Market-Based Management Chapters 14, 15, 16 Marketing Plans and Performance

Marketing Planning Process Step 1: Situation Analysis Step 2: SWOT Analysis Step 3: Strategic Market Plan Step 4: Marketing Mix Strategy Adjust Marketing Plan as Necessary Step 7: Perform Review Step 6: Profit Plan Step 5: Marketing Budget

Figure 14-9 Components of a Market Strategy Review Handout

Successful Plan Implementation Owning the Marketing Plan Supporting the Marketing Plan Adapting the Marketing Plan Detailed Action Plans 2. Champion and Ownership Team 3. Compensation 4. Management Involvement Time to Succeed Resource Allocation Communication Required Skills Continuous Improvement Feedback Measures Persistence Adaptive Rollout

A Hierarchy of Performance Strategic Performance Marketing Performance Financial Performance Program A Performance Program B Performance Program C Performance Task 1 Performance Task 2 Performance Task 3 Performance

Marketing Performance is the End Product of Marketing Plans and Marketing Actions But, this model doesn’t account for all that can go wrong.

Marketing Plans Marketing Actions Marketing Performance Poor Data Analysis and Planning Poor Communication of Objectives Poor Tracking of Performance Insufficient Resource Allocation Insufficient Training Changes in Customer Needs

This is Further Complicated by Difficulties in Problem Diagnosis

SUCCESS UNCERTAIN TROUBLE UNCERTAIN MARKETING PLANS APPROPRIATE INAPPROPRIATE 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 I M P L E N T A O GOOD 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. POOR

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

Performance Relationships Program Effectiveness Sales/Share Increases New Service Performance Profitability Customer Satisfaction Efficiency

Defining Marketing Effectiveness The Achievement of Marketing Program Goals Sales growth/share growth Retention Profitability Awareness Positioning Cost reduction

Sub-dimensions of Performance

Performance Dimensions - Growth Sales growth Share growth Increased sales to existing customers Sales to new customers Opening new markets

Performance Dimensions - Efficiency Achieving goals with minimum resource invested. Productivity Outputs/Inputs Efficiency = Sales . Mktg Exp.

Performance Dimensions - New Products Development Trial rate Retention rate Time to market Revenue from new services

Performance Dimensions - Customer Satisfaction Retention/Loyalty Perceived value received

Performance Dimensions - Profitability ROA = Profits/Assets Cash Flow/Assets = CFROA Return on Sales (ROS) = Profits/Sales Meeting Margin or Contribution Goals

Conclusions: Evaluation of program effectiveness depends on the objectives set for the program. While profitability is one dimension, success will be determined by those variables which drive profitability. Many of these variables are marketing performance indicators.

Common Firm Goal Attainment Metrics Awareness rates. Satisfaction and Loyalty Ratings Growth and Share targets. Hurdle rates for Project ROI NPV hurdles.