CIM Coursebook 05 06 Analysis and Evaluation (CIM Coursebook) (CIM Coursebook)

233 Pages·2005·2.15 MB·English

by  Wendy Lomax

Analysis and Evaluation
2005–2006

Analysis and Evaluation
2005–2006
Wendy Lomax and Adam Raman
AMSTERDAM BOSTON HEIDELBERG LONDON NEW YORK OXFORD
PARIS SAN DIEGO SAN FRANCISCO SINGAPORE SYDNEY TOKYO
ElsevierButterworth-Heinemann
LinacreHouse,JordanHill,OxfordOX28DP
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Firstpublished2005
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Contents
Preface Welcome to the CIM coursebooks vii
Unit 1 Introduction 1
Statements of Related Marketing Practice 3
Introduction 5
Marketing philosophy 8
Market orientation 9
Marketing stakeholders 15
Marketing and value 16
The role of marketing in corporate strategy 17
The role of analysis and evaluation in marketing planning 18
The strategic market management process 18
Unit 2 Evaluating performance: marketing metrics 25
How will this unit help you and how does it within the A&E course structure 26
Statements of Related Marketing Practice 27
Introduction 28
The balanced scorecard 36
Unit 3 Brand valuation 41
How will this unit help you and what can you expect to
achieve after completing this unit? 42
Statements of Related Marketing Practice 44
Introduction 44
Brands as assets 44
Unit 4 Auditing marketing activities 55
How will this unit help you and what can you expect to
achieve after completing this unit? 56
Statements of Related Marketing Practice 57
Historical perspective of marketing audits 57
Audit of marketing activities 58
Further considerations for developing a distribution audit 74
Unit 5 Evaluating performance: financial measures 78
Statements of Related Marketing Practice 79
How will this unit help you and what can you expect to
achieve after completing this unit? 80
Introduction 85
Financial statements 85
Management accounts 88
Shareholder value analysis 96
Economic value added 97
v
Contents
Unit 6 Analysing the external environment 104
Statements of Related Marketing Practice 106
How will this unit help you and what can you expect to achieve after
completing this unit? 106
Introduction 107
Environmental monitoring 107
The macro and micro environments 109
Porter’s Five Forces 124
Unit 7 Analysing the internal environment 128
Statements of Related Marketing Practice 129
How will this unit help you and what can you expect
to achieve after completing this unit? 130
Resource-based view of the firm 131
Models to assess attractiveness of products and markets 131
Portfolio analysis models 131
Value chain analysis 143
The innovation audit 144
Unit 8 Characteristics of the global marketplace 149
Statements of Related Marketing Practice 150
Introduction 150
International market intelligence gathering 152
Assessing the attractiveness of markets 158
The international Marketing Intelligence System 160
Market entry methods 163
Culture 166
Role of IT 167
Unit 9 Defining competitive advantage 171
What is competitive advantage? 172
How to use generic strategies 179
Appendices
1 Guidance on examination preparation 187
2 Answers and debriefings 200
3 Past examination paper and examiners’ report 208
4 Curriculum information and reading list 212
Index 219
vi
Preface
welcome to the
CIM coursebooks
A message from the author
ThiscoursebookisdesignedtomeettheneedsofstudentsstudyingfortheCharteredInstitute
of Marketing’s Analysis and Evaluation examination. The structure of the coursebook mirrors
the Analysis and Evaluation syllabus and reflects the relative weighting given to each subject.
TheAnalysisandEvaluationmoduleactsasafoundationonwhichtheotherDiplomasubjects
are based. This module builds on the operational aspects that have already been covered at
Certificate and Advanced Certificate level. However, this module is designed to look at the
strategic implications of the analysis and to evaluate them, rather than merely cover the
mechanics of the process.
Themoduleisdesignedtobevaluabletothosewhoplanoraspiretoworkatastrategiclevelin
an organization.
TheAnalysisandEvaluationsyllabusisoneoffourmoduleswhichcomprisethePostgraduate
DiplomainMarketing.Itisstronglyrecommendedthatthismoduleistakenfirstsincetheother
three modules build upon it. The four modules are:
1. Analysis and Evaluation – covers the concepts, techniques and models involved in
developing a detailed understanding of the market, customers and competitive envir-
onment internally and externally, the organization, its capabilities and assets, the
opportunities available to it and its current performance.
2. Strategic Marketing Decisions – covers the concepts, techniques and models involved
in formulating a customer-focused competitive business or corporate strategy and
developing a specific and differentiated competitive position. It includes investment
decisions affecting marketing assets.
3. Managing Marketing Performance – covers the implementation stage of the strategy.
Thisencompassesmanagingmarketingteams,managingchange,implementingstrat-
egy through marketing activities and working with other departments, and using mea-
surement as a basis for improvement.
4. StrategicMarketinginPractice – providesthe opportunitytoexplorestrategicmarketing
in a practical setting. It also incorporates the latest trends and innovations in marketing.
This module has been developed to provide the knowledge and skills for analysis and evalu-
ationof performancerequiredbystrategicmarketers.It isdesignedtoprepareyouforpractice
at a strategic marketing level. Assuming you have appropriate experience, you should be able
to apply the knowledge that you have learned immediately within your organization and add
value quickly to yourself and your employer.
vii
Preface
The coursebook reflects the syllabus and the relative weighting of the different elements:
Element 1: Strategic management and the role of marketing (10 per cent)
The role of marketing within different organizations
Degrees of market orientation
How marketing creates value customers, shareholders and other stakeholders
Criteria for success.
Element 2: Evaluation of business performance (30 per cent)
Processes and techniques used to evaluate past and current performance to allow
informed decisions about future activity
Financial and marketing measures of performance, including evaluation of brand equity.
Element 3: Analysis of the internal environment (20 per cent)
Objective analysis of an organization’s internal capabilities and environment
Identification of core competencies
Frameworks for evaluation such as value chain and portfolio analysis.
Element 4: Analysis of the external environment (20 per cent)
Objective analysis of the organization’s position in the external environment
Analysis of micro and macro environments using PEST or similar and Five Forces
Synthesis of results from internal and external analyses to give objective summary of
competitive position and performance.
Element 5: Characteristics of the global marketplace (20 per cent)
Differences in foreign markets
Entry evaluation and modes of entry
Role of the internet.
At the end of each unit there is recommended reading. Try not to be overwhelmed by this and
pace yourself. It is important that you do some additional reading as this text is designed to
complement additional texts rather than replace them.
We, as examiners, are always looking for breadth of knowledge as well as depth. We need to
see that you have the ability to apply the concepts, techniques and frameworks to practical
situations. It is a good idea to develop a portfolio of examples which you can use to illustrate
youranswers.Makesurethatyoureadthebusinesspressandthemarketingtrademagazines
sothatyoucanbuildaportfolioofexamplestoimpresstheexaminerswithyourabilitytoapply
what you have learned.
The author would like to thank all the copyright holders who have given permission for their
work to be reproduced here. Particular thanks are due to Kingdom Business School and the
Chartered Institute of Marketing for their generous waiving of copyright. Every attempt has
been made to contact the owners of copyright but should any omission have occured please
get in contact to resolve the matter.
viii
Preface
An introduction from the academic development advisor
In the last two years we have seen some significant changes to CIM Marketing qualifications.
The changes have been introduced on a year-on-year basis, with Certificate changes imple-
mented in 2002, and the Professional Diploma in Marketing being launched in 2003. The
ProfessionalPostgraduateDiplomainMarketingwaslaunchedin2004.Thenewqualifications
are based on the CIM Professional Marketing Standards developed through research with
employers.
Professional Postgraduate
Diploma in Marketing
↓
Professional Diploma
in Marketing
↓
Professional Certificate
in Marketing
↓↓
Introductory Certificate
in Marketing
StudynoteªCIM2005
As a result the authoring team, Elsevier Butterworth-Heinemann and I have all aimed to
rigorously revise and update the coursebook series to make sure that every title is the best
possible study aid and accurately reflects the latest CIM syllabus. This has been further
enhanced through independent reviews carried out by CIM.
We have aimed to develop the assessment support to include some additional support for the
assignment route as well as the examination, so we hope you will find this helpful.
ThereareanumberofnewauthorsandindeedSeniorExaminersintheserieswhohavebeen
commissioned for their CIM course teaching and examining experience, as well as their
research into specific curriculum-related areas and their wide general knowledge of the latest
thinking in marketing.
Wearecertainthatyouwillfindthesecoursebookshighlybeneficialintermsofthecontentand
assessmentopportunitiesandastudytoolthatwillprepareyouforbothCIMexaminationsand
continuous/integrativeassessmentopportunities.Theywillguideyouinalogicalandstructured
waythroughthedetailofthesyllabus,providingyouwiththerequiredunderpinningknowledge,
understanding and application of theory.
The editorial team and authors wish you every success as you embark upon your studies.
Karen beamish
Academic Development Advisor
ix