Transcript Basic Marketing, 17e

Chapter 20
Managing Marketing’s Link with
Other Functional Areas
For use only with
Perreault/Cannon/
McCarthy texts, © 2009
McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
At the end of this presentation, you should be
able to:
1.
2.
3.
Understand why turning a marketing plan
into a profitable business requires money,
information, people, and a way to get or
produce goods and services.
Understand the ways that marketing
strategy decisions may need to be
adjusted in light of available financing.
Understand how a firm can implement and
expand a marketing plan using internally
generated cash flow.
At the end of this presentation, you should be
able to:
4.
Understand how different aspects of production
capacity and flexibility should be coordinated
with marketing strategy planning.
5.
Understand the ways that the location and cost
of production affect marketing strategy
planning.
6.
Know how marketing managers and
accountants can work together to improve
analysis of the costs and profitability of specific
products and customers.
7.
Know some of the human resource issues that
a marketer should consider when planning a
strategy and implementing a plan.
Marketing and Other Functional Areas Provide
Company Resources for Strategy Planning and
Implementation (Exhibit 20-1)
Resource Requirements for
Marketing Strategies and Plans
Finance
Production &
Operations
Accounting
Human
Resources
Marketing in the Broader Context
CrossFunctional
Challenges Are
Greatest With
New Efforts
New Product Cross-Functional Challenges
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Finance Function: Money to Implement
Marketing Plans
Investor’s Time
Horizon Is
Important
Investors Expect
a
Return
What Is
Capital?
Key
Financial
Issues
Capital Comes
From Internal
and External
Sources
The CFO
Handles Money
Matters
Opportunities
Compete for
Capital/Budgets
Working Capital
Pays for ShortTerm Expenses
Forecasts May
Become An
Ethical Issue
Other Efforts to Raise Capital
Debt Financing
Has Interest
Cost
Interest Expense
May Impact
Prices
Expanding Profits
May Mean
Expanded Plan
Winning
Strategies
Generate Capital
Keeping the Money Flowing
Cash Flow – When
Money Is Available
Improve Return of
Investment
Marketing Mix Affects
Capital Needed
Production
Must Be
Coordinated
with the
Marketing Plan
Bertolli
Pasta Sauce:
The only
leading
brand that
goes from
vine to jar in
just one day.
Marketing Implications of Production Problems
Slow Production
Quantity
Adjustments
Stock-Outs
Source Supply
Wasted Marketing
Effort
Difficulty in New
Product Coverage
May Require
Staged Distribution
Need to
Produce Many
Product Lines
May Require
Outsourcing or a
Virtual Corporation
Where Products Are Produced Matters
Moving
Production to
Low-Cost
Countries
Task Transfer
Overseas
Production Has
Critics
Other Issues in Production
Mass
Customization
Serves
Individual
Needs
Producing to
Order
Requires
Flexibility
Mass
Customization
Is Not Mass
Marketing
Sometimes Batched Production Is Still Necessary!
Checking Your Knowledge
Wizard Parts Company, an auto parts manufacturer,
provides its customers with production flexibility. This
could help Wizard support its customers with:
A. Computerized reorder capabilities.
B. Electronic data interchange (EDI).
C. Just-in-time deliver (JIT).
D. Any of the above.
E. None of the above.
Accounting Data Can Help in Understanding
Costs and Profits
Functional Accounts
Natural Accounts
•
•
Formal Financial
Accounting
Examples:
Salaries
Wages
Supplies
Raw Materials
•
vs.
•
Purposes for Which
Expenditures Are
Made
Examples:
Milling
Grinding
Maintenance
• Reclassify Natural to Functional
• Reallocate Functional Accounts
• Evaluate Profitability of Profit Centers
Cost Analysis Helps Track Down the Loser
(Exhibit 20-2)
Spreading Natural Accounts to Functional
Accounts (Exhibit 20-3)
Allocating Functional Costs to Customers
(Exhibit 20-4)
A More Detailed View of Costs
(Exhibit 20-5)
Profitability of Individual Customers and Whole
Company (Exhibit 20-6)
Checking Your Knowledge
Bill Thomas, marketing manager at ATI Service, conducts
marketing cost analysis. He is correct when he says which
of the following about marketing cost analysis:
A. “Traditional accounting analysis fails to analyze the
purpose of marketing costs.”
B. “Marketing costs should be allocated to general
overhead.”
C. “Functional and natural accounts should usually have
the same names.”
D. “Functional accounts are the categories (like salaries
and raw materials) to which costs are charged in the
normal accounting cycle.”
E. All of these statements are true.
Checking Your Knowledge
Sharon Gage, marketing manager at Yellow Hat Supply,
wants to calculate the cost of marketing some of Yellow
Hat’s products to different target markets. Which of the
following will she probably have to do:
A. Reorganize some of the company’s functional cost
accounts into natural cost accounts.
B. Allocate personal selling expenses into general
overhead.
C. Reclassify all natural accounts into functional accounts.
D. None of the above because it is impossible to link the
costs of marketing to specific target markets.
People Put Plans Into Action
People – Important
Resources
New Strategies Mean
People Changes
Communication
Promotes Change
Growth Strains
Human Resources
Allow Time
for Training
Managing Changes
One Change May
Mean Several
Plan Time for
Changes
Key
Issues
Marketing
Enlivens the Firm
Cutbacks Mean
Planning
Interactive Exercise: Cross-Functional
Decision- Making
You should now be able to:
1.
2.
3.
Understand why turning a marketing plan
into a profitable business requires money,
information, people, and a way to get or
produce goods and services.
Understand the ways that marketing
strategy decisions may need to be
adjusted in light of available financing.
Understand how a firm can implement and
expand a marketing plan using internally
generated cash flow.
You should now be able to:
4.
Understand how different aspects of production
capacity and flexibility should be coordinated
with marketing strategy planning.
5.
Understand the ways that the location and cost
of production affect marketing strategy
planning.
6.
Know how marketing managers and
accountants can work together to improve
analysis of the costs and profitability of specific
products and customers.
7.
Know some of the human resource issues that
a marketer should consider when planning a
strategy and implementing a plan.
Key Terms
•
•
•
•
•
•
•
•
•
•
•
Capital
Working capital
Stock
Debt financing
Cash flow
statement
Production capacity
Virtual corporation
Task transfer
Mass customization
Natural accounts
Functional accounts