1.2 The Marketing Management Process Marketing management is a process that is intended to facilitate transactions by bringing buyers and sellers together. Consistent with the marketing concept, the ultimate goal of the process is to create exchanges that satisfy both company and customer. As illustrated in Figure 1.2, the process of marketing management from the seller's perspective can be characterized as a series of four stages of decision making: situation analysis, marketing strategy, marketing mix decisions, and implementation and control. Figure 1.2: Marketing management process How can you apply this process to a company, product, and target market you are aware of? Each of these stages is described in greater detail in the sections that follow. Before proceeding, however, it is important to keep two features of the model in mind. The purpose of the model is to provide a measure of discipline to the process of marketing management to improve the quality of managers' decisions. Its value lies in making sure that the decision maker is deliberate, thorough, and systematic in the planning and execution of marketing strategy. An important consideration when evaluating the model is that it is not simply a linear recipe card for decision making. It is intended to provide an aid to assessing the goodness of fit between marketing problems and alternative solutions. As such, it is not a substitute for thinking. The model can only be as useful, flexible, and dynamic as the user makes it. Stage I: Situation Analysis In many instances, corporate, division, and business unit level goals and strategic priorities will shape and direct the process of marketing management from the outset. Given those constraints, the first step of the process is to undertake a thorough analysis of the current situation and environment confronting the organization. Situation analysis is at the heart of marketing's endeavor to identify new opportunities to satisfy unmet customer wants and needs. Opportunities typically stem either from finding new ways to serve the needs of existing customers or uncovering new markets for existing product or service lines. Many new opportunities incorporate elements of both new products and new markets. Product-related opportunities for a regional hospital, for example, might include the addition of alternative therapies (e.g., acupuncture) or creating satellite wellness or express-care centers in local shopping centers and malls. The addition of a new service line in sports medicine and rehabilitation care might be one way to reach a new segment of the market. The goal in situation analysis is to provide an analysis of both macro- and micro-environmental factors that will impact marketing strategy. The process also serves to make the organization cognizant of its capabilities and resource limitations. For this reason, SWOT analysis (discussed in Chapter 3) is a starting point for performing situation analysis that is favored by many ma ...

1. 1.2 The Marketing Management Process
Marketing management is a process that is intended to facilitate
transactions by bringing buyers and sellers together. Consistent
with the marketing concept, the ultimate goal of the process is
to create exchanges that satisfy both company and customer.
As illustrated in Figure 1.2, the process of marketing
management from the seller's perspective can be characterized
as a series of four stages of decision making: situation analysis,
marketing strategy, marketing mix decisions, and
implementation and control.
Figure 1.2: Marketing management process
How can you apply this process to a company, product, and
target market you are aware of?
Each of these stages is described in greater detail in the sections
that follow. Before proceeding, however, it is important to keep
two features of the model in mind. The purpose of the model is
to provide a measure of discipline to the process of marketing
management to improve the quality of managers' decisions. Its
value lies in making sure that the decision maker is deliberate,
thorough, and systematic in the planning and execution of
marketing strategy. An important consideration when evaluating
the model is that it is not simply a linear recipe card for
decision making. It is intended to provide an aid to assessing
the goodness of fit between marketing problems and alternative
solutions. As such, it is not a substitute for thinking. The model
can only be as useful, flexible, and dynamic as the user makes
it.
Stage I: Situation Analysis
In many instances, corporate, division, and business unit level
goals and strategic priorities will shape and direct the process
of marketing management from the outset. Given those
constraints, the first step of the process is to undertake a
thorough analysis of the current situation and environment

2. confronting the organization. Situation analysis is at the heart
of marketing's endeavor to identify new opportunities to satisfy
unmet customer wants and needs. Opportunities typically stem
either from finding new ways to serve the needs of existing
customers or uncovering new markets for existing product or
service lines. Many new opportunities incorporate elements of
both new products and new markets. Product-related
opportunities for a regional hospital, for example, might include
the addition of alternative therapies (e.g., acupuncture) or
creating satellite wellness or express-care centers in local
shopping centers and malls. The addition of a new service line
in sports medicine and rehabilitation care might be one way to
reach a new segment of the market.
The goal in situation analysis is to provide an analysis of both
macro- and micro-environmental factors that will impact
marketing strategy. The process also serves to make the
organization cognizant of its capabilities and resource
limitations. For this reason, SWOT analysis (discussed in
Chapter 3) is a starting point for performing situation analysis
that is favored by many managers. SWOT is an analytical
procedure that requires consideration of the firm's internal
Strengths and Weaknesses relative to the Opportunities and
Threats posed by the external environment.
CVS and many other companies are meeting shoppers' needs
conveniently and, ultimately, building more traffic for their
stores.
Associated Press
Since the objective of situation analysis is to uncover viable
market opportunities, it needs to be comprehensive in scope.
One way to make sure that all relevant features of the
environment are considered is by using the 4 Cs framework:
company, customers, competitors, and climate/culture. In this
model, company refers to the internal capabilities and resources
of the firm, while the remaining three Cs represent elements of
the external environment. (Applications of this model are

3. discussed in Chapter 5.)
Regardless of the analytical devices and techniques deployed,
the final product of the situation analysis is an accurate map of
both the internal and external environmental circumstances
confronting the organization. This process may identify
potential problems in the firm's current marketing plan that
require remedial action. However, the primary objective is to
identify market opportunities by demonstrating gaps between
consumer preferences and the current array of competitive
brands. Once the most attractive of these opportunities are
evaluated, a marketing strategy for applying the organization's
resources to satisfy the potential market demand is created.
Let's consider again the challenges confronting a regional
hospital. The high cost of delivering quality health care and
many patients' limited ability to pay reflect both internal and
external environmental challenges. This growing gap or tension
necessarily poses a threat to maintaining high levels of patient
satisfaction. Marketing opportunities exist to help narrow this
gap. The concept of creating wellness centers at shopping
centers and malls is one possible response to the challenge.
These express health care centers could provide basic care for
common ailments, routine inoculations, and short customer
waiting times and extended hours to make the centers more
convenient. If staffed only by a registered nurse, the per-patient
cost of treatment for common ailments and minor injuries in
this setting would be far less than clinic or hospital visits.
Stage II: Marketing Strategy
After the situation analysis has identified the best opportunities
for the firm, a multilayered strategic plan is required to
effectively and efficiently capitalize on them. The most general
level of strategy that needs to be addressed at this stage in the
marketing management process is the identification of the
generic strategy that is best suited to pursuing the opportunity.
The three basic types of generic marketing strategy are product
differentiation, cost leadership, and market focus (Porter, 1980).
Product differentiation strategy requires distinguishing your

4. product from competitors' in a way that makes prospective
buyers prefer your brand. The basis of differentiation can be
tangible or intangible attributes of the product—including the
brand image itself. For this reason, product differentiation
strategy is often most closely identified with the marketing
function.
Cost leadership strategy allows a firm with lower overall costs
of production and marketing to attract price-sensitive customers
by selling at relatively lower prices than competitors. Lower
costs can be derived from economies of scale and experience
curve efficiencies in manufacturing and other operational areas
of the organization. Competitively lower direct and indirect
operating costs may also be rooted in outsourcing, tighter
production cost control processes, more-efficient distribution
networks, and higher rates of capacity utilization.
Market focus strategy is not a separate or distinctly different
strategy from the other two, but instead describes the scope over
which the firm will implement either cost leadership or
differentiation strategies. Organizations may opt to compete in
broadly defined mass markets or focus on narrower segments of
the market. In a narrow, focused approach to strategy,
competitive advantage is gained by serving the unique needs of
a market segment or niche better than larger competitors can
because of their size.
The generic strategy options for a regional health care provider
can be defined in the same way as they would be for any other
type of organization. Hospitals can pursue a differentiation
strategy based on several dimensions of care. For example,
some may opt to emphasize the latest in high technology, while
others stress personal care. The contrast of high tech versus
high touch is typical in fields such as cardiology, obstetrics, and
senior care.
Cost leadership in health care can be achieved through more
efficient operations and superior cost management techniques.
Some advantages are uniquely tied to economies, giving bigger
organizations an advantage. However, smaller health care

5. systems have access to cost-savings opportunities that diminish
as the size of the organization increases. Focus strategy options,
as noted, simply describe the scope over which the firm will
implement either cost leadership or differentiation strategies. In
a health care setting, this typically applies to decisions made for
individual service lines versus the organization as a whole.
The best generic strategy is chosen based on how the unique
strengths of the organization relate to the opportunity identified
by the situation analysis. All organizations thrive in
environments that allow them to leverage their strengths
relative to their competitors. The strengths of a firm are
typically rooted in either superior brand differentiation or cost
advantages over other producers. Further, these advantages can
be applied in either broadly defined markets or narrow market
niches. The resulting generic strategy options are illustrated in
Figure 1.3.
College of Technology we have a very large military population
of both students and instructors. Quite a few of you may be
active duty or retired; perhaps you just left the military after
actively serving.
There is a very strong relationship between business strategy
and military strategy. As your textbook states on page 19, terms
such as “objectives, mission, strengths, and weaknesses were
first used in a military setting. In fact, the word strategy
originates from the Greek word strategos (stratus – the army
and ago – to lead).
Although business deals with competition and the military deals
with conflict, both are based on competitive advantage. Both
capitalize on strengths and opportunities and minimize
weaknesses and threats. Both deal with change and the element
of surprise.

6. The similarities between military and business strategy can be
seen in Sun Tzu’s The Art of War and in the Comprehensive
Strategic Management Model. Excerpts from Sun Tzu’s writings
are found on page 20 of your textbook and more in depth on the
website: www.sonshi.com/learn.html (Links to an external
site.)Links to an external site. The Comprehensive Strategic-
Management Model is located in Chapter 9, page 287, of your
textbook.
In this last discussion forum, let’s map the differences and the
similarities between military and business strategy. In your
post, identify one point that is similar or different. Explain how
or why these similarities or differences occur. Evaluate how you
might use or have used this information in your career path