MANAGING MARKETING

PERFORMANCE
INTRODUCTIONS

about David Kilburn

Head of Business Development, Associate Professor and
DSGi Marketing Fellow, formerly Barclays Fellow
DipM, MCIM, Chartered Marketer
Marketing management experience in retail industry- home
improvements, food, and consumer electronics
Worked part time for CMC for 5 years
Marketing Director for BSM Electronics
Store Director WHSmith Do-It-All
Online marketing tutor/ Dissertation advisor for worldwide MBA
programme - Liverpool University
External Examiner for Marketing/Business University of Wales
in Spain and Italy
Marketing Tutor for ISTUD in Milan, Italy each summer

ABOUT YOU!
Tell us something about yourself
Who you are?
Where you work?
What your role is?
Your marketing experience?
Academic path?
Your involvement with strategic
marketing management issues?

SETTING THE SCENE

Assignment or exam?
Dates, requirements and deadlines

Use College Web facilities

CIM Learning Zone and EBSCO
Reading
Study Guide text book
Previous papers and answers
Examiners comments
Tutor Forum February 2009
Webinars
Revision session assignment session
Contact me
dkilburn@bournemouth.ac.uk

The 5 elements
1. Creating organisational context for
effective implementation of strategy
2. Managing change and internal marketing
3. Implementing strategy through marketing
activities
4. Management techniques for managing
the marketing function
5. Measurement, evaluation and control

Fit with overall pg syllabi

ANALYSIS & EVALUATION
Strategic marketing
Evaluation of performance
Internal analysis
External analysis
The global marketplace

MANAGING MARKETING
PERFORMANCE
Organisational context
Internal marketing
Implementing strategy
Managing marketing
Measurement & control

STRATEGIC MARKETING
DECISIONS
Competitive advantage
Innovation/reorientation
SMD in global marketplace
SMD in portfolio management
Investment decisions/control
STRATEGIC MARKETING
IN PRACTICE
Learning outcomes only.
No specified
syllabus elements

Scope of the syllabus

How to do the job of marketing
relates to marketing practice

Tests application rather than

knowledge:
extend knowledge into thinking
from what to why and how

Draws on a wide range of resources

CONTEXT
7

Focus
The How of marketing rather than
the what
Delivery emphasis is on Listen and
Challenge
Shift from analysis to critical
evaluation

MMP AUDIT

Discussion with examiner

Key points
Tutor forum
Last diet

MMP Focus Meeting Feedback

Key issues resulting from the first set of
marking
Referencing is important but there is recognition
of the work based nature of the assignments
and the increase thereby in Internet based
referencing.
Looking for sound theoretical underpinning
Looking for Trail of evidence - linkage between
audit, selection of options and recommendations
Students need to define the boundaries of the
project clearly e.g. 1 or 2 products in 1 or 2
markets is enough

10

MMP Focus Meeting Feedback

Good practice
Trail of evidence
Support in audit findings
A good audit is: Relevant to the topics
Linked to the report
NOT cut and pasted!

Numbered report and good structure

Good index KEY
Do mind maps to sort ideas prior to writing the
report

11

MMP Focus Meeting Feedback

Good practice more..
Evaluation (acid test is so what?)
Depth not breadth is critical

12

MMP Focus Meeting Feedback

Poor practice
Unapplied models (Senior examiners
bete noir) vital to apply in context
Too much description not evaluation
looking for ability to use data to
discriminate in decisions
Poor referencing misspelling of
authors names!
Poor use of appendices this is a
business report
13

Grade Descriptors
Example assignment from last
assessment

14

MY ASSUMPTIONS!
You have prior knowledge and some
experience of using the theories that
apply to this syllabus
If you are unsure at any stage
SHOUT!

15

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE
Session 1
The role and practice of leadership

16

CIM Definition of Marketing

Marketing is the management
process responsible for identifying,
anticipating and satisfying customer
requirements profitably.

17

Learning outcomes
At the end of the session you will be able
to:
Explain the role of the strategic leader in
managing marketing performance
Explain the role of the strategic leader in
achieving marketing orientation
Explain the role of the strategic leader in
building shareholder value through marketing
activities
Explain the role of the strategic leader in
ensuring marketing effectiveness
18

What is leadership?
Leadership is the process of influencing
others to work willingly towards the
achievement of organisational goals.
Leadership can be characterised in terms
of traits or characteristics (of leaders) and
styles (which are to be adopted).
Leadership skills can be learnt and
improved

19

Manager or leader - differences?

Managers

Leaders

Cope with

complexity

change

Address

the present and

the short term

the future and the

longer term

Performance meets
expectations

exceeds
expectations

Focus

unlocking potential

(John Kotter)
20

controlling

Models of leadership style

Huneryager and Heckman; Likert
Dictatorial, autocratic, democratic, laissez-faire

Ashridge Management College

Autocratic, persuasive, consultative, democratic
(omits the extremes at each end)
Tells, sells, consults, joins

McGregor
Theory X and theory Y

Hersey and Blanchard: situational

leadership
Match the style to the development level of the
subordinate
http://changingminds.org/disciplines/leadership/styles/situational_leadership_he
rsey_blanchard.htm

21

Mini Case -Autoglass:Leadership success factors

22

Customer driven
Energy, drive and change
Analytical thinker
Commercial ideas and action
Planner and implementer
Open communicator
Leading and motivating teams
Partnership builder
(see handouts)

Mini Case -Autoglass:Leadership success factors

Question one
Think of two successful leaders
that you have known, preferably
selecting examples that display
different approaches. Assess
each of them in relation to the
various Autoglass success
factors.
23

Mini Case -Autoglass:Leadership success factors

Question two
Now consider a less effective
leader. To what extent did he or
she demonstrate the various
success factors?

24

What guides the organisation?

Strategy
Strategic fit

Style

Employees

Culture

Leadership
Values

25

Leadership skills (Belbin)

26

Versatility
Feedback
Charisma
Integrity
Altruism

Decision making
Problem solving
Initiating action
Fostering linkages
Assisting in
evolution and
change

What does the leader do?

Adair identifies 8
leadership activities

27

Defining the task

Planning
Briefing
Controlling
Evaluation
Motivating
Organising
Setting an example

Leaders determine how organisations develop

Strategic choice
theory (Stacey,
2003)
Formulation and
implementation of
strategy are different
It is the role of
leaders to formulate
strategy and to
direct its
implementation

28

Theory of the
learning
organisation
(Senge, 1990)
Organisations
evolve as a result
of high levels of
learning by
individuals and
teams

Marketing Managements Role

29

Life cycle of marketing

30

Relationship marketing implications for

marketing practice

31

Useful web-sites
www.shapetheagenda.com
Go to past agendas then select hard edged marketing.
The most recent paper on managing marketing people
is also worth a look

www.wnim.com
Whats new in marketing

http://www.thewisemarketer.com/
VERY GOOD!
www.cim.co.uk
www.excellencenorthwest.co.uk/Resources/Steve_
Kempster_19th_July.ppt
A useful overview

32

Minicase - Leadership
Consider a small manufacturing company,
t/over circa 25m p/a, marketing team of 3
Manager (you), executive and assistant. The
corporate objective is to increase sales by
25% over the next 3 years and the marketing
objectives are to increase brand awareness by
50% & the number of new prospects by 50%.
You need to increase your team by one,
what are the leadership issues to consider?

33

34

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE
Session 2
Planning the team

35

Learning outcomes
At the end of the session, you will be able
to:
Appraise the requirements of a given set of
tasks and their context, and assess the impact
of relevant factors on the creation or
development of a team to perform those tasks.
Determine the skills, characteristics and roles
required within a team to carry out specific
tasks effectively.
Prepare a plan showing how the team should
be structured, selected, formed and developed
to ensure effective performance.

36

A group is a collection of people

. who perceive
themselves to be a
group!
In Understanding
Organisations Charles
Handy differentiates a
group from a random
collection of individuals.
Members of a group:
have a common sense
of identity and belonging
are loyal to the group
and conform to its
standards

37

A group is not a team: teams have synergy

A team is a small
number of people with
complementary skills
who are committed to
a common purpose,
performance goals,
and approach for
which they hold
themselves mutually
accountable

38

Katzenbach and
Smith, The Wisdom of
Teams, 1994

Groups become teams when they have a sense

of purpose
Needs are complex and multi-layered and
need to be managed as such (Adair)
Their members play particular roles
(Belbin)
They are likely to pass through stages of
development (Tuckman)
Their effectiveness depends on their terms
of reference and their conduct (Handy)
Leadership is key (Ashridge; Belasco &
Stayer)

39

6 differences between a team and a group (Belbin)

40

Teams

Groups

Size

Limited

Medium/large

Selection

Critical

Limited

Leadership Shared/rotating

Solo

Perception Mutual knowledge

Focus on leader

Style

Role spread

Conformism

Spirit

Dynamic interaction

Togetherness

John Adair identified 3 overlapping needs

Task Roles
Initiating
Information Seeking
Strategic planning
Evaluating
Decision-making

Task
needs

Group maintenance
roles
Encouraging
Clarifying vision
Standard setting
Peace-keeping

www.johnadair.co.uk
41

Group
needs

Individual maintenance
roles
Individual
needs

Objective setting
Feedback
Recognition
Training
Empowerment
Counselling

Team skills, characteristics and roles

Need for key competences across the
team
Need to achieve a balance of
personalities and skills
Need to consider the tasks to be
undertaken, the individuals who make
up the team, and the cohesiveness of
that team

42

Designing a team
Meredith Belbin identified 9 distinct management roles
Chairman - presides and has a co-ordinating style
Shaper- team leader with a directive style
Plant- introvert but intellectually dominant/ imaginative
Monitor/ Evaluator - analytically intelligent/ critical
Resource Investigator - source of contacts.
Company Worker / Implementer - getting the job done
Team Worker - handles personal relationships in the
team
Completer/ Finisher - keeping the team to
its deadlines
(Specialist)
www.belbin.co.uk
43

TEAM DEVELOPMENT
(TUCKMAN AND JENSEN)

STAGE 1 - Forming
STAGE 2 - Storming
STAGE 3 - Norming
STAGE 4 - Performing
Tuckman (1965)

STAGE 5 - Dorming
Tuckman and Jensen (1977)

44

Choosing the right people is not always

straightforward

45

eligibility
entry criteria

suitability
performance criteria

qualifications
relvant experience
references
acceptability
(at interview)

aptitude
versatility
assessments
role fit
(with others)

Forming and developing (marketing) teams

Teams dont just happen
There is a process
Leader needs to nurture the team
through these stages of development
Recruit for attitude, train for skill
Consider motivational and morale issues
Consider the personal and skill
development needs

46

Handy: team effectiveness

47

The Givens

The Intervening Factors

The Outcomes

members
task
environment

motivation
processes + procedures
leadership

productivity
team satisfaction

Planning and control is a discipline

Plan, do, check and adjust (PDCA)
Plan what is to be done
Do it
Check that it has been done right
Adjust: make any changes necessary

48

Types of Teams

Multi-disciplinary
Multi-skilled
Project
Virtual
Managers role prioritisation,
planning, control, decision making &
problem solving
Leadership
49

Virtual teams
No manager: this makes them very
democratic
No meetings: this is enabled by
modern technology
No organisation or structure:
members are typically multi-skilled

50

Case Studies

51

Finally: Elton Mayo and the Hawthorne studies

Performance responds to attention
People perform better if they perceive that
they are a group singled out for attention
Tom Peters.

Relationships within work are important to

employees
Groups develop spontaneously and can set
their own rules, attitudes and standards

52

www.accel-team.com/human_relations/hrels_01_mayo.html

Useful web-sites
www.belbin.com
A basic introduction to Belbin ideas

www.teamtechnology.co.uk
Leadership, management, teamwork and
business

www.buildingyourteam.com
Free articles and tips for team building

www.greatplacetowork.com
Does what it says on the tin

www.johnadair.co.uk
Leadership and management

53

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE
Session 3

Developing and managing

teams
54

Learning outcomes
At the end of the session, you will be able to:
Demonstrate an ability to manage the work of
teams and individuals to achieve objectives and
create effective working relationships within the
team and with other teams
Critically evaluate the productivity, satisfaction
and effectiveness of teams against their
objectives using appropriate techniques.
Analyse the causes of any sub-optimal
performance and recommend how to improve the
teams performance, including plans to improve
motivation, commitment and loyalty.

55

Motivation: what is it and whats the theory?

Motivation is simply reason(s) for behaviour
There are two types of theories:
Content theories eg Maslow (hierarchy of needs) and
Herzberg (two-factor theory)
Process theories eg Vroom (expectancy theory) and
Handy (motivation calculus)

Need

56

Want

Action

Result

Maslows hierarchy of needs

Fulfilment of potential

Selfactualisation

Independence
Relationships, affection,
belonging
Security, order,
predictability, freedom
Food, shelter

57

Esteem

Love/Social Needs
Safety Needs

Physiological Needs

Maslow

58

Herzberg
Herzberg identifies two factors which
affect motivation at work:
1. Hygiene factors
elements which cause job
dissatisfaction

2. The motivators
elements which cause job satisfaction

59

Handys motivational calculus

Each individual has a motivation calculus
which is concerned with:
Energising behaviour;
Direction of behaviour; and
Sustaining behaviour

Motivation is based on strength of need

E= effort, energy, enthusiasm and
expenditure of time, resources and passion

60

http://www.businessballs.com/charleshandy.htm

Schein (1965) says that different people are

motivated in different ways

61

Rational economic: scientific management

Social man: human relations
Self-actualising man: Maslow/Herzberg
Complex man: all of the above

Schein, E.H. (1965) Organisational Psychology. Prentice-Hall Inc, New Jersey

Schein also talks of a psychological contract

This exists between individuals and their
employer:
Coercive: employee feels he/she is being
forced to contribute
Calculative: employee accepts a reward/effort
relationship
Co-operative: employee identifies with the
organisation

Motivation exists when both the individual

and the employer view the contract in the
same way.

62

Then the accepted motivators are well known

Job design, enrichment, enlargement
and rotation
Participation in decision making and
empowerment
Pay and incentive schemes
Individual and group

Good people management

63

Creating effective working relationships

Nine strategies for creating trust
(Robbins & Finley)
Have clear, consistent goals
Be open, fair and willing to listen
Be decisive and how to be
decisive
Support all other team members
Take responsibility for team
actions
Give credit to team members
Be sensitive to the needs of
team members
Respect the opinions of others
Empower team members to act

64

Evaluating team performance

Performance management/performance
appraisal systems
Review achievement to objectives
Discuss progress of the team and of individuals
Look forward dont slip into a blame culture
approach
Learn lessons from mistakes and move on
Review regularly
Give recognition and praise where due
Celebrate team success

65

Be sure about 4 key factors

Goals
must be established at the forming stage

Roles
Should be established before the
norming stage

Processes
Often get developed during storming

Relationships
Critical for performing
66

Management of Peripheral
Workers

What sort of working?

Benefits
Challenges
Management Challenges
Trust
Communication
Measurement & achievement
Involvement

67

Summary
Forming and developing marketing teams
Teams dont just happen
Forming, storming, norming and performing
Leader needs to nurture the team through these
stages of development
Recruit for attitude, train for skill
Consider motivational and morale issues
Consider the personal and skill development

68

Minicase Motivation &

Team Management
In your small marketing team of 5 there is a
manager, 2 executives and 2 assistants. One of
the executives is not performing to full strength
and complains a lot!
Taking the role of manager, discuss how you
would try to motivate this executive and how you
would manage this situation going forward?
Which theories might assist in your
management strategy?

69

LUNCH

70

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE Managing Change
Session 4

Strategic marketing, culture

and change
71

Learning outcomes
At the end of the session, you will be able to:
Recommend how an organisation should
become more strongly market oriented,
taking into account the nature of its
environment and culture.
Assess the main pressures on an
organisation to change and the initiatives
available or being used to respond.
Critically evaluate the role and content of
an internal marketing communications plan
and its contribution to managing change in
an organisation.
72

Market Orientation
Definition 1
..entails one of more departments engaging in
activities geared towards developing an
understanding of customers current and future
needs and the factors affecting them, sharing of
this understanding across departments and the
various departments engaging in activities
designed to meet select customer needs
(Kohli and Jaworski, 1990)

73

Market orientation
An organisational culture where beating the
competition through the creation of superior
customer value is the paramount objective
throughout the business.
Oriented towards customer
Alert to competitive situation
Co-operation between functions
Emphasis on profit, not turnover
Responsiveness to changes
(Piercy, Market Led Strategic Change, 2001)
74

Market Led
Strategic Management
Market orientation
beating the competition through the
creation of superior customer value (Piercy)

Components
Customers, Competition, Inter-functional,
Culture, Long-term profit focus

Challenges
New: Customers, Competitors, types of
organisation, ways of doing business
75

Organisational Culture
The sum total of the beliefs,
knowledge, attitudes of
mind and customs to which
people are exposed during
their interaction with the
organisation.

76

Culture

The way we do things around here

Deal
and Kennedy 1982
Collective programming of the mind
Distinguishes one group from another
Hofstede (1991)
77

Corporate Cultures
Speed of feedback
Slow

High risk

Bet your company

culture

Fast

Hard macho culture

Attitude
to risk
Low risk

Process culture

Source: Deal and Kennedy (2000)

78

Work hard/play hard

culture

Changing philosophies and orientations

Product
Orientated

Sales
Orientated
Supply
increases

DEMAND
EXCEEDS
SUPPLY
Sellers market Emphasis is on
increasing
output

Source: Kotler
79

Market
Orientated
Supply
increases

DEMAND
EQUALS
SUPPLY
Products are
pushed
at customers.
Emphasis is on
advertising and
selling

Societal
Orientated

Environmental
concerns

SUPPLY
EXCEEDS
DEMAND
Buyers market
Emphasis is on
customer needs
and
allocation of
resources
to satisfy them

CUSTOMER
NEEDS
EXPAND

Demands are now on

quality issues. Management
must satisfy long-term
interests of society
and individual as
well as needs of
customers and
the organisations
mission

A model of market orientation

80

Key components of achieving marketing orientation

Customers: know them well enough to give
superior value
Competition: what are their short and long-term
capabilities?
Inter-functional: mobilise the entire company to
create superior customer value
Culture: employee behaviour should be managed
to ensure customer satisfaction
Long term profit focus: have a strategic but
realistic vision

82

Hooley, Sounders and Piercey; 2003

Role of marketing in strategic management

Identify and monitor customer needs and
market situation
Link customer needs to organisations
capabilities
Contribute to determining competitive
positioning
Implement marketing programmes to
deliver value and retain customers
Measure the effectiveness of marketing
activities

83

Whats driving all this? Changes outside

new customers
new competitors
new types of
organisation

new ways of
doing business

84

rising expectations
sophistication
cynicism
from other countries
different business models
outsourcing
collaboration
alliances
stakeholder influences
customer specific marketing
database marketing
internet marketing
customer co-operatives

Environmental analysis

85

External analysis

86

If everyone in the company does marketing

what does marketing do?
It orchestrates the marketing that
everyone else does
It is the font of all knowledge
About customers;
About competitors; and
About the company and its
products/services

It is the engine of growth

87

Marketing and change

88

Nothing is permanent
except change
Heraclitus

89

Organisation & Change

Model
All of these could change!

90

McKinsey 7S model

Effective internal marketing

can help!

Kenichi Ohmae got there first; the strategic triangle

customer needs

interference with competitors'

marketing programs

company aims to
satisfy customer
needs

competitors offer
alternative
satisfactions
innovate,
differentiate,
imitate?

company

other stakeholders

91

competitor focus
analyse
competitors'
resources and
competences

competitors

Key drivers of change?

ICT
Eg Music marketing

Globalisation
Wal-Mart?

Ethical concerns
Fair Trade
Cause related marketing

92

The world is changing

External issues
(PESTER)
Political
Economic
Sociological
Technological
Environmental
Regulatory
and
Competitive

93

Internal issues Retention or gain of

competitive advantage
Cost-savings
New senior
management
New owners and other
stakeholders

Internal marketing
Deals with internal customers - an
important stakeholder group
Essential in effecting marketing
oriented culture
Marketing techniques can help to
motivate staff and increase level of
involvement

94

Kotler sums it up as a marketing triangle

company

internal marketing
program

plans

employees

customers
interactive marketing

(1999)

95

external marketing
program

Internal marketing
Provides communication to help
employees identify with corporate
objectives - the common goal
Breaks down them and us culture
Competitive advantage can be achieved
through employee knowledge
Product/service innovation can come from
employee ideas
Good customer service needs constant
reinforcement

96

Internal marketing - 3 phases

1. Employee motivation and
satisfaction
2. Customer orientation
3. Strategy implementation and change
management
Source : Ahmed and Rafiq (2002)

97

First segment the market

Segmentation
Different levels of management
Different functions
Different locations, cultures
Supporters, opposers, neutrals
(Jobber 2001)
Its not single dimensional

98

STAKEHOLDERS
Mendelows power/interest matrix

Low InterestHigh Interest

Low Power
High Power

99

Minimal Effort

Keep Satisfied

Keep Informed

Key Players

Then use the marketing mix internally

Product
Strategy and process
of change
Job or function may be
internal product
Price
Psychological price loss of status,
uncertainty, loss of
productivity

100

Promotion
Clear communication
essential
Noticeboards,
meetings, intranet,
newsletters, etc
Place
Information, training
etc - channel providing
services to the internal
customer

Discussion point
Why do so many organisations fail in their
efforts to be truly marketing oriented?
List the internal cultural barriers that may
be frustrating their ambitions and provide
suggestions as to ways in which these
barriers might be overcome.
What theories might assist?

101

Useful references
www.valuebasedmarketingmanagement.ne
t
a useful reference about just about everything
marketing

www.organisationalchange.co.uk
a consultancy in organisational change

www.mad.co.uk
delivering business insight

102

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE
Session 5

Change management

103

Learning outcomes
At the end of the session, you will be able to:
Identify and evaluate the sources of and
the techniques for overcoming resistance
to change.
Assess the impact of change in a
marketing department.
Prepare a plan to deal with change in the
marketing department, including the
development of appropriate skills and
capabilities to meet the objectives.

104

Managing Strategic Change

Styles
Education/comms, collaboration/partic, intervention,
direction (coercion).

Roles
Leadership/change agent, middle mgt., outsiders

Levers

105

Organisational routines
Symbolic processes
Politics/Alliances
Communications

What kind of change?

The Johnson and Scholes model

nature of change
transformational

proactive

tuning

planned

reactive

management role

106

incremental

adaption

forced

Change and the individual: people dont like change

They resist it because of:

Fear
Uncertainty
Lack of confidence
Dissonance

It changes them
Physiologically
Circumstantially
Psychologically
107

People respond to change in different ways

Acceptance
Enthusiastic or otherwise

Indifference
Passive resistance
Active resistance

108

Change is a process: it can be managed

1: determine need for change
2: plan the change
3: analyse possible reactions
4: consider alternatives
5: develop final plan
6: communicate the plan
7: implement, review and evaluate, modify as
appropriate
Put it all into the hands of a change agent but make
sure that he gets visible top management support.

109

Force Field Analysis the three step model

Driving forces
(for change)

A requirement of
New legislation.

Professional Commitment
To controlling the organisation.

Requirement to report
To external agencies

A concern for quality

Current State

Restraining forces
(resistance)

Cynicism about change

another fad
Existing systems
are sufficient
Trade Union concern
Over effects on job
Working conditions
Complexity of producing
Such reviews
Cost of carrying
out such reviews

110

Kurt Lewin

Ideal Position

Emergent approach
Stable/ predictable
environment

Turbulent/ unpredictable
environment

Planned
change

The change continuum

Source:Adapted from Burnes (1996)

111

Emergent
change

John Hunt (Managing People at Work)

Unlearning is as important as learning
Unfreezing requires:
A trigger eg a crisis or event
A champion to challenge
inherited thinking
Buy-in from colleagues
Restructuring
UNFREEZE
Existing
behaviour

112

Attitudinal/
behavioural
change

REFREEZE
new
behaviour

Creating major change (Kotter 1996)

1. Establish sense of urgency
2. Create the guiding coalition
3. Develop a vision and strategy
4. Communicate the change vision
5. Empower broad-based action
6. Generate short term wins
7. Consolidate gains and produce more
change
8. Anchor new approaches in the culture
113

Making time for change

1. Global change
2. Organisational change
3. Personal change
Source: Robbins and Finley (1998)

114

The Change Curve

115

Originally developed by Kubler-Ross

And adapted by Wilson 1993

Think about 3 phases in change

(Conner and Patterson)
Preparation
Contact
Awareness

Acceptance
Understanding
Positive perception

Commitment

116

Installation
Adoption
Institutionalisation
Internalisation

Cultural change is the most difficult

Get prepared
Hampden Turner

Find the dangers

Bring conflicts into the open
Play out corporate dramas
Reinterpret the corporate myths
Look at symbols, images, rituals
Create a new learning system

Take it through the entire organisation

Wait 3 (or even 8) years!

117

Dont forget HR implications

There may be redundancies. These
need to be carried out legally and
meet the companys social
responsibility policies;
Recruitment policy and practice may
need to be reviewed; and
Training is probably going to be a
major need to bring everyone up to
speed
118

Group discussion point

Overcoming resistance to change through
internal marketing. Consider (one of):
A small B2B machinery supplier looking to
become a more market led organisation
following recent acquisition
A national charity looking to change its
strategy for attracting donations from local
charity shops to national advertising
A local supermarket chain looking to build
alliances with retailers elsewhere
How would you do it?
119

Mini Case
Managing Change
A new marketing director has come in to the
business and is making changes in the
strategy of the marketing team. This will
result in job losses and changes in the
structure of the team. To make matters
worse their style is very dictatorial.
What obstacles do you think this person will
come up against, and how should they
overcome them?
120

Summary
Change is inevitable, but it is not always
welcomed, and often resisted.
Success with change programmes can be
improved by taking peoples fears into account
May be necessary to have a Change Agent
You cant change too much too often cynicism
sets in and that is the most difficult to overcome
Cultural change is difficult

121

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE
Session 6
Building shareholder value through
marketing activities
122

Learning outcomes
At the end of the session, you will be able to:
Explain the link between marketing activities and
shareholder value.
Explain the measurement of economic value added
Determine the contribution to shareholder value of
marketing activities undertaken.
Critically appraise methods available for valuing
brands.
Explain how brand equity can be built and brands
can be valued.
Recommend an appropriate approach for the
organisation.

123

Strategic decisions are concerned with

The long term direction of the
organisation
Achieving some advantage
Scope of an organisations activities
Matching the activities of the
organisation to the environment in
which it operates

Source: Johnson & Scholes

124

Implementation
Shareholder Value Analysis
Computing Value
Economic profit = NOPAT (CE x cost of capital)

Discounting Cash flows

Value based management
Marketing assets

125

Firstly a useful reference

126

SVA: shareholder value analysis

EVA: economic value added
NOPAT: net operating profit after tax
ROCE: return on capital employed
DCF: discounted cash flow
NPV: net present value

Economic profit versus accounting profit

Accounting profit is what is reported in a
companys results and what is reported is
strictly controlled by the principle of
prudence (tell that to Enron!)
Many expenditures which are in fact
investments and will pay off in the future
are treated as expenses
Economic profit may treat such
expenditures as investments

127

Shareholder value and total shareholder return

Investors focus 80%

of their decision on
cash beyond 4 years

Today

Total shareholder return (TSR)

TSR = dividends + share price growth
128

+10 years

Source : Valueline and PA Consulting Group 2002

www.cim.co.uk/mediastore/PA_unlockingrealvalue.pdf

Investors are
most interested
in what will
generate cash in
future

Value drivers
Read Doyle!
Value based marketing

129

Key to enhancing value is to understand the drivers

Financial

Volume
Timing
Risk
Sustainability

Marketing
Choice of markets
Target customers
Positioning

Organisational
Internal and external

130

Positioning for differential advantage is a little more complex

Product leadership
Operational excellence
Brand superiority
Customer intimacy

There are often examples of all four

positions taken in an industry

131

Marketing strategies to create value

Marketing assets
Marketing knowledge
Brands
Customer loyalty
Strategic channel relationships

132

Marketing and shareholder value

CUSTOMERS
133

Value
drivers
Marketing
skills

Marketing
results
Marketing
assets

Financial
results

SHAREHOLDERS

Marketing
activities

Strategies to develop SV
1.
2.
3.
4.
5.
6.

Economies of scale
Economies of scope
Cost advantages
Product differentiation
Access to distribution channel
Government policy

Source: Peterson (2004)

134

Boston matrix and shareholder value

A
selected
few

Remainder
divested

Liquidated

Competitive position
135

Limitations of SVA
Forecasting
Cost of Capital
Estimating terminal
value
Baseline business
value
Options for the future
Market valuation
136

Brands

137

Strong brands can increase cashflow

Strong brands can increase cashflow
by
Obtaining higher prices; and
Higher volume growth; resulting in
Lower costs; and
Higher asset utilisation

138

But whats a brand?

Its an entity with a
collection of attributes that
strongly influence purchase
(Hugh Davidson)
It comprises an effective
product, a distinctive identity
and added values.

139

Branding
What is a brand?
A name, sign, symbol, design or combination
of them, intended to identify goods or services
of one seller or group of sellers and to
differentiate them from those of competitors
(Kotler)

What makes up a brand?

Benefits of branding
Customers, Marketers, Shareholders
140

Brand building process

Basic
brand

Augmented
brand
Extras

Pack
Training

Features
Guarantees

Potential
brand
141

Services

Name
Product
Design

Delivery

Quality
Logos

Installations

Technical
support

Types of brand/brand image

Attribute brands image conveys
confidence in its functional attributes
e.g. Volvo (safety), Persil (washes whiter)
Aspirational brands image conveys a
lifestyle to which people aspire e.g.
Martini (sophisticated jet-setter), Rolex
(top professional)
Experience brands conveys an image of
shared associations and emotions e.g.
Nike (just-do-it), Marlboro (rugged
masculine values)
Doyle Value-Based Marketing, 2000

142

From Commodity Brand to Power Brand

Components of a brand

143

CENTRAL VALUES

EXPRESSIVE VALUES

CORE VALUES

What the brand and the

consumer share at a
fundamental level
What the brand says
about the consumer
What the brand does for
the consumer

Brands are used in different ways: brand architecture

Company brands eg Mercedes
Source brands eg Kelloggs
Corn Flakes
Range brands eg Sharwoods
Product brands eg Ronseal
Umbrella brands eg Philips

Whats the difference between a

range brand and an umbrella
brand?
144

Brand stretching: be careful

What is it?
Using a brand name successful in one market
to enter another

Why do it?
Its cheap, uses an existing asset and is less
risky than a new brand

When to do it
When the brand core values are applicable to
the new market and when activity in the new
market will not adversely affect them

But: it may damage the first brand and its

not a substitute for real marketing
145

Brand Planning & Strategies

Brand Planning

Market Analysis
Brand Situation Analysis
Targeting future positions
Testing new offers
Planning & evaluating performance

Brand Strategies
Brand Stretching
Revitalising brands
Global or local?

146

Valuing Brands
Should brands be valued?
Methods
Cost
Royalties
Market Value
Economic Use Value
SVA Approach to brand Valuation
Discount rate
Future earnings
147

Business Week/ Interbrand valuations 2007

148

Young and Rubicams Brand Asset

valuator

differentation

relevance

esteem

brand strength

brand stature

BrandAsset
Valuator

www.yrbav.com

149

knowledge

Millward Browns BrandDynamics

bonding

nothing else beats it

does it offer something

better than the others?

can it deliver?

advantage
performance

does it offer me
something?

relevance

do I know about it?

presence

www.millwardbrown.com

150

strong relationship/
high share of category expenditure

weak relationship/
low share of category expenditure

Interbrands strength index

element weightingcomment
leadership
25% how dominant is the brand in its sector?
market
10% is it growing?
stability
15% how loyal are the customers?
international scope
25% how far does the brand reach?
trend
10% are sales growing?
support?
10% how much is being spent and how well?
protection
5% what's the IP position?

151

Summary
Organisational value drivers McKinsey 7
S model identifies these
SVA approach is good but has limitations
NPV = Sum of the present values of all
future cashflows.
NPV can be used for project appraisal
Brands are important differentiators and
can be, perhaps inaccurately, valued &
exploited.

152

CIM PROFESSIONAL PG DIPLOMA

MANAGING MARKETING
PERFORMANCE

Thats all for day 1!

153