Session 10 Implementing & Managing Market-Driven Strategies group3

2 Designing Market-Driven Organizations

3  Considerations in organizational design  Organizational design options  Selecting an organizational design  Global dimensions of organizations

4 CONSIDERATIONS IN ORGANIZATION DESIGN Extent of need to alter vertical structures Extent of partnering with other organizations Extent of process- type organizational design Considerations in Marketing Organization Matching structure to strategic goals Impact of Internet on organizational processes Need to integrate value-creating activities around customers

5 Alternative Organizational Structures Traditional Hierarchy Functional Structure Process Overlay Functional Overlay Process Structure Horizontal Structure

6 The Challenge of Integration  Integration problems  Marketing’s links to other functional units  Additional approaches to effective integration – relocation/design of facilities – personnel movement – reward systems – formal procedures – social orientation – project budgeting

7 Impact of the Internet on Organization  New managerial roles and practices are mandated by the Web – fast access to information from any location and remotely – accelerated trend towards flatter organizations – virtual team-working across geographical and organizational boundaries – new approaches to supplier relationship management (SRM) and customer relationship management (CRM) – managing and controlling outsourcing of more business processes and activities to specialist suppliers

8 Organizational Design Options  Traditional designs  Marketing’s corporate role  New forms of marketing organizations

9 TRADITIONAL DESIGNS Functional Matrix Product- Focused Market- Focused Traditional Marketing Organization Designs

10 Product-Focused Structure

11 Marketing Organization Based on a Combination of Functions and Products

12 Organizational Transformation  Hybrid organization forms  Designs linked to value strategy and core capabilities  Vital role of data networks  Shared information and decision making

13 New Forms of Marketing Organization  New marketing roles – Chief relationship officer, chief knowledge office, chief customer officer  Transforming vertical organizations through managing processes  New organizational forms – networked organizations – the marketing coalition company – venture marketing organizations

14 The Marketing Coalition Company

15 Selecting an Organization Design  Organizing concepts  Organizing the sales force

16 TRANSACTIONALBUREAUCRATIC ORGANICRELATIONAL Centralized Formalized Nonspecialized Internal (hierarchical) Organization of Activity External (market) Organization of Activity Decentralized Nonformalized Specialized Organizing Concepts

17 Organizing the Sales Force  Organizing multiple sales channels – personal selling – Internet-based channels – telesales – direct marketing  Coordinating major account responsibilities – Key account management – Global account management

18 Global Dimensions of Organizations  Issues in organizing global marketing strategies –Variations in business functions –Organizational considerations  Coordination and communication –Strategic alliances –Executive qualifications

19 Marketing Organization Plan Combining Product, Geographic, and Functional Features

20 GLOBAL ORGANIZING ISSUES Standardized Versus Customized Strategies Alternative Organization Forms Executive Qualifications Strategic Alliances Coordination and Communication Global Marketing Organization

21 Marketing Strategy Implementation and Control

22 Marketing Strategy Implementation and Control  The marketing plan  Implementing the plan  Strategic evaluation and control  Performance criteria and information needs  Performance assessment and action

23 The Marketing Plan  How the marketing plan guides implementation  Contents of the marketing plan  Managing the planning process

24 MARKET TARGET(S) OBJECTIVES PROGRAM POSITIONING STRATEGY Marketing Strategy Overview

25 Exhibit 15-1 Marketing Planning Relationships MARKETING STRATEGY Annual Marketing Plan Implementation Evaluation Revision Annual Marketing Plan

26 Contents of the Marketing Plan

27 Dimensions of Planning Process Marketing Planning Process Analytical Process Dimension Behavioral Process Dimension Organizational Process Dimension Techniques Procedures Systems Planning Models Managerial perceptions Participation Strategic assumptions Structure Information Culture Process Consistency

28 Implementing the Plan  Implementation process  Improving implementation  Internal marketing  A comprehensive approach to improving implementation  Internal strategy-structure Fit  Developing a market orientation  The role of external organization

29 The Implementation Process Activities to be implemented How implementation will be done Responsibility for implementation Time and location of implementation

30 Improving Implementation Skilled Implementers Incentives Organizational Design Effective Communications Improving Implementation Internal Marketing

31 Internal Marketing Strategy Plan External Marketing Program Internal Marketing Program Internal Marketing Program: Targeted at key groups in the company, alliance partner companies, and other influencers External Marketing Program Targeted at key customers, segments and niches, and other external influencers

32 BALANCED SCORECARD MANAGEMENT CONTROL SYSTEM Financial Measures Internal Business Process Measures Customer Measures Learning and Innovation Measures Comprehensive Approach to Improving Implementation

33 Factors Affecting the Implementation of Business and Marketing Strategies Corporate strategy External environment Corporate-SBU relationship SBU’s organization structure; interfunctional coordination processes SBU’s strategy ManufacturingR & DFinanceMarketing policies and strategies Marketing plans for individual product-market entries SBU’s performance

34 Strategic Evaluation and Control  Customer relationship management (CRM)  Overview of evaluation activities  The strategic marketing audit

35 Data Mining and CRM  Victoria’s Secret - Data mining to improve inventory decisions  Music company - People over 62 buy rap music  Wal-Mart - Data mining so each store adapts merchandizing to local preferences  AT&T - CRM data to identify profitability of individual customer and adapt service levels

36 Find New Opportunities or Avoid Threats Solve Specific Problems Keep Performance on Target Evaluation Activities

37 Strategic Marketing Evaluation and Control Conduct strategic marketing audit Select performance criteria, measures, and metrics Obtain and analyze information Assess performance and take necessary action

38 Strategic Marketing Audit  Corporate Mission and Objectives  Business Composition and Strategies  Marketing Strategy (for each planning unit)  Marketing Program Activities  Implementation and Management

39 Performance Criteria and Information Needs  Selecting performance criteria and measures  Marketing metrics  Obtain and analyze information

40 Marketing Metrics External market metrics Financial measuresSales value/volume Marketing investment Profit Brand equityRelative satisfaction Commitment Relative perceived quality Relative price Availability Internal Market metrics Innovation healthStrategy and employeeCulture alignment andOutcomes commitment

41 Performance Assessment and Action  Opportunities and performance gaps  Determining normal and abnormal variability  Deciding what actions to take