CIM REVISION CARDS Marketing Management in Practice John Williams AMSTERDAM l BOSTON PARIS l SAN DIEGO l HEIDELBERG SAN FRANCISCO l l l LONDON l SINGAPORE l NEW YORK SYDNEY l l OXFORD TOKYO Elsevier Butterworth-Heinemann Linacre House, Jordan Hill, Oxford OX2 8DP 30, Corporate Drive, Burlington, MA 01803 First published 2004 Copyright ß 2004, Elsevier Ltd All rights reserved No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright holder except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, England W1T 4LP Applications for the copyright holder’s written permission to reproduce any part of this publication should be addressed to the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone: (+44) 1865 843830, fax: (+44) 1865 853333, e-mail: permissions@elsevier.co.uk You may also complete your request on-line via the Elseiver homepage (http://www.elsevier.com), by selecting ‘Customer Support’ and then ‘Obtaining Permissions’ British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalogue record for this book is available from the Library of Congress ISBN 07506 62883 For information on all Elsevier Butterworth-Heinemann publications visit our website at http://books.elsevier.com Printed and bound in Great Britain TABLE OF CONTENTS Preface iv Management and marketing roles Recruiting the team 17 Developing the team 34 Project management 54 Managing change 64 Market research 68 Developing marketing plans 86 Marketing communications and customer service 100 Bibliography 117 PREFACE Welcome to the CIM Revision Cards from Elsevier/Butterworth–Heinemann We hope you will find these useful when coming to revise for your CIM exam The cards are designed to be used in conjunction with the CIM Coursebooks from Elsevier/Butterworth–Heinemann, and have been written specifically with revision in mind They also serve as invaluable reviews of the complete modules, perfect for those studying via the assignment route n Learning outcomes at the start of each chapter identify the main points n Key topics are summarized, helping you commit the information to memory quickly and easily n Examination and revision tips are provided to give extra guidance when preparing for the exam n Key diagrams are featured to aid the learning process n The compact size ensures that the cards are easily transportable, so you can revise any time, anywhere To get the most of your revision cards, try to look over them as frequently as you can when taking your CIM course When read alongside the Coursebook they serve as the ideal companion to the main text Good luck – we wish you every success with your CIM qualification! PREFACE v Marketing Management in Practice The module is assessed by either examination or an Integrated Project The focus of the module is on: n Teams n n n n Working in marketing teams and with people in other functions International issues as part of everyday marketing life in organizations Managing and motivating people and teams to produce results Developing and managing teams to add value to the organization’s activities and deliver effective results n Effective team performance is contingent on a balance between the: needs of the task needs of the individuals within the team maintenance needs of the team as a whole n Integration and application of knowledge from all the Diploma modules n Applying the theory of market research, planning and communications from the previous modules n Developing and implementing the marketing plan by undertaking marketing activities and projects n Broad and practical demonstration of marketing at an operational level n Awareness of the strategic context n Basic project management techniques to help with managing the task This Page Intentionally Left Blank MANAGEMENT AND MARKETING ROLES Syllabus Reference: 1.1, 1.2 n To describe the nature of relationships with other functions in organizations operating in a range of different industries and contexts (1.1) n To explain the importance of developing and maintaining effective relationships with people in other functions and disciplines (1.2) These particular learning objectives are a theme throughout the book Unit KEY DEFINITIONS å Global firm – A firm that, by operating in more than one country, gains R&D, production, marketing and financial advantages in its costs and reputation that are not available to purely domestic competitors å Global organization – A form of international organization whereby top corporate management and staff plan worldwide manufacturing or operational facilities, marketing policies, financial flows and logistical systems The global operating unit reports directly to the chief executive, not to an international divisional head MARKETING MANAGEMENT IN PRACTICE MANAGEMENT AND MARKETING ROLES The Focus of the Module n The module emphasizes the importance of developing positive working relationships within the marketing team and with external agents and internal organizational functions via effective communication and effective management of quality and customer care n You need to show awareness of the challenges that marketing teams face operating in a global context n The need for appropriate research to inform the planning process n Developing effective communication strategies so that people have the right information to complete the task is important n Selecting the right people for the right team by identifying knowledge, skills and other essential attributes required n Building strong marketing teams through flexible and adaptable leadership n Motivating teams and individuals to raise their performance by recognizing and rewarding achievement n The importance of planning for operational marketing, including auditing, setting objectives, scheduling, resourcing, implementing and evaluating the plan n The need to communicate effectively as a team when working together on projects and to develop a communication strategy for the marketing plan n Using the combined knowledge and skills within marketing teams to implement marketing plans Marketing Orientation n A marketing oriented company needs to align its distinctive competencies with market opportunities, but to this effectively requires a team effort n Customer focus needs to be shared by the whole organisation and not seen as the responsibility of only the marketing department or marketing person in isolation n A key element of market orientation is intelligence-gathering about customer needs and preferences and what influences them This should involve people throughout the organization, but channelled for analysis towards a particular part of it n The structure of an organization can be a barrier to success if it separates one department from another In some organizations, sales, marketing and customer service are organized as a team, but finance, human resource management, research and development, production, purchasing and management all affect the marketing effort n To ensure that everyone is working to the same broad objectives as a team requires good communication and an awareness and respect for each other’s contributions MARKETING MANAGEMENT IN PRACTICE MARKETING COMMUNICATIONS AND CUSTOMER SERVICE Evaluating Channel Effectiveness Key performance and evaluation measures include: n Regular reviews n A forum for problem review and solution n Monthly, quarterly and yearly sales data analysis n Average stock levels n Lead and delivery times n Zero defects n Customer service complaints n Marketing support – achieving marketing objectives, level of marketing activity, sales promotions n Annual performance audit 104 From an Internet perspective, typical evaluation methods of marketing effectiveness might include: n Number of leads n Increased sales n Customer retention n Increased market share n Brand enhancement and loyalty n Customer service Types of Evaluation Formative evaluation includes pre-testing of materials, and is designed to test the strengths and weaknesses of a programme before it is ready for implementation n Process evaluation reviews the tasks of implementing the programme n Outcome evaluation is used to gather descriptive information It gathers information about knowledge and attitude changes, expressed intentions of the target audience and the initiation of policy changes n Impact evaluation is the most comprehensive of the four types of evaluation It focuses on the long-term outcomes of the programme and long-term behaviour change If the programme is to be continued, revisions should be undertaken If this is the end of the programme, documentation of what was learned should be made, so as to assist others who may undertake a similar project in the future An evaluation report should be prepared that could be used to secure funding to continue the programme and assist others conducting similar activities MARKETING MANAGEMENT IN PRACTICE 105 MARKETING COMMUNICATIONS AND CUSTOMER SERVICE 106 Integrated Marketing Communications Advertising n Creating an integrated marketing communications plan is important for achieving maximum effectiveness Using the elements of the communications mix in a coordinated way so as to achieve the objectives of a promotion The role of marketing communications is to differentiate a product/brand (to make it different to a competitor’s brand or seem different through effective positioning) n Remind and reassure a target audience with regard to benefits (to encourage (re)purchase) n Inform a target audience by providing new information (e.g of a new brand or flavour) n Persuade an audience to take a particular set of actions (e.g visit a theatre, stop smoking) n Measuring advertising effectiveness is important for understanding how well ads are performing and what changes need to be made to improve performance n Promotion research consists of media and message research n Media research measures audience composition and size for media vehicles as a basis for determining ratings n Audience measurement services include magazine, local radio, national radio and television n Multiple measurement methods are usually preferable to single techniques to assess advertising effectiveness Sales promotions n Sales promotions often complement advertising, and may be planned and executed in parallel with associated advertising and possible public relations campaigns n Attitude – Positivity or negativity and whether there is any change in consumer behaviour n Media coverage and tone – Coverage in a range of media – number of column inches, key headings n Sales promotions can be a highly targeted and flexible form of communications and evaluation of their effectiveness is usually an integral part of the communication through, e.g coupon redemption, vouchers/coupons n Positioning – Comparative information about the relative position of the organization and the competition Public relations n Share price – A share price can be affected by a myriad of external factors outside a company’s control Some commonly used measures of results are: n Budget – Has the planned activity been achieved within budget and timescale n Awareness – Established through using market research activities n Response generation – Enquiries or leads linked to reference codes or enquiry sources n Sales – When an organization suffers from negative perception, sales tend to drop The challenge is to rehabilitate the image in order to increase sales MARKETING MANAGEMENT IN PRACTICE 107 MARKETING COMMUNICATIONS AND CUSTOMER SERVICE Direct marketing activities n Direct marketing may take the form of direct mail, telemarketing, electronic marketing, and online marketing It is immediate, customizable to individual consumers or groups of consumers, and interactive Generally, direct marketing allows for easy measurement of effectiveness n Datamining (the extraction of hidden predictive information from large databases) is used to drill down into the data to any level of detail needed to identify common characteristics of high-volume users 108 n Evaluation of direct marketing activities is based upon the pre-determined objectives of the campaign Typical measures for successful implementation of the direct marketing campaign will include: Response rate Conversion rate Order value Repeat orders n Often, this information will be gathered through a range of voucher and campaign response codes that will be able to distinguish the source of the direct mail or promotion However, the cost per enquiry and per order needs to be identified Click-through rates are a common online measurement Communications in marketing channel networks Review and evaluate the effectiveness of communications activities A planned, channel-orientated communications strategy should contribute to and reinforce the partnerships in the network There are many factors that can influence channel communication strategy, for example: Single elements of the communications mix are not used in isolation The overall impact of a coordinated marketing communications campaign and the degree to which the promotional objectives have been achieved are key measures that interest stakeholders Pre-testing is about showing unfinished advertisements, often to focus groups to gather their reactions and to understand their reasoning Post-testing is concerned with the evaluation of a campaign once it has been released A typical measurement is the number of enquiries or direct responses elicited by a single advertisement or campaign Recall and recognition tests are common post-testing procedures for advertisements Tracking studies involve collecting data from buyers on a regular basis, in order to assess their perceptions of ads Power – are some organizations more important than others? Direction – are communications one-way or two-way? Frequency – how often should messages be sent? Timing – messages should be sent to all members simultaneously or serially? Style and content – messages should be formal/ informal? What must be included? MARKETING MANAGEMENT IN PRACTICE 109 MARKETING COMMUNICATIONS AND CUSTOMER SERVICE Sales promotion evaluation includes methods such as consumer audits and general sales information, retail audits, including, for example, changes in stock levels, distribution, market share, etc immediately after a promotional campaign Sales force feedback is also a common measure Voucher/coupon redemption – Usually coded so that the different response rates can be tracked The benefits of good customer service Customer service is a link in a chain between buyer and seller and one of a series of links between stages in a marketing channel An integrated customer service process can reduce cost, save time and improve profitability Linking customer service information with sales data improves business scheduling and helps target potential customers It helps to avoid 110 duplication of effort and presents a unified, informed image n Increased customer retention rates It has been repeatedly shown that good service leads directly to increased customer retention rates, but the service has to be of a high standard to genuinely keep customers n Reduced costs of running the business Increased customer retention rates means the resources associated with setting up the customer’s details are reduced to only once over a long time period, compared to a constant turnover of customers n Reduced marketing costs Many studies have shown that it costs around to times as much to attract a new customer compared with making the same sale to an existing customer Stronger position in the competitive market place n Companies identified as being good service providers tend to have higher revenue growth compared with poor service competitors Improved internal communication, staff relations and morale n Employees who receive positive feedback from their interactions with customers, and a reduction in the number of complaints, are bound to feel more satisified with their work than working in a hostile climate n CRM (Customer Relationship Management) In theory, CRM (Customer Relationship Management) systems allow different parts of the business to share customer information, and every part of a company to be aware of customer needs Customer care Customer care needs to be an integral part of the business strategy and effective customer relationship management means focusing on the needs of customers A myriad of factors will affect customer loyalty: Satisfaction among employees is often a driving force behind customer satisfaction, since customer interaction with staff is often central to their experience If an organization’s operational processes are not coherent, this will affect the customer’s experience Employees who deal with customers need to be empowered to make certain decisions independently Service standards should be used wherever customers have direct contact with the organization, for example, speed and courtesy when answering phone calls Find out about different customer segments Collect information about what and when customers purchase and use it for improving customer service MARKETING MANAGEMENT IN PRACTICE 111 MARKETING COMMUNICATIONS AND CUSTOMER SERVICE As part of a sales and marketing strategy, set out the levels of service that will be offered to different customer types Customer audit l Who are the current customers? l What proportion of our business does each represent? l Who is the ‘buyer’? l Are their needs satisfied? l How can we improve the service offered? Current customer base Investment in the current customer base will result in: l Additional repeat business l Closer and more productive working relationships with customers l Word-of-mouth recommendations l A steadier and more predictable flow of business 112 Looking after customers l Receive complaints positively l Record and analyze l Change pro-actively l Communicate at their convenience l Look for win–win solutions Improving performance l Learn from experience l Measure standards of service l Involve employees in solving problems preventing good service l Internal and external benchmarking Monitoring and evaluating customer service n A number of issues that impact upon quality measurement n The difference in perception between employees and customers n The inseparability of production and consumption n The individuality of employees’ performance and customers’ perceptions There is a proposed formula for measuring these components: n Customer expectations – service organizations’ perceptions of customer expectations n Customer experience – service organizations’ perceptions of customer experience n Processes that can contribute to the monitoring and evaluation of the service that customers receive: n Marketing research – gather information about services and their delivery n Observing customer–staff interactions as the latter receive a service n Interviews to understand their perceptions and expectations versus their experience n Customer satisfaction surveys – questionnaires to monitor customer satisfaction n Mystery consumer experience – include a mystery person in the delivery of the service n Evaluating dissatisfaction – examine the main causes of customer dissatisfaction n Monitoring image – how is the image of the service perceived n Performance appraisals – of staff involved in the delivery of a service n Employee group discussions – internal marketing practice MARKETING MANAGEMENT IN PRACTICE 113 MARKETING COMMUNICATIONS AND CUSTOMER SERVICE Ways to improve customer service n Personalize communications – for example, greeting a customer by name, personalizing the e-mail addresses of customer-facing employees n Create opportunities for feedback n Find out from new customers why they chose the company over the competition n Encourage complaints, as only one in ten dissatisfied customers bothers to complain; usually dissatisfied customers just take their custom elsewhere n Establish a customer hotline, and make sure the number is on every piece of paper sent out 114 n Differentiate between different customer segments n When marketing, if appropriate, differentiate between different market segments l Potential customers who have not yet purchased anything l Customers who have already made a purchase to increase the frequency of their buying l Premium customers who already make regular purchases Plan for introducing better customer service n Review other organizations with a good reputation for good customer service Look at how this compares with practices in the target organization n Agree what customer service means and how it will be interpreted in the target organization n Agree customer service standards and procedures n All staff should participate in the process of change Establish a working group or project team that has representation from all the parts of the organization that have an influence on customer service n Review strengths and weaknesses n Agree and communicate customer satisfaction performance targets n Develop plans to implement changes, including an internal marketing plan n A training programme aimed at everyone who has an influence on customer service should be devised or outsourced and implemented Customer retention management There are a number of techniques for measuring customer satisfaction linked to profitability Established customers tend to be more profitable because: n They place frequent, consistent orders, and cost less to serve n They tend to buy more n Satisfied customers may sometimes pay premium price n Retaining customers makes it difficult for competitors to enter a market or increase their share n Satisfied customers often refer new customers to the supplier at no extra cost n A higher retention rate implies fewer new customers need to be acquired MARKETING MANAGEMENT IN PRACTICE 115 MARKETING COMMUNICATIONS AND CUSTOMER SERVICE 116 Hints and Tips Key skills Seven stage process to the integrated assessment n You need to know how to review and evaluate the effectiveness of communications activities and the role of the individual and team in the process n You need to show that you understand how to use communications to support change and help implement plans – including internal marketing plans using a range of methods, e.g – Training and development programmes – Intranet – Newsletters – Briefings – Effective external communications n You need to be able to plan and implement communications campaigns teams of marketers Go to www.cimvirtualinstitute.com and www.marketingonline.co.uk for additional support and guidance n Design a research project to contribute to a marketing challenge n Gather and store information appropriately n Act on information by developing, implementing and controlling an operational marketing plan n Use the main techniques available for planning, scheduling and resourcing activities within the plan n Use marketing communications effectively with external audiences n Manage the customer service element of the plan BIBLIOGRAPHY Adair, J (1988) Effective Leadership, London: Pan Belbin, R and Meredith (1996) Management Teams: Why they Succeed or Fail, London: Butterworth– Heinemann Belbin, R and Meredith (1996) Team Roles at Work, London: Butterworth–Heinemann Bennis, Warren, G., (1994) On Becoming a Leader, New York: Perseus 2nd Edition Boddy, D (2002) Management: An Introduction, pp 30–32, conventional and critical perspectives and studying management Gronroos, C (1994) From Marketing Mix to Relationship 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of Management, London: Heinemann 118 ... establishing goals, developing training programs, and supervising local sales managers and their personnel MARKETING MANAGEMENT IN PRACTICE MANAGEMENT AND MARKETING ROLES Marketing in British... sales promotions and advertising MARKETING MANAGEMENT IN PRACTICE MANAGEMENT AND MARKETING ROLES Marketing Management n CIM s definition of marketing is ‘The management process which identifies, anticipates... the marketing plan n Using the combined knowledge and skills within marketing teams to implement marketing plans Marketing Orientation n A marketing oriented company needs to align its distinctive