Organizing & Planning for Effective
1. Which is more important: planning or
• Arguments for the importance of planning
• Implementation of marketing strategies is
unlikely to be effective unless all of the business’
people are following the same plan.
• Formal plans also establish the timetables and
objectives that are the benchmarks for
management’s evaluation and control of the
firm’s marketing strategies.
• Arguments for the importance of
• It is crucial for carrying out strategic planning
• If improper implementation, management may
mistakenly decide the wrong strategy had been
• Common venture capitalist’s adage
• “Give me ‘A’ implementation of a ‘B’ plan over
‘B’ implementation of an ‘A’ plan.”
2. How should marketing’s degree of
autonomy, shared programs and
resources, and the basis for its incentives
vary across different business strategies?
Shared Programs and Synergy
- relatively little
- little synergy in areas central to
- high level of synergy and
Evaluation and Reward Systems
- high incentives based on sales and share
- high incentives based on profits or ROI
Low cost defender
- incentives based on profits or ROI
3. How should the firm’s organization be
structured to most effectively implement
different business strategies?
– The degree to which formal rules and standard
policies and procedures govern decisions and
– Refers to the location of decision authority and
control within an organization’s hierarchy
– Refers to the division of tasks and activities across
positions within the organizational unit.
• SBU will perform best on volume and share-growth
• Functional strengths are marketing, sales, R&D, and
• % of sales spent on marketing, sales, R&D, and engineering
are high and fixed assets are low relative to competitors
• Managers from marketing, sales, R&D, and engineering have
substantial influence on business and marketing strategy
• Structure has low levels of formalization and centralization,
but high level of specialization
• SBU will experience high levels of inter-functional conflict
• Differentiated defender?
• SBU will perform best on ROI dimensions when:
• Its functional strengths include sales, financial management,
control and those functions related to its differential
• % of sales spent on sales force, gross fixed assets per
employee, % of capacity utilization, and % of sales devoted to
other functions related to differential advantage are high
relative to competitors
• Financial managers, controller, managers of functions related
to unit’s differential advantage have substantial influence on
business and marketing strategy decisions
• Structure has moderate levels of formalization, centralization
• SBU will experience moderate levels of inter-functional
• Low-cost defender?
• SBU will perform best on ROI and cash flow dimensions
• Its functional strengths include engineering, production,
distribution, and financial management and control
• Marketing, sales, and product R&D expenses are low, but
process R&D, fixed assets per employee, and % of capacity
utilization are high relative to competitors.
• Financial, controller, and production managers have
substantial influence on business and marketing strategy
• Structure has moderate levels of formalization and
centralization, but low levels of specialization
4. What are the merits and limitations of
structuring the marketing organization
on a functional, product, or market
basis? When might each form best be
- Can be used on a global basis, too.
• Merits: Simple and easy to implement.
• Limitations: Relies heavily on standard rules and
operating procedures. Conflicts across functional
areas are resolved in a hierarchical manner.
• Best use: for small startup companies; or for
large companies operating in stable and slowgrowth industries where the environments are
predictable. The form is appropriate for low-cost
defender SBUs attempting to maximize their
efficiency and profitability in mature or declining
• Product management?
• Merits: Has the ability to identify and react more quickly
to the threats and opportunities individual productmarket entries face; improved coordination of
functional activities within and across product markets;
and increased attention to smaller product-market
entries that might be neglected in a functional
• Limitations: This structure has difficulty in obtaining the
cooperation necessary to develop and implement
effective programs for a particular product given that a
product manager has little direct authority.
• Best use: For companies or SBUs that have many
product-market entries. (diff defender ;analyzer)
• Market management?
• Merits: Gives market managers more authority
and independent budgets to work with.
• Limitations: Potential for lack of control or
consistency with this kind of decentralized
• Best use: For companies who market a single
product to a large number of markets where
customers have very different requirements and
preferences. (differentiated defender; analyzer)
• What about a Matrix structure?
• Merits: Brings multiple points of view to decision-making. Once
decisions are reached, they are more likely to reflect the
expertise of a variety of functional specialists, to be innovative,
and to be quickly and effectively implemented.
• Limitations: Requires participative decision making which can be
very inefficient; requires a good deal of time and effort for the
team to reach mutually acceptable decisions and gain approval
from all the affected functional areas. Even with fast
implementation, may slow responsiveness to changes in market
and competitive conditions.
• Best use: A business facing an extremely complex and uncertain
environment may find a matrix organization appropriate.
(prospector/ new product development in analyzers and
5. How should managers decided when the
time has come to restructure an
organization and what new structure
should replace the old?
Five Key Drivers
• Customer needs
• Informational requirements of the sales
and marketing personnel charged with
meeting those needs
• Ability of a given structure to motivate and
coordinate the kinds of activities that
market conditions require
• Available competencies and resources
6. What does a Marketing Plan contain?
• Executive Summary: Presents a short
overview of the issues, objectives, strategy,
and actions incorporated in the plan and
their expected outcomes for quick
• Current Situation: Summarizes relevant
background information on the market,
competition, past performance of the
product and the various elements of its
marketing program (e.g., distribution,
promotion, etc.), and trends in the macroenvironment.
• Key Issues: Identifies the main opportunities and
threats to the product that the plan must deal
with in the coming year, and the relative
strengths and weaknesses of the product and
business unit that must be taken into account in
facing those issues
• Objectives: Specifies the goals to be
accomplished in terms of sales volume, market
share, and profit.
• Marketing Strategy: Summarizes the overall
strategic approach that will be used to meet the
• Action Plans: This is the most critical section of
the annual plan for helping to ensure effective
implementation and coordination of activities
across functional departments. It specifies:
What specific actions are to be taken.
Who is responsible for each action.
When the action will be engaged in.
How much will be budgeted for each action
• Projected Profit & Loss Statement: Presents the
expected financial payoff from the plan.
• Controls: Discusses how the plan’s progress will
be monitored; may present contingency plans to
be used if performance falls below expectations
or the situation changes.
• Contingency Plans: Describes actions to be
taken if specific threats or opportunities
materialize during the planning period.
6. What are some of the things a good
marketing plan does to help ensure its
• Marketing plans are more likely to be
implemented effectively when:
• Objectives meet the SMART test [Specific,
Measurable, Attainable, Relevant (to the firm’s
• Target market is clearly identified
• Action plans and milestones identify specific
timelines, responsibilities, and budgets
• Contingency plans are identified