Exam 3

Question 1

Selecting the right combination of name, symbol, term, or design that identifies a product

Answer 1

Branding strategy

Question 2

Part of a brand. Words, letters, and number that can be spoken.

Answer 2

Brand name

Question 3

Part of a brand. Symbols, figures, or a design.

Answer 3

Brand mark

Question 4

Parts of a brand

Answer 4

• Brand name - Words, letters, and numbers that can be spoken
• Brand mark - Symbols, figures, or a design

Question 5

What is corporate branding?

Answer 5

• Considered as important as product-related branding
• Aimed at a variety of stakeholders
• Designed to build and enhance firm’s reputation
• Rebuilds firm’s reputation when unfavorable events occur

Most firms consider their corporate brands to be equally as important as individual product-related brands. In fact, product-related brands and corporate brands are clearly intertwined.

1. Corporate branding activities are typically aimed at a variety of stakeholders, including customers, shareholders, advocacy groups, government regulators, and the public at large.
2. Corporate branding and reputation are critical to effective product-related branding and positioning as they create trust between the firm and its stakeholders. These activities are designed to build and enhance the firm’s reputation among these groups, and to rebuild the firm’s reputation when unexpected and unfavorable events occur.

Negative coverage of a company’s problems can have quick, dramatic, and long-lasting effects on its brand and reputation.

Question 6

What is the goal of corporate branding?

Answer 6

• Designed to build and enhance firm’s reputation
• Rebuilds firm’s reputation when unfavorable events occur

Question 7

Advantages of selling manufacturer (name) brands

Answer 7

1. Reduced costs: heavy promotion by the manufacturer reduces the marketing costs of the merchant that carries the brand.
2. Built-in loyalty: manufacturer brands come with their own cadre of loyal customers.
3. Enhanced image: the image and prestige of the merchant are enhanced.
4. Lower inventory: manufacturers are capable of time-certain delivery, which allows the merchant to carry less inventory and reduce inventory costs.
5. Less risk: poor quality or product failures become attributed to the manufacturer rather than the merchant.

Question 8

Advantages of selling private-label (store) brands

Answer 8

1. Increased profit: the merchant maintains a higher margin on its own brands and faces less pressure to cut prices to match the competition.
2. Less competition: where manufacturer brands are carried by many different merchants, private-label brands are exclusive to the merchant that sells them.
3. Total control: the merchant has total control over the development, pricing, distribution, and promotion of the brand.
4. Merchant loyalty: customers who are loyal to a private-label brand are automatically loyal to the merchant.

Question 9

Private-label brands

Answer 9

or store brands, are owned by the merchants that sell them. They are typically more profitable for the merchant than manufacturer brands.

Question 10

Manufacturer brands

Answer 10

are important in driving customer traffic. They also give customers confidence that they are buying a widely known brand from a respected company.

Question 11

Individual branding

Answer 11

A firm uses this type of branding when it gives each of its product offerings a different brand name, such as Proctor & Gamble (Tide, Downy, Cover Girl, Scope). The key advantage of individual branding is that the potential poor performance of one product does not tarnish the brand image of other products in the firm’s portfolio. It is also useful in market segmentation when the firm wants to enter many segments of the same market (Tide, Cheer, Bold, Gain, Ariel of Proctor & Gamble).

Question 12

Family branding

Answer 12

This type of branding occurs when a firm uses the same name or part of the brand name on every product. For example, every cereal in the Kellogg’s portfolio uses the Kellogg’s name. The key advantage of family branding is that the promotion (and brand image) of one product reflects on other products under the same family brand. However, in addition to the obvious risk of releasing a poor product under a family brand, family branding also runs the risk of overextension. Too many brand extensions, especially into unrelated areas, can confuse customers and promote brand switching.

Question 13

Strategic brand alliances

Answer 13

• Cobranding
  
  • Using two or more brands on one product
  • Leverages image and reputation of multiple brands to create distinctive differentiation
  • Examples - Processed foods and credit cards
• Brand licensing
  
  • Contractual agreement where a firm permits another to use its brand on non-competing products
  • Exchange involves licensing fee
  • Helps attain instant recognition for firm’s brand among consumers

Question 14

Brand value

Answer 14

• Brand loyalty- Positive attitude towards a brand that results in customers consistently choosing the brand
  
  • Three degrees
    
    • Brand recognition
    • Brand preference
    • Brand insistence
• Brand equity
  
  • Firm-centric view of a brand’s value
  • Marketing and financial value associated with a brand’s position in the marketplace
  • Linked to brand name awareness, brand loyalty, and brand quality

Question 15

Brand recognition

Answer 15

occurs when a customer knows about the brand and is considering it as one of several alternatives in the evoked set.

Question 16

Brand preference

Answer 16

is a stronger degree of brand loyalty where a customer prefers one brand to competitive brands and will usually purchase this brand if it is available.

Question 17

Brand insistence

Answer 17

occurs when customers will go out of their way to find the brand and will accept no substitute.

Question 18

Brand loyalty

Answer 18

is a positive attitude toward a brand that causes customers to have a consistent preference for that brand over all other competing brands in a product category:

1. Brand recognition occurs when a customer knows about the brand and is considering it as one of several alternatives in the evoked set.
2. Brand preference is a stronger degree of brand loyalty where a customer prefers one brand to competitive brands and will usually purchase this brand if it is available.
3. Brand insistence occurs when customers will go out of their way to find the brand and will accept no substitute.

Question 19

Brand equity

Answer 19

is the value of the brand to the firm, or the marketing and financial value associated with a brand’s position in the marketplace. Brand equity usually has ties to brand name awareness, brand loyalty, brand quality, and other attributes. Brand equity is hard to measure; however, it represents a key asset for any firm. Firms will go to great lengths to protect their brand assets.

Question 20

Does packaging and labeling go hand-in-hand with branding?

Answer 20

Yes. It helps develop a product, its benefits, its differentiation, and its image.

Question 21

Packaging

Answer 21

serves a number of important functions, including protection, storage, convenience, product modification, repositioning, and cobranding.

Question 22

Labeling

Answer 22

not only aid in product identification and promotion, but they also contain a great deal of information to help customers make proper product selections.

is an important legal issue as several federal laws and regulations specify the information that must be included on a product’s packaging. For example, the Nutritional Labeling and Education Act of 1990 mandated that packaged food manufacturers must include detailed nutritional information on their packaging.

Question 23

What are the tools of positioning strategy? What are their basic issues?

Answer 23

• The key to strengthening a product’s current position is to monitor constantly what target customers want and the extent to which customers perceive the product as satisfying those wants. Strengthening a current position is all about continually raising the bar of customer expectations.
• Repositioning (Finding a new position) may involve a fundamental change in any of the marketing mix elements, or perhaps even all of them. Some of the most memorable marketing programs involve attempts to move to new positions.

Question 24

What is the difference between differentiation and positioning?

Answer 24

• Differentiation involves creating differences in the firm’s product offering that set it apart from competing offerings. Differentiation typically has its basis in distinct product features, additional services, or other characteristics.
• Positioning refers to creating a mental image of the product offering and its differentiating features in the minds of the target market. This mental image can be based on real or perceived differences among competing offerings.

Question 25

What are the basis for differentiation?

Answer 25

The most important basis for differentiation is the brand. Customer perceptions of a brand are of utmost importance in differentiation because differences among competing brands can be based on real (e.g., product characteristics, features, or style) or psychological (e.g., perception and image) qualities. In addition to the brand, other important bases for differentiation include product descriptors and customer support services.

1. Product features: factual descriptors of the product and its characteristics. For instance, Apple’s 13-inch MacBook Pro includes key features such as an Intel Core i7 processor and aluminum unibody construction. However, features are not generally the pieces of information that lead customers to buy. Features must be translated into the second context, advantages.
2. Advantages: performance characteristics that communicate how the features make the product behave, hopefully in a fashion that is distinctive and appealing to customers. For example, the advantages of the MacBook Pro include a lightweight, compact design, fast performance, and long battery life. However, the real reason customers buy products is to gain benefits.
3. Benefits: the positive outcomes or need satisfaction that customers acquire from purchased products. Thus, the benefits of the MacBook Pro, for example, include ultimate mobility and rugged entertainment on the road. Other benefits, like increased productivity and connectivity, might also be implied in Apple’s promotional program.

One aspect of a product’s description that customers value highly is quality. Product characteristics that customers associate with quality include reliability, durability, ease of maintenance, ease of use, and a trusted brand name.

A firm may have difficulty differentiating its products when all products in a market have essentially the same quality, features, or benefits. In such cases, providing good customer support services-both before and after the sale-may be the only way to differentiate the firm’s products and move them away from a price-driven commodity status. Support services include anything the firm can provide in addition to the main product that adds value to that product for the customer. Regardless of the basis for differentiation, reality is often not as important as perception. Firms that enjoy a solid image or reputation can differentiate their offerings based solely on the company or brand name alone.

Question 26

What are the stages of the product life cycle?

Answer 26

1. Development
2. Introduction
3. Growth
4. Maturity
5. Decline

Question 27

Development stage

Answer 27

• No sales revenue during this stage
• Components of product concept
  
  • Understanding customer’s desired uses and benefits
  • Description of product
  • Potential for creating a complete product line
  • Analysis of feasibility of product concept
• Test marketing is conducted to gauge customer needs before developing marketing strategy

Question 28

Introduction stage

Answer 28

• Begins when development is complete and ends when customers widely accept the product
• Marketing strategy goals
  
  • Attract customers by raising awareness and interest
  • Induce customers to try and buy
  • Engage in customer education activities
  • Strengthen or expand channel and supply chain relationships
  • Build on availability and visibility through trade promotion
  • Set pricing objectives
• Length can vary depending on the market

Question 29

Growth stage

Answer 29

• Profits rapidly increase and decline toward the end of this stage
• Length depends on nature of product and competitive reactions
• Organizational priorities
  
  • Establish a strong, defensible marketing position
  • Achieve financial objectives that repay investment
• Strategy shifts from customer acquisition to retention and building brand loyalty
• Marketing strategy goals
  
  • Leverage product’s perceived differential advantages
  • Establish clear brand identity
  • Create unique positioning
  • Maintain control over product quality
  • Maximize product availability
  • Maintain or enhance product’s ability to deliver profits to partners
  • Find ideal balance between price and demand
  • Keep an eye on the competition
  • Leverage product’s perceived differential advantages in terms of branding, quality, price, value, and so on, to secure a strong market position.
  • Establish clear brand identity through coordinated promotional campaigns aimed at both customers and the trade.
  • Create unique positioning through the use of advertising that stresses the product’s benefits for target customers relative to other available solutions or products.
  • Maintain control over product quality to assure customer satisfaction.
  • Maximize product availability through distribution and promotion activities that capitalize on the product’s popularity.
  • Maintain or enhance product’s ability to deliver profits to partners, especially retailers that control shelf space and product placement.
  • Find ideal balance between price and demand as price elasticity becomes more important as the product moves toward the maturity stage.
  • Keep an eye on the competition.
• Challenges Faced During the Growth Stage
  
  • Pricing
    
    • Firms must balance need for cash flow and need to be competitive
    • Complicating factors
      
      • Relationship between perceived quality and price
      • Increasing price sensitivity of customers
  • Rise in competition in the market
    
    • Build a defensible market
    • Image can be based on quality, price, image, or technological standards
  • All markets go through a shakeout period and dominant firms emerge

Question 30

Maturity stage

Answer 30

• Longest stage in the cycle in which no more firms will enter the market
• Window of opportunity remains open for new product features and variations
  
  • Essential when firms want to gain market share
• Typically, a firm has four general goals that can be pursued during the maturity stage:
  
  • Generate cash flow
  • Hold market share
  • Steal market share
  • Increase share of customer

Maturity Stage: Strategic Options to Achieve Goals

• Develop new product image
• Find and attract new users to the product
• Discover new applications and uses for the product
• Apply new technology to the product

Question 31

Decline stage

Answer 31

• Firms can attempt to postpone the decline
  
  • Product demand can be renewed via:
    
    • Repositioning
    • Developing new features
    • Applying new technology
• Firms can accept inevitability of decline
  
  • Harvesting
    
    • Gradual reduction in marketing expenses and usage of a less resource-intensive marketing mix
  • Divesting
    
    • Withdrawing all marketing support from the product
• Decline Stage: Factors to Consider
  • Market segment potential
    
    • Look for viability and profitability associated with loyal customers
  • Market position of the product
    
    • Attract customers from competitors’ abandoned products
  • Firm’s price and cost structure
    
    • Have low cost and maintain selling price
  • Rate of market deterioration
    
    • Faster the rate of deterioration, sooner the firm should divest its product

Question 32

What does social responsibility mean?

Answer 32

Firm’s obligation to maximize its positive impact on society while minimizing its negative impact.

Question 33

What are the diminsions of social responsibility?

Answer 33

• Economic responsibility of making a profit
• Legal responsibility of obeying laws and regulations
• Ethical responsibility to uphold principals and standards
• Philanthropic responsibility to increase the firm’s positive impact on society

From economic responsibilities, firms must be responsible to all stakeholders for financial success. The economic responsibility of making a profit serves employees and the community at large.

From legal responsibilities, firms have expectations, at a minimum, to obey laws and regulations.

Ethical responsibilities refer to principles and standards that define acceptable marketing conduct as determined by the public, government regulators, private interest groups, competitors, and the firm itself. Ethical responsibilities include decisions about what is right or wrong in the organizational context of planning and implementing marketing activities in a global business environment to benefit (1) organizational performance, (2) individual achievement in a work group, (3) social acceptance and advancement in the organization, and (4) stakeholders. Because discussing and addressing potential problems during the strategic planning process could save millions, companies are increasingly creating extensive ethics and compliance programs to identify problems early on.

Philanthropic activities, which go beyond marketing ethics, are not required of a company, but they promote human welfare or goodwill above and beyond the economic, legal, and ethical dimensions of social responsibility. Many firms link their products to a particular social cause on an ongoing or short-term basis, a practice known as cause-related marketing. Other firms go further and adopt strategic philanthropy, the synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits. Social entrepreneurship occurs when an entrepreneur founds an organization that strives to create social value rather than simply earn profits.

Question 34

What does cause-related marketing stand for?

Answer 34

Philanthropic activities, which go beyond marketing ethics, are not required of a company, but they promote human welfare or goodwill above and beyond the economic, legal, and ethical dimensions of social responsibility. Many firms link their products to a particular social cause on an ongoing or short-term basis, a practice known as cause-related marketing. Other firms go further and adopt strategic philanthropy, the synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits. Social entrepreneurship occurs when an entrepreneur founds an organization that strives to create social value rather than simply earn profits.

Question 35

What does sustainability stand for? What are green marketing and greenwashing?

Answer 35

• Programs designed to protect and preserve the natural environment
  
  • Eco-friendly business practices
  • Waste reduction
  • Reduction in greenhouse gas emissions
  • LEED building certification
• Green marketing
  
  • Creating long-term customer relationships while also maintaining, supporting, and enhancing the natural environment
  • Greenwashing - Misleading consumers about the eco-friendly nature of products

Question 36

What are marketing ethics and strategy?

Answer 36

• Marketing ethics
  
  • Principles and standards that define acceptable marketing conduct
  • Requires firms to consider all stakeholders, both internal and external
• Most basic ethical standards have been codified as laws
• Standards of conduct
  
  • Firms and individuals must accept responsibility and comply with established value systems
• Employees in sales positions hold key responsibility for ethical behavior
• Deviation from accepted standards leads to:
  
  • Breakdown in exchange process
  • Violation of public trust
  • Customer dissatisfaction
  • Legal action
• Intertwined with respect to a firm’s reputation
  
  • Directly affects success of marketing strategies

Question 37

What are ethical issues in marketing program?

Answer 37

An ethical issue is an identifiable problem, situation, or opportunity that requires an individual or organization to choose from among several actions that must be evaluated as right or wrong, ethical or unethical. Marketers must be able to identify ethical issues and decide how to resolve them.

• Product-related
  
  • Failure to disclose risks, product design, and counterfeit products
• Pricing-related
  
  • Price discrimination, price fixing, predatory pricing, and superficial discounting
• Supply chain-related
  
  • Labor issues, raw material sources, and quality control
• Promotion-related
  
  • False or misleading communication, ambiguous statements, bribery, and direct marketing fraud

Question 38

How can we regulate marketing ethics?

Answer 38

Regulating Marketing Ethics

• Firms prefer to regulate themselves by:
  
  • Compliance with laws and regulations
  • Joining trade associations
  • Joining Better Business Bureau (BBB)
• Benefits of self-regulation
  
  • Less expensive
  • Practical and realistic guidelines
  • Reduced need to expand government bureaucracy
• Limitations of self-regulation
  
  • Non-member firms are not obligated to follow guidelines
  • Most associations lack necessary tools to enforce guidelines
  • Less strict than government regulations
• Many firms attempt to regulate themselves in an effort to demonstrate ethical responsibility and prevent regulation by federal or state governments. In addition to complying with all relevant laws and regulations, many firms choose to join trade associations that have self-regulatory programs. Although such programs are not a direct outgrowth of laws, many became established to stop or delay the development of laws and regulations that would restrict the associations’ business practices. Some trade associations establish codes of conduct by which their members must abide or risk rebuke or expulsion from the association.
• The best-known self-regulatory association is the Better Business Bureau. When a firm violates what the BBB believes to be good business practices, the bureau warns consumers.
• Self-regulatory programs have a number of advantages over government regulation:
  
  • They are usually less costly.
  • Their guidelines are generally more practical and realistic.
  • They reduce the need to expand government bureaucracy.
• However, they also have some limits:
  
  • Non-member firms are under no obligation to abide by a trade association’s industry guidelines or codes.
  • Most associations lack the necessary tools or authority to enforce their guidelines.
  • These guidelines are often less strict than regulations established by government agencies.

Question 39

What does “codes of conduct” mean? What are core values or principles of a code of conduct?

Answer 39

Codes of Conduct (Code of Ethics)

• Formal statement that describes what firms expect of their employees
• Methods of implementation
  
  • Integrating code into daily decision making
  • Periodically revising code to eliminate possible weaknesses
• Impossible to resolve every ethical concern
  
  • Helps deal with dilemmas by limiting certain activities
• Reflects management’s desire for compliance with values, rules, and policies
• Without ethics training and uniform standards and policies regarding conduct, it is hard for employees to determine what conduct is acceptable within the company. In the absence of such programs and standards, employees will generally make decisions based on their observations of how coworkers and supervisors behave. To improve ethics, many companies have developed codes of conduct (also called codes of ethics) that consist of formalized rules and standards that describe what the company expects of its employees.
• A code of conduct that does not address specific high-risk activities within the scope of daily operations is inadequate. Codes should also be updated periodically. Core values or principles that should be contained in a code of conduct include trustworthiness, respect, responsibility, fairness, caring, and citizenship.
• Codes of conduct will not resolve every ethical issue encountered in daily operations, but they help employees and managers deal with ethical dilemmas by prescribing or limiting specific activities. In other words, the code should provide guidelines that enable employees to achieve organizational objectives in an ethical manner.
• It is essential for organizations to communicate their codes effectively, so employees know what the company expects of them.

Codes of Conduct: Core Values

• Trustworthiness
• Respect
• Responsibility
• Fairness
• Caring
• Citizenship
• The above are considered to be highly desirable in any code of ethical conduct. These values will not be effective without distribution, training, and the support of top management in making them a part of the corporate culture and the ethical climate. Employees need specific examples of how these values can be implemented.
• Many firms have a code of ethics, but sometimes they do not communicate their code effectively. A code placed on a website or in a training manual is useless if the company does not reinforce it on a daily basis. By communicating both the expectations of proper behavior to employees as well as punishments they face if they violate the rules, codes of conduct curtail opportunities for unethical behavior and thereby improve ethical decision-making.

Key Considerations in Developing and Implementing a Code of Ethical Conduct

• Examine high-risk areas and issues.
• State values and conduct necessary to comply with laws and regulations. Values are an important buffer in preventing serious misconduct.
• Identify values that specifically address current ethical issues.
• Consider values that link the organization to a stakeholder orientation. Attempt to find overlaps among organizational and stakeholder values.
• Make the code of conduct understandable by providing examples that reflect values.
• Communicate the code frequently and in language that employees can understand.
• Revise the code every year with input from a wide variety of internal and external stakeholders

Question 40

What is ethical leadership?

Answer 40

Ethical Leadership

• Ethical cultures emerge from strong leadership
• Employees look to the leader as a model of acceptable behavior
  
  • Requires top management support
• Great ethical leaders:
  
  • Create common goal or vision for the company
  • Obtain buy-in or support from significant partners
  • Motivate others to be ethical
  • Use the resources that are available to them
  • Enjoy their jobs and approach them with an almost contagious tenacity, passion, and commitment
• There is increasing support that ethical cultures emerge from strong leadership. Many agree that the character and success of the most admired companies emanate from their leaders. The reason is simple: Employees look to the leader as a model of acceptable behavior. As a result, if a firm is to maintain ethical behavior, top management must model its policies and standards. In fact, maintaining ethical culture is near impossible if top management does not support ethical behavior.
• Having a strong ethical climate depends on top mangers who consistently model the firm’s policies and standards. Great leaders:
  
  • create a common goal or vision for the company
  • obtain buy-in, or support, from significant partners
  • motivate others to be ethical
  • use the resources that are available to them
  • enjoy their jobs and approach them with an almost contagious tenacity, passion, and commitment

Ethical Leadership and Corporate Culture

• Strong corporate culture helps guide employee behavior
• Ethics training can help the firm, peers, and supervisors
  
  • Helps lessen likelihood of misconduct
• Helps ensure that all personnel:
  
  • Recognize situations that need ethical decision-making
  • Understand firm’s values and culture
  • Have the ability to evaluate impact of ethical decisions
• The culture of the organization—as well as superiors, peers, and subordinates—can play a key role in guiding employee behavior.
• Ethics training can ensure that everyone in the firm:
  
  • recognizes situations that might involve ethical decision-making
  • understands the value and culture of the firm
  • can evaluate the impact of ethical decisions on the firm in light of its value structure.

Relationship to Marketing and Financial Performance

• Ethical climate
  
  • Requires firms to incorporate interest of all stakeholders in actions and decisions
• Effect of strong ethical climate on employees
  
  • Motivated to serve customers
  • Committed to the firm
  • Committed to high quality standards
  • Satisfied with their job
• One of the most powerful arguments for including ethics and social responsibility in the strategic planning process is the evidence of a link between ethics, social responsibility, and financial performance.
• An ethical climate calls for organizational members to incorporate the interests of all stakeholders, including customers, in their decisions and actions.
• Employees working in an ethical climate will make an extra effort to better understand the demands and concerns of customers.
• As employees perceive an improvement in the ethical climate of their firm, their commitment to the achievement of high-quality standards also increases. They become more willing to personally support the quality initiatives of the firm.

Question 41

What does stakeholder orientation mean?

Answer 41

Stakeholder Orientation

• Degree to which firms understand and address stakeholder demands
• Activities include:
  
  • Organization-wide generation of data about stakeholders and assessment of the firm’s effects on stakeholders
  • Distribution of information derived, throughout the firm
  • Organization’s responsiveness to intelligence provided
• Viewed as a continuum
  
  • Likely to be adopted by a firm to varying degrees
• A natural progress from a market orientation is to view all stakeholders as important. The degree to which a firm understands and addresses stakeholder demands can be referred as a stakeholder orientation. This orientation is comprised of three activities:
  
  • the organization-wide generation of data about stakeholder groups and the assessment of the firm’s effects on these groups: generating data about stakeholders begins with identifying the stakeholders who are relevant to the firm
  • the distribution of this information throughout the firm
  • the organization’s responsiveness as a whole to this intelligence: the responsiveness of the organization to stakeholder intelligence consists of the initiatives that the firm adopts to ensure that it abides by or exceeds stakeholder expectations and has a positive impact on stakeholder issues.
• This is very similar to the step involved in a market orientation, but the firm becomes more concerned about all stakeholders, including employees, suppliers, shareholders, regulators, and the community.
• A stakeholder orientation can be viewed as a continuum in that firms are likely to adopt the concept to varying degrees.

Question 42

How can we incorporate ethics and social responsibility into strategic planning?

Answer 42

Incorporating Ethics and Social Responsibility into Strategic Planning

• Typically done through ethical compliance programs or integrity initiatives
• Marketing strategy and implementation should reflect understanding of:
  
  • Risks associated with misconduct
  • Ethical and social consequences of strategic choices
  • Values of organizational members and stakeholders
• Top management should demonstrate commitment via actions
• Many firms integrate ethics and social responsibility into their strategic planning through ethics compliance programs or integrity initiatives that make legal compliance, ethics, and social responsibility an organization-wide effort.
• The marketing plan should include distinct elements of ethics and social responsibility that reflect an understanding of the risks associated with ethical and legal misconduct, the ethical and social consequences of strategic choices, and the values of organizational members and stakeholders.
• A marketing plan that ignores social responsibility or is silent about ethical requirements leaves the guidance of ethical and socially responsible behavior to the work group, which risks ethical breakdowns and damage to the firm.

Question 43

What are intended marketing strategy and realized marketing strategy?

Answer 43

• Intended marketing strategy - What the firm wants
• Realized marketing strategy - Strategy that actually takes place

Question 44

What is the link between planning and implementation, such as interdependancy, evolution, and separation?

Answer 44

• Interdependency
  
  • Implementation depends on strategy and strategy depends on implementation
• Evolution
  
  • Planning and implementation must evolve over time because environmental factors constantly change
  • No single, correct way to implement a strategy
• Separation
  
  • Planning is often done at the top of the organizational hierarchy, and implementation occurs at the firm’s frontline

Question 45

What is marketing structure?

Answer 45

• Marketing Structure: the methods of organizing a firm’s marketing activities, the formal lines of authority, and the division of labor within the marketing function.
  
  • Centralized structure: the top of the marketing hierarchy coordinates and manages all marketing activities and decisions. Centralized structures are very cost-efficient and effective in ensuring standardization within the marketing program.
  • Decentralized structure: the frontline of the firm coordinates and manages marketing activities and decisions. Decentralized marketing structures have the important advantage of placing marketing decisions closer to the frontline where serving customers is the number one priority. The decision to centralize or decentralize marketing activities is a trade-off between reduced costs and enhanced flexibility.

Question 46

What are elements of marketing implementation?

Answer 46

Marketing implementation involves a number of interrelated elements and activities. These elements must work together for strategy to be implemented effectively. Because we examined marketing strategy issues in previous topic, we now look briefly at the remaining elements of marketing implementation:

• Shared goals and values: the “glue” of successful implementation—they bind the entire organization together as a single, functioning unit. Institutionalizing shared goals and values within a firm’s culture is a long-term process. The primary means of creating shared goals and values is through employee training and socialization programs.
• Marketing Structure: the methods of organizing a firm’s marketing activities, the formal lines of authority, and the division of labor within the marketing function.
  
  • Centralized structure: the top of the marketing hierarchy coordinates and manages all marketing activities and decisions. Centralized structures are very cost-efficient and effective in ensuring standardization within the marketing program.
  • Decentralized structure: the frontline of the firm coordinates and manages marketing activities and decisions. Decentralized marketing structures have the important advantage of placing marketing decisions closer to the frontline where serving customers is the number one priority. The decision to centralize or decentralize marketing activities is a trade-off between reduced costs and enhanced flexibility.

Elements of Marketing Implementation

• Systems and processes
  
  • Work activities that absorb inputs to create information
  • Communication outputs that ensure the firm’s operation
• Resources
  
  • Type and amount of tangible and intangible assets that can be used to implement marketing strategy
• Systems and Processes: collections of work activities that absorb a variety of inputs to create information and communication outputs that ensure the consistent day-to-day operation of the firm. Examples include information systems, strategic planning, capital budgeting, procurement, order fulfillment, manufacturing, quality control, and performance measurement.
• Resources: include a wide variety of tangible and intangible assets that can be brought together during marketing implementation. Tangible resources include financial resources, manufacturing capacity, facilities, and equipment. Examples of intangible resources are marketing expertise, customer loyalty, brand equity, corporate goodwill, and external relationships/strategic alliances.

Elements of Marketing Implementation

• People (human resources)
  
  • Employee selection and training
  • Employee evaluation and compensation
  • Employee motivation, satisfaction, and commitment
• Leadership
  
  • Art of managing others
  • How managers communicate with employees and motivate them to implement marketing strategies

People (human resources): the quality, diversity, and skill of a firm’s human resources can also make or break implementation.

• Employee selection and training: matching employees’ skills and abilities to the marketing tasks to be performed.
• Employee evaluation and compensation: tying employee rewards to performance levels on required marketing activities.
• Employee motivation, satisfaction, and commitment: the extent to which employees have the motivation to implement the strategy, their overall feelings of job satisfaction, and the commitment they feel toward the organization and its goals.

Leadership: how managers communicate with employees, as well as how they motivate their people to implement the marketing strategy. Today’s business leaders must be courageous enough to take a long-term view of corporate success (in other words, they often need to sacrifice short-term gains for the sake of the future). Leaders have responsibility for establishing the corporate culture necessary for implementation success. A good deal of research has shown that marketing implementation is more successful when leaders create an organizational culture characterized by open communication between employees and managers. This type of leadership creates a climate where managers and employees have full confidence and trust in each other.

Question 47

What is implementation by command? What are advantages and disadvantages of this approach?