1. Implementing and Controlling Marketing Plans: Evolution and Revolution
CHAPTER NINETEEN
Chapter Nineteen
Implementing and Controlling Marketing Plans: Evolution and Revolution
Implementing and Controlling Marketing Plans: Evolution and Revolution
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts.
© 2008 McGraw-Hill Companies, Inc.
McGraw-Hill/Irwin
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

2. When we finish this lecture you should
This slide relates to material on p. 516.
Understand how information technology speeds up feedback for better implementation and control.
Know why effective implementation is critical to customer satisfaction and profits.
Know how total quality management can improve implementation—including implementation of service quality.
Understand how sales analysis can aid marketing strategy planning.
At the end of this lecture, you should:
Understand how information technology speeds up feedback for better implementation and control.
Know why effective implementation is critical to customer satisfaction and profits.
Know how total quality management can improve implementation—including implementation of service quality.
Understand how sales analysis can aid marketing strategy planning.

3. When we finish this lecture you should
This slide relates to material on p. 516.
Understand the differences in sales analysis, performance analysis, and performance analysis using performance indexes.
Understand the difference between the full-cost approach and the contribution-margin approach.
Understand how planning and control can be combined to improve the marketing management process.
Understand what a marketing audit is and when and where it should be used.
At the end of this lecture, you should:
5. Understand the differences in sales analysis, performance analysis, and performance analysis using performance indexes.
6. Understand the difference between the full-cost approach and the contribution-margin approach.
7. Understand how planning and control can be combined to improve the marketing management process.
8. Understand what a marketing audit is and when and where it should be used.

4. Strategy Planning, Implementation, and Control (Exhibit 19-1)
IT speeds information flow
Total quality management
Quality and implementation
Control
Sales analysis
Performance analysis
Cost analysis
Planning and control
Marketing audit
Summary Overview
A carefully planned marketing strategy improves a firm’s chances of success, but a plan that is not implemented well will not reach its potential – and may even fail. Timely control information helps a marketing manager improve both implementation and the basic strategy. Control can signal when plans need to be adapted--or changed completely--to adjust to new market conditions.
Key Issues
This chapter will help you understand how to improve the implementation and control of marketing plans.
The discussion of implementation will include:
How improvements in information technology (IT) and e-commerce have changed implementation and control; and,
Total quality management approaches.
Then, the chapter will highlight how marketing managers use control-related tools such as sales, performance, and cost analysis. These analyses will be combined to look at planning and control. Finally, a marketing audit will be defined and discussed.

5. Speed Up Information For Better Implementation and Control
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Fast feedback can be a competitive advantage
Fast feedback can be a competitive advantage
Marketing manager must take charge
Marketing manager must take charge
Summary Overview
If good strategies and plans are developed, the marketing manager and the rest of the people in the organization know what needs to be done. Implementation puts plans into operation; control provides feedback that helps the marketing manager learn how plans and implementation are working and how to plan for the future. Advances in information technology allow the marketer to speed up information for better implementation and control.
Key Issues
Feedback improves the marketing management process.
Computers linked to checkout scanners, intranets, and decision support systems give today’s marketing manager fast market feedback.
Fast feedback can be a competitive advantage, but the marketing manager must take charge to ensure that the necessary data is captured as it comes in.
New information technologies offer speed and detail.
It is possible for marketing managers to get some information instantly.
Computers can provide almost any level of detail, in any form the manager wants.
With some marketing programs, such as TV shopping networks, marketing managers can see the “real time” or instantaneous effects of manipulations of the 4Ps.
Discussion Question: Are there other technologies that offer this “real time” updating? Hint: think about your day-to-day shopping experiences, both in-store and online.
New IT offers speed and detail : : :

6. Effective Implementation Means That Plans Work As Intended
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Summary Overview
Implementing a marketing plan may involve many different operational decisions and activities. When these operational elements are executed well, customers get what is intended. If the plan is good, customer satisfaction and repeat purchase should result. However, poor implementation may alienate customers.
Key Issues
Good implementation builds relationships with customers.
Information technology can improve marketing plan implementation.
Interactive customer databases can track purchase patterns, update prices, and even suggest product alternatives.
Building relationships over the Internet is a challenge.
Implementation deals with internal or external matters.
Internal means invisible to the customer, such as distribution activities.
The marketing strategy for the children’s book Harry Potter and the Goblet of Fire called for it to be released everywhere on the same day.
As the ad above details, it was an implementation challenge for Amazon.com to get copies to 250,000 eager kids all at once, but FedEx helped solve the delivery problem.
External means directly involving the customer, such as personal selling.
Implementation has its own objectives in addition to the strategic objectives.
Managers usually want implementation to be better, faster, and cheaper.
Discussion Question: Can the goals of being better, faster, and cheaper work against each other? How?
On Saturday, July 8th, Amazon.com and FedEx made Harry Potter and the Goblet of Fire one of the largest book releases in Internet history.

7. Dealing with Customer Complaints
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Complaints Bring Problems to Light
Complaints Bring Problems to Light
Summary Overview
Customer complaints are important sources of information.
Key Issues
Customer complaints bring implementation problems to light. If organizations do not find out what things are going wrong, customers will grow increasingly dissatisfied. Methods for providing consumers with an opportunity to register complaints or make suggestions include:
Using salespeople to gather information from customers, especially in business markets.
Toll-free telephone lines, websites, and .
Complaints need a response. Consumers need to be connected to the person(s) within the organization who can solve their problems. Inquiries should be tracked to ensure that consumers get appropriate responses.
Poor complaint handling can lead to negative word-of-mouth and losing customers; good complaint handling can lead to positive word-of-mouth and customer retention.
Discussion Question: If you have ever used a feedback mechanism to register a complaint or make a suggestion to a company, was it a positive or negative experience? Explain. :
Complaints Need a Response :

8. Using Information Technology to Improve Implementation (Exhibit 19-2)
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Summary Overview
This exhibit shows some of the ways that firms are using information technology to improve specific implementation jobs.
Key Issues
Note that some of the examples focus on internal matters and some on external, customer-oriented matters.
Product: Computer technology can speed up the new-product development process, or pretest label designs on the Internet.
Place: Bar codes, scanners, “smart” tags, and electronic data interchange improve inventory management in the channel. Teleconferencing with channel members can improve coordination of new initiatives in a franchise system.
Promotion: Distribution of ads to local TV stations is made quicker by transmitting the ads via satellite. The use of toll-free numbers and web addresses on product labels deepens relationships with customers.
Price: “Frequent shopper” or “valued customer” cards can track purchases and automatically use applicable discounts. Technology can also help in implementing price sensitivity studies.
Discussion Question: What is it about technology that makes it especially attractive as a way to improve marketing implementation?

9. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Technology and Implementation
Courtesy of National Association of Realtors
This ad from the National Association of Realtors stresses the importance of utilizing available technologies, including the Internet, to improve service quality.
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10. Building Quality Into the Implementation Effort
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Summary Overview
At its core, total quality management (TQM) meets customer requirements. It is about everyone in the organization being committed to quality improvement, throughout all of the firm’s activities, in order to better serve customer needs. For marketers, this means applying TQM concepts to the whole marketing mix.
Key Issues
Production companies have been concerned about reducing defects for a long time.
The cost of poor quality is lost customers.
Japanese manufacturers are world leaders in showing that it costs far less to do something right the first time than it does to pay to fix it later.
Defects—either in physical products or in services--mean dissatisfied customers who may go elsewhere.
In this ad, Balboa wants producers of spas to know that its controls meet ISO 9001 quality standards and that, as a supplier, it is dedicated to satisfying the needs of the spa producer’s final consumers.
Discussion Question: Have you ever bought a product to find that it was broken, didn’t work, or was substandard in some way? How did you react? What action, if any, did you take to correct the problem? What was the outcome? How did your experience affect future purchases?

11. TQM is Easier Said Than Done (Exhibit 19-3)
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Summary Overview
Getting a handle on doing things right the first time is easier if an organization adopts a philosophy of continuous improvement: a commitment to constantly make things better one step at a time. TQM goes beyond eliminating defects in current workmanship; it encourages all workers and managers to always look at how things can be done better.
Key Issues
Managers who use TQM think of quality improvement as a way to sort out things gone right and things gone wrong.
They take detailed measurements related to a problem area.
They analyze the measures to determine the best candidates for fixing.
TQM efforts should start with customer needs.
Pareto chart: a graph that shows the number of times a problem cause occurs, ordered from most frequent to least frequent.
In this example, a restaurant manager has categorized the complaints reported on customer comment cards.
The complaints are arranged from most frequent to least frequent.
In order to “slay the dragons first,” the manager would work on solving the most frequent problem, and then move to work on the others.
Discussion Question: After identifying the problem areas, what’s next?

12. Why Things Go Wrong (Exhibit 19-4)
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Summary Overview
Once marketers understand what is wrong, the next step is to figure out why things go wrong.
Key Issues
Fishbone diagram: a visual aid that helps organize cause-and-effect relationships for things gone wrong.
In the restaurant example, the biggest problem identified was that people have to wait to be seated.
Note also that the third most frequent complaint is about tables not being clean. These two problems may be related.
The fishbone diagram summarizes four categories of causes: policies, procedures, people, and the physical environment.
For example, part of the problem is due to a faulty credit card machine, which slows down payment of checks.
Replacing the credit card machine—a relatively quick fix– may make it possible to move customers out more quickly, and allow the staff to clear tables faster.
Discussion Question: What should the manager do in order to determine if the replacement of the credit card machine solves the problem? How can the diagram help if replacing the machine doesn’t completely solve the problem?

13. Building Quality into Services
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Server Is Linked To the Service
Server Is Linked To the Service
Summary Overview
Recently, marketers in service businesses have been paying a lot of attention to improving service quality through TQM. Even producers of basic commodities have customer service concerns that are part of their overall marketing plans.
Key Issues
Service improvements are somewhat more difficult to implement than improvements in physical goods.
One reason is that the server is inseparable from the service. For example, a technically competent physician may have a horrible “bedside manner.”
The best ways to improve service are to train people and then empower them to serve.
Role-playing exercises and showing employees how their jobs relate to the total company effort are two effective training techniques.
Empowerment: giving employees the authority to correct a problem without checking with management.
Line-level employees are much closer to problems, so giving them the power to correct problems is a way to improve customer satisfaction.
Discussion Question: What other things does empowerment do for the employees of an organization, beyond making it possible to solve customers’ problems more quickly?
Training Is Crucial
Training Is Crucial
Empowerment Works : : :

14. Other Issues in Quality Implementation Efforts
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Manage Expectations with Good Communication
Manage Expectations with Good Communication
Separate the Routine from the Special
Separate the Routine from the Special
Summary Overview
There are several other things marketers can do to make the implementation of quality improvement efforts more successful.
Key Issues
Customers appreciate clear communication with marketers.
Marketers can manage expectations with good communication. When service fulfills customer expectations, customers are more satisfied.
Marketers should give clear, honest explanations when customer expectations are not fulfilled.
Discussion Question: What examples have you encountered in which marketers try to manage your expectations through communication?
Marketers should separate the routine and plan for the special.
Technology can help perform many routine services, and often reduce their cost.
Managers must lead the quality effort through their actions and involvement.
TQM won’t work without top-level support.
Firms that are successful clearly specify jobs and benchmark performance.
Firms must detail what tasks need to be done, how, and by whom.
Benchmarking: picking a basis of comparison for evaluating how well a job is being done. Benchmarks can be internal or external to the firm.
Getting a return on quality is important, so managers must take care to deal with the most critical customer satisfaction issues in order to control costs.
Managers Lead the Effort
Managers Lead the Effort
Get a Return on Quality
Specify Jobs and Benchmark
Specify Jobs and Benchmark : : : : :

15. Breakdowns for Sales Analysis
Sales Analysis Shows What’s Happening
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Geographic Region
Geographic Region
Product Characteristics
Product Characteristics
Customer Characteristics
Customer Characteristics
Breakdowns for Sales Analysis
Order Size
Summary Overview
Good managers want to keep a firmer hand on the controls by consulting information that is more specific than typical accounting reports. Sales analysis looks at the details of a company’s sales records.
Discussion Question: Why might a marketer not want to do a sales analysis?
Key Issues
Sales analysis is easy to do and may be a byproduct of basic accounting procedures, However, the marketing manager must make sure that the company captures identifying information on important dimensions, such as:
Product category, package size, grade, or color.
Geographic region—country, state, county, city, sales rep’s territory.
Customer characteristics (new or existing account, purchase frequency, etc.)
Channel of distribution.
Price or discount class.
Method of sale—online, telephone, or sales rep.
Financial arrangement—cash or charge.
Order size.
Sales analyses over time highlight trends and contribute to more accurate sales forecasts.
Too much data can drown a manager. A graph is worth a thousand numbers, because it can make it easier to see patterns in the data.
Channel of Distribution
Channel of Distribution
Financial Arrangement
Price or Discount Class
Method of Sale
Financial Arrangement
Price or Discount Class
Method of Sale : : : : : : : :

16. Performance Analysis Looks for Differences (Exhibit 19-5)
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Summary Overview
Performance analysis looks for exceptions or variations from planned performance. Numbers are compared between territories, salespersons, or expected performance levels to see how individual parts of the program are working. Performance analysis is extremely useful in identifying problem areas that could otherwise be missed in more global summary statistics.
Key Issues
This exhibit gives an illustration of straight performance analysis.
A company sells its products in five regions, labeled as areas A, B, C, D, and E.
One sales representative serves each region.
The table shows the total number of sales calls made by the rep, the total number of orders, ratio of orders to sales calls, dollar sales, average sales per order, and total customers per rep.
Discussion Question: Look at the reps serving sales areas D and E. How do they compare to the reps in the other regions?
Clearly, the reps in areas D and E are not performing as well as the other reps. Sales are low.
However, the small number of customers suggests that the sales potential might be low.

17. What About Costs? (Exhibit 19-6)
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Summary Overview
Continuing the example from the previous slide, this exhibit compares the cost of supporting sales reps in the five regions.
Key Issues
This exhibit shows the relative costs of compensation, and expenses for each sales rep.
It also shows the ratio of sales to cost, the total dollar sales produced, and the cost to sales ratio.
Discussion Question: Look at the reps in regions D and E. How do their costs compare to the costs for the reps in the other regions?
Here again, the reps in areas D and E are not performing as well.
Their costs are much higher than the costs for the reps in the other regions.
The performance analysis does not provide all of the reasons why this situation exists, but it does pinpoint areas of concern.

18. Performance Indexes Simplify Human Analysis (Exhibit 19-7)
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Summary Overview
To get a better check on performance effectiveness, it may be useful to compare against “what ought to have happened.” A performance index is a number that compares actual performance against an established quantitative standard, for example, dividing actual sales by expected sales and then multiplying by 100.
Key Issues
A performance index is like a batting average. It provides managers with a “scorecard” of territory, team, or salesperson performance. A simple example shows where the problem is:
The United States is broken into four regions: northeastern, southern, midwestern, and western. The percentage of the total U. S. population in each region is in column (1).
Expected sales, based on population size for each region, are in column (2), and actual sales are in column (3).
The performance index in column (4) is simply the actual sales divided by the expected sales, times 100.
Discussion Question: Which region is underperforming?
Performance analysis points out a problem with the western region. But a series of performance analyses may find the real problem. Your text provides a good example of such a series in the case of CarAudio, Inc.
Problems may be hidden in summary data, so marketers should avoid rash judgments based on incomplete information.
The iceberg principle: 90 percent is hidden below the surface.

19. Checking your knowledge
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A sales manager for Wilson Sporting Goods reviewed salesperson performance. Salesperson A had a performance index of 110, while Salesperson B had a performance index of 80. What might the sales manager conclude:
Salesperson B’s performance should be a model for the whole sales force.
Salesperson A should change her effort to bring her to the average.
Salesperson A requires additional sales training
Salesperson B may be having some problems.
Salesperson B requires additional training.
Answer: D
Checking your knowledge (answer explanation):
Clearly Salesperson B is below average. But this analysis alone does not tell us the cause of this performance shortfall. So we can only conclude that Salesperson B might have some problems – the best answer is ‘D’.

20. Contribution Margin Approach
Marketing Cost Analysis – Controlling Costs Too
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Allocation
Full-Cost Approach
Contribution Margin Approach
Summary Overview
Sales come at a cost; so marketing costs have a purpose. Marketing cost analysis is a technique for determining and ensuring that money is spent for a specific marketing purpose. Knowing where money goes helps managers determine whether a given activity is being performed cost-effectively.
Key Issues
Discussion Question: What kinds of marketing costs might there be? Hint: Think back to Chapter 18 and the discussion of fixed and variable costs.
It often makes sense to allocate costs to specific customers and products. This lets managers directly analyze the profitability of the firm’s target markets.
Should all costs be allocated?
Cost allocation can be tricky, especially as some costs are likely to be common to several products and customers. Two basic approaches are possible:
Full-cost approach: all costs are allocated to products, customers, or other categories, including fixed and common costs—so everything costs something.
Profitability can be determined by subtracting costs from sales.
This method assumes that costs have been allocated correctly.
Contribution-margin approach: not all costs are allocated in all situations.
This approach focuses on variable costs and allocates them, leaving fixed costs unallocated. So, it ignores some costs to get results.
It can be more illustrative of actual product or department performance since it assumes that fixed costs remain separate from individual product areas. It may also help managers avoid conflict over the allocation of fixed costs.
Full-Cost Approach : : :

21. A Full-Cost Example (Exhibit 19-12)
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Summary Overview
The two approaches to cost analysis can lead to different decisions.
Key Issues
In this illustration of the full-cost approach, a firm’s profit and loss statement is shown for the firm as a whole, and then for each of three departments.
Discussion Question: Look at Departments 1, 2, and 3. Are all three profitable? Should an unprofitable department be eliminated?

22. A Full-Cost Example (Exhibit 19-13)
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Summary Overview
Note what happens if Department 1 were eliminated.
Key Issues
Its sales volume would be lost, but its fixed costs remain—in this case, administrative expenses.
These fixed costs would have to be allocated to the remaining departments in proportion to their sales volume.
This reallocation doubles the administrative expenses for the two departments, and reduces net profit for the firm as a whole.
Discussion Question: Should Department 1 still be eliminated?
Department 1 should remain, since it contributes positively to the firm’s overall profit.

23. A Contribution-Margin Example (Exhibit 19-14)
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Summary Overview
Continuing the previous example, information from the same firm is presented using the contribution-margin approach.
Key Issues
The difference between the full-cost and contribution margin approaches is evident in looking at the exhibit.
The fixed administrative expenses are not allocated to departments.
The variable costs—cost of sales and selling expenses– are subtracted from sales to get the contribution margin.
Discussion Question: In Chapter 18, the concept of contribution margin came up in the context of break-even analysis. What is the difference between the contribution margin in this example and the computation of contribution margin in Chapter 18?
Note also that the fixed costs are deducted from the total contribution for the firm to determine the firm’s net profit.
It makes sense to retain a department as long as it has a positive contribution margin.
Both the full-cost and contribution margin approaches have their advantages and disadvantages. Managers may choose sides based on their position in the firm.
The contribution-margin approach helps to show the actual performance of operating managers and salespeople.
Top management, however, may prefer full-cost analysis, arguing that some products, departments, or customers must cover the fixed costs.

24. Planning and Control Combined (Exhibit 19-15)
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Summary Overview
Managers often combine sales and cost analyses to monitor performance and highlight areas of concern or opportunity.
Key Issues
This exhibit is a planning and control chart for a small retailer.
For each month, the manager has determined the contribution that each department should make.
In other words, sales, plus costs, plus help from every department, should equal the overall annual profit goal of $163,000.
Below each of the planned figures is a space to show the actual figures and the difference between the planned and actual contribution, expenses, and profits.
Discussion Question: Clearly, the document is being used as a planning document, because the anticipated figures are included. What is it about the document that makes it a control document? What is the advantage of having monthly targets as opposed to less frequent targets?
As time passes, the manager can make comparisons between planned and actual sales.
If the actual sales do not measure up, corrective action could take the form of improving implementation or changing strategies.

25. Checking your knowledge
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Mark Sun is a sales manager for Applied Robotics. He has asked his assistant to prepare a report that shows him how each of his sales reps has performed over the last year – showing their percentage above or below quota This is an example of:
using natural accounts.
the contribution margin approach.
the marketing strategy planning process.
performance analysis.
sales analysis.
Answer: D
Checking your knowledge (answer explanation):
The sales quota is the specific sales or profit objective a salesperson is expected to achieve. Performance analysis looks for deviations from planned performance, so the best answer here is ‘D’.

26. Checking your knowledge
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Wendy Ball, sales manager for Applied Engineering Products, was reviewing the performance of her salespeople. One sales rep has sales 25% below quota. This analysis should lead the sales manager to conclude:
that the sales rep has a great deal of competition in her territory.
that the sales rep is not working hard enough.
that the sales rep’s quota was set too high
that there is no reason to worry, because the rest of the sales force is 25% over quota.
Nothing at this point because of the iceberg principle.
Answer: E
Checking your knowledge answer explanation:
There are many possible reasons why the sales rep has sales below quota. So the iceberg principle suggests the need to dig deeper to see what lies under the surface. The best answer selection for this question is ‘E’.

27. Checking your knowledge
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A marketing cost analysis conducted by Rosa Ruiz, marketing manager at Ruiz Windows, shows Watson Construction to be an unprofitable customer. Ruiz Windows should:
change the delivery terms on Watson’s orders.
raise prices on all items sold to Watson.
assign a new salesperson to Watson.
try to find out why Watson is unprofitable.
refuse to sell to Watson Construction.
Answer: D
Checking your knowledge (answer explanation):
There are many possible reasons that Watson may be unprofitable. A more thorough analysis may help uncover the reasons and help Rosa Ruiz to make better choices about what to do with this customer.

28. An Audit Shouldn’t Be Necessary, But Often Is!
The Marketing Audit
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Detailed Examination of Plans
Detailed Examination of Plans
Use of Strategy Planning Framework
Use of Strategy Planning Framework
Summary Overview
The marketing manager can do a better job by using the analyses discussed so far. However, the control process often focuses on short run problems and adjustments. Unfortunately, while crises pop up, planning and control must go on.
Key Issues
Marketing audit: a systematic, critical, and unbiased review and appraisal of the basic objectives of the marketing function.
In addition, the marketing audit evaluates the organization, methods, procedures and people employed to implement the policies.
Other key aspects of the audit include:
Detailed examination of the firm’s current marketing plans.
Use of the marketing strategy planning framework—working backward to evaluate the plans that have been implemented.
Evaluation of the quality of the effort.
Involvement of consumers, competitors, channel members and employees.
In an ideal world, a marketing audit shouldn’t be necessary, but it often is, because some managers may be so directly involved in strategies they developed that they need an outside view.
Evaluation of Quality
Involvement of Internal/External Parties
Evaluation of Quality :
An Audit Shouldn’t Be Necessary, But Often Is! : : : :

29. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive Exercise: Sales and Performance Analysis
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Basic Marketing.

30. You now
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Understand how information technology speeds up feedback for better implementation and control.
Know why effective implementation is critical to customer satisfaction and profits.
Know how total quality management can improve implementation, including implementation of service quality.
Understand how sales analysis can aid marketing strategy planning.
You now should:
Understand how information technology speeds up feedback for better implementation and control.
Know why effective implementation is critical to customer satisfaction and profits.
Know how total quality management can improve implementation, including implementation of service quality.
Understand how sales analysis can aid marketing strategy planning.

31. You now
This slide relates to material on p. 516.
Understand the differences in sales analysis, performance analysis, and performance analysis using performance indexes.
Understand the difference between the full-cost approach and the contribution-margin approach.
Understand how planning and control can be combined to improve the marketing management process.
Understand what a marketing audit is and when and where it should be used.
You now should:
5. Understand the differences in sales analysis, performance analysis, and performance analysis using performance indexes.
6. Understand the difference between the full-cost approach and the contribution-margin approach.
7. Understand how planning and control can be combined to improve the marketing management process.
8. Understand what a marketing audit is and when and where it should be used.

32. Key Terms Control Total quality management (TQM)
This slide refers to boldfaced terms appearing in Chapter 19.
Control
Total quality management (TQM)
Continuous improvement
Pareto chart
Fishbone diagram
Empowerment
Benchmarking
Sales analysis
Performance analysis
Performance index
Iceberg principle
Full-cost approach
Contribution-margin approach
Marketing audit
Summary Overview
These are key terms you should be familiar with based upon the material in this presentation.
Key Issues
Control: the feedback process that helps the marketing manager learn (1) how ongoing plans and implementation are working and (2) how to plan for the future.
Total quality management (TQM): a management approach in which everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs.
Continuous improvement: a commitment to constantly make things better one step at a time.
Pareto chart: a graph that shows the number of times a problem cause occurs, with problem causes ordered from most frequent to least frequent.
Fishbone diagram: a visual aid that helps organize cause and effect relationships for "things gone wrong."
Empowerment: giving employees the authority to correct a problem without first checking with management.
Benchmarking: picking a basis of comparison for evaluating how well a job is being done.
Sales analysis: a detailed breakdown of a company's sales records.
Performance analysis: analysis that looks for exceptions or variations from planned performance.
Performance index: a number that shows the relation of one value to another.
Iceberg principle: much good information is hidden in summary data.
Full‑cost approach: all costs are allocated to products, customers, or other categories.
Contribution‑margin approach: a cost analysis approach in which all costs are not allocated in all situations.
Marketing audit: a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function and of the organization, methods, procedures, and people employed to implement the policies.