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Marketing Due Diligence: Reconnecting Strategy to Share by Malcolm McDonald

By Malcolm McDonald

On the most sensible of an organization, revenues don't subject, gains don't topic, even go back on funding is a secondary drawback. What issues is proportion cost and what drives proportion cost is the construction of shareholder worth. Many advertising administrators, keen about branding and different promotional strategies, pass over this primary fact of recent enterprise and so smash the wealth in their company's final vendors. by means of failing to think about and deal with the company hazard linked to their recommendations, they carry returns under the price of capital and overlook the firm's raison d'etre. The board wishes a fashion of retaining those sellers to account. advertising Due Diligence is a brand new procedure which has emerged from years of analysis at Cranfield, one in every of Europe's prime company colleges. It blends confirmed rules from strategic and fiscal administration with new innovations approximately organisational effectiveness to create a strategy that at once connects business plan to shareholder price. CEOs and CFOs can't come up with the money for to function with out advertising Due Diligence. undesirable advertising and marketing administrators can't manage to pay for to paintings with it. * best point Cranfield dependent writer group utilizing most up-to-date Cranfield in-company examine* Connects advertising plans and funding to the valuation of the company and the way it might give a contribution to expanding stakeholder worth* Systematic and useful technique in order that it may be utilized by either practitioners and scholars

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Nor is marketing strategy simply a case of picking the most attractive market segment. Different companies have different distinctive capabilities, which may determine the best choice of segment. Consider, for instance, the different capabilities of Mercedes, Toyota and Ferrari, and what that implies for their choice of target customers and what value proposition to provide. In most cases, the choice of which segments to target and what to offer them is a difficult one, requiring an understanding of the market opportunities and threats as well as the company’s strengths and weaknesses.

Market segmentation should be driven by customer needs and wants, according to best practice studies. These techniques are well understood in the academic world, but corporate practice still seems to be in the dark ages. Segmentation in practice is dominated by easily available demographic data, rather than more difficult to obtain data on actual customer behaviour and attitudes. In business-to-business marketing, managers most usually segment according to industry and occupational classification data that is easy to access and fail to consider the needs and behaviours of business customers that underlie true segmentation.

This could be loosely translated as: ‘Where you come to get sold to’. And when government bodies, charities and the like say: ‘We need marketing’, what they mostly mean is: ‘We need some promotion’. Why CEOs must demand a revolutionary new approach 17 The way forward, then, is clear. Chief Executives must wrest the marketing community from where it currently is (sales support) and take marketing centre stage, with a major impact on corporate strategy development. There is more than enough evidence that correct market definition, market segmentation and positioning is one of the fundamental determinants of corporate success.

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