Market-Based Management

Chapters 14, 15, 16

Marketing Plans and Performance

1
Marketing Planning Process

Step 1: Step 2: Step 3: Step 4:

Situation SWOT Strategic Marketing
Analysis Analysis Market Mix
Plan Strategy

Adjust Step 7: Step 6: Step 5:

Marketing Perform Profit Marketing
Plan as Review Plan Budget
Necessary

2
Figure 14-9 Components of a Market Strategy

Review Handout

3
Successful Plan Implementation

Owning the Supporting the Adapting the

Marketing Plan Marketing Plan Marketing Plan

1. Detailed 1. Time to Succeed 1. Continuous

Action Plans Improvement
2. Resource
2. Champion and Allocation 2. Feedback
Ownership Measures
3. Communication
Team
3. Persistence
4. Required Skills
3. Compensation
4. Adaptive
4. Management Rollout
Involvement

4
 A Hierarchy of Performance

Strategic
Performance

Marketing Financial
Performance Performance

Program A Program B Program C

Performance Performance Performance

Task 1 Task 2 Task 3

Performance Performance Performance 5
Marketing Performance is the
End Product of Marketing Plans
and Marketing Actions

Marketing Marketing Marketing

Plans Actions Performance

But, this model doesnt account for all that

can go wrong.
6
Marketing Marketing Marketing
Plans Actions Performance

Poor Poor Poor

Data Analysis Communication Tracking of
and Planning of Objectives Performance

Insufficient
Insufficient
Resource
Training
Allocation

Changes in
Customer
Needs 7
This is Further Complicated by
Difficulties in Problem Diagnosis

8
 MARKETING PLANS
APPROPRIATE INAPPROPRIATE

I SUCCESS UNCERTAIN
M All that can be Good execution can
P done to insure mitigate poor strategy,
success has forcing success.
L
GOOD been done OR
E
The same good
M execution can
E hasten failure
N
T TROUBLE UNCERTAIN
A Poor execution hampers Very Difficult to diagnose
T good strategy. Mgmt because bad strategy is
I may never become masked by poor
POOR
aware of strategic execution.
O soundness because of Difficult to fix because
N implementation both strategy and
inadequacies execution are wrong. 9
As with Corporate or Business Unit
Performance, Marketing Performance
Has Multiple Dimensions

10
 Performance Relationships
Program Effectiveness

Sales/Share
Increases

New Service
Performance
Profitability
Customer
Satisfaction

Efficiency
11
Defining Marketing Effectiveness
The Achievement of Marketing Program
Goals
Sales growth/share growth
Retention
Profitability
Awareness
Positioning
Cost reduction
12
Sub-dimensions of Performance

13
Performance Dimensions - Growth

Salesgrowth
Share growth
Increased sales to existing
customers
Sales to new customers
Opening new markets

14
Performance Dimensions - Efficiency

Achievinggoals with minimum

resource invested.
Productivity
Outputs/Inputs

Efficiency = Sales .
Mktg Exp.

15
Performance Dimensions - New
Products Development
Trial
rate
Retention rate
Time to market
Revenue from new services

16
Performance Dimensions - Customer
Satisfaction
Satisfaction
Retention/Loyalty
Perceived value received

17
Performance Dimensions -
Profitability
ROA = Profits/Assets
Cash Flow/Assets = CFROA
Return on Sales (ROS) = Profits/Sales
Meeting Margin or Contribution Goals

18
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.

19
Common Firm Goal Attainment Metrics

Awareness rates.
Satisfaction and Loyalty Ratings
Growth and Share targets.
Hurdle rates for Project ROI
NPV hurdles.

20