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Marketing in the Boardroom  Ten crucial questions Directors are asking their marketing     colleagues--- and the answers t...
Objective• To spell out how marketers can become more  accountable to the Board for marketing strategy and  for marketing ...
AGENDA*   profit and loss Accounts and marketing*   the impact of price on profits*   challenges and how excellent compani...
Inter Tech‟s 5 year performancePerformance (£million)       Base Year    1      2      3      4      5Sales Revenue       ...
Why Market Growth Rates Are Important        InterTech’s 5 Year Market-Based PerformancePerformance (£million)       Base ...
Quality of profits      %                                              Virtuous plc (%)                       Dissembler p...
Financial data is of limited value  “The information appearing in the majority of  boardrooms remains predominantly financ...
Short-term decisions    Improvements in a short-term financial    measure such as economic profit can be    achieved throu...
Page 9
The marketing investment time lag  Measuring marketing performance isn‟t like measuring factory  output – a fact that many...
Marks & Spencer‟s Trends         Service Positive   Value for Money   Share Price (Indexed)9585756555453525155      Nov 95...
Marks & Spencer’s Market Cap (from Bloomberg)                                                              Under the stewa...
The devastating impact of price discounts                 - 5% Discount   -10% Discount Price     £10        9.50         ...
The Impact of Price on Profit                    Start Point   Vol + 1%   Costs - 1% Price + 1%Volume                 1000...
The impact of price on profit                      Start point   Volume = +1%   Costs = 1%   Price = +1%        Volume    ...
The Price-Value Cycle                                   Cut                                  prices   Model 1             ...
Challenges     • Market Maturity     • Globalisation     • Customer power                         Page 17
Market Maturity                  Page 18
• Technology• Production• Sales• Accountancy• Fads• Marketing                Page 19
Globalisation                Page 20
New global leaders                     Leaders                                                   ?                        ...
Customer Power                 Page 22
In search of excellence (Peters)     43 “excellent” companies     14 “excellent” companies 5 years later       6 “excellen...
Page 24
How excellent companies are        responding                              Page 25
How excellent companies are responding  (Core Value)                     (Efficiency)    Product/                         ...
Quality and share both drive profitability                                                                ROI (%)         ...
Page 28
Over 40 years of research into the link between long runfinancial success and excellent marketing strategies reveal thefol...
Key Elements of World Class Marketing1.   A deep understanding of the market place2.   Correct needs-based segmentation an...
The purpose of strategic marketing planning  The overall purpose of strategic marketing, and its  principal focus is the i...
Map of the marketing domain                      Define markets                       & understand                        ...
Financial Risk and Return              High                   1 Return            2                   3              Low  ...
Question 1• Do we know and understand our key target markets?                                               Page 34
Market mapping        …including the number of each customer type                                        vol/val %        ...
Market map – office equipment                                     Direct                                 47%     24%      ...
Question 2• Do we address real segments in our key target  markets?                                                  Page 37
Personalising segments                         Page 38
Listen to how customers talk about category needCustomer View                   Supplier ViewAdvice• cutting costs        ...
Understand the different category buyers                                  Business                        Business        ...
This is a friend I know…                   … she is a busy young lady                   … she looks after her health and l...
Question 3• Do we know for sure what our sources of differential  advantage are in each of the principal segments in  our ...
SWOT analysis         • By segment, what value is required by             the customer?         • What value are you offer...
STRENGTHS    WEAKNESSESOPPORTUNITIES   THREATS                             Page 44
Strengths                       Weaknesses• It can create value for the   • It is meaningful to the  organisation and cust...
Independent Schools--- 5 key buying factors•   Academic•   Convenience•   School and family relationships•   Enhancement• ...
Academic Factors•   Personality and vision of Head•   Exam results•   Class size•   League table position (compared to reg...
Strategic marketing planning exercise – SWOT  analysis                1. SEGMENT DESCRIPTION            2. CRITICAL SUCCES...
Question 4• Do we all agree on the prioritisation of our markets  and the segments within each market?                    ...
Question 5• Are the objectives for revenue growth and market  share realistic?                                            ...
Setting expectations of performance         P                                        P  high              Supplier busines...
Market attractiveness evaluation                Factor                         Scoring Criteria                           ...
Question 6• Are the strategies (including products, services and  solutions) consistent with the objectives?              ...
Invest                 Maintain                 Manage            Opportunistic                  for Growth               ...
Activities by medium                                          Activity                        Recognise Initiate     Excha...
The Sunworshippers                                             Mobile          Broadcast   Traditiona                     ...
John and Mary Lively                                             Mobile          Broadcast   Traditiona                   ...
Relevant?            The Times 19th Jan 2005                            Page 58
Question 7• Have we assessed dispassionately the risks  associated with our strategic marketing plan?                     ...
Justifying investment in marketing assetsWhilst accountants do not measure intangibleassets, the discrepancy between marke...
Balance sheet              Assets                                Liabilities           - Land                             ...
Balance sheet              Assets                               Liabilities        - Land                               - ...
Balance sheet                Assets                               Liabilities         - Land                              ...
Asset Breakdown for the top 10 countries byEnterprise Value (US$ millions, 2011)                                          ...
Intangibles     P and G have paid £31 billion for Gillette, but have     bought only £4 billion of tangible assets -   Gil...
Brands are key intangibles in most businessesBrands are estimated to represent at least 20% of the intangible value ofbusi...
Everything an organisation does converges on thebusiness value proposition that is projected to thecustomer and is represe...
Brands Increasingly Drive Business ResultsBrands affect business value by influencing the behaviour of a wide range of She...
• A brand is a name or a symbol on a product, service, person or  place• A successful brand creates super profits• A succe...
The Brand Iceberg                                    Symbol                                  Brand Name                   ...
SUCCESSFUL BRANDS• Build trust• Have a price/quality trade off – win/win• Offer consistently superior value•   Result ? Su...
Unsuccessful Brands  There are many products that pretend to be brands, but are  not the genuine article. As the Director ...
Page 73
Map of the marketing domain                      Define markets       Strategic zone                       & understand   ...
The historic rift between marketers and the finance        department, caused by marketing’s reluctance to be        accou...
Three questions need to be answered• How does the company plan to generate its predicted  future sales and profits?• Will ...
What is Marketing Due Diligence?                      Marketing Due                         Diligence                     ...
Market Risk Profile                               The marketing strategy has a higher• Product Category Existence   probab...
Ansoff matrix                                                       PRODUCTS                                             i...
Market Share Risk Profile                                    The marketing strategy has a higher                          ...
Shareholder Value Risk Profile  • Profit Pool                  The marketing strategy has a                               ...
Question 8• Having taken account of the risks referred to above  and having adjusted the forecast net free cash flows  for...
Question 9• Have we agreed the measurement of effectiveness  metrics we want reported to us and their frequency?          ...
Map of the marketing domain                      Define markets       Strategic zone                       & understand   ...
Overall Marketing Metrics Model                                         Lead indicators            Lag indicators         ...
Map of the marketing domain                      Define markets       Strategic zone                       & understand   ...
Expenditures to develop marketing assets make sense if thesum of the discounted cash flows they generate is positive.     ...
Projected cash              DCF and NPV                                  flows from                  methods              ...
Question 10• Overall, are we happy that the time, effort and  expense involved in developing marketing strategies  are rea...
Conditions determining a strong marketing strategy• That the marketing strategy defines real target  segments.• That the m...
“Great stars shine brightest when the sky is darkest.  In austere times, great brands bestow  pleasure, maintain their pre...
Page 92
APPENDIX 1             Page 93
Market mapping   Showing the number of each customer type, volumes and share    Suppliers       Distributors         Retai...
APPENDIX 2             Page 95
Quick Market Segmentation Solution•       Write down the main benefits sought by customers•       Hygiene factors are bene...
60% high                      Service                24               36   40%                                      60%Sma...
• Starting at the top, and moving in a clockwise direction,  multiply 60% by 60% to give 36% (see 1st circle).• Then multi...
Interpretation•  The 1st segment (36%), the biggest segment, requires both high service and   a large product range.• The ...
APPENDIX 3             Page 100
1 = relatively less                                        SWOT Summary Matrix                                     1 = poo...
APPENDIX 4             Page 102
Valuing Key Market Segments Background/Facts  Risk and return are positively correlated, ie. as risk increases, investors ...
Suggested Approach Identify your key market segments. It is helpful if they can be classified on a vertical axis (a kind o...
Portfolio analysis - directional policy matrix (DPM)                                     Relative company competitiveness ...
APPENDIX 5             Page 106
The Contents of a Strategic Marketing Plan (<20 pages)              • Mission or Purpose Statement              • Financia...
Key (revenue and profit growth)   • from productivity        • by product for market for existing products from existing m...
SWOT Analyses on Key Segments         • include pictorial representations of the SWOTs, such as bar charts         • highl...
APPENDIX 6             Page 110
Ten Crucial questions Boards are asking theirmarketing colleagues and the answers they shouldbe giving.By Professor Malcol...
Question 1.Do we know and understand our key markets?Answer:    We define our markets in terms of needs satisfied, not the...
Question 3.Do we know what our sources of differentiation are in each of the principal marketsegments in our key target ma...
Question 5.Are our objectives for revenue growth and market share realistic?Answer:    For attractive markets (attractive ...
Question 6.Are our strategies for product development, pricing, customer service, channel managementand promotion consiste...
Question 8.Have we calculated whether our strategic marketing plan creates or destroysshareholder value?Answer:    We work...
Question 10.Are we happy with our marketing planning processes?Answer:Our plans demonstrate:    1   A deep understanding o...
In conclusion, let me say that, whilst all these questionsare not relevant to all markets, unless marketers cananswer the ...
APPENDIX 7             Page 119
Are you getting these essential deliverables fromyour strategic marketing plan?Score out of 10Market structure and segment...
Detailed checklist of essential deliverablesfrom a strategic marketing planScore out of 10Scope· Are all the segments clas...
Take marketing into the boardroom,                                 and connect marketing strategy to                      ...
A colourful, witty, original                                         but deadly serious guide to                          ...
Page 124
m.mcdonald@cranfield.ac.ukwww.malcolm-mcdonald.comProf. Malcolm McDonald free videosand downloads@www.oxlearn.com
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Malcolm mc donald. eng

  1. 1. Marketing in the Boardroom Ten crucial questions Directors are asking their marketing colleagues--- and the answers they should be receiving. by Professor Malcolm McDonald Russia 1st March 2012This presentation is the copyright of Professor Malcolm McDonald
  2. 2. Objective• To spell out how marketers can become more accountable to the Board for marketing strategy and for marketing expenditure Page 2
  3. 3. AGENDA* profit and loss Accounts and marketing* the impact of price on profits* challenges and how excellent companies respond* some basic concepts* ten questions directors are asking their CMOs Page 3
  4. 4. Inter Tech‟s 5 year performancePerformance (£million) Base Year 1 2 3 4 5Sales Revenue £254 £293 £318 £387 £431 £454- Cost of goods sold 135 152 167 201 224 236Gross Contribution £119 £141 £151 £186 £207 £218- Manufacturing overhead 48 58 63 82 90 95- Marketing & Sales 18 23 24 26 27 28- Research & Development 22 23 23 25 24 24Net Profit £16 £22 £26 £37 £50 £55Return on Sales (%) 6.3% 7.5% 8.2% 9.6% 11.6% 12.1%Assets £141 £162 £167 £194 £205 £206Assets (% of sales) 56% 55% 53% 50% 48% 45%Return on Assets (%) 11.3% 13.5% 15.6% 19.1% 24.4% 26.7% Page 4
  5. 5. Why Market Growth Rates Are Important InterTech’s 5 Year Market-Based PerformancePerformance (£million) Base Year 1 2 3 4 5Market Growth 18.3% 23.4% 17.6% 34.4% 24.0% 17.9%InterTech Sales Growth (%) 12.8% 17.4% 11.2% 27.1% 16.5% 10.9%Market Share(%) 20.3% 19.1% 18.4% 17.1% 16.3% 14.9%Customer Retention (%) 88.2% 87.1% 85.0% 82.2% 80.9% 80.0%New Customers (%) 11.7% 12.9% 14.9% 24.1% 22.5% 29.2%% Dissatisfied Customers 13.6% 14.3% 16.1% 17.3% 18.9% 19.6%Relative Product Quality +10% +8% +5% +3% +1% 0%Relative Service Quality +0% +0% -20% -3% -5% -8%Relative New Product Sales +8% +8% +7% +5% +1% -4% Page 5
  6. 6. Quality of profits % Virtuous plc (%) Dissembler plc (%) Sales Revenue 100 100 Cost of Goods Sold 43 61 Profit Margin 57 39 Advertising 11 3 R&D 5 - Capital Investment 7 2 Investment Ratio 23 5 Operating Expenses 20 20 Operating Profit 14 14 Key Trends • Past 5 year revenue growth 10% pa • Flat revenue, declining volume • Heavy advertising investment in new/ • No recent product innovation, little improved products advertising • Premium priced products, new plant, so• Discounted pricing, so high cost of low cost of goods sold goods sold 3Note: This table is similar to a P&L with one important exception - depreciation, a standard item in any P&L has been replaced by capital expenditure, which does not appear in P&Ls. In the long-term, Capex levels determine depreciation costs. Capex as a percentage of sales in an investment ratio often ignored by marketers, and it has been included in this table to emphasize its importance. The make-up of 14% Operating Profits Factor Virtuous plc (%) Dissembler plc (%) Profit on existing products over 21 15 3 years old Losses on products recently (7) (1) launched or in development Total operating profits 14 14From Hugh Davidson‟s “Even More Offensive Marketing” Page 6
  7. 7. Financial data is of limited value “The information appearing in the majority of boardrooms remains predominantly financial in nature. Without (additional) information on value- creating activities management are typically flying blind – when financials tell them there is a problem management have already missed the optimal point for taking appropriate corrective action”. PricewaterhouseCoopers – ValueReporting™ Review 2003, Transparency in Corporate Reporting, p.25 Page 7
  8. 8. Short-term decisions Improvements in a short-term financial measure such as economic profit can be achieved through postponing capital investments, reducing marketing and training expenditures, or by divesting assets, each of which may have a positive effect on near-term performance but could adversely affect long- term value creation performance. Nevertheless, when incentivised with bonuses to „manage for the measure‟ this is exactly what many managers will do irrespective of the consequences on shareholder value. „Why Value-Based Management Goes Wrong‟, Simon Court, Market Leader, 2002 Page 8
  9. 9. Page 9
  10. 10. The marketing investment time lag Measuring marketing performance isn‟t like measuring factory output – a fact that many non-marketing executives don‟t fully gasp. But the output of marketing can be measured only long after it has left the „plant‟. HBR, November 2004, McGovern, G., Court, D., Quelch, A. and Crawford, B. Page 10
  11. 11. Marks & Spencer‟s Trends Service Positive Value for Money Share Price (Indexed)9585756555453525155 Nov 95 Mar 98 Sept 99 Base: M&S Customers Page 11
  12. 12. Marks & Spencer’s Market Cap (from Bloomberg) Under the stewardship of Stewart Rose value in the business recovered up until the 2008 crisis In 2004, M&S was in the throes of an attempted takeover by Arcadia Group & BHS boss, Philip Green. On 12 July a recovery plan was announced which would involve selling off the financial services business to HSBC Bank plc. Philip Green withdrew his takeover bid after failing to get sufficient backing from shareholders Page 12
  13. 13. The devastating impact of price discounts - 5% Discount -10% Discount Price £10 9.50 9.00 Profit £2 1.50 1.00 Sell 100 133.3 200 Page 13
  14. 14. The Impact of Price on Profit Start Point Vol + 1% Costs - 1% Price + 1%Volume 1000 1010 1000 1010Fixed Costs 400 400 396 400Variable Costs 500 505 495 500Profit 100 105 109 110Turnover 1000 1010 1000 1010Profit IncreaseProfit Increase 0% 0.0% 5% 0.5% 9% 0.9% 10% 10.0% Page 14
  15. 15. The impact of price on profit Start point Volume = +1% Costs = 1% Price = +1% Volume 1,000 1,010 1,010 1,010 Fixed costs 400 400 396 396 Variable 570 575.7 570 570 costs Profit (3%) 30 34.3 44 54 (+80%) Price 1 1 1 1.01 Turnover 1,000 1,010 1,010 1,020 Page 15
  16. 16. The Price-Value Cycle Cut prices Model 1 Higher volume At lower Vicious Circle Lose sales Margins Reduce Specifications & promotion to maintain R.O.I Raise Model 2 price Higher customer Lower volume, but Acceptance & Benign Circle Higher revenue from volume Better margins Improve Product & promotion Page 16
  17. 17. Challenges • Market Maturity • Globalisation • Customer power Page 17
  18. 18. Market Maturity Page 18
  19. 19. • Technology• Production• Sales• Accountancy• Fads• Marketing Page 19
  20. 20. Globalisation Page 20
  21. 21. New global leaders Leaders ? 2nd tier New guerrillas GuerrillasEmbrionic markets Growing markets Mature markets Page 21
  22. 22. Customer Power Page 22
  23. 23. In search of excellence (Peters) 43 “excellent” companies 14 “excellent” companies 5 years later 6 “excellent” companies 8 years later (Richard Tanner Pascale “Managing on the Edge: how successful companies use conflict to stay ahead” 1990, Viking, London) Page 23
  24. 24. Page 24
  25. 25. How excellent companies are responding Page 25
  26. 26. How excellent companies are responding (Core Value) (Efficiency) Product/ Processes Service Customers Professional People Marketing (Understanding (Creativity) Market Needs) © Page 26
  27. 27. Quality and share both drive profitability ROI (%) 38 27 20 High 25 20 13 21 40% 14 7 -1% Relative Product Quality Low High 60% 25% Low Relative Market Share Source: PIMS Page 27
  28. 28. Page 28
  29. 29. Over 40 years of research into the link between long runfinancial success and excellent marketing strategies reveal thefollowing:Excellent Strategies Weak Strategies• Target needs based • Target product categories segments • Make similar offers to all• Make a specific offer to each segments segment • Have little understanding of• Leverage their strengths and their strengths and minimise their weaknesses weaknesses• Anticipate the future • Plan using historical data Page 29
  30. 30. Key Elements of World Class Marketing1. A deep understanding of the market place2. Correct needs-based segmentation and prioritisation3. Segment-specific propositions4. Powerful differentiation, positioning and branding5. Effective strategic marketing processes Page 30
  31. 31. The purpose of strategic marketing planning The overall purpose of strategic marketing, and its principal focus is the identification and creation of sustainable competitive advantage. © Professor Malcolm McDonald Page 31
  32. 32. Map of the marketing domain Define markets & understand value Asset Determine Monitor Base value value Proposition Deliver value Page 32
  33. 33. Financial Risk and Return High 1 Return 2 3 Low Low High Risk Adapted from Professor Keith Ward, Cranfield School of Management Page 33
  34. 34. Question 1• Do we know and understand our key target markets? Page 34
  35. 35. Market mapping …including the number of each customer type vol/val % vol/val vol/ % N National N Other vol/val Builders val % N Local Distributors Retailers % N vol/val Contractors % N Local N Regional vol/ Builders Distributors val % vol/ N Spcist. val % vol/ Retailers vol/val N Private N National val % % Companies vol/vol/val % Distributors val % N Detp. vol/val % UK Sales Retailers vol/val % vol/val % N Local vol/val % N Sheds Government vol/val % Users vol/val % vol/val % N = Number N Domestic % = Your Share Users vol/val % NB. Sketch out complex junctions separately. Alternatively, build an outline map, applying details at the junctions to be segmented. Page 35
  36. 36. Market map – office equipment Direct 47% 24% Type A 5% 3% Field Sales Dealer Chain Type A 7% 3% Independent Type B 0% 1% Dealer Chain Type B 1% 8% Independent Type C 15% 9% Dealer Chain Manufacturers Final Users Type C 7% 18% Independent 5% 4% VARs Buying 7% 10% Final Users Route to Market Consortia 4% 10% Retail Company’s Route to Market Direct 0% 4% Extracted from the complete map Response 0% 6% Other Page 36
  37. 37. Question 2• Do we address real segments in our key target markets? Page 37
  38. 38. Personalising segments Page 38
  39. 39. Listen to how customers talk about category needCustomer View Supplier ViewAdvice• cutting costs • fast PAD family• future technology direction • multimedia FRADsHelp • PIX firewall• design & configuration• process engineering • Solutions• electron commerce • Gigabit EthernetRun • solutions• international network• disaster recovery • high performance • LAN support Page 39
  40. 40. Understand the different category buyers Business Business perfectionist Save my budget Radical thinkers Business Profit engineer general “Reward” “Relief” Radical Save my architect career Technical Conservative idealist technocrat Technical Page 40
  41. 41. This is a friend I know… … she is a busy young lady … she looks after her health and loves fresh produce … she drives to the supermarket on a Saturday morning … she reads Hello Magazine … she has a cat … she doesn‟t pay attention to the price of products … she does look out for promotionsI know 12m people in the UK as well as I knowMiss Jones Page 41
  42. 42. Question 3• Do we know for sure what our sources of differential advantage are in each of the principal segments in our key target markets? Page 42
  43. 43. SWOT analysis • By segment, what value is required by the customer? • What value are you offering to entice the customer to buy from you • Avoid SWAGs © Professor Malcolm McDonald Page 43
  44. 44. STRENGTHS WEAKNESSESOPPORTUNITIES THREATS Page 44
  45. 45. Strengths Weaknesses• It can create value for the • It is meaningful to the organisation and customers customer• It is unique • It is unique• It is inimitable • It is difficult to fix• It is lastingOpportunities Threats• It is large • It is significant• It is accessible • It is lasting• It is lasting Page 45
  46. 46. Independent Schools--- 5 key buying factors• Academic• Convenience• School and family relationships• Enhancement• Costs Page 46
  47. 47. Academic Factors• Personality and vision of Head• Exam results• Class size• League table position (compared to regional competitors)• Student academic successes (Oxbridge, major universities, competitions)• Academic planning: A level, IB, pre-U; IGCSE? New subjects?• Flexibility of subject choice• Academic history (results over a number of years)• Quality/knowledge/experience of staff• Facilities for teaching and learning• Learning opportunities outside mainstream subjects (could be vocational skills)• Reporting procedures• Innovations in teaching and learning Page 47
  48. 48. Strategic marketing planning exercise – SWOT analysis 1. SEGMENT DESCRIPTION 2. CRITICAL SUCCESS 3. WEIGHTING 4. STRENGTHS / WEAKNESSES It should be a specific part of FACTORS (How important ANALYSIS the business and should be In other words, how do is each of these How would your customers score you and very important to the customers choose? CSFs? Score each of your main competitors out of 10 on organisation out of 100) each of the CSFs? Multiply the score by the weight. 1 You Comp A Comp B Comp C Comp D 2 1 3 2 4 3 5 4 5. OPPORTUNITIES / THREATS Total 100 5 What are the few things outside your direct control that have had, and will have, an impact on this part of your business? THREATSOPPORTUNITIES 1 2 3 4 5 6. KEY ISSUES THAT NEED TO BE ADDRESSED What are the really key issues from the SWOT that need to be addressed? Page 48
  49. 49. Question 4• Do we all agree on the prioritisation of our markets and the segments within each market? Page 49
  50. 50. Question 5• Are the objectives for revenue growth and market share realistic? Page 50
  51. 51. Setting expectations of performance P P high Supplier business high/ medium strength with High customer Low C G C G High Strategic Star Strategic Selective Mkt/Segment investment investment attractiveness Status Streamline P Pmedium Pro-active Manage for low - cash Low maintenance C G C G Page 51
  52. 52. Market attractiveness evaluation Factor Scoring Criteria 10-7 6-4 3-0 Score Weighting Ranking 1. Market Size (£ millions) > €250 €51-250 < €50 5 15 0.75 2. Volume Growth (Units) > 10% 5-9% < 5% 10 40 4.0 3. Industry Profitability > 15% 10-15% < 10% 8 35 2.8 4. Competitive Intensity Low Medium High 6 10 0.6 Total 8.15This form illustrates a quantitative approach to evaluating market attractiveness. Each factor is scored, then multiplied by thepercentage weighting and totalled for the overall score. In this example, an overall score of 8.5 out of 10 places this market in thehighly attractive category. Page 52
  53. 53. Question 6• Are the strategies (including products, services and solutions) consistent with the objectives? Page 53
  54. 54. Invest Maintain Manage Opportunistic for Growth for Cash Development Maintain or Increase Maintain or slightly Forego share for Invest selectivelyMarket Share Dominance milk for earnings profit in share Differentiation Prune less successful Aggressively prune DifferentiationProducts differentiate for key line expansion segments Lead - aggressive Hold prices or Raise Aggressive - price forPrice pricing for share raise if possible share Aggressive Limit Minimize Aggressive marketingPromotion marketing Broaden Hold wide Gradually withdraw Limited coverageDistribution distribution distribution pattern distribution Page 54
  55. 55. Activities by medium Activity Recognise Initiate Exchange Negotiate / Commit potential dialogue information tailor Personal contact Direct mail Medium Telephone Advertising Electronic Page 55
  56. 56. The Sunworshippers Mobile Broadcast Traditiona Internet iTV telephone TV l channels • Recognise Exchange potential • Initiate dialogue • Exchange information Negotiate/tail or Commit • Exchange value • Monitor Page 56
  57. 57. John and Mary Lively Mobile Broadcast Traditiona Internet iTV telephone TV l channels • Recognise Exchange potential • Initiate dialogue • Exchange information Negotiate/ta ilor Commit . • Exchange value • Monitor Page 57
  58. 58. Relevant? The Times 19th Jan 2005 Page 58
  59. 59. Question 7• Have we assessed dispassionately the risks associated with our strategic marketing plan? Page 59
  60. 60. Justifying investment in marketing assetsWhilst accountants do not measure intangibleassets, the discrepancy between market and bookvalues shows that investors do. Page 60
  61. 61. Balance sheet Assets Liabilities - Land - Shares - Buildings - Loans - Plant - Overdrafts - Vehicles etc. etc. £100 million £100 million © Professor Malcolm McDonald, Cranfield School of Management Page 61
  62. 62. Balance sheet Assets Liabilities - Land - Shares - Buildings - Loans - Plant - Overdrafts - Vehicles etc. etc. £100 million £900 million © Professor Malcolm McDonald, Cranfield School of Management Page 62
  63. 63. Balance sheet Assets Liabilities - Land - Shares - Buildings - Loans - Plant - Overdrafts - Vehicles etc. Goodwill £800m £900 million £900 million © Professor Malcolm McDonald, Cranfield School of Management Page 63
  64. 64. Asset Breakdown for the top 10 countries byEnterprise Value (US$ millions, 2011) Page 64
  65. 65. Intangibles P and G have paid £31 billion for Gillette, but have bought only £4 billion of tangible assets - Gillette brand £ 4.0 billion - Duracell brand £ 2.5 billion - Oral B £ 2.0 billion - Braun £ 1.5 billion - Retail and supplier network £10.0 billion - Gillette innovative capability £ 7.0 billion TOTAL £27.0 billion (David Haigh, Brand Finance, Marketing Magazine, 1st April 2005) Page 65
  66. 66. Brands are key intangibles in most businessesBrands are estimated to represent at least 20% of the intangible value ofbusinesses on the major world stock markets. Brands combine with othertangible and intangible assets to create value Developed Markets Brand Brand Marketing intangible 20% Patents Technology intangibles Software Intangible assets Customer relationships Customer intangible Other Intangible Distribution rights Assets Contract intangibles Assembled workforce 55% Business Goodwill Tangible Tangible assets Assets Illustrative 25% Source: Brand Finance Page 66
  67. 67. Everything an organisation does converges on thebusiness value proposition that is projected to thecustomer and is represented by the brand name.(Professor Malcolm McDonald ) Page 67
  68. 68. Brands Increasingly Drive Business ResultsBrands affect business value by influencing the behaviour of a wide range of Shell’sstakeholders, some of which directly impact Shell’s P&L (and hence value) STAKEHOLDER STAKEHOLDER FINANCIAL SHAREHOLDER PERCEPTION BEHAVIOUR IMPACT VALUE • Pay price premium Customers Revenues - individuals, • Buy more businesses Suppliers / • Lower prices Partners • Better terms Costs Brand - • Willingness to partner RevenuesTrademarks businesses, energy asset owners •(more opportunities) Employees • Better retention - current and potential Costs • Lower salary expectations Reputation Shareholders / Productivity • Better qualified candidates Bankers - individual and institutional • Higher PE ratio Indirect Other • Lower volatility Costs influence Stakeholders Influences on value • Lower borrowing costs Risk business and - government, media, opini • Better repayment conditions brand value on formers, academics, publi c, environmentalists Page 68
  69. 69. • A brand is a name or a symbol on a product, service, person or place• A successful brand creates super profits• A successful global brand presents the same or similar message all over the world e.g McDonald‟s, Mercedes, Coca Cola, IBM• The brand is about the total experience, not the logo. Successful brands offer consistently superior value that is delivered by fair processes. Page 69
  70. 70. The Brand Iceberg Symbol Brand Name What you can see Product Price Key Assets and Efficient Production What you Competences can’t see People Low Cost Operations High Service Levels Strong Supply Chain Management Effective Selling Brands Are Business Systems, Not Just Labels and Names From “Even More Offensive Marketing” by Hugh Davidson Page 70
  71. 71. SUCCESSFUL BRANDS• Build trust• Have a price/quality trade off – win/win• Offer consistently superior value• Result ? Super profits through higher volume/marginsUNSUCCESSFUL BRANDS• Cut corners/ reduce costs• Tell lies• Add some “gold “ to the packaging• Result ? Eventually become commodities and trade on price Page 71
  72. 72. Unsuccessful Brands There are many products that pretend to be brands, but are not the genuine article. As the Director of Marketing at TESCO said, “Pseudo brands are not brands. They are manufacturers‟ labels. They are “me-toos” and have poor positioning, poor quality and poor support. Such manufacturers no longer understand the consumer and see retailers solely as a channel for distribution”Marketing Globe Vol 2, No. 10. 1992. Page 72
  73. 73. Page 73
  74. 74. Map of the marketing domain Define markets Strategic zone & understand where metrics are defined value (Level 1) Asset Determine Monitor Base value value Proposition Measurement zone where metrics are applied Deliver (Levels 2 & 3) value Page 74
  75. 75. The historic rift between marketers and the finance department, caused by marketing’s reluctance to be accountable for what they do, is as marked as ever.Tense relations betweenCFOs and Marketers are “Marketers have constantly hiddendividing boardrooms over behind a fog of measures that are the value of marketing. based purely on tactical marketing One in three CFOs said activity, rather than solid financial they did not believe metrics that are relevant to the City”. marketing to be crucial in determining strategy. “Marketing in 3D” Deloitte Page 75
  76. 76. Three questions need to be answered• How does the company plan to generate its predicted future sales and profits?• Will the marketing strategy on which these plans are based work?• Will this strategy create shareholder value, given its inherent level of risk? Page 76
  77. 77. What is Marketing Due Diligence? Marketing Due Diligence Risk Assessment Market Risk: Strategy risk: Implementation risk: Is the market Will we get our Will we get our there? planned share? planned profit? Page 77
  78. 78. Market Risk Profile The marketing strategy has a higher• Product Category Existence probability of success if the product category is well established If the target segment is well• Segment Existence established If the sales volumes are well• Sales Volumes supported by evidence If the forecast growth is in line with• Forecast Growth historical trends If the pricing levels are conservative• Pricing Assumptions relative to current pricing levels Page 78
  79. 79. Ansoff matrix PRODUCTS increasing technological Present newness New Present Market Product Penetration Development MARKETS increasing market newness Market New Diversification Extension © Professor Malcolm McDonald, Cranfield School of Management Page 79
  80. 80. Market Share Risk Profile The marketing strategy has a higher probability of success if the target is defined in terms of homogeneous segments and is characterised by utilisable data • Target Market Definition If the proposition delivered to each segment is different from that delivered to other segments and addresses the needs which characterised the target segment • Proposition Specification If the strengths and weaknesses of the organisation are independently assessed and the choice of target and proposition leverages strengths and minimises weaknesses • SWOT Alignment If choice of target and proposition is different from that of major competitors • Strategy Uniqueness If changes in the external microenvironment and macroenvironment are identified and • Anticipation of market change their implications allowed for Page 80
  81. 81. Shareholder Value Risk Profile • Profit Pool The marketing strategy has a higher probability of success if the targeted profit pool is high and growing • Profit Sources If the source of new business is growth in the existing profit pool • Competitor Impact If the profit impact on competitors is small and distributed If the internal gross margin • Internal Gross Margin assumptions are conservative Assumptions relative to current products • Assumptions of Other If assumptions regarding other Costs costs, including marketing support, are higher than existing costs Page 81
  82. 82. Question 8• Having taken account of the risks referred to above and having adjusted the forecast net free cash flows for each major product for market for each year, have we calculated whether the strategic marketing plan creates or destroys shareholder value? Page 82
  83. 83. Question 9• Have we agreed the measurement of effectiveness metrics we want reported to us and their frequency? Page 83
  84. 84. Map of the marketing domain Define markets Strategic zone & understand where metrics are defined value (Level 1) Asset Determine Monitor Base value value Proposition Measurement zone where metrics are applied Deliver (Levels 2 & 3) value Page 84
  85. 85. Overall Marketing Metrics Model Lead indicators Lag indicators Resource Forecast/Intention/ Plan/ Strategy/ Objectives/ allocation/ profitactuality action achievement results spend PFs budget actions, esp. product corporateBusiness funds & performance marketing marketelement time segment HFs £ what who £ what who ms% corporate budget sales£ rev£ £ what who CSFs profit£ profit£ £ what whoMeasure- application costs, activi metrics on performance turnover,ment of spend ty achievement by product profit & milestones of factor to market shareholder & outputs required level segment valuePositioningof issues inthe model Cost to achieve Required by Market growth Responsibilities customers. Customer acquisition/ retention/ Relative to uptrading/ X-selling/ regained competitors Product/customer mix Channel performance
  86. 86. Map of the marketing domain Define markets Strategic zone & understand where metrics are defined value (Level 1) Asset Determine Monitor Base value value Proposition Measurement zone where metrics are applied Deliver (Levels 2 & 3) value Page 86
  87. 87. Expenditures to develop marketing assets make sense if thesum of the discounted cash flows they generate is positive. Page 87
  88. 88. Projected cash DCF and NPV flows from methods investing in a implicitly make promotion A this comparison B Companies should be Assumed cash C making this flow resulting comparison from doing More likely nothing cash flow resulting from doing nothingNote: Most executives compare the cash flow frompromotion against the default scenario of doing nothingassuming, incorrectly, that the present health of thecompany will persist indefinitely if the investment is notmade. For a better assessment of the promotion‟s value,the comparison should be between the projecteddiscounted cash flow and the more likely scenario of adecline in performance in the absence of promotional Figure 10investment. Adapted from Christensen CM et al, ( 2008 ) 2 + 2 + 2 + 2 = £-0.6 million £ - 7 million + (1+r) (1+r)² (1+r)³ (1+r)4 £ - 1 million + 2 + 2 + 2 + 2 = £5.4 million (1+r) (1+r)² (1+r)³ (1+r)4 Page 88
  89. 89. Question 10• Overall, are we happy that the time, effort and expense involved in developing marketing strategies are really worth it? Page 89
  90. 90. Conditions determining a strong marketing strategy• That the marketing strategy defines real target segments.• That the marketing strategy defines segment-specific value propositions• That the marketing strategy allocates resources differentially by segment or market• That the marketing strategy aligns to the market via SWOT Page 90
  91. 91. “Great stars shine brightest when the sky is darkest. In austere times, great brands bestow pleasure, maintain their premium and take a long view” Mark Ritson, Marketing Magazine 3rd December 2008 (p.20) Page 91
  92. 92. Page 92
  93. 93. APPENDIX 1 Page 93
  94. 94. Market mapping Showing the number of each customer type, volumes and share Suppliers Distributors Retailers Contractors Final users Sketch out complex junctions separately. Alternatively, build an outline map, applying details at the junctions to be 60k 42% (25k) segmented. 75k 40% (30k) Contractors Segment 1 35k 15k 33% (5k) [90] [2500] Key: Using „Segment 3‟ as an 51% (18k) 55k 36% (20k) example (one of three target Regional General segments); the total number of 20k 50% (10k) [18] [320] customers found here is [3000] and Segment 3 the total quantity of units they buy is 35k 29% (10k) [3000] 45k of which your company‟s share 45k 22% (10k) 45k 42% (19k) is 42% which equates to (19k) units. Suppliers [9] National Specialists 300k 28% (84k) [3] [110] Note: The number of units Segment 4 „consumed‟ by the final users usually 65k 38% (25k) [5500] equates to the number of units 60k 40% (24k) 25k entering the market (any surplus 28% (7k) Sheds being „stock‟) – 300k in this example. Local [45] [4] Others Please take some time to follow the [12 500] routes through the map and you will 90k 22% (20k) 80k 19% (15k) 140k 15% (21k) observe that, like the work of an 45k 9% (4k) accountant, it all „balances‟. Page 94
  95. 95. APPENDIX 2 Page 95
  96. 96. Quick Market Segmentation Solution• Write down the main benefits sought by customers• Hygiene factors are benefits that any product or service must have to be acceptable in the market. Try to ignore these.• Motivators are those benefits that contribute towards the customer‟s decision about which product to buy• Take the „motivators‟ and choose the 2 main ones• Draw two straight horizontal lines and make an estimate of the percentage of customers at each end. So, for example, if service level is a key motivator of what is bought, see below: 40% 60% Low service High service Likewise, if the breadth of the product range is a key motivator of what is bought, see below: 40% 60% low range high range • Take the left hand point of the first horizontal line and drag it over the second horizontal line to make cross as shown Page 96
  97. 97. 60% high Service 24 36 40% 60%Small product Large productrange range 16 24 40% low service Page 97
  98. 98. • Starting at the top, and moving in a clockwise direction, multiply 60% by 60% to give 36% (see 1st circle).• Then multiply 60% by 40% to give 24% (see second circle)• Then multiply 40% (the bottom of the vertical axis) by 40% to give 16% (see third circle).• Lastly, multiply 40% by 40% to give 16% (see fourth circle).• The circles represent segments in the market. Page 98
  99. 99. Interpretation• The 1st segment (36%), the biggest segment, requires both high service and a large product range.• The second segment (24%) prefers a large product range and is less interested in service.• The third segment (16%), doesn‟t care much about either a large product range or service.• The fourth segment (24%) prefers good service and is less interested in a large product range.• Although not essential, you might consider giving each segment a name.Action• Ensure your „offer‟, including the product, price, service and promotion reflect the differing needs of each segment.Example• An example of segmentation of the A4 paper market follows. Please note that if, as in the case of the A4 paper market, there is one very large segment (in this case 56%), the exercise ca be repeated for just this large segment, resulting in seven segments in total. Page 99
  100. 100. APPENDIX 3 Page 100
  101. 101. 1 = relatively less SWOT Summary Matrix 1 = poor performance important 5 = very important 5 = excellent performance Importance to CustomerCritical Importance Your company’s 1 2 3 4 5Success to customer performance (1Factors (how (1 to 5) to 5)customers Your Company’s Performancechoose) 1A AB 2 BC C D 3D E F 4E GF 5 Instructions 1. List critical success factors – i.e. How customers choose in the first column.G 2. For each CSF score its relative importance to the customer (between 1 and 5) NOTE: that a score of 1 or 2 doesn‟t mean it is unimportant to customers – only that it is relatively less important than a CSF with a high score (the second column). 3. For each CSF, score your company‟s actual or perceived performance (between 1 and 5) (the third column). 4. Transfer the joint scores for each CSF and performance to the matrix. 5. Interpretation • Scores in the bottom left of the matrix could indicate that you are over- performing • Scores in the top right of the matrix could indicate that you are under- performing
  102. 102. APPENDIX 4 Page 102
  103. 103. Valuing Key Market Segments Background/Facts Risk and return are positively correlated, ie. as risk increases, investors require a higher return. Risk is measured by the volatility in returns, ie. high risk is the likelihood of either making a very good return or losing all your money. This can be described as the quality of returns. All assets are defined as having future value to the organisation. Hence assets to be valued include not only tangible assets like plant and machinery, but intangible assets, such as Key Market Segments. The present value of future cash flows is the most acceptable method to value assets including key market segments. The present value is increased by: - increasing the future cash flows - making the future cash flows „happen‟ earlier - reducing the risk in these cash flows, ie. improving the certainty of these cash flows, and, hence, reducing the required rate of return.© Professor Malcolm McDonald Page 103
  104. 104. Suggested Approach Identify your key market segments. It is helpful if they can be classified on a vertical axis (a kind of thermometer) according to their attractiveness to your company. „Attractiveness‟ usually means the potential of each for growth in your profits over a period of between 3 and 5 years. (See the attached matrix) Based on your current experience and planning horizon that you are confident with, make a projection of future net free cash in-flows from your segments. It is normal to select a period such as 3 or 5 years. These calculations will consist of three parts: revenue forecasts for each year; cost forecasts for each year; net free cash flow for each segment for each year. Identify the key factors that are likely to either increase or decrease these future cash flows. These factors are likely to be assessed according to the following factors: the riskiness of the product/market segment relative to its position on the ANSOFF matrix; the riskiness of the marketing strategies to achieve the revenue and market share; the riskiness of the forecast profitability (e.g. the cost forecast accuracy ). Now recalculate the revenues, costs and net free cash flows for each year, having adjusted the figures using the risks (probabilities) from the above. Ask your accountant to provide you with the overall SBU cost of capital and capital used in the SBU. Thiswill not consist only of tangible assets. Thus, £1,000,000 capital at a required shareholder rate of return of10% would give £100,000 as the minimum return necessary. Deduct the proportional cost of capital from the free cash flow for each segment for each year. An aggregate positive net present value indicates that you are creating shareholder value – ie. achieving overall returns greater than the weighted average cost of capital, having taken into account the risk associated with future cash flows. Page 104
  105. 105. Portfolio analysis - directional policy matrix (DPM) Relative company competitiveness High Low High ? Invest/ build Segment NB. Suggested time period - attractiveness 3 years Maintain Manage for Low No cash change Present position Forecast position in 3 years© Professor Malcolm McDonald Page 105
  106. 106. APPENDIX 5 Page 106
  107. 107. The Contents of a Strategic Marketing Plan (<20 pages) • Mission or Purpose Statement • Financial Summary Products Existing New Existing 1 2 Markets Revenue New Profit 3 4 t.0 T+1 T+2 T+3© Professor Malcolm McDonald Page 107
  108. 108. Key (revenue and profit growth) • from productivity • by product for market for existing products from existing markets • from new products in existing markets • from existing products in new markets • from new products in new markets Plus a few words of commentary Market Overview/Summary Market definition Market map showing vol/rev flows from supplier through to end user, with major decision points highlighted Where appropriate, provide a future market map Include commentary/conclusions/implications for the company At major decision points, include key segments© Professor Malcolm McDonald Page 108
  109. 109. SWOT Analyses on Key Segments • include pictorial representations of the SWOTs, such as bar charts • highlight major conclusions/issues to be addressed Portfolio Summaries of the SWOTs • include Directional Policy Matrix (DPM) summaries of:- - the attractiveness of the segments over the next 3-5 years - the current relative competitive position of your company in each segment - the planned competitive position of each segment over the next 3-5 years Marketing Objectives and Strategies for the next 3-5 years • include objectives (volume, value, market share, profit, as appropriate) for the next 3-5 years for each segment as represented by the planned position of each circle on the DPM • include strategies (the 4XPs) with costs for each objective Consolidated Budget for the next 3-5 years • this will be a consolidation of all the revenues, costs and profits for the next 3-5 years and should accord with the financial summary provided earlier© Professor Malcolm McDonald Page 109
  110. 110. APPENDIX 6 Page 110
  111. 111. Ten Crucial questions Boards are asking theirmarketing colleagues and the answers they shouldbe giving.By Professor Malcolm McDonaldIntroductionAs was made clear by the Deloitte report in 2007, Directors will no longertolerate sloppy, unprofessional marketing departments who fail to justifythe often substantial sums of money they spend. The following are tencrucial questions they are increasingly demanding answers to. Page 111
  112. 112. Question 1.Do we know and understand our key markets?Answer: We define our markets in terms of needs satisfied, not the products we sell. Remember IBM (“we are in the mainframe market “ ) ? and Gestetner ( “ we‟re in the duplicator market “ ) ? We map our markets, showing product/service flows, volumes/values in total, our shares and draw critical conclusions for our company. We know what the key decision points are. In particular, we understand the 20/80 rule, as this is where segmentation is done.Question 2.Do we address real segments in our markets?Answer: We do proper needs based segmentation, not that a priori nonsense such as socioeconomics (not all As behave the same), demographics (not all 18-24 year old women behave the same, geodemographics (not everyone in the same street behaves the same) etc. We also understand the needs of members of each segment . Page 112
  113. 113. Question 3.Do we know what our sources of differentiation are in each of the principal marketsegments in our key target markets?Answer: We regularly check on the buying motives of segments and compare how well our company performs compared with main competitors We act on the resulting strengths and weaknesses. We check that our strengths create value for us and the customer and that they are difficult to copy. We work hard at tackling our weaknesses that are meaningful to the customer We regularly monitor the opportunities and threats by segment and work hard to take advantage of the opportunities and to ameliorate the threats.Question 4.Do we all agree where we should target our limited resources?Answer: We prioritise the segments in each market, having classified them all according to relative potential for growth in our profits in each over the next three years and according to our company‟s relative competitive position in each. Page 113
  114. 114. Question 5.Are our objectives for revenue growth and market share realistic?Answer: For attractive markets (attractive means there is potential growth in sales and profits in the next three years), our objectives are to improve Net Present Value (NPV), whilst investing in growing/retaining our competitive position For attractive markets in which we have few strengths, having chosen the better ones, our objectives are to improve our competitive position by investing in them . For those markets not selected for investment, our objectives are to maximise net free cash flows For unattractive markets in which we have few strengths, our objectives are to maximise net free cash flows For unattractive markets where we have strengths, our objectives are to minimise costs consistent with retaining our competitive position and to maximise net free cash flows Page 114
  115. 115. Question 6.Are our strategies for product development, pricing, customer service, channel managementand promotion consistent with our objectives?Answer: Our strategies match the objectives referred to above. For example, the majority of the available budget goes into attractive markets where we have strengths followed by unattractive markets where we have strengths, followed by attractive markets where we have few strengths – in that orderQuestion 7.Have we dispassionately assessed the risks associated with our strategic marketing plan?Answer: We assess the risks associated with our MARKET forecasts by using the long established tools of marketing, such as product life cycle analysis. We assess the risks associated with our plans for new products and markets by using tools such as the Ansoff matrix We assess the risks associated with our declared STRATEGIES by testing whether we are addressing proper needs-based segments with specific offers and whether we are leveraging our strengths, minimising our weaknesses, taking advantage of opportunities and ameliorating threats. We assess the risks associated with our declared BUDGETS by checking our forecast margins against historical margins and by checking that we are not setting unrealistic objectives such as rapid growth in static or declining markets. Page 115
  116. 116. Question 8.Have we calculated whether our strategic marketing plan creates or destroysshareholder value?Answer: We work with our senior accountants having taken account of the risk adjusted net free cash flows from all of products for markets. We then calculate whether these cash flows are greater than the cost of capital. If they are, we are creating shareholder value and can quantify this.Question 9.Have we agreed the metrics for measuring market effectiveness?Answer: We know the levels of promotional expenditure necessary to maintain our current level of sales ( maintenance ) We subject any promotional expenditure over and above maintenance expenditure (investment/growth expenditure) to net present value calculations. We know the difference between lead indicators (actions that cause sales etc.) and lag indicators (outputs, such as sales growth) As a result of this, we know what needs reporting, why, when, how often and to whom it should be reported. Page 116
  117. 117. Question 10.Are we happy with our marketing planning processes?Answer:Our plans demonstrate: 1 A deep understanding of our markets 2 A clear understanding of needs based segments 3 A clear prioritisation of our objectives and strategies 4 Quantified proof that they create shareholder value 5 They are clear, creative and interesting 6 They enable us to allocate our scarce resources differentially Page 117
  118. 118. In conclusion, let me say that, whilst all these questionsare not relevant to all markets, unless marketers cananswer the relevant ones, they should either get theirmarketing education up to par, or question whetherthey are in the right job.Professor Malcolm McDonald Page 118
  119. 119. APPENDIX 7 Page 119
  120. 120. Are you getting these essential deliverables fromyour strategic marketing plan?Score out of 10Market structure and segmentation• Is there a clear and unambiguous definition of the market we are interested in serving?• Is it clearly mapped, showing product/service flows, volumes/values in total, our shares and critical conclusions for our organisation?• Are the segments clearly described and quantified? These must be groups of customers with the same or similar needs, not sectors.• Are the real needs of these segments properly quantified with the relative importance of these needs clearly identified?Differentiation• Is there a clear and quantified analysis of how well our company satisfies these needs compared to competitors?• Are the opportunities and threats clearly identified by segment?© Professor Malcolm McDonald Page 120
  121. 121. Detailed checklist of essential deliverablesfrom a strategic marketing planScore out of 10Scope· Are all the segments classified according to their relative potential for growth in profits over the next three years and according to our company‟s relative competitive position in each?· Are the objectives consistent with their position in the portfolio? (volume, value, market share, profit)· Are the strategies (including products, services and solutions) consistent with the objectives?· Are the measurement metrics proposed relevant to the objectives and strategies?· Are the key issues for action for all departments clearly spelled out as key issues to be addressed?Value capture· Do the objectives and strategies add up to the profit goals required by our company?· Does the budget follow on logically and clearly from all the above, or is it merely an add on?© Professor Malcolm McDonald Page 121
  122. 122. Take marketing into the boardroom, and connect marketing strategy to shareholder value Available to order now from…www.malcolm-mcdonald.com – insert offer code ATZ6 into the basket and receive 10% off plus free post and packing! Page 122
  123. 123. A colourful, witty, original but deadly serious guide to understanding marketing principles! The international bestseller onmarketing planning – essential reading for anyone serious about marketing Available to order now from… www.malcolm-mcdonald.com – insert offer code ATZ6 into the basket and receive 10% off plus free post and packing! Page 123
  124. 124. Page 124
  125. 125. m.mcdonald@cranfield.ac.ukwww.malcolm-mcdonald.comProf. Malcolm McDonald free videosand downloads@www.oxlearn.com

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