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Marketing Management For Non-Marketing Managers: Improving Returns on Marketing Investments



Marketing Management For Non-Marketing Managers: Improving Returns on Marketing Investments

Heather Fitzpatrick

ISBN: 978-1-937-35267-7 May 2017 352 Pages

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Although marketing-related expenses are a significant portion of most organizations’ budgets, it is often frustrating for those with budget oversight to get a clear picture of the returns on their marketing investment.

This engaging book offers practical ways for non-marketing managers and executives to measure and improve marketing returns. It gives you the tools you need to be able to correctly assess the potential of your marketing and accurately evaluate the returns. You’ll learn:

  • Why market leaders achieve significantly greater returns on their marketing than others within their market.
  • The 3 main reasons most marketing plans fail to live up to their potential, and the steps you must take to avoid these pitfalls.
  • How to evaluate your marketing investment’s likely ROI before you invest the money.
  • When and how to assess the financial returns of your marketing efforts.
  • How well your own organization is performing in the management of its marketing investments.

The book includes:

  • Case studies from companies of various sizes and in a cross-section of industries, including not-for-profits
  • 4 tests to use prior to the approval of a marketing budget
  • A marketing performance evaluation tool to assess and improve your organization’s marketing management

Section 1: What is Marketing? 1

1 A Market Leader’s Definition of Marketing 3

How Market Leaders Define Marketing 4

Marketing, the Discipline, Versus Marketing, the Function 5

Marketing in Your Organisation—and in This Book 7

Chapter 1 Summary 8

Section 2: Managing the Discipline of Marketing 11

2 The Discipline of Marketing: the Foundation for Business Strategy 13

Why the Discipline of Marketing Produces the Crystal Ball Effect 14

Leveraging Market Insight 15

Opportunities: Identifying Unmet, Untapped or Underserved Market Needs 16

Threats: Understanding the Competition 17

Opportunities and Threats: Your Company’s Reputation 18

The Other Half of Marketing: Meeting Market Needs 19

Choosing a Market: The Challenge of Serving Many Masters 20

The Cost of Market Diversity 21

The Benefits of Market Focus 22

Focus Made the Difference 23

Choosing a Market 24

Translating Value Proposition Into Products and Services 25

Aligning Your Business Activities 27

The Point C Principle 27

The Importance of Vision 29

Developing Vision 29

Gap Analysis 30

Setting Business and Financial Objectives 30

Questions for Non-Marketing Managers to Ask About the Discipline of Marketing 31

Chapter 2 Summary 32

3 Brand Management Fundamentals 35

The Definition of Brand 35

The Building Blocks of a Strong Brand 36

Strong Brands Reflect the Company’s Value Proposition 37

Strong Brands Are Based on Truth 38

Companies With Strong Brands Are Good Corporate Citizens 38

Strong Brands Reflect the Image of the Merchant With Whom Their Customer Would Like to Do Business 39

The Value of a Strong Brand 40

Sources of Added Value Attributed to Brand 41

Increased Customer Preference 41

Reduced Promotional Cost 41

Reduced Price Sensitivity 41

Ability to Recruit and Retain Top Talent 42

Easier Access to Capital and Financial Markets 42

Public Benefit of the Doubt 42

Best Practices and Tools of the Brand Trade 43

Graphics Standards 43

Key Messages 46

Talking Points 48

Brand Audits 48

Brand Architecture 49

Mitigating and Addressing Brand Damage 50

Questions for Non-Marketing Managers to Ask About Brand Management 51

Chapter 3 Summary 52

Section 3: Evaluating Proposed Investments In The Marketing Function 57

4 Evaluating Marketing Plan Alignment 59

What Drives Returns on Marketing Investments 59

The Marketing Alignment Map 61

Targeted Business and Financial Objectives 62

Desired Brand Reputation 63

Influencing Factors 63

Marketing Strategies 64

Marketing Tactics 64

Expected Tactical Outcomes 66

Expected Marketing Outcomes 66

Expected Financial Returns 67

Evaluating Marketing Alignment 67

The Benefits of Alignment 68

Questions for Non-Marketing Managers to Ask About Evaluating Marketing Plan Alignment 68

Chapter 4 Summary 69

5 Understanding What Influences Market Behaviour 73

Do You Know Why Your Customer Chooses Your Company—and Why Non-Customers Don’t? 73

The Danger of Assumptions 74

What Your Marketing Function Needs to Know 75

Purchasing Decision Criteria 77

Clip-Level and Competitive Criteria 77

Market Segments 79

Understanding Relative Market Positions 80

Other Influencing Factors 81

Prioritising Influencing Factors 82

The Connection Between Influencing Factors, Marketing Strategies and Results 84

The Relative Importance of Price 85

Questions for Non-Marketing Managers to Ask About Factors Influencing Purchasing Behaviour 86

Chapter 5 Summary 87

6 Aligning Marketing Tactics With Influencing Factors 91

Tactics Are Not Strategies 91

Well-Crafted Marketing Strategies Provide Specific Guidance 93

Align Attributes to Pick the Right Tactic 94

Market Size 95

Market Demographics 96

Business-to-Business Versus Business-to-Consumer 96

Potential Impact on Influencing Factors 96

Brand Impact 96

The Competitive Environment 97

Cost-Benefit Analysis 97

Return Timeline 97

Complimentary Marketing Mixes 98

‘How’ Is as Important as ‘What’ 98

Special Considerations for International and Multi-Cultural Markets 99

Special Considerations for Not-for-Profits 100

Questions for Non-Marketing Managers to Ask About Aligning Marketing

Tactics With Influencing Factors 102

Chapter 6 Summary 102

7 Products and Services: The First ‘P’ of Tactical Marketing 107

Product Management and Innovation 108

The Alternative to Innovation Is Death 110

If Innovation Is Critical to Survival, Why Don’t Companies Do It? 111

Key Principles in Product Management 115

How the Product Life Cycle Affects Other Aspects of Marketing 115

The Impact of New Product or Service Introductions on Existing Products or Services 116

Discontinuing or Changing a Product or Service 117

Brand Considerations 118

Beyond the Product or Service 119

Outsourcing Products or Expertise 120

Questions for Non-Marketing Managers to Ask About Products and Services 121

Chapter 7 Summary 122

8 Placement or Distribution: The Second ‘P’ of Tactical Marketing 125

Go Where the Market Looks for Solutions 125

Balance Cost With Benefits 126

Consider the Impact on Brand 126

An Introduction to Channel Management 126

Direct Distribution 127

Indirect, or Channel, Distribution 132

Cutting Out the Middleman 135

Vertical Integration 135

Franchising and Licensing 136

Disintermediation 137

Creative Partnerships 137

Strategic Partnerships 137

Value Added Resellers 138

Joint Ventures 138

Multi-Channel Distribution 138

Channel Conflict 139

How Channel Decisions Impact Product and Service Innovation 140

Questions for Non-Marketing Managers to Ask About Place or Distribution 140

Chapter 8 Summary 141

9 Pricing: The Third ‘P’ of Tactical Marketing 145

The Impact of a Dollar (or Pound, or Yen or Rupee) 145

Common Approaches to Evaluating Price 147

Cost-Based Pricing 147

Competition-Based Pricing 149

Value-Based Pricing 149

Price and the Product Life Cycle 151

Incentive Pricing Approaches 152

Loss Leaders 152

Freemiums 153

Coupons, Groupons, Rebates, Sales and Other Short-Term Price Reductions 154

Fixed Fees or Fixed Prices 155

Retainers 155

Package Prices 156

Contingency Pricing 156

Bulk Pricing 156

Multiple Unit Pricing 156

Push Money/Prize Money Allowances 157

Other Pricing Approaches 157

Price Discrimination 157

Dynamic Pricing 158

Terms 158

Guarantees, Warrantees and Return Policies 159

Advertising and Promotional Allowances 159

Psychological Pricing 160

The Connection Between Price, Product or Service, Distribution Systems and Operations 160

The Impact of Brand on Price 161

Market Realities 161

Legal Issues 162

Questions for Non-Marketing Managers to Ask About Price 163

Chapter 9 Summary 163

10 Promotions: The Fourth ‘P’ of Tactical Marketing 167

Understanding the Two Functional Purposes of Promotions 168

Delegate, but Don’t Abdicate 170

Why Following the Leader Is Risky 171

Communicate So the Market Hears What You Say 172

Pick the Right Tool for the Purpose 173

A Guide to Common Promotional Tactics 173

Advertising 173

Direct Marketing 178

Websites 180

Social Media 183

Collateral Materials and Related Marketing Communications 187

Media Relations 189

Public Relations (Other Than Media Relations and Social Media) 191

Questions for Non-Marketing Managers to Ask About Promotions 193

Chapter 10 Summary 193

11 Evaluating Returns On Marketing Investments 197

Debunking the Measurement Myth 197

The Benefits of Measurement 200

Measuring Results in Anticipation of Funding 200

Measuring Returns During and After Execution 202

Determining the Appropriate Level of Accuracy 202

Measurement Models: Simple to Complex 203

Case Study #1: Evaluating the Potential Impact of a Website Overhaul 204

Case Study #2: Evaluating the Impact of Changes in Products, Channels and Promotions 206

Case Study #3: Increasing Precision Through Analytics 210

Risk Adjustment 212

Return on Marketing Investment 214

Questions for Non-Marketing Managers to Ask About Measurement and Returns 216

Chapter 11 Summary 216

Section 4: Managing Marketing Operations 219

12 Why Do Good Plans Fail? 221

The Tortoise Law 222

Why Companies Voluntarily Abandon Their Plans 222

Lack of Executive Commitment 223

Leadership Changes 223

Failure to Plan for Change 224

No Evidence of Progress 224

Executive Distrust 225

Why Companies Drift Away From Their Plans 225

Lack of Executive Commitment 225

Poor Accountability 226

Incremental Changes 227

Why Companies Involuntarily Abandon Their Plans 228

Inadequate Staffing 228

Failure to Anticipate Significant Changes 229

Failure to Anticipate Opportunities 230

Questions for Non-Marketing Managers to Ask About Keeping a Plan on Track 230

Chapter 12 Summary 231

13 Staffing The Marketing Department 233

Estimating Human Resources Requirements 233

Acceptance of Responsibilities 236

Assessing the Required Skills 237

Using External Resources to Address Skill Gaps 238

The Benefits of External Resources 238

How to Decide When to Use External Marketing Resources 239

Selecting a Resource 240

Overseeing External Resources 243

Questions for Non-Marketing Managers to Ask About Staffing the Marketing Department 245

Chapter 13 Summary 245

14 Managing Measurement 249

Addressing the Language Barrier 249

Agreeing on Metrics 251

Building Processes and Systems to Measure Performance 253

Don’t Forget the Investment Side of the ROI Equation 254

Remaining Focused 255

Coordinating Efforts 256

The CEO’s Role in Measurement 257

Questions for Non-Marketing Managers to Ask About Managing the Measurement of Marketing Performance 258

Chapter 14 Summary 258

15 Cultivating Systematic Listening 261

Modelling the Way: The Executive’s Role in Building the Crystal Ball Effect 261

Building a Listening Culture 263

Validating Internal Information With Third-Party Research 265

Why Market Research Reduces Risk 265

Effective Research Keeps the End in Mind 266

Identify Assumptions and Define Risks 266

Assess the Appropriate Investment 267

Start With the End 268

Key Market Research Tools and Concepts 268

Types of Research 269

Bias Risk in Research 270

Research Design 271

The Art of Interpretation in Research 271

Questions for Non-Marketing Managers to Ask About Cultivating Systematic Listening 272

Chapter 15 Summary 273

Section 5: Conclusion 275

16 Four Tests to Run Before Funding 277

The Alignment Test 277

How the Test Works 277

Case Study: The Alignment Test in Action 280

The Assignment Test 283

How the Test Works 284

Case Study: The Assignment Test in Action 285

The Risk Assessment Test 286

How the Test Works 286

Case Study: The Risk Assessment Test in Action 287

The Anticipated Returns Test 289

How the Test Works 290

Case Study: The Anticipated Returns Test in Action 291

Chapter 16 Summary 296

17 Now What? 297

Marketing Performance Evaluation: How Does Your Company Compare? 298

Section I: The Discipline of Marketing 298

Section II: Evaluating Marketing Plans 299

Section III: Managing the Marketing Function 301

Now, Take It Again 304

Share Your Answers 304

Ask Questions 304