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Chapter 2

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Chapter 2

  1. 1. DEVELOPING SUCCESSFUL MARKETING AND CORPORATE STRATEGIES C HAPTER
  2. 2. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: <ul><li>Describe the three organizational levels of strategy. </li></ul><ul><li>Describe why business, mission, organizational culture, and goals are important in organizations. </li></ul><ul><li>Explain how organizations set strategic directions by assessing where they are now and seek to be in the future. </li></ul>
  3. 3. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: <ul><li>Describe the strategic marketing process and its three key phases: planning, implementation, and control. </li></ul><ul><li>Explain how the marketing mix elements are blended into a cohesive marketing program. </li></ul>
  4. 4. WHERE CAN AN “A” IN ICE CREAM MAKING LEAD?
  5. 5. ORGANIZATIONS AND THEIR LEVELS OF STRATEGY <ul><li>Profit </li></ul><ul><li>Business Firm </li></ul><ul><li>Kinds of Organizations </li></ul><ul><li>Nonprofit Organization </li></ul><ul><li>Firm, Company, Corporation, Organization </li></ul>
  6. 6. <ul><li>Levels in Organizations and How Marketing Links to Them </li></ul><ul><li>Corporate Level </li></ul><ul><li>Strategic Business Unit (SBU) </li></ul><ul><li>Functional Level </li></ul><ul><li>Business Unit Level </li></ul>ORGANIZATIONS AND THEIR LEVELS OF STRATEGY <ul><li>Department </li></ul>
  7. 7. FIGURE 2-1 The three levels of strategy in organizations: corporate, business unit, and functional
  8. 8. <ul><li>Strategy Issues in Organizations </li></ul><ul><li>The Business </li></ul><ul><li>The Mission (Mission Statement/Vision) </li></ul><ul><li>Organizational Culture </li></ul><ul><li>Stakeholders </li></ul><ul><li>Organizational Culture </li></ul>ORGANIZATIONS AND THEIR LEVELS OF STRATEGY
  9. 9. Medtronic’s “Rising Figure” Mural What does it signify to stakeholders?
  10. 10. <ul><li>Strategy Issues in Organizations </li></ul><ul><li>Goals or Objectives </li></ul><ul><li>Profit </li></ul><ul><li>Sales </li></ul><ul><li>Market Share </li></ul><ul><li>Quality </li></ul><ul><li>Customer Satisfaction </li></ul><ul><li>Employee Welfare </li></ul><ul><li>Social Responsibility </li></ul>ORGANIZATIONS AND THEIR LEVELS OF STRATEGY
  11. 11. Concept Check 1. What are the three levels in today’s large organizations? <ul><ul><li>A: The corporate, business unit, and functional levels exist in large corporations. </li></ul></ul>
  12. 12. Concept Check 2. What is the meaning of an organization’s mission? <ul><ul><li>A: Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values. </li></ul></ul>
  13. 13. Concept Check 3. How do an organization’s goals relate to its mission? <ul><ul><li>A: Goals or objectives measure how well the organization’s mission is being accomplished. </li></ul></ul>
  14. 14. SETTING STRATEGIC DIRECTIONS <ul><li>Competencies </li></ul><ul><li>A Look Around: Where Are We Now? </li></ul><ul><li>Customers </li></ul><ul><li>Competitive Advantage </li></ul><ul><li>Competitors </li></ul>
  15. 15. Lands’ End Unconditional Guarantee What is the strategic focus?
  16. 16. SETTING STRATEGIC DIRECTIONS <ul><li>Growth Strategies: Where Do We Want to Go? </li></ul><ul><li>Business Portfolio Analysis (BCG) </li></ul><ul><li>Relative Market Share </li></ul><ul><li>Market Growth Rate </li></ul><ul><li>Stars </li></ul><ul><li>Cash Cows </li></ul><ul><li>Dogs </li></ul><ul><li>Question Marks or Problem Children </li></ul>
  17. 17. FIGURE 2-2 Boston Consulting Group portfolio analysis for Kodak, as it might appear in 2006 Kodak self- service kiosk Kodak film sales: US, Canada, & W. Europe Kodak digital photo printer Kodak digital camera
  18. 18. Kodak Traditional Film Cartridge What SBU type in the BCG growth-share matrix?
  19. 19. Kodak Digital Camera What SBU type in the BCG growth-share matrix?
  20. 20. Kodak Digital Photo Printer What SBU type in the BCG growth-share matrix?
  21. 21. Kodak Picture Maker Self-Service Kiosk What SBU type in the BCG growth-share matrix?
  22. 22. SETTING STRATEGIC DIRECTIONS <ul><li>Growth Strategies: Where Do We Want to Go? </li></ul><ul><li>Market-Product Analysis </li></ul><ul><li>Market Penetration </li></ul><ul><li>Market Development </li></ul><ul><li>Product Development </li></ul><ul><li>Diversification </li></ul>
  23. 23. FIGURE 2-3 Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s
  24. 24. Concept Check 1. What are competencies and why are they important? <ul><ul><li>A: Competencies are an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations, which if exploited, can lead to the organization’s success . </li></ul></ul>
  25. 25. Concept Check 2. What is business portfolio analysis? <ul><ul><li>A: Business portfolio analysis studies a firm’s business units as though they were a collection of separate investments. </li></ul></ul>
  26. 26. Concept Check 3. What are the four market-product strategies? <ul><ul><li>A: (1) market penetration; (2) market development; (3) product development; and (4) diversification. </li></ul></ul>
  27. 27. THE STRATEGIC MARKETING PROCESS <ul><li>Strategic Marketing Process </li></ul><ul><li>How do we allocate our resources to get where we want to go? </li></ul><ul><li>How do we convert our plans to actions? </li></ul><ul><li>How do our results compare with our plans, and do deviations require new plans? </li></ul><ul><li>Marketing Plan </li></ul>
  28. 28. FIGURE 2-4 The strategic marketing process
  29. 29. <ul><li>Strategic Marketing Process: The Planning Phase </li></ul><ul><li>Step 1: Situation (SWOT) Analysis </li></ul><ul><li>Situation Analysis </li></ul><ul><li>SWOT Analysis </li></ul><ul><li>O pportunities </li></ul><ul><li>S trengths </li></ul><ul><li>T hreats </li></ul><ul><li>W eaknesses </li></ul>THE STRATEGIC MARKETING PROCESS
  30. 30. FIGURE 2-5 Ben & Jerry’s: a SWOT analysis to get it growing again
  31. 31. Ben & Jerry’s One Sweet Whirled Campaign What is the impact of a SWOT analysis?
  32. 32. <ul><li>Strategic Marketing Process: The Planning Phase </li></ul><ul><li>Step 2: Market-Product Focus and Goal Setting </li></ul><ul><li>Market Segmentation </li></ul><ul><li>Set Marketing and Product Goals </li></ul><ul><li>Select Target Markets </li></ul><ul><li>Find Points of Difference </li></ul><ul><li>Position the Product </li></ul>THE STRATEGIC MARKETING PROCESS
  33. 33. Medtronic’s Champion Heart Pacemaker What features are important to the Asian market?
  34. 34. <ul><li>Strategic Marketing Process: The Planning Phase </li></ul><ul><li>Step 3: Marketing Program </li></ul><ul><li>Product Strategy </li></ul><ul><li>Price Strategy </li></ul><ul><li>Promotion Strategy </li></ul><ul><li>Place (Distribution) Strategy </li></ul>THE STRATEGIC MARKETING PROCESS
  35. 35. FIGURE 2-6 Elements of the marketing mix that comprise a cohesive marketing program
  36. 36. Concept Check 1. What is the difference between a strength and an opportunity in a SWOT analysis? <ul><ul><li>A: Both are positive factors for the organization, but a strength is an internal factor whereas an opportunity is an external one. </li></ul></ul>
  37. 37. Concept Check 2. What is market segmentation? <ul><ul><li>A: Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. </li></ul></ul>
  38. 38. Concept Check 3. What are points of difference and why are they important? <ul><ul><li>A: Points of difference are those characteristics of a product that make it superior to competitive substitutes. They are the single most important factor in the success or failure of a new product. </li></ul></ul>
  39. 39. <ul><li>Strategic Marketing Process: The Implementation Phase </li></ul><ul><li>Obtaining Resources </li></ul><ul><li>Designing the Marketing Organization </li></ul><ul><li>Developing Schedules </li></ul>THE STRATEGIC MARKETING PROCESS
  40. 40. FIGURE 2-7 Organization of a typical manufacturing firm showing a breakdown of the marketing department
  41. 41. <ul><li>Strategic Marketing Process: The Implementation Phase </li></ul><ul><li>Executing the Marketing Program </li></ul><ul><li>Marketing Strategy </li></ul><ul><li>Marketing Tactics </li></ul>THE STRATEGIC MARKETING PROCESS
  42. 42. Kodak EasyShare Cameras in China What marketing strategy & tactics are used?
  43. 43. <ul><li>Strategic Marketing Process: The Control Phase </li></ul><ul><li>Comparing Results With Plans to Identify Deviations </li></ul><ul><li>Acting on Deviations </li></ul><ul><li>Planning Gap </li></ul><ul><li>Exploiting a Positive Deviation </li></ul><ul><li>Correcting a Negative Deviation </li></ul>THE STRATEGIC MARKETING PROCESS
  44. 44. FIGURE 2-8 Evaluation and control of Kodak’s marketing program
  45. 45. Concept Check 1. What is the control phase of the strategic marketing process? <ul><ul><li>A: This is the phase that seeks to keep the marketing program moving in the direction set for it. </li></ul></ul>
  46. 46. Concept Check 2. How do the objectives set for a marketing program in the planning phase relate to the control phase of the strategic marketing process? <ul><ul><li>A: The planning phase objectives are used as the benchmarks to which the actual performance results are compared in the control phase. </li></ul></ul>
  47. 47. MEDTRONIC’S MISSION STATEMENT GOING ONLINE
  48. 48. <ul><ul><li>1. What stakeholders are specifically mentioned or implied in Medtronic’s mission? What values are associated with each stakeholder? </li></ul></ul>Going Online
  49. 49. <ul><ul><li>2. What is the scope of Medtronic’s mission? Why does Medtronic limit its scope? </li></ul></ul>Going Online
  50. 50. <ul><ul><li>3. Why does Medtronic NOT define itself as being in the “medical device” business? </li></ul></ul>Going Online
  51. 51. BP: ALLOCATING RESOURCES TO BRING YOU GASOLINE AND FRESH BREAD! VIDEO CASE 2
  52. 52. VIDEO CASE 2 BP
  53. 53. VIDEO CASE 2 BP <ul><ul><li>1. How does BP use its strategic marketing process to allocate resources to opportunities such as the BP Connect concept? Is BP Connect consistent with BP’s mission and values? Explain. </li></ul></ul>
  54. 54. VIDEO CASE 2 BP <ul><ul><li>2. Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis for the BP Connect concept—looking forward globally to the next three years. </li></ul></ul>
  55. 55. VIDEO CASE 2 BP <ul><ul><li>3. In addition to features such as high-tech pumps and twenty-first century information technology, what other marketing mix activities would you recommend as part of Step 3 of the planning phase? </li></ul></ul>
  56. 56. MARKETING VERSUS BUSINESS PLANS SUPPLEMENTAL LECTURE NOTE 2-1
  57. 57. FIGURE A-1 Elements in typical marketing and business plans targeted at different audiences
  58. 58. PLANNING VS. IMPLEMENTATION ISSUES SUPPLEMENTAL LECTURE NOTE 2-2
  59. 59. FIGURE 2-A Results of good and bad marketing planning and implementation
  60. 60. ORGANIZING FOR MARKETING SUPPLEMENTAL LECTURE NOTE 2-3
  61. 61. FIGURE 2-B Organization of a business unit in a typical consumer packaged goods firm, showing two product or brand groups
  62. 62. FIGURE 2-C Units with which the product manager and product group work
  63. 63. PROJECT SCHEDULING USING GANTT CHARTS SUPPLEMENTAL LECTURE NOTE 2-4
  64. 64. FIGURE 2-D Tasks to complete a term project
  65. 65. FIGURE 2-E Gantt chart for scheduling the term project
  66. 66. MARKETING YOURSELF IN-CLASS ACTIVITY 2-1
  67. 67. Yahoo!/Hot Jobs TV Ad
  68. 68. Sample Résumé
  69. 69. Sample Cover Letter
  70. 70. MARKETING PLANNING WORKSHEET IN-CLASS ACTIVITY 2-2
  71. 73. Profit <ul><ul><li>Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses are subtracted from its total sales. </li></ul></ul>
  72. 74. <ul><ul><li>Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values. </li></ul></ul>Mission
  73. 75. <ul><ul><li>Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization . </li></ul></ul>Organizational Culture
  74. 76. <ul><ul><li>Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time. </li></ul></ul>Goals or Objectives
  75. 77. <ul><ul><li>Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. </li></ul></ul>Market Share
  76. 78. <ul><ul><li>The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets. </li></ul></ul>Strategic Marketing Process
  77. 79. <ul><ul><li>A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years. </li></ul></ul>Marketing Plan
  78. 80. <ul><ul><li>Situation analysis involves taking stock of where a firm or product has been recently, where it is now, and where it is headed in terms of the organization’s plans and the external factors and trends affecting it. </li></ul></ul>Situation Analysis
  79. 81. <ul><ul><li>SWOT analysis is an acronym describing an organization’s appraisal of its internal S trengths and W eaknesses and its external O pportunities and T hreats. </li></ul></ul>SWOT Analysis
  80. 82. <ul><ul><li>Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. </li></ul></ul>Market Segmentation
  81. 83. <ul><ul><li>Points of difference are those characteristics of a product that make it superior to competitive substitutes. </li></ul></ul>Points of Difference
  82. 84. <ul><ul><li>A marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it. </li></ul></ul>Marketing Strategy
  83. 85. <ul><ul><li>Marketing tactics are detailed day-to-day operational decisions essential to the overall success of marketing strategies. </li></ul></ul>Marketing Tactics

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