of the organisation

• Achieving some advantage

• Scope of an organisation’s activities

• Matching the activities of the organisation to the environment in which it operates

Source: Johnson & Scholes

125

Implementation

• Shareholder Value Analysis– Computing Value

• Economic profit = NOPAT – (CE x cost of capital)

– Discounting Cash flows– Value based management– Marketing assets

126

Firstly a useful reference

• SVA: shareholder value analysis

• EVA: economic value added

• NOPAT: net operating profit after tax

• ROCE: return on capital employed

• DCF: discounted cash flow

• NPV: net present value

127

Economic profit versus accounting profit

• Accounting profit is what is reported in a company’s results and what is reported is strictly controlled by the principle of prudence (tell that to Enron!)

• Many expenditures which are in fact investments and will pay off in the future are treated as expenses

• Economic profit may treat such expenditures as investments

128

Investors are most interested

in what will generate cash in

future

Investors focus 80% of their decision on

cash beyond 4 years

Today +10 years

Total shareholder return (TSR)TSR = dividends + share price growth

Source

: Valu

elin

e a

nd P

A C

onsu

lting G

roup 2

00

2www.cim

.co.uk/mediastore/P

A_unlockingrealvalue.pdf

Shareholder value and total shareholder return

129

Value drivers

Read Doyle!

Value based marketing

130

Key to enhancing value is to understand the drivers

• Financial– Volume– Timing– Risk– Sustainability

• Marketing– Choice of markets– Target customers– Positioning

• Organisational– Internal and external

131

• Product leadership

• Operational excellence

• Brand superiority

• Customer intimacy

• There are often examples of all four positions taken in an industry

Positioning for differential advantage is a little more complex

132

Marketing strategies to create value

Marketing assets

• Marketing knowledge

• Brands

• Customer loyalty

• Strategic channel relationships

133

Marketing and shareholder value

Marketing activities

€

Marketing skills

Marketing assets

Value drivers

Marketing results

Financial results

CU

STO

MER

SS

HA

REH

OLD

ER

S

Strategies to develop SV

1. Economies of scale

2. Economies of scope

3. Cost advantages

4. Product differentiation

5. Access to distribution channel

6. Government policy

Source: Peterson (2004)

134

Boston matrix and shareholder value

135

A selected few

Competitive position

Remainder divested

Liquidated

136

Limitations of SVA

• Forecasting

• Cost of Capital

• Estimating terminal value

• Baseline business value

• Options for the future

• Market valuation

137

Brands

138

Strong brands can increase cashflow

Strong brands can increase cashflow by

• Obtaining higher prices; and

• Higher volume growth; resulting in– Lower costs; and– Higher asset utilisation

139

But what’s a brand?

• It’s an entity with ‘a collection of attributes that strongly influence purchase’ (Hugh Davidson)

• It comprises an effective product, a distinctive identity and added values.

140

Branding

• What is a brand?– ‘A name, sign, symbol, design or combination

of them, intended to identify goods or services of one seller or group of sellers and to differentiate them from those of competitors’

(Kotler)

• What makes up a brand?• Benefits of branding

– Customers, Marketers, Shareholders

141

Brand building process

Product

Name Qualit

yLogos

Pack

FeaturesDesign

Basicbrand

Services

Delivery

Technical support

Extras

Training

GuaranteesInstallations

Augmentedbrand

Potentialbrand

142

• Attribute brands – image conveys confidence in its functional attributes – e.g. Volvo (safety), Persil (washes whiter)

• Aspirational brands – image conveys a lifestyle to which people aspire – e.g. Martini (sophisticated jet-setter), Rolex (top professional)

• Experience brands – conveys an image of shared associations and emotions – e.g. Nike (just-do-it), Marlboro (rugged masculine values)

Doyle ‘Value-Based Marketing, 2000

Types of brand/brand image

143

CORE VALUES

EXPRESSIVE VALUES

CENTRAL VALUES What the brand and the consumer share at a fundamental level

What the brand says about the consumer

What the brand does for the consumer

From

Com

modit

y B

rand t

o P

ow

er

Bra

nd

Components of a brand

144

Brands are used in different ways: brand architecture

• Company brands eg Mercedes• Source brands eg Kelloggs

Corn Flakes• Range brands eg Sharwoods• Product brands eg Ronseal• Umbrella brands eg Philips

What’s the difference between a range brand and an umbrella

brand?

145

Brand stretching: be careful

• What is it?– Using a brand name successful in one market

to enter another• Why do it?

– It’s cheap, uses an existing asset and is less risky than a new brand

• When to do it– When the brand core values are applicable to

the new market and when activity in the new market will not adversely affect them

• But: it may damage the first brand and it’s not a substitute for real marketing

146

Brand Planning & Strategies

• Brand Planning – Market Analysis– Brand Situation Analysis– Targeting future positions– Testing new offers– Planning & evaluating performance

• Brand Strategies– Brand Stretching– Revitalising brands– Global or local?

147

Valuing Brands

• Should brands be valued?• Methods

– Cost– Royalties– Market Value– Economic Use Value– SVA Approach to brand Valuation

• Discount rate• Future earnings

Business Week/ Interbrand valuations 2007

148

149

Young and Rubicam’s Brand Asset valuator

brand strength brand stature

BrandAsset Valuator

differentation relevance esteem knowledge

www.yrbav.com

150

Millward Brown’s BrandDynamics

presence

strong relationship/high share of category expenditure

weak relationship/low share of category expenditure

nothing else beats it

does it offer something better than the others?

can it deliver?

does it offer me something?

do I know about it?

bonding

advantage

performance

relevance

www.millwardbrown.com

151

Interbrand’s strength index

element weightingcommentleadership 25% how dominant is the brand in its sector?market 10% is it growing?stability 15% how loyal are the customers?international scope25% how far does the brand reach?trend 10% are sales growing?support? 10% how much is being spent and how well?protection 5% what's the IP position?

152

Summary

• Organisational value drivers – McKinsey 7 S model identifies these

• SVA approach is good but has limitations• NPV = Sum of the present values of all

future cashflows.• NPV can be used for project appraisal• Brands are important differentiators and

can be, perhaps inaccurately, valued & exploited.

153



That’s all for day 1!

1 managing marketing performance introductions. 2 about david kilburn head of business development,...

Documents