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Market-Based ManagementMarket-Based Management

Chapters 14, 15, 16Chapters 14, 15, 16

Marketing Plans and PerformanceMarketing Plans and Performance

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Step 1: Situation Analysis

Step 2: SWOT

Analysis

Step 3: Strategic Market

Plan

Step 4: Marketing

Mix Strategy

Step 5: Marketing

Budget

Step 6: Profit Plan

Step 7: Perform Review

Adjust Marketing

Plan as Necessary

Marketing Planning ProcessMarketing Planning Process

3

Figure 14-9 Components of a Market Strategy

Review Handout

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Successful Plan ImplementationSuccessful Plan Implementation

Owning the Marketing Plan

Supporting the Marketing Plan

Adapting the Marketing Plan

1. Detailed Action Plans

2. Champion and Ownership Team

3. Compensation

4. Management Involvement

1. Continuous Improvement

2. Feedback Measures

3. Persistence

4. Adaptive Rollout

1. Time to Succeed

2. Resource Allocation

3. Communication

4. Required Skills

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A Hierarchy of PerformanceA Hierarchy of Performance

MarketingPerformance

Program CPerformance

Program APerformance

Task 1Performance

Task 2Performance

Task 3Performance

Program BPerformance

StrategicPerformance

FinancialPerformance

6

Marketing Performance is the Marketing Performance is the End Product of Marketing Plans End Product of Marketing Plans and Marketing Actionsand Marketing Actions

MarketingPlans

MarketingActions

MarketingPerformance

But, this model doesn’t account for all that can go wrong.

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MarketingPlans

MarketingActions

MarketingPerformance

PoorCommunication

of Objectives

PoorData Analysisand Planning

PoorTracking of

Performance

InsufficientResourceAllocation

Insufficient Training

Changes in Customer

Needs

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This is Further Complicated by This is Further Complicated by Difficulties in Problem Diagnosis Difficulties in Problem Diagnosis

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TROUBLE• Poor execution hampers good strategy. Mgmt may never become aware of strategic soundness because of implementation inadequacies

UNCERTAIN

• Very Difficult to diagnose because bad strategy is masked by poor execution.• Difficult to fix because both strategy and execution are wrong.

SUCCESS• All that can be done to insure success has been done

UNCERTAIN • Good execution can mitigate poor strategy, forcing success. OR The same good execution can hasten failure

MARKETING PLANS

APPROPRIATE INAPPROPRIATE

IMPLEMENTATION

GOOD

POOR

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As with Corporate or Business Unit As with Corporate or Business Unit Performance, Marketing Performance Performance, Marketing Performance Has Multiple Dimensions Has Multiple Dimensions

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Performance RelationshipsPerformance Relationships

Sales/ShareIncreases

New ServicePerformance

CustomerSatisfaction

Efficiency

Program Effectiveness

Profitability

12

Defining Marketing EffectivenessDefining Marketing Effectiveness

The Achievement of Marketing Program GoalsThe Achievement of Marketing Program Goals

–Sales growth/share growthSales growth/share growth

–RetentionRetention

–ProfitabilityProfitability

–AwarenessAwareness

–PositioningPositioning

–Cost reductionCost reduction

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Sub-dimensions of PerformanceSub-dimensions of Performance

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Performance Dimensions - GrowthPerformance Dimensions - Growth

Sales growth Sales growth Share growthShare growth

–Increased sales to existing Increased sales to existing customerscustomers

–Sales to new customersSales to new customers

–Opening new marketsOpening new markets

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Performance Dimensions - EfficiencyPerformance Dimensions - Efficiency

Achieving goals with minimum Achieving goals with minimum resource invested.resource invested.

–ProductivityProductivity–Outputs/InputsOutputs/Inputs

Efficiency = Efficiency = Sales . Sales . Mktg Exp. Mktg Exp.

16

Performance Dimensions - New Performance Dimensions - New Products DevelopmentProducts Development Trial rateTrial rate Retention rateRetention rate Time to marketTime to market Revenue from new servicesRevenue from new services

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Performance Dimensions - Customer Performance Dimensions - Customer SatisfactionSatisfaction SatisfactionSatisfaction Retention/LoyaltyRetention/Loyalty Perceived value receivedPerceived value received

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Performance Dimensions - Performance Dimensions - ProfitabilityProfitability ROA = Profits/AssetsROA = Profits/Assets Cash Flow/Assets = CFROACash Flow/Assets = CFROA Return on Sales (ROS) = Profits/SalesReturn on Sales (ROS) = Profits/Sales Meeting Margin or Contribution GoalsMeeting Margin or Contribution Goals

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Conclusions: Conclusions: Evaluation of program effectiveness Evaluation of program effectiveness

depends on the objectives set for the depends on the objectives set for the program.program.

While profitability is one dimension, While profitability is one dimension, success will be determined by those success will be determined by those variables which drive profitability.variables which drive profitability.

Many of these variables are marketing Many of these variables are marketing performance indicators.performance indicators.

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Common Firm Goal Attainment MetricsCommon Firm Goal Attainment Metrics

Awareness rates.Awareness rates. Satisfaction and Loyalty RatingsSatisfaction and Loyalty Ratings Growth and Share targets. Growth and Share targets. Hurdle rates for Project ROI Hurdle rates for Project ROI NPV hurdles.NPV hurdles.