Session 4

1. Session 4 Assessing and Utilising Organisational Resources and Measuring Marketing Performance Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

2. Course Objectives To deliver a coherent and deliverable market oriented internal culture to encourage flexibility which is SMART enough for your employer to understand and give you the go ahead. To follow the CIM guidelines so as not to throw away marks To maximise the LSM on-line resources = SUCCESS Michael G. Warner Chartered Marketer MBA DipM FCIM FIDM

3. Organisational Structure Organisational structure refers to the pattern of relationships among positions in the organisation among members of the organisation. How the activities and the people are groped in an organisation depends on the specific structure of the organisation. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

4. Two Major Components of Organisational Structure Formalisation: the extent to which rules and regulations are used to regulate behaviour. This is affected by the size of the organisation. Centralisation: refers to where decision making powers lie. Highly centralised organisations, decisions are made at the highest level of management and visa versa. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

5. Flatter Organisations Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

6. Horizontal structure – five ways Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

7. Horizontal structure – five ways Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

8. The Boundaryless Organisation A boundaryless organisation eliminates barriers that separate functions (e.g. marketing versus manufacturing), domestic and foreign operations, different levels of work (managerial versus hourly) and between the organisation and its customers and suppliers. Boundaryless organisations ensure that the specifications and requirements of the suppliers, producers and consumers are all well integrated to achieve objectives. Milkovich & Boudreau (1994) Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

9. The McKinsey 7s Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

10. Teams • Multi-disciplinary teams • Multi-skilled teams • Project teams • Virtual teams • Self-managed teams Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

11. Stages in Team Development Tuckman & Jensen 1977 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

12. Skills assessment An organisation needs to assess the current skills and competencies and the required skill levels of their employees. Then the gap between the current skills and the required skills needs to be addressed. Skills can be assessed through Performance appraisals Diagnostic tests such as questionnaires and psychometric tests Feedback from peers and colleges Michael G.Warner Chartered Marketer MBA DipM FCIMFIDDM

13. ‘Fit’ between strategy and culture Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM Source: Adapted from Schwartz & Davis, 1981

14. Strategic Funding Framework • The funding framework consists of four steps: • Campaign targets- understand the organisation and its requirements • Funding mix assessment – Selection of the funders • Case statement – Develop communication • Managing the relationship development process • It Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

15. Adaptability Strategic adaptability, or a firm’s ability to adjust its business practices and competitive tactics in response to the perceived efficacy of its strategic actions. strategic adaptability, implies being responsive to strategic outcomes and the effects of prior actions. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

16. Effectiveness ='Doing the right things' Efficiency= 'Doing things the right way' Measures of efficiency ROI Key performance measures R&D productivity Turnover per employee Productivity per employee • Measures of effectiveness • Key performance measures • Market share • Customer loyalty • Customer complaints • Sales revenue Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

17. Efficiency to Effectiveness Matrix Effective & Efficient = 'Thrive' Organisations that pursue the right strategy efficiently thrive. Ineffective & Efficient = 'Die Quickly' To be highly efficient at doing the wrong thing is to fail heroically. Effective & Inefficient = 'Survive' Many organisations get by, 'surviving', forever showing potential, but never meeting their growth targets. Ineffective & Inefficient = 'Die Slowly' Organisations that fall into this category lack a cohesive compelling vision of what they are aiming to become and leadership that will make things happen. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

18. Marketing measures • Strategic measures - used to measure the performance of the organisation as a whole. These include • Market share • Return on investment • Efficiency of branding strategies • Tactical measures These are short term measures which measure the satisfaction of customers, customer loyalty and promotions . Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

19. Evaluating business and marketing strategy –Financial measures • Total profit • Sales • Capital employed • Ratios - ROCE, profit/sales ratio, cost/sales ratio, asset turnover ration • Earnings per share, dividend per share, Gearing • Share price Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

20. Evaluating business and marketing strategy- Innovation and value creation measures • Innovation frequency • Innovation success rate • Innovation payback Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

21. Evaluating business and marketing strategy-Customer Measures • Customer acquisition • Customer repeat purchases • Customer profitability • Customer retention Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

22. Ethics and Strategy – MUST TOUCH The stakeholder view Many groups are affected by the activities of an organisation. For example shareholders are concerned regarding their return on investment, employees expect to be treated equally whilst the government is concerned regarding the ethical stance of the company. The ethical stance The ethical stance of the company is concerned with the minimum obligations that the company extends towards its stakeholders There are two approaches concerned with ethics of the organisation Compliance based approach - The company acts within the legal obligations Integrity based approach -This approach is based on the managements responsibility towards the ethical behaviour of the organisation. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

23. Shareholder value analysis Shareholder value analysis (SVA) is based on value creation for shareholders. It is concerned with evaluating the effectiveness of the investment decisions of the organisation. The shareholder value creation by past performance is measured by economic profits Economic profit = Net operating profit after tax- (capital employed x cost of capital) Cash flow approach – This method is used to identify the economic value which could be created by a company in the future. QUESTIONABLE Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

24. Value based management Financial value drivers • Cash flow volume • Cash flow risk • Cash flow timing • Cash flow sustainability ? YIELD ? PROFIT Marketing value drivers • Choice of markets • Marketing knowledge • Customer loyalty • Relationships with channel partners Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

25. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

26. Agenda • Brand identity • Brand extensions • Brand loyalty • Global Brands • Positioning • Brand management • Organisational structures • The importance of corporate culture on marketing strategy • Teams in organisations • Motivation • Adaptability • Efficiency and effectiveness • Brands • Brand equity • Brand dimensions Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

27. Types of Organisational Structure Functional Product/brand Geographical Divisional Matrix Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

28. Organisational Culture vs Formalisation/Centralisation Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM