1. Chapter 19: Implementing and
Controlling Marketing Plans: Evolution and Revolution

2. Implementation Objectives
Innovative thinking and approaches may help the marketing manager overcome challenges and better achieve major implementation objectives
Better, so customers really get superior value as planned
Faster, to avoid delays that cause customers problems
Lower cost, without wasting money on things that don't add value for the customer

3. Smart Marketers Encourage Customer Complaints
Complaint Management
Smart Marketers Encourage Customer Complaints
Complaints Alert Marketers to Problems
When Using Personal Selling – Best if Salespeople Directly Ask About Problems
Marketers With Many Customers Can:
Have Toll-Free Phone Lines
Websites
& Snail Mail

4. Making Customer Contact Easier Provides
Praise Identifies Critical Advantages
Questions Can Prevent Problems From Occurring
Complaints Identify Problems Faster
Keep Track of All Three To
Identify Important Advantages
Identify Potential Problems
Identify Current Problems

5. When Managing Complaints
Suggest A Solution Where Appropriate
Make SURE to Execute on Solutions
Identify Nuts & Ignore Them
Responses Should Be Tracked By Management
Frequencies Should Be Part of MIS System

6. Total Quality Management
Everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs
The cost of poor quality is lost customers
Achieving quality requires continuous improvement—a commitment to constantly make things better one step at a time
Uses statistical process controls to identify problems. Examples:
Pareto charts
Fishbone diagrams
"Slay the dragons first"... to get a return on quality
Specify jobs and benchmark performance

7. Pareto Chart (Exhibit 19-3)
This slide relates to material on pp
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?

8. Why Things Go Wrong – Fishbone Diagram (E 19-4)
This slide relates to material on pp
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?

9. Losing A Good Customer Is Expensive!
Avg profit per day for a car rental company is $15.
Salesperson Sally rents a car 45 days a year
If you make Sally mad - what is the cost?
$15 profit for one day?
$675 for one year?
$6,750 for ten years?

10. Customer Service Critical not to over promise
Full explanations of shortcomings often helps
Often improved when routine & special attention situations are separated
Often try to use computers to handle routine information

11. Computerization Guidelines
1] Identify the usage situations
2] Identify the heavy users
3] Have menus or other information ranked by order of use - don’t make customers go through the entire menu
Are the very heavy users profitable? If not, drop them.

12. Quality Programs Need 3 Things to Succeed
1] Top management support
2] Specify each task that needs to be done, how it is to be done, and who is to perform the task
3] Quantify the measures

13. Benchmarking
Benchmarking – picking a basis of comparison for evaluating how well a job is done (527)
Always Benchmark Against Internal Standards
Benchmark Against External Standards If Company is Weak In An Area
When Poorly Performing – Don’t Give “The Best of the Worst” Major Rewards

14. Feedback & Sales Analysis
Feedback process that helps the marketing manager learn
how ongoing plans and implementation are working
how to plan for the future
Sales Analysis looks at details of where sales come from
customers
products
territories, etc.

15. Performance & Cost Analysis
Performance Analysis compares actual with targets
Cost Analysis controls spending

16. Some Bases for Sales, Cost, or Profit Analysis
Geographic region
Product (package size, style, etc.)
Customer size
Customer type or class of trade
Price or discount class
Method of sale
Cash or charge (financial arrangement)
Size of order
Commission class

17. Cost Analysis Must understand costs to control them
Analyzing and dealing with fixed costs can be a challenge
full-cost approach allocates fixed costs
contribution-margin approach is an alternative
two approaches have different benefits, limitations

18. Performance Analysis Looks for Differences (Exhibit 19-5)
This slide relates to material on p. 530.
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.

19. What About Costs? (Exhibit 19-6)
This slide relates to material on p. 531.
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.

20. Performance Indexes Simplify Human Analysis (Exhibit 19-7)
This slide relates to material on pp
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.

21. A Full-Cost Example (Exhibit 19-12)
This slide relates to material on pp
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)
This slide relates to material on p. 538.
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)
This slide relates to material on pp
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)
This slide relates to material on pp
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. An Audit Shouldn’t Be Necessary, But Often Is!
The Marketing Audit
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
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! : : : :