Burning Ideas

Marketing strategy must reflect a coordinated effort of product performance and two-way communication. Within the communication process must be integration of marketing efforts and messages. Further, what is communicated about the product must be accurate, or the position won’t be supported. How can a company make certain that such integration occurs?
Several factors can encourage the appropriate level of integration within the marketing program. Clear strategic decisions, personnel stability, compensation systems that support the marketing strategy, and formal communication and organizational structures that encourage cross-functional interaction are among the more important.

Clear Strategic Decisions
In one study that examined mismatches between marketing and sales strategies, an issue that surfaced was a lack of decisiveness on the part of senior marketing executives. For example, two sales managers said that, although formal strategy indicated that a product would be on the market for the next few years, informal signals from marketing management indicated that the product might be withdrawn. As a result, the sales force was not putting any effort into those products. Sales and marketing strategies are neither immediate nor irreversible; if management waffles on strategic decisions, then marketing and sales investments could be wasted and relationships (both internal and external) damaged.

Personnel Stability
Relationships take time to build. As mentioned earlier, internal relationships go through the same stages as external relationships. Moving people rapidly through the organization can mean that relationships between areas of the marketing department are never built. One manager in one study reported three marketing executives in five years; one salesperson told us he had three different sales managers in one year! While each successive manager had to try to quickly build rapport with each subordinate and superior, the whole sales team suffered because new relationships had to be built between each new manager and all of the other functional areas. When rapid personnel turnover occurs, the relationship cannot get past the exploration stage.

Compensation
A key issue that creates ill will is the fact that different groups within marketing compete for the same budget. Fights over budgets can create bad feelings and damage relationships. Budgets, though, are not the only “money” issue that can damage or enhance relationships. Many companies are evaluating and testing compensation plans that encourage teamwork. For example, marketing managers may find that their pay contains incentives based on sales or contribution margins. When that is the case, they are incented to work more closely with the sales force. Morehead Supply is one company that pays quarterly bonuses to all marketing personnel if sales targets are achieved. Unlike profit sharing plans that the company also uses, these bonuses are specifically designed to encourage teamwork within the marketing–sales interface. Compensation can also help turn budgeting into teamwork. By using a joint compensation system, all of those competing for budget end up being paid based on the same performance. As a result, they are more determined than ever to see that the budget results in effective marketing. The issue, though, also affects how areas such as manufacturing, engineering, and other functional area bonuses are paid. When those areas are also compensated for customer satisfaction and teamwork, then those outcomes are more likely.

Organizational Structure
Compensation plans, though, should be supported by the appropriate organizational structure. The structure of the organization can enhance or inhibit the ability to create internal partnerships. In the next section, we discuss different types of organizational structures, as well as the different groups within marketing between whom partnerships are created.

If you know that your backpacking trip will take you through snowy mountain roads and swampy hiking trails, you would be wise to put on your snow tires and double up on insect repellant. Similarly, if you know the nature of competitive challenges in your market, you should be sure your firm is adequately prepared to meet them. Every firm has both strengths and weaknesses, but it is how they match up against the competitive structure of the market that determines success.
Three broad types of action plans are implicated by competitive analysis. A firm will want to choose its competitive battlegrounds judiciously. If it is the low-cost producer, it might enjoy profitable business from a large, powerful buyer. A firm that is disadvantaged on the cost side should probably not pursue business from the powerful buyer, but compete in another customer sector where quick response and specialized technical service are critical. Solar Kids, a Cincinnati-based computer training company, faced up to the waning profit opportunities at elementary and high schools: lots of rivals, impoverished and slow-paying customers. It changed its name to Solar Comp and moved into corporate training, where competition pivots on expertise with the latest applications software and personal productivity tools.
Innovative organizations will sometimes pursue a strategy designed to change the competitive structure of the industry. Advertising and a sophisticated means of programmed merchandising for resellers may transform a market characterized by small regional manufacturers into one dominated by a few national marketers. In markets where this has occurred, the new competitive structure creates barriers to entry through new distribution requirements and product differentiation by branding.
The third strategic approach is to anticipate and exploit change in the competitive structure of the industry. Our challenge is to look carefully at each competitive force, understand its root causes, and forecast its impact on the profitability of an industry. Then, with insight and mobility superior to our competition, we try to secure a position to capitalize on the evolution of the field. In the opening vignette to this chapter, we profiled the moves to stake out a commercial presence in the developing digital economy. It is a reasonable bet that its growing experience and reputation will earn it superior profits and up the stakes for potential rivals in these evolving markets.

A business strategy also has to develop the detailed aims and action plans for the functional areas. A host of questions must be addressed in this portion of a strategy. Will special emphasis be given logistics for customer service or will the firm decentralize manufacturing to provide short supply linkages to key customers? Will the firm need a strong advertising campaign or will it need to support distributor activities that play key roles in product differentiation? How important is supply management, relative to other facets of the value creation process? How can the sales, service, and operations people at the branches be encouraged to work as a team?
In many markets, careful analytical attention and planning are given to the product line—its scope, composition by functional feature and durability, horizontal and vertical connectivity, price, and so on. A computer company must consider the relationship of each model to the others it markets. What is the positioning strategy for each model and the array of accessories and peripherals? Engineering, purchasing, manufacturing, and logistics must collaborate in the formulation of supporting goals and activities.
The growing interconnectivity in today’s information environment has posed new challenges for computer makers. For the small and midsized firms that want network services, manufacturers are relying more heavily on their value-added resellers (VARs). But at least two distinct action plans are evident. The approach used by Digital and Compaq favors Internet and/or intranet technology to provide technical and strategic support to a broad base of VARs. The other approach, exemplified in moves by IBM and Apple, provides increased service and incentives for an elite group of VARs.
Of course, the remainder of the marketing mix must also be tightly formulated. Advertising and distribution strategies must be worked out to support the intended positioning and product line strategies. The roles of the sales force with respect to each product and customer group need to fit with the advertising and telephone marketing strategies. Also, pricing strategies need to be in harmony with the advertising, selling, distribution, and manufacturing strategies.

Substantial markets can be revealed by a number of estimation techniques. One very powerful approach is the use of scenarios. Scenarios comprise a forecasting technique that requires managers to write explicit anticipated futures and articulate the chains of events that would need to occur to make the future happen. For example, Royal Dutch Shell tuned its supply strategy when its scenario process in 1973 found no compelling reasons for Arab states to increase their crude oil production. Furthermore, some of the authors helped an environmental management company determine the market for certain types of training. The task involved getting accurate counts of employees in different industries who handled hazardous and toxic materials, plus an assessment of the likelihood of new government regulations that—by fiat or new economic sanctions— would impact the training demand.
A related approach involves hard thinking and analysis of how the product fits into the value-added process. This approach is sometimes called the buildup approach or factoring. Market estimates by this approach come from building up the materials or parts units needed in a specific application or from specific accounts. For example, potential demand for a surgical staple designed for closing Caesarian sections can be estimated from a count of the average number of staples needed to close a typical Csection, times the number of C-sections performed in different countries. Projections in each country are apt to show different trends, based on differences in hospital protocols, fertility patterns, and population distributions.
The same basic approach can be applied using survey responses from prospects or from members of the sales force. Likewise, the volume of certain materials, logistical services, or MRO (maintenance, repair and operating) goods can be compared to finished products output in a statistical series. A statistical series is an estimation technique that uses the correlation between demand and some other set of economic activities to yield a forecast.

Decide exactly what you want to do.

Clarity
You must be clear about what it its that you want – what it is your doing – and why you are doing it, at every step of your life. You must know and see how everything you do fits in with your life.

Goal Orientation
Successful people are intensely goal orientated. They know what they want and are working towards the achievement of their goals every single day.

A Simple 7 Part Goal Setting Formula

1. Decide exactly what you want – formulate a goal
2. Then write it down (a goal not written down is merely a wish or a fantasy)
3. Set a deadline and even sub-deadlines if the goal is large and long-term
4. Make a list of everything you will have to do to achieve your goal.
5. Make a plan – organize your list by setting priorities on the list activities
6. Take action – Do this immediately DO IT NOW! And develop a sense of urgency. You must be intensely action orientated.
7. Do something every single day – Maintain momentum by doing something that will move you towards your goal daily.

The Best Goal Setting Exercise
(Practice it over and over again during your life)

1. Start with a blank sheet of paper
2. Make a list of 10 goals that you want to accomplish in the next 12 months (write your goals in the present tense, as if you already accomplished them and start every goal with the word I)
3. Go over your list of 10 goals and select that one goal that will have the greatest impact on your life, if your were to achieve it
4. Take your chosen goal and write it on the top of a separate sheet of paper. Then write down a deadline for it. And then formulate a plan. Take action on the plan immediately, and resolve to do something every day until you achieve your goal.