Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Managing Marketing’s
Link with Other Functional
Areas
Text © The McGraw−Hill
Companies, 2002600 Chapter 20
ways, or the marketing manager may need to find
creative ways to phase in a strategy over time so that it
generates enough cash flow to “pay its own way.”
There also needs to be close coordination between a
firm’s production specialists and the marketing plan. To
get that coordination, the marketing manager needs to
consider the firm’s production capacity when evaluating
alternative strategies. And flexibility in production may
allow the firm to pursue different strategies at the same
time or to switch strategies more easily when new op-
portunities develop.
Figuring out the profitability of a strategy, product,
or customer often requires a real understanding of
costs—production costs, marketing costs, and other
costs that may accumulate. Traditional accounting re-
ports are often not very useful in pinpointing these
costs. However, marketing managers and accountants
are now working together to get more accurate cost in-
formation—by developing functional accounts rather
than just relying on natural accounts typically used for
financial analysis.
Money, facilities, and information are all important
in developing a successful strategy, but most strategies
are implemented by people. So a marketing manager
must also be concerned with the availability and skills of
the firm’s people—its human resources. New marketing
strategies may upset established ways of doing things.
Plans need to be clearly communicated so that everyone
knows what to expect. Further, plans need to take into
consideration the time and effort that will be required to
get people up to speed on the new jobs they will be ex-
pected to do.
Making the strategic planning decisions that con-
cern how a firm is going to use its overall
resources—from marketing, production, finance, and
other areas—is the responsibility of the chief execu-
tive officer, not the marketing manager. Further, the
marketing manager usually can’t dictate what a man-
ager in some other department should do. However, it
is sensible for the marketing manager to make recom-
mendations on these matters. And marketing
strategies and plans that the marketing manager rec-
ommends are more likely to be accepted, and then
successfully implemented, if the links between market-
ing and other functional areas have been carefully
considered from the outset.Questions and Problems- Identify some of the ways that a firm can raise
money to support a new marketing plan. Give the
advantages and limitations—from a marketing
manager’s perspective—of each approach. - An entrepreneur who started a chain of auto ser-
vice centers to do fast oil changes wants to quickly
expand by building new facilities in new markets
but doesn’t have enough capital. His financial ad-
visor suggested that he might be able to get
around the financial constraint and still grow rap-
idly if he franchised his idea. That way the
franchisees would invest to build their own cen-
ters, but fees from the franchise agreement would
also provide cash flow to build more company-
owned outlets. Do you think this is a good idea?
Why or why not? - Explain, in your own words, why investors in a firm’s
stock might be interested in a firm’s marketing man-
ager developing a new growth-oriented strategy.
Would it be just as good, from the investors’ stand-
point, for the manager to just maintain the same
level of profits? Why or why not? - A woman with extensive experience in home health
care and a good marketing plan has approached a
bank for a loan, most of which she has explained she
intends to “invest in advertising designed to recruit
part-time nurses and to attract home-care patients
for her firm’s services.” Other than the furniture in
her leased office space, she has few assets. Is the bank
likely to loan her the money? Why?- Could the idea of mass customization be used by a
publisher of college textbooks to allow different in-
structors to order customized teaching materials—
perhaps even unique books made up of chapters
from a number of different existing books? What do
you think would be the major advantages and disad-
vantages of this approach? - Give examples of two different ways that a firm’s
production capacity might influence a marketing
manager’s choice of a marketing strategy. - Is a small company’s flexibility increased or de-
creased by turning to outside suppliers to produce
the products it sells? Explain your thinking. - Explain how a marketing manager’s sales forecast for
a new marketing plan might be used by
a. A financial manager.
b. An accountant.
c. A production manager.
d. A human resources manager.