MarketingManagement.pdf

then. Two groups of experienced marketers are implementing the plan. One

is the board of directors, many of whose members are executives of major

financial corporations or their spouses. The other group has been recruited

from businesses that are using their association with the Ailey company for

their own marketing purposes. For example, Healthsouth Corporation pro-

vides free physical therapy to the dancers and benefits from the association

in marketing its chain of sports medicine clinics. Jaguar, the official car of

Alvin Ailey, has made a large donation in exchange for this designation and

the right to use Alvin Ailey in advertising and for access to the its mailing

list. With an audience that is almost half African American and 43 percent

of which is between the ages of 19 and 39, Ailey is providing access to an

important market for its corporate partners and earning their enthusiastic

support.^22

VALUATION AND CONTROL

To deal with the many surprises that occur during the implementation of marketing

plans, the marketing department continuously has to monitor and control marketing

activities. In spite of this need, many companies have inadequate control procedures.

This conclusion was reached in a study of 75 companies of varying sizes in different

industries. The main findings were these:

■ Smaller companies do a poorer job of setting clear objectives and establishing

systems to measure performance.

■ Less than half of the companies studied knew their individual products’ prof-

itability. About one-third of the companies had no regular review procedures for

spotting and deleting weak products.

■ Almost half of the companies fail to compare their prices with those of the com-

petition, to analyze their warehousing and distribution costs, to analyze the

causes of returned merchandise, to conduct formal evaluations of advertising ef-

fectiveness, and to review their sales force’s call reports.

■ Many companies take four to eight weeks to develop control reports, which are

occasionally inaccurate.

Table 6.6 lists four types of marketing control needed by companies: annual-plan

control, profitability control, efficiency control, and strategic control.

ANNUAL-PLAN CONTROL

The purpose of annual-plan control is to ensure that the company achieves the sales,

profits, and other goals established in its annual plan. The heart of annual-plan con-

trol is management by objectives. Four steps are involved (Figure 6-11). First, manage-

ment sets monthly or quarterly goals. Second, management monitors its performance

in the marketplace. Third, management determines the causes of serious performance

deviations. Fourth, management takes corrective action to close the gaps between

goals and performance.

This control model applies to all levels of the organization. Top management sets

sales and profit goals for the year that are elaborated into specific goals for each lower

level of management. Each product manager is committed to attaining specified lev-

els of sales and costs; each regional and district sales manager and each sales repre-

sentative is also committed to specific goals. Each period, top management reviews

and interprets the results.

Managers use five tools to check on plan performance: sales analysis, market-share

analysis, marketing expense–to–sales analysis, financial analysis, and market-based

scorecard analysis.

part five

Managing and

Delivering Marketing

(^696) Programs
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