Transcript CIM PROFESSIONAL PG DIPLOMA MANAGING MARKETING …

MANAGING MARKETING
PERFORMANCE
Weekend Programme
Day 2
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CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Welcome back
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What we're doing today? - am
• 9.30am start
– Review of Day 1
– Syndicate activities
– Implementing Business Strategy
• Reputation and CSR
• Coffee
• Service quality
• Communications and relationships
– Managing the marketing function
• Quality and process management
• Lunch at 1pm
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What we're doing today? – pm
– Managing the marketing function
• Project management
• Creativity and innovation
• Managing external resources
• Tea
– Measurement, evaluation and control
• Measurement and control
• Measuring the value of marketing
• Managing marketing performance
– Day 2 Review
• 4.30pm - Close
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Review of Day 1
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Syndicates
• Exam group
• Assignment group
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CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 7
IMPLEMENTING BUSINESS
STRATEGY
Reputation and corporate social
responsibility
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Learning outcomes
At the end of the session, you will be able to:
• Build sustainability into business and marketing
activities (including the mix) through planning, the
instillation of values and day-to-day management.
• Build ethics into business and marketing activities
(including the mix) through planning, the instillation
of values and day-to-day management.
• Propose a contingency plan and procedures to be
taken in the event of a ‘crisis’ or threat to the
reputation of the brand or the organisation
(including communications with the press and
stakeholders).
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Ethics and the organisation; why
are they important?
• Ethics are about right and wrong
• Cultural differences have an impact
• Ethics dictate a company’s policies
and standards of behaviour
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Corporate ethics operate at 3 levels
• The company’s relationships with
society at large;
• The impact of the company’s
operations on the communities within
which it operates and the people it
employs; and
• The behaviour of the company’s
people
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Organisations must take an ethical stance
• Ethical stance: the extent to which a
company will exceed its minimum
obligation to stakeholders on ethical
grounds.
– Johnson and Scholes
•
•
•
•
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Short term stakeholder interest
Long term stakeholder interest
Multiple stakeholder interest
Shaper of society
Corporate ethics are visible in
corporate behaviour
• Corporate ethics can be managed in
two ways:
– Compliance based: bureaucratic control
– Integrity based: cultural control
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The two approaches are quite different
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Compliance
Integrity
Ethos
Knuckle under
Choose
standards
Objective
Keep to the law
Enable legal and
responsible
conduct
Originators
Lawyers
Management and
others
Methods
Reduced
discretion
Leadership
Behavioural
assumptions
Self interest
Social conscience
Standards
Law
Company values
Staffing
Lawyers
Managers too
Education
Law, compliance
Values too
Activities
Rules
Values and
engagement
Corporate ethics are visible in
corporate behaviour
Corporate governance is the conduct of
an organisation’s senior officers.
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What does social responsibility mean
for marketing?
•
•
•
•
•
Consumer oriented marketing
Innovative marketing
Value marketing
Sense of mission marketing
‘Responsible’ marketing
• Societal marketing is a management
orientation … in a way that preserves or
enhances consumers’ and society’s well
being. - Kotler
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Why is corporate social
responsibility (CSR) relevant?
• Value-based marketing (VBM)
addresses the expectations of
customers and shareholders/owners
• CSR addresses the expectations of
the other stakeholders:
– Society at large
– Community
– The environment
– Interest groups
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CSR – A cause for concern and action?
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Useful web addresses
• CIM Code of Professional standards
– www.cim.co.uk/mediastore/constitution_2003.p
df
• UK government gateway to CSR
– www.societyandbusiness.gov.uk
• Business in the community, 700 companies
committed to CSR
– www.bitc.org.uk
• The tobacco companies (BAT, Phillip
Morris) have extensive CSR material on
their websites. See also the Portman
Group. http://www.portman-group.org.uk
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Portman Group
"Just as people should show personal
responsibility when drinking alcohol,
companies must demonstrate responsibility
in the way that they conduct their business.
We work with the drinks industry to raise
standards of alcohol marketing. We
challenge companies to be socially
responsible and inspire them to achieve
best practice."
David Poley
Chief Executive, the Portman Group
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Crises
• 1984 – Union
Carbide
• 1987 - Townsend
Thoreson
• 1988 – Perrier
• 1989 – Exxon
• 1991 – Ratner’s
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•
•
•
•
1995 – Pepsi
1995 – Intel
1995 – Persil
2000 – Ford/
Firestone
• 2003 – SARS
• 2004 – Coca- Cola
Crisis Management phases
1.
2.
3.
4.
5.
Signal Detection
Preparation
Damage Containment/limitation
Recovery
Learning
Source : Pearson et al (1997)
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Individual retaliation
• Try
• www.untied.com
• Enjoy!
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Summary
• Ethical approaches are fundamentally
“….doing what you said you would do and
not hurting anyone!!”
• Corporately, CSR takes a stakeholder
approach and considers all participants in the
business
• CSR can be a good idea for small & large
business alike
• CSR can be a strategic goal – e.g. Waitrose,
Bodyshop, Co-oP bank etc.
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CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 8
IMPLEMENTING BUSINESS
STRATEGY
Service quality
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Learning outcomes
At the end of the session, you will be able to:
• Identify ‘moments of truth’ in delivering a
service and activities that may add further
value and assess their likely impact on
customers and intermediaries;
• Propose and implement appropriate
improvements to customer service by
developing and enhancing customer care;
and
• Establish and apply techniques for
managing and monitoring service quality,
including the use of specific measures.
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Moments of truth
At Scandinavian Airlines (SAS) it
is estimated that each year staff
come into contact, for an average
of 15 seconds, with 10 million
customers around 5 times. As
their President reflects:
“Thus, SAS is created in the
minds of our customers 50 million
times a year, 15 seconds at a
time. They are the moments
when we must prove to our
customers that SAS is the best
alternative.”
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Types of service encounters
1. Remote encounters
– Customer contact through impersonal
means. Eg computer interaction
(ATM’s, web)
2. Phone encounters
– Calling for information, placing orders
and arranging for service
3. Face to face encounters
– Direct personal contacts for any
purpose eg sales or service delivery
Shostack (1985)
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Why is service quality so important?
• Enormous growth of service sector
since WW2
• Harder to define and judge than
product quality
• Intangibility
• Providers must do their utmost to
identify the expectations of target
customers with respect to each
specific service being offered
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The customer journey
• Identifies key processes at the customer
interface
• Understanding of these processes can
enable improvements to be made to
ensure positive experiences
• Helps clarify customer needs and
preferences
• Information is gathered and stored – feeds
into:
– Development of processes
– Staff training
– Product/service development
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Customer care programmes
• Identifies customers
• Establishes needs
• Identifies what they want in terms of
service
• Sets standards
• Monitors service regularly against
standards
• Takes action to improve
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Service quality
• Competitive advantage can be obtained by
delivering consistently higher quality
service than competitors
• Customer service expectations must be
exceeded
• Internal marketing essential
• Needs top management commitment
• Standards must be set
• Performance must be monitored
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Syndicate work
In groups of two, discuss and then
comment on your company’s customer
service strategy and performance. Does
it meet and exceed customers’
expectations?
Is it imbued within the organisational
culture?
Does your company leader drive this
forward?
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Service quality models
• Grönroos
– (1984)
• The ‘Gap’ model
– (Parasuraman et al 1985 and Zeithaml
et al 1990)
• SERVQUAL
– (Parasuraman et al 1988, Zeithaml et al
1990, Parasuraman et al 1991)
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Grönroos’s service quality model
1. Technical quality
– What customer receives – the outcome
of the process
2. Functional quality
– How the customer receives the
technical outcome “ the expressive
performance of a service”.
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Grönroos perceived service quality
expected service
perceived service quality
perceived service
image
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technical quality
functional quality
what?
how?
The ‘Gap’ model
• “A set of key discrepancies or gaps
exists regarding executive
perceptions of service quality and the
tasks associated with service
deliveries to consumers. These gaps
can be major hurdles in attempting to
deliver a service which consumers
would perceive of being of high
quality”
Parasuraman et al 1985
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Service quality gaps model
(Parasuraman, Zeithaml and Berry, 1985)
Word-of-mouth
Communications
CUSTOMER
Personal needs
Past experience
Expected service
Gap 5
Perceived service
PROVIDER
Gap 1
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Gap 3
Service
delivery
Gap 4
Service quality
specifications
Gap 2
Management perceptions
of customer expectations
External
communications to
customers
Reasons for service quality gaps
• GAP 1 – not knowing what customers
expect
• GAP 2 – the wrong service quality
standards
• GAP 3 – the service performance gap
• GAP 4 – when promises do not match
actual delivery
• GAP 5 – the difference between
customer perception and expectation
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Determinants of service quality
•
•
•
•
•
•
•
•
•
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Tangibles
Reliability
Responsiveness
Communication
Credibility
Competence
Courtesy
Understanding customers’ needs
Access
Parasuraman et al 1985
Determinants of perceived service quality
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Dimensions
of quality
Tangibles
Reliability
Responsiveness
Competence
Courtesy
Credibility
Security
Access
Communication
Knowledge
Parasuraman et al 1985
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Word of
mouth
Past
experience
Expected
service
Perceived
service
Buyers’
needs
Advertising
Perceived
service
quality
SERVQUAL Model
Understanding customer expectations
•Marketing research
•Open communication with employees
Service quality specifications
•Service goals
•Management commitment to service
quality
Service Quality –
Dimensions
•Reliability
•Assurance
Employee performance
•Employee training
•Evaluation and compensation schemes
Managing service expectations
•Advertising
•Good internal communications
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•Tangibles
•Empathy
•Responsiveness
Dibb, Simkin, Pride & Ferrell, 2001
Adapted from Parasuraman, Berry &
Zeithaml - 1991
SERVQUAL (Ziethaml and Bitner, 1988)
tries to quantify service
• Reliability: ability to perform the promised
service dependably and accurately
• Assurance: knowledge and courtesy of
employees and their ability to convey trust
and confidence
• Tangibles: physical facilities, equipment,
appearance of personnel
• Empathy: caring individualised attention
• Responsiveness: willingness to help
customers and to provide prompt service
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Usage of SERVQUAL
• Service industries to understand
perceptions of needs and to measure
quality of delivery
• Internal – to understand employees
perceptions of service quality to
achieve service improvement
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The process
• Customer survey to determine
– The relative importance of each attribute
– A measurement of performance
expectations that would relate to an
excellent company
– A measurement of performance for the
company in question
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SERVQUAL
BENEFITS
• Provides
–
–
–
–
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A benchmark created
by your customers
Performance levels as
perceived by them
Suggestions
Impressions from
employees regarding
customer
expectations and
satisfaction
• LIMITATIONS
• Include
– Validity of the 5
dimensions
– Applicability to all
sectors
– Risk in using difference
scores
– Measures in assessing
the quality of
information services
The links
• Excellence – Tom Peters 1982
• Market Orientation
• Relationship Marketing
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Common practices in excellent
service companies
1. A strategic concept
2. A history of top management commitment
to quality
3. The setting of high standards
4. Systems for monitoring service
performance
5. Systems for satisfying complaining
customers
6. Satisfying employees as well as
customers
Source : Kotler
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Service blueprint framework
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Mystery shopping programme
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Useful web-sites
• The Institute of Customer Service
– www.instituteofcustomerservice.com
• The Service Quality Institute
– www.customer-service.com
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CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 9
IMPLEMENTING BUSINESS
STRATEGY
Communications and
relationships
52
Learning outcomes
At the end of the session, you will be able to:
• Develop and manage integrated marketing and
communications programmes to establish and build
relationships appropriate to the needs of customers or
clients.
• Develop and manage integrated marketing and
communications programmes to establish and build
relationships appropriate to the needs of intermediaries.
• Develop support for relationships with customers, clients and
intermediaries using appropriate information systems and
databases.
• Adhere to relevant privacy and data protection legislation
when using the above mentioned systems.
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Model of communication
Noise
Source
Coded
Message
Medium
Feedback
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Decoded
Message
Receiver
How Marketing
Communications works
1.
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
(Kotler & Armstrong, 2001)
2.
Sales
3.
Persuasion
Involvement
Saliency
Awareness
Trial
Reinforcement
Nudge
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(Ehrenberg, 1997)
AIDA is old fashioned (but not dead)
• Attention, Interest, Desire, Action.
AIDA is sequential.
• Sales, Persuasion, Involvement,
Saliency are alternative frameworks.
• Awareness, Trial, Reinforcement,
Nudge is Ehrenberg’s view.
• There is no best model.
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The communications context
ORGANISATION
CONTEXT
Customer Profiling
Competitive positioning
Suppliers
Employees
Partners
Local and National Community
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Business Objectives
CUSTOMER CONTEXT
Acquisition
Market dynamics
BUSINESS CONTEXT
Shareholders
Ethical and Moral Stance
STAKEHOLDER CONTEXT
Local and National Government
ENVIRONMENTAL CONTEXT
Evaluating alternative approaches
Keller (2001)
• Coverage: breadth and depth
• Contribution: effectiveness on its own
• Commonality: synergy with other
approaches
• Complementarity: power to show,
emphasise or develop different
associations
• Robustness: effectiveness across the
audience
• Cost – consider cost to determine value in
IMC programme
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Building relationships
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Taking communications further:
building relationships
•
•
•
•
•
•
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Supplier-customer bonds
Technological bonds
Legal bonds
Financial bonds
Cultural bonds
Social bonds
Relationship marketing orientation
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Characteristics of relationship marketing
• Long-term orientation or horizon
• Commitment and fulfilment of
promises
• Customer share, not market share
• Customer lifetime value
• Two-way dialogue
• Customisation
Little & Marandi
2003
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The benefits to the organisation: the relationship
marketing ladder
PARTNER
ADVOCATE
SUPPORTER
Emphasis on
winning
customers
(Customer
catching)
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CLIENT
CUSTOMER
PROSPECT
Emphasis on
developing and
enhancing
relationships
(Customer
keeping)
Direct and database marketing
1. Targeting – who are the targets for
the offer?
2. Interaction – How and what should
we communicate?
3. Control – what is the return on the
investment?
4. Continuity – How can we build the
relationship?
Source: McCorkell (1999)
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IT in developing relationships
• Information can be made readily
available to targeted audiences –
– Internet – corporate stakeholders
– Intranet – internal market
– Extranet – suppliers and key customers
• Can be instantly updated
• Can support sales personnel and
provide a personalised service
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The six market model
Influence
markets
Internal
markets
Referral
markets
Customer
markets
Employee
markets
Supplier
markets
Christopher et al., 1994
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Networks & stakeholders
• Power over the actions of the organisation
- formal, economic, political
• ‘Map’ stakeholder relationships and assess
impact of marketing communications
strategy
• Vertical Marketing Systems - attempt to
achieve economies of scale and maximise
market impact through collaborative
partnerships
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Summary
• Extended marketing mix for services…but
beware in professional services traditional
marketing techniques are still being
developed
• Service quality = satisfaction = more
customers = more loyalty = more sales
• Relationship marketing (RM) & focus on
the individual – (precision marketing)
• People & their behaviour are key to RM
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CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 10
MANAGING THE MARKETING
FUNCTION
Quality, process and project
management
69
Learning outcomes
At the end of the session, you will be able to:
• Assess the relevance of the key concepts of quality
management, including structured approaches to continuous
improvement and problem solving, and their use in
conducting marketing activities.
• Develop a plan for compliance of a marketing function’s
activities with an organisation’s quality management system.
• Assess the relevance to the marketing function of the
concept of process and techniques for process
management, and develop a plan for their use in conducting
marketing activities.
• Assess the relevance of the key concepts and techniques of
project (or programme) management, and develop plans for
their use in conducting marketing and other business
activities.
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First let’s get a few definitions clear!
• Quality management is an organisationwide approach focused on continuous
improvement which ensures that the
organisation’s activities meet or exceed
customer expectations
• Process management refers to analysing,
monitoring and defining business
processes for effectiveness and efficiency
• Project management is the process of
managing non-repetitive activities to
ensure that they achieve time, cost and
performance objectives
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Benchmarking is often the start
• Benchmarking is the establishment of
targets through whose use relative levels of
performance can be identified. These are
the baseline at which improvement
programs can be targeted.
• Benchmarking may be:
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–
–
–
–
–
–
Strategic
Performance based
Process
Internal
External
International
There are different approaches to quality
• Inspection: traditional quality control
• Design: product and process
– Design for quality
– Zero defects; right first time
– Quality circles
• Quality assurance and standards
– Supplier guarantees quality
– IS0 9000 focuses on systems not
outputs
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Quality gurus
• Juran: fitness for use
– Quality of design and quality of
conformance
• Crosby: zero defects and right first
time
• Ishikawa: quality circles
• Taguchi: quality cost model
• Oakland: total quality management
• And Deming …
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Continuous improvement (the ‘Deming cycle’)
Adapt,
implement
& monitor
What and
who
ACT
PLAN
CHECK
DO
Analyse
findings &
assign cause
Source: Drummond & Ensor
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Direct
contact &
secondary
data
Total quality management
• A way of managing a business to ensure
complete customer satisfaction both
internally and externally
• Not a one-off process but a continual
examination
–
–
–
–
–
–
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Continuous improvement (Kaizen)
Employee involvement
Focus on the customer
New relationship with suppliers
Discipline and standardisation
Long term commitment
Quality systems & marketing
• Quality management standards and
systems
– Six Sigma is a standard
• DMAIC and DMADV processes
– ISO 900x is a system
• Processes needed to ensure
marketing’s compliance
• Positive or negative impact?
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The European Foundation for Quality Management
has led the excellence movement in Europe
enablers
results
people
leadership
policy and strategy
people results
processes
partnerships and
resources
society results
innovation and learning
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customer results
key
performance
results
CIM PROFESSIONAL PG
DIPLOMA
MANAGING MARKETING
PERFORMANCE
MANAGING THE MARKETING
FUNCTION
Process management
79
What’s a process?
input
process
output
• A set of logically related tasks performed to
achieve a desired business outcome
(Davenport and Short, 1990)
• Processes go across functions
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Marketing is a business process
• It can be measured and it can be
managed
• More important though: as a
consequence of this it can be
improved.
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And here’s one I prepared earlier …
build awareness
generate suspect
suspect
develop prospect
repeat
buy
build relationship
quote
long term
prospects
secure order
order
service customer
install equipment
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Business process re-engineering
(BPR)
• Business process re-engineering is
the ‘… redesign of business
processes to achieve dramatic
improvements …’
(Hammer and Champy)
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TQM and BPR compared
TQM: improvement
Incremental
Existing process
Continuous
BPR: innovation
Radical
Clean slate
One-time
Time required
Short
Long
Participation
Bottom-up
Top-down
Typical scope
Narrow
Broad
Level of change
Starting point
Frequency of
change
Functional focus Within
Across
Risk
Moderate
High
Primary enabler
Statistics
IT
Type of change
Cultural
Structural
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Process management and marketing
• Need to understand the customer’s
purchasing processes
• Map the customer journey –
processes involved at customer
interaction points
• Benefits and disadvantages of
process management for marketing
• Process management is fundamental
in services (think about the 7 Ps)
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Syndicates
In groups of two, map the customer
journey within your company and
comment on its effectiveness.
Could it be improved, if so, how?
86
LUNCH!
87
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
MANAGING THE MARKETING
FUNCTION
Project management
88
What’s a project?
• ‘A project is an undertaking that has a
beginning and an end and is carried
out to meet established goals within
cost, schedule (delivery) and quality
objectives’
(Haynes, Project Management).
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The Role of the
Project Manager
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•
•
•
•
•
•
•
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Outline planning
Detailed planning
Teambuilding
Communication
Co-ordination
Monitoring & control
Problem resolution
Quality control
Project Life Cycle
Resources required
Phases
Defining
Phase
Start
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Planning
Phase
Time
Implementing
Phase
Controlling
Phase
Completing
Phase
Finish
•
•
•
•
•
•
•
Project Life Cycle
Conceiving &
defining the
project.
Implementing
the plan.
Completing &
evaluating
the project.
Planning
The project.
Analyse problem
Define project
Final objective
Success criteria
Alternatives
Evaluate
Select & assess.
92
• Manageable units
• Estimate resources
• Schedule & plan
resources & timings
• Review progress
• Monitor performance
• Take corrective action
• Did the end result
meet the clients
expectations?
• Was the project
management
successful?
Tools are available for project management
• Gantt charts
– Times based bar charts
– Easy but simple
• Critical path analysis (CPA)
– Well developed and universally accepted
– Defines the critical path and determines
resource needs
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Project management – criteria for success
• Customer satisfaction – expectations
need to be managed
• Organisation satisfaction – e.g. profit,
development of capability
• Team learning – can lessons be
learned and taken forward to other
projects
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Project management – reasons for failure
• Lack of appropriate expertise and
approach from Project Leader – need to
provide development
• Lack of support from project sponsor –
need to communicate resources needed
and reasons
• Lack of ability/necessary expertise of team
members – need to select carefully
• Lack of ‘buy-in’ from end-users – need to
involve them in the project
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Project management – post-project evaluation
• Customer & stakeholder evaluation
• Reviewing final status report with
project team
• Recording lessons learned
• Reviewing final report with sponsor
• Celebrating success
96
Project management skills and problems
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Useful web-sites
• www.dti.gov.uk/quality
– DTI site with information about quality processes
• www.apm.org.uk
– The Association for Project Management
• www.pmforum.org and www.4pm.com
– US project management sites
• www.efqm.org
– The European quality forum
• www.deming.org and www.juran.com
– The Deming and Juran Institutes
• www.kaizen-institute.com
98
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 11
MANAGING THE MARKETING
FUNCTION
Instilling creativity and
innovation
99
Learning outcomes
• At the end of the session you will be
able to:
– Assess the capabilities of an
organisation to exploit innovation and
creativity in its products/services and
processes.
– Develop and nurture processes and
techniques within marketing teams to
exploit innovations in marketing
100
Syndicates
Inviting customers in to the creative
process.
BMW designed an online toolkit that
facilitated the involvement of their customers
in the innovation process. Customers were
delighted to be invited to engage in the
creative process, and some visited engineers
for direct input into new product and service
ideas. This creative process has the
advantage of engaging customers and
acquiring successful ideas at little cost.
In groups of two, describe a similar process that your company
has undertaken or discuss how this could work in your own
organisation.
101
102
The innovation audit
• ‘A critical assessment of the firm’s
innovations record, the internal
obstacles to innovation and how
performance can be enhanced.’
103
Syndicates
P.180/181 Palmer, Cockton,Cooper
Cemex, Mexico has 9 innovation days
per year which have led to 250 ideas
being generated.
Think of your own company. Would this
work? If so, how would you introduce
and manage it? If not, what are the
barriers to innovation?
104
The innovation audit should cover ...
•
•
•
•
•
105
Organisational climate
Rate of NPD
Customer satisfaction ratings
The innovation/value matrix
Balance of cognitive styles of senior
managers
The nature of strategic innovation
• ‘Most strategic innovations come from
outsiders, rarely from established players’
(Markides)
• ‘The challenge is to foster creativity and
innovation at a strategic level within
organisations’ (Ensor)
• Fostering creativity & innovation:
– individual level
– operational level
– strategic level
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Strategic Marketing: Planning and Control – Drummond, Ensor, Ashford
Conditions required for innovation
Moderate
environmental
uncertainty
Cohesive
workgroups
Exchange of
information
Innovation
Resources for
innovation
107
Supportive
structure &
systems
Low people
turnover
Useful web-sites
• www.mycoted.com
– A list of creativity techniques
• www.gocreate.com
• www.thinksmart.com
• www.3dthinkers.com
– Articles and ideas from consultants
• www.balancedscorecard.org
– US based balanced scorecard gurus
108
Syndicates
In groups of two, consider your own
organisation and comment on how you
undertake innovation.
What is your system for NPD?
Has it been successful?
109
Syndicates
Sky plus case.
In groups of two, looking at Rogers
Framework which classifies
characteristics of new products under 5
headings (relative advantage,
compatibility, complexity, divisibility,
and communicability) consider how
your own organisation meets these
criteria or not as the case may be.
110
Creative Leadership and Innovation
The creation and nurturing of an
innovative culture relies heavily on the
kind of leadership that can release
passions, imaginations and energy in a
company. This type of creative leader
has the following qualities:• They design cultures that support
innovation
People are encouraged to adapt to changing
circumstances, challenge the status quo, and
operate in a productive discomfort zone
111
Creative Leadership and Innovation
• They inspire people
They have a clear vision for the future
and know how to motivate people to
achieve the corporate vision
• They provide insights, not solutions
In a complex environment, they recognize
that there is a need to give form to what is
unfolding by asking important questions.
• They maintain focus, not control
Rather than tight control, they encourage a
healthy disequilibrium, and show in their actions how
to tolerate uncertainty and live with paradox.
112
Syndicates
In groups of two select an example
either from your own company or an
external one and comment on the 4
qualities of creative leadership
mentioned in the previous
two slides
113
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 12
MANAGING THE MARKETING
FUNCTION
Managing external resources
114
Learning outcomes
At the end of the session, you will be able to:
• Establish a mechanism, which is consistent
with organisational policy, for deciding the
activities to be undertaken by external
suppliers.
• Carry out cost benefit analysis of the
options available, including agencies and
outsourcing.
• Gain approval for the relevant expenditure.
115
It’s not just about marketing services
opportunities to outsource
• Marketing research
• Specialised aspects of communications
– PR
– Advertising
– Direct marketing
– Sales promotions
– Field marketing
– New media
• Sales
• Manufacturing
• Research & development
• IT
• HR
• Discrete processes
• Etc etc
116
When to outsource: it all depends
not
proprietary
high priority: strong
outsourcing
candidates
data are
proprietary
dependant on industry and
company dynamics
process is
proprietary
profit model
is proprietary
proprietary nature of process or function
medium priority: outsourcing opportunities
low priority: captive
sourcing candidates
common across
industries
unique to self
uniqueness of business process or function
117
(Gottfredson et al, 2005)
Take a hard look at capability and costs
be open-minded
company's ability to perform function
better
than it
needs to
be!
source to reduce cost
sacrifice capability if necessary
sufficient
source to reduce cost
not good
enough
consider creating a
new business
(if adjacent to core
business)
source to increase
capability at lower cost
above industry
median
source to increase capability
even at higher cost if necessary
at industry
median
cost per transaction
118
below industry
median
Outsourcing: beware
• Allowing somebody else to do a part of
your business because they are better or
cheaper.
• You surrender control and you acquire a
major relationship management issue.
• Never, never do it for a core competence
• And always be very objective about costs,
quality, delivery and agility issues.
119
Cost/benefit analysis
• Identify all costs and benefits using
principle of opportunity cost
• Measure the costs and benefits in
monetary terms
• Conduct sensitivity analysis – the
likelihood of the cost or benefit
occurring
• Take account of the timing of costs or
benefits (discounting)
120
121
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 13
MEASUREMENT, EVALUATION
AND CONTROL
Measurement and control
122
Learning outcomes
At the end of the session, you will be able to:
• Develop and use ‘accounting’ measures of performance of
marketing activities against objectives.
• Define and use customer related and innovation measures
as part of the organisation’s balanced scorecard.
• Measure the financial returns achieved on specific
investments in marketing activities and programmes and
compare them with the original business case or investment
appraisal.
• Propose measures of the value generated by developing a
position based on sustainability or ethics and of the progress
of the organisation in achieving the desired position.
123
Effective control depends on feedback
• This is no more than our old friend the
Deming cycle (plan, do, check and
adjust) applied to a basic process
model (input-process-output)
• Remember that output is a
consequence, you can only control
inputs and process.
• Remember also that there is generally
a time lag between input and output
124
Focus on the critical performance parameters
• Strategy drives critical success factors
(CSFs we must be able to …)
• Action are initiated to drive performance
towards the CSFs (we will …)
• Critical performance parameters track
progress.
• Critical performance parameters are more
often sign posts and not end results.
125
Short/long term balance is the premier
management challenge
• Pressure to deliver short term results can
easily stimulate counter strategic activity
• But sometimes tactical success is a prerequisite for strategic freedom!
–
–
–
–
126
Set realistic short term goals
Ensure good control information is in place
Combine patience with persistence
Behave right
Techniques for evaluating performance
• Balanced scorecard
• Measures (or metrics) of marketing
performance, including marketing
assets
• Financial techniques and ratios, e.g.
shareholder value analysis
• Other ‘structured’ techniques, e.g.
value chain analysis, innovation audit,
portfolio analysis, and cultural web
127
Kaplan and Norton (1992, 1993)
the balanced scorecard
“..gives managers a fast but comprehensive view of the business”
128
Measures within the balanced scorecard
have a ‘causal relationship’
financial
ROCE
customer loyalty
customer and market
on-time delivery
internal/business
processes
process quality
learning and growth
129
Source: Kaplan and Norton 1992,1993
process cycle time
employee skills
The balanced score card takes a
broader view of performance
• Single measures have a habit of
encouraging counter strategic behaviour
• The balanced score card is a set of
measures that gives managers a
comprehensive view of the business
–
–
–
–
130
Customer related measures
Financial measures
Internal business measures
Innovation and learning measures
Service Balanced Scorecard
131
Value chain analysis
132
Innovation audit
Pioneers
value
innovations
Migrators
value
improvements
Settlers
me-too
businesses
current portfolio
the innovation/value matrix
Kim and Mauborgne (1998)
133
planned
portfolio
Portfolio analysis
134
Budgeting is a formal and collective
process
• Everyone does it at the same time
• It is used for co-ordination, communication
and control and typically addresses a one
year period
• Regard it as a tactical implementation of
strategy
• It’s a bit like democracy: not perfect but
there’s nothing better.
• Variance vs. budget is a form of ‘check’
135
Some questions to be answered when
evaluating performance
• What are the key strategic decisions facing
the organisation?
• What are the owners’ expectations?
• How well are we meeting them now?
• Where are we strong and
weak/vulnerable?
• How can we meet or exceed them in future
in the light of known opportunities and
threats?
• What do we need to do?
136
Targets, Budgets & Ratios
• Budgets
– Purpose, preparing, period, & forecasts
– Sales budget v marketing expenses
– Setting the marketing budget (methods)
• Variance analysis
– How much does each measure vary from the
budget?
• Ratio analysis
– One year to the next, one business to another
137
Ratio analysis (1/3)
• Sources of information
– Management accounts
– Published financial accounts
– Data and records held by marketing,
operations and finance
– Marketing/competitor information system
– Market research reports
– Primary research
– Intelligence (in both senses of the word!)
138
Sources of financial data
• Financial statements (with notes):
– Profit & loss account
– Balance sheet
– Source & application of funds
• Management accounts:
– Budgets
– Management accounts/reports
139
Ratio analysis (2/3)
• Profitability & Performance
– Profit margin (PBIT/turnover)
– Asset turnover (turnover/net assets)
– ROCE (PBIT/net assets)
PBIT
RoCE
Profit Margin
Capital Employed
140
Turnover
Asset Turnover
Ratio Analysis (3/3)
• Operational
– Debtor days (debtors/sales)x365
– Stock T/over period (closing stock/cogs)x365
• Corporate
– Profitability
– RoCE
• Marketing Specific
– Financial (sales, profits, margins etc.)
– Non-financial (orders, leads, personnel)
141
Financial ratios
• Profitability ratios
• Liquidity ratios - short term risk
• Solvency (or capital structure) ratios longer term risk
• Investment ratios – shareholders
• Value added ratios – performance of
resources or inputs
• To revise go to
www.bized.ac.uk/compfact/ratios/index.htm
142
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 14
MEASUREMENT, EVALUATION
AND CONTROL
Measuring the value of
marketing
143
Learning outcomes
At the end of the session, you will be able to:
• Assess the value that marketing activities
generate and contribute to shareholder
value, as appropriate working with
colleagues from other disciplines, using
appropriate models and techniques.
• Identify key areas for measurement.
• Develop appropriate metrics for those key
areas.
144
The marketing audit should cover ...
•
•
•
•
•
•
145
marketing environment
marketing strategy
marketing organisation
marketing systems
marketing productivity
marketing functions
Marketing activities that generate value
•
•
•
•
•
•
•
•
•
146
Increasing customer retention
Growing share of customer
Winning new customers
Developing new products and services
Entering new markets
Developing new distribution channels
Grow internationally
Acquisitions and alliances
Diversification
Marketing Activity impact on balance sheet - 1
147
Marketing Activity impact on balance sheet - 2
148
Summary
• Control systems need to be in place, and
appropriate feedback systems are key to
success.
• Balanced scorecard offers a way of looking
at the whole business
• Budgets are important as limits and targets
• The importance and relevance of both
financial & non-financial ratios must be
understood by marketers.
149
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Session 15
MEASUREMENT, EVALUATION
AND CONTROL
Managing marketing performance
150
Learning outcomes
At the end of the course, you will be able to:
• Create an appropriate climate for the
achievement of strategic objectives through
marketing teams.
• Implement the business strategy through
marketing activities.
• Use appropriate management techniques
in managing the marketing function.
• Initiate and critically evaluate systems for
the control of marketing activities
undertaken as part of business and
marketing plans.
151
Strategic management process
Adapted from
Johnson & Scholes
External
environment
Capabilities
& resources
Strategic
analysis
Generation
of options
Strategy
formulation
Evaluation
of options
Selection
of strategy
152
Culture,
expectations
& power
Resource
planning
Strategy
implementation
People &
systems
Structure
& culture
Strategic direction
153
Linkages!
154
We’ve covered a lot of ground
• Teams and leadership
• Managing change
• Implementing business strategy
–
–
–
–
Strategic marketing orientation
Ethical considerations
Integrated marketing communications
Managing services
• Managing the marketing function
– Quality, process and project management
• Measurement, evaluation and control
155
This course is about management
• Marketing at the centre of the
organisation
– Is the font of all knowledge
– Provides the engine of growth
– Orchestrates company wide marketing
activity
• But fundamentally it’s about people
156
CIM PROFESSIONAL PG DIPLOMA
MANAGING MARKETING
PERFORMANCE
Thank you and good luck!
157