Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 2 STRATEGIC MARKETING PLANNING
distribution channels selected, and the physical distribution systems used or created, must 
also ensure that the products or services get to the target customers. In this way, elements 
of the mix are integrated to deliver a consistent and targeted message to the markets/desired 
customers.
Where elements of the mix contradict each other, the positioning achieved will be con-
fused, and as a result will confuse customers.
2.5.2 Organisation
How the marketing effort and the marketing department are organised will have an effect 
on how successfully the strategy is implemented.
At a very basic level, it is essential for the required humans (people) and financial 
resources to be available. However, the ways in which these resources are organised 
(organisational form) can also affect ability to implement strategy effectively. The more 
‘traditional’ organisational structures often found in marketing are functional and product 
(brand) management.
Within a functional organisation structure, the marketing department consists of spe-
cialists in various marketing activities who report to a coordinator (in effect) of marketing 
activity, often entitled ‘manager’ or ‘director’. Typical functions include sales management, 
advertising and promotions management, market research and new product development. 
An extension of the functional design is a geographic organisation where, within the func-
tions given previously as examples (such as sales management), managers are responsible 
for specific geographic markets. Functional structures offer simplicity, and are designed to 
foster high levels of expertise in each function. They are also, and often, the first step for 
organisations wishing to adopt a higher and more active profile for the marketing function 
as a whole. They are most applicable where the number and complexity of products or 
services the company has on the market are limited.
Within a product (or brand) management structure (originally pioneered by Procter 
& Gamble in 1927 for a then-ailing Camay soap brand), responsibility for all marketing 
activities of a particular product rests with one product manager. In diversified companies 
(suggesting some degree of scale) with many different products, the system has the major 
advantage of locating responsibility of the mix of marketing activities around one individ-
ual, hence making a consistent and coordinated approach more likely. Additionally, and in 
larger companies, product managers are able to call on the talents of functional specialists 
as and when necessary.
Dramatic changes in the marketing environment have caused many companies to rethink 
the role of the product manager. Today’s consumers have more information and benefit 
from more choice than ever before and, as a result, consumer marketing companies are 
shifting away from ‘national’ advertising and favouring price and point-of-sale promotions, 
as well as a focus on the digital space for communication with (and to) customers. Brand 
managers have traditionally focused on long-term, brand-building strategies that target 
mass audiences, but today’s marketplace realities often demand shorter-term, sales-building 
strategies designed for local markets.
A second significant force affecting brand management is the growing power of retail-
ers. Larger and arguably more powerful retailers now demand more trade promotions and 
support from suppliers, in exchange for scarce shelf space. The move towards more trade 
promotion and support though retail channels leaves marketing budgets stretched, and 
certainly less money for national advertising – traditionally the brand manager’s primary 
marketing tool. The use of digital tools and channels has also been a ‘game changer’, and 
this is discussed further, and in more depth, later in this text.
Other companies adopt a category management approach. Under this system, brand 
managers report to a category manager who has total responsibility for an entire prod-
uct category. For example, Heinz, Unilever, L’Oréal and Proctor and Gamble have all 

---

49
IMPLEMENTATION
traditionally adopted a category management approach, as it offers a number of important 
advantages over alternative approaches. First, category managers have broader planning 
perspectives than brand managers, as rather than focusing on specific brands, they can 
shape a company’s entire category offering. Second, it better matches the buying processes 
of retailers. Recently, retailers have tended to make individual buyers responsible for all 
suppliers in a specific product category, and hence a category management system connects 
far more strongly with this new retailer ‘category buying’ system.
For companies that sell one product line to many different types of market that have dif-
ferent needs and preferences, a market management organisation might be most effective. 
Many companies are organised along market lines. A market management organisation 
is similar to the product management organisation. Market managers are responsible for 
developing long-range, annual plans for sales and profits in their markets. This system’s 
main advantage is that the company is organised around the needs of specific customer 
segments.
Increased attention is also being given to organisational approaches based on key pro-
cesses of value creation and delivery, rather than traditional structures and mechanisms. 
Traditional organisational approaches are often seen as too slow, unresponsive and cum-
bersome to deal with rapidly changing markets, new Internet-based competition and strate-
gies depending on alliances and partnering. For example, a venture marketing organisation 
is one such approach (Aufreiter et al., 2000). It was this approach that allowed Starbucks 
to take its Frappucino from a line manager’s idea to a full national launch in less than a 
year. In its first year, Frappucino contributed 11 per cent of Starbucks’ US sales. More gen-
erally, the pressure is towards a more effective integration of company resources around 
value creation, regardless of traditional organisational structures (Hulbert et al., 2003). 
Additionally (and as discussed briefly in Chapter 1), organisations are trying to dismantle 
functional boundaries and bring teams together to focus on customer outcomes. For exam-
ple, Annhauser-Busch InBev and Johnson & Johnson have implemented cross-functional 
working teams (or squads/tribes) in order to align their internal structures and employee 
skills more closely with the competitive and market issues faced.
Whatever the organisational structure, individuals are needed with the necessary skills 
to carry out various marketing tasks. Two sources of personnel emerge: those internal to 
the company or those brought in from outside. When entering new markets, bringing in 
external expertise can be a shortcut to developing the knowledge needed in-house. Skills 
can be improved and extended through training programmes held within a company or 
through outside training agencies.
2.5.3 Control
As the marketing strategy is executed, an important role of the marketing department is to 
monitor and control the effort. Marketing managers, after all, have a vested and significant 
interest in being able to justify and quantify the outcomes of their actions and expenditure 
(Hanssens and Dekimpe, 2012).
Performance can be monitored in two main ways: on the basis of market performance 
and on financial performance. Market performance measures such things as sales, market 
share, customer attitudes and loyalty. Changes in these over time can then be related back 
to the original objectives of the strategy being pursued. However, performance measures 
should include factors other than those used to set objectives, to ensure that pursuit of 
those objectives has not lost sight of the wider implications. For example, a strategic objec-
tive may be to reduce costs, but no one monitors customer satisfaction or complaints. As 
a result, the company reduces costs (and achieves an objective), but loses customers and 
puts its future in jeopardy. This is, of course, an extreme example to illustrate the idea of 
casting a wide net of control variables in order to capture unintended outcomes (as far as 
is possible, of course).

---

50