A marketing strategy can achieve its desired results only if implemented properly. Properly is the key word. It is important to remember that a firm’s intended marketing strategy often differs from the realized strategy (the one that actually takes place). This also means that actual performance is often different from expectations. Typically, there are four possible causes for this difference:
1. The marketing strategy was inappropriate or unrealistic.
2. The implementation was inappropriate for the strategy.
3. The implementation process was mismanaged.
4. The internal and/or external environments changed substantially between the development of the marketing strategy and its implementation.
To reduce the difference between what actually happened and what the company expected and to correct any of these four problems marketing activities must be.
1. The marketing strategy was inappropriate or unrealistic.
2. The implementation was inappropriate for the strategy.
3. The implementation process was mismanaged.
4. The internal and/or external environments changed substantially between the development of the marketing strategy and its implementation.
To reduce the difference between what actually happened and what the company expected and to correct any of these four problems marketing activities must be.
evaluated and controlled on an ongoing basis. Although the best way to handle implementation problems is to recognize them in advance, no manager can successfully recognize all of the subtle and unpredictable warning signs of implementation failure. With that in mind, it is important that the potential for implementation failures be managed strategically by having a system of marketing controls in place that allows the firm to spot potential problems before they cause real trouble. Exhibit 9.5 outlines a framework for marketing control that includes two major types of control: formal controls and informal controls.Although we discuss each type of marketing control separately, most firms use combinations of these control types to monitor strategy implementation.
Formal Marketing Controls
Formal marketing controls are activities, mechanisms, or processes designed by the firm to help ensure the successful implementation of the marketing strategy. The elements of formal control influence the behaviors of employees before and during implementation, and to assess performance outcomes at the completion of the implementation process. These elements are referred to as input, process, and output controls respectively.
Input Controls Actions taken prior to the implementation of the marketing strategy are input controls. The premise of input control is that the marketing strategy cannot be implemented correctly unless the proper tools and resources are in place for it to succeed. Recruiting, selecting, and training employees are among the most important input controls. Another critical input control deals with financial resources. These control activities include resource allocation decisions (manpower and financial), capital outlays for needed facilities and equipment, and increased expenditures on research and development. Financial resources can make or break a marketing strategy or its implementation. For example, General Motors was quite slow to infuse additional capital into its Saturn division after it was first launched. For years, Saturn was unable to compete effectively due to constrained resources that limited its ability to develop and market new vehicles. A case in point: Saturn did not enter the highly profitable SUV market until 2002 long after its competitors. By the time GM did give Saturn additional resources, it was too late to repair the brand’s tarnished image. General Motors later closed the Saturn division as a part of its corporate restructuring.
Process Controls
Formal Marketing Controls
Formal marketing controls are activities, mechanisms, or processes designed by the firm to help ensure the successful implementation of the marketing strategy. The elements of formal control influence the behaviors of employees before and during implementation, and to assess performance outcomes at the completion of the implementation process. These elements are referred to as input, process, and output controls respectively.
Input Controls Actions taken prior to the implementation of the marketing strategy are input controls. The premise of input control is that the marketing strategy cannot be implemented correctly unless the proper tools and resources are in place for it to succeed. Recruiting, selecting, and training employees are among the most important input controls. Another critical input control deals with financial resources. These control activities include resource allocation decisions (manpower and financial), capital outlays for needed facilities and equipment, and increased expenditures on research and development. Financial resources can make or break a marketing strategy or its implementation. For example, General Motors was quite slow to infuse additional capital into its Saturn division after it was first launched. For years, Saturn was unable to compete effectively due to constrained resources that limited its ability to develop and market new vehicles. A case in point: Saturn did not enter the highly profitable SUV market until 2002 long after its competitors. By the time GM did give Saturn additional resources, it was too late to repair the brand’s tarnished image. General Motors later closed the Saturn division as a part of its corporate restructuring.
Process Controls
Process controls include activities that occur during implementation, designed to influence the behavior of employees so they will support the strategy and its objectives. Although the number of process controls is potentially limitless and will vary from one firm to the next, Exhibit 9.5 provides some examples of universal process controls that all firms must employ and manage well. The process control that stands out above all others is management commitment to the strategy. Several research studies have confirmed that management commitment to the marketing strategy is the single most important determinant of whether the strategy will succeed or fail.33 This commitment is critical because employees learn to model the behavior of their managers. If management is committed to the marketing strategy, it is more likely that employees will be committed to it as well. Commitment to the marketing strategy also means that managers must be committed to employees and support them in their efforts to implement the strategy.
Another important process control is the system used to evaluate and compensate employees. In general, employees should be evaluated and compensated based on criteria relevant to the marketing strategy.For example, if the strategy requires that salespeople increase their efforts at customer service, they should be rewarded on the basis of this effort, not on other criteria such as sales volume or the number of new accounts created. Further, the degree of authority and empowerment granted to employees is another important process control. Although some degree of empowerment can lead to increased performance, employees given too much authority often become confused and dissatisfied with their jobs.Having good internal communication programs another type of process control can help to alleviate these problems.
Output Controls
Another important process control is the system used to evaluate and compensate employees. In general, employees should be evaluated and compensated based on criteria relevant to the marketing strategy.For example, if the strategy requires that salespeople increase their efforts at customer service, they should be rewarded on the basis of this effort, not on other criteria such as sales volume or the number of new accounts created. Further, the degree of authority and empowerment granted to employees is another important process control. Although some degree of empowerment can lead to increased performance, employees given too much authority often become confused and dissatisfied with their jobs.Having good internal communication programs another type of process control can help to alleviate these problems.
Output Controls
Output controls ensure that marketing outcomes are in line with anticipated results. The primary means of output control involves setting performance standards against which actual performance can be compared. To ensure an accurate assessment of marketing activities, all performance standards should be based on the firm’s marketing objectives. Some performance standards are broad, such as those based on sales, profits, or expenses. We say these are broad standards because many different marketing activities can affect them. Other performance standards are quitespecific, such as many customer service standards (e.g., number of customer complaints,
repair service within 24 hours, overnight delivery by 10:00 A.M., on-time airline arrivals). In most cases, how the firm performs relative to these specific standards will determine how well it performs relative to broader standards. But how specific should performance standards be? Standards should reflect the uniqueness of the firm and its resources, as well as the critical activities needed to implement the marketing strategy. In setting performance standards, it is important to remember that employees are always responsible for implementing marketing activities, and ultimately the marketing strategy. For example, if an important part of increasing customer service requires that employees answer the telephone by the second ring, then a performance standard should be set for this activity. Standards for the performance of marketing personnel are typically the most difficult to establish and enforce.
One of the best methods of evaluating whether performance standards have been achieved is to use a marketing audit to examine systematically the firm’s marketing objectives, strategy, and performance. The primary purpose of a marketing audit is to identify problems in ongoing marketing activities and to plan the necessary steps to correct these problems. A marketing audit can be long and elaborate, or it can be short and simple. Exhibit 9.6 displays a sample marketing audit. In practice, the elements of the audit must match the elements of the marketing strategy. The marketing audit should also be used to gauge the success of ongoing implementation activities—not just when problems arise.
One of the best methods of evaluating whether performance standards have been achieved is to use a marketing audit to examine systematically the firm’s marketing objectives, strategy, and performance. The primary purpose of a marketing audit is to identify problems in ongoing marketing activities and to plan the necessary steps to correct these problems. A marketing audit can be long and elaborate, or it can be short and simple. Exhibit 9.6 displays a sample marketing audit. In practice, the elements of the audit must match the elements of the marketing strategy. The marketing audit should also be used to gauge the success of ongoing implementation activities—not just when problems arise.
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