Lecture Marketing (12/e): Chapter 22 – Kerin, Hartley, Rudelius

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LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 22, YOU SHOULD BE ABLE TO:

LO 22-1

Explain how marketing managers
allocate their limited resources.

LO 22-2

Describe Porter’s generic business
strategies and synergy analysis
planning frameworks.

LO 22-3

Explain what makes an effective
marketing plan.

22­2


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 22, YOU SHOULD BE ABLE TO:

LO 22-4

Use a time-based agenda and an action

item list to conduct a meeting.

LO 22-5

Describe an organization’s marketing
department and the role of a product
manager.

LO 22-6

Explain the use of marketing ROI,
metrics, and dashboards in evaluating
marketing programs.
22­3


WARM DELIGHTS FOR TODAY’S
ON-THE-GO CONSUMERS




Breaking the Rules at “Big G”
•

Warm Delights

•

Warm Delights Minis

Cereal Industry Facts of Life
•

Expense

•

Success Rate

•

Market Decline
22­4


WARM DELIGHTS FOR TODAY’S
ON-THE-GO CONSUMERS


Creative Initiatives at Big G
•

Single-Portion Entrees

•

High-Fiber, Low Calorie Cereals

•

Healthy Snacks

•

High-Protein Yogurt

•

Breakfast Drink

Fiber
One

22­5


MARKETING BASICS: DOING WHAT WORKS
LO 22-1
AND ALLOCATING RESOURCES
FINDING AND USING WHAT REALLY WORKS



Strategy



Execution
Smucker’s



Culture



Marketspace
22­6


MARKETING BASICS: DOING WHAT WORKS
LO 22-1
AND ALLOCATING RESOURCES
USING SALES RESPONSE FUNCTIONS



Sales Response Function



Maximizing Incremental Revenue
Minus Incremental Cost



An Example of
Resource Allocation
•

Year 1

•

Year 4
22­7


FIGURE 22-1 A sales response function shows
the impact on sales at various levels of
marketing effort on annual sales revenue

22­8


MARKETING BASICS: DOING WHAT WORKS
LO 22-1
AND ALLOCATING RESOURCES
USING SALES RESPONSE FUNCTIONS



Allocating Marketing
Resources in Practice



Share Points—Need Estimates of:
•

Market Share

•

Revenues

•

Gross Margin

•

Cannibalization

22­9


FIGURE 22-2 The actions in the strategic
marketing process are supported and directed
by detailed reports, studies, and memos

22­10


MARKETING BASICS: DOING WHAT WORKS
LO 22-1
AND ALLOCATING RESOURCES
USING SALES RESPONSE FUNCTIONS



Resource Allocation and the
Strategic Marketing Process



Output Reports

22­11


LO 22-1

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
USING MARKETING METRICS IN PLANNING



“If You Don’t Where You’re Going,
Any Road Will Get You There.”



Innovation Metrics
•

Output Metrics

•

Input Metrics
22­12


FIGURE 22-A Metric ranked No. 1 by
respondents from organizations using more
than three innovation metrics

22­13


LO 22-1

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
THE VARIETY OF MARKETING PLANS



Long-Range Marketing Plans



Annual Marketing Plans

22­14

LO 22-2

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
MARKETING PLANNING FRAMEWORKS



Porter’s Generic Business Strategies



Cost Leadership Strategy



Differentiation Strategy



Cost Focus Strategy



Differentiation Focus Strategy
22­15


FIGURE 22-3 Porter’s four generic business
strategies involve combinations of competitive

scope and costs vs. product differentiation

22­16


LO 22-2

Campbell’s and IKEA
Which generic business strategy does each use?

22­17


LO 22-2

General Mills and Chobani
Which generic business strategy does each use?

22­18


LO 22-2

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
SYNERGY ANALYSIS



Synergy Analysis

•

Marketing Synergy

•

R&D-Manufacturing
Synergy
22­19


LO 22-2

MARKETING MATTERS
A Test of Your Skills: Where are the Synergies?

1. Where are the marketing synergies?
2. Where are the R&D-manufacturing synergies?
3. What is the ideal market-product grid for a merger?

22­20


FIGURE 22-4 Market-product grids show
alternative strategies for a lawnmower
manufacturer

22­21

LO 22-2

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
SYNERGY ANALYSIS



Market-Product Concentration



Market Specialization



Product Specialization



Selective Specialization



Full Coverage
22­22


FIGURE 22-5 The ideal merger for Great States
to obtain full market-product coverage

22­23


LO 22-3

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
MARKETING PLANNING AND STRATEGY LESSONS



Guidelines for an Effective
Marketing Plan
•

Set Measurable, Achievable Goals

•

Use a Base of Facts and Assumptions

•

Use Simple, but Clear and Specific Plans

•

Have Complete and Feasible Plans
22­24

LO 22-3

THE PLANNING PHASE OF
THE STRATEGIC MARKETING PROCESS
MARKETING PLANNING AND STRATEGY LESSONS



Guidelines for an Effective
Marketing Plan
•

Make Plans Controllable and Flexible

•

Find the Right Person to Implement

•

Work Toward Concensus-Building

22­25