Chapter 2

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-1

DEVELOPING SUCCESSFUL MARKETING

AND CORPORATE STRATEGIES

CHAPTER


AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

1. Describe the three organizational levels of strategy.

2. Describe why business, mission, organizational culture, and goals are important in organizations.

3. Explain how organizations set strategic directions by assessing where they are now and seek to be in the future.


AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

4. Describe the strategic marketing process and its three key phases: planning, implementation, and control.

5. Explain how the marketing mix elements are blended into a cohesive marketing program.


WHERE CAN AN “A” INICE CREAM MAKING LEAD?


ORGANIZATIONS AND THEIRLEVELS OF STRATEGY

• Profit

Business Firm

• Kinds of Organizations

Nonprofit Organization

Firm, Company, Corporation, Organization


• Levels in Organizations and How Marketing Links to Them

Corporate Level

Strategic Business Unit (SBU)

Functional Level

Business Unit Level


Department


FIGURE 2-1FIGURE 2-1 The three levels of strategyin organizations: corporate, business unit, and functional


• Strategy Issues in Organizations

The Business

The Mission (Mission Statement/Vision)

Organizational Culture

• Stakeholders

• Organizational Culture



Medtronic’s “Rising Figure” MuralWhat does it signify to stakeholders?


• Strategy Issues in Organizations

Goals or Objectives

• Profit

• Sales

• Market Share

• Quality

• Customer Satisfaction

• Employee Welfare

• Social Responsibility



Concept Check

1. What are the three levels in today’s large organizations?

A: The corporate, business unit, and functional levels exist in large corporations.


Concept Check

2. What is the meaning of an organization’s mission?

A: Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.


Concept Check

3. How do an organization’s goals relate to its mission?

A: Goals or objectives measure how well the organization’s mission is being accomplished.


SETTING STRATEGIC DIRECTIONS

Competencies

• A Look Around: Where Are We Now?

Customers

• Competitive Advantage

Competitors


Lands’ End Unconditional Guarantee What is the strategic focus?



• Growth Strategies: Where Do We Want to Go?

Business Portfolio Analysis (BCG)

• Relative Market Share

• Market Growth Rate

Stars

Cash Cows

Dogs

Question Marks or Problem Children


FIGURE 2-2FIGURE 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 digitalphoto printer

Kodak digitalcamera


Kodak Traditional Film CartridgeWhat SBU type in the BCG growth-share matrix?


Kodak Digital CameraWhat SBU type in the BCG growth-share matrix?


Kodak Digital Photo PrinterWhat SBU type in the BCG growth-share matrix?


Kodak Picture Maker Self-Service KioskWhat SBU type in the BCG growth-share matrix?



• Growth Strategies: Where Do We Want to Go?

Market-Product Analysis

• Market Penetration

• Market Development

• Product Development

• Diversification


FIGURE 2-3FIGURE 2-3 Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s


Concept Check

1. What are competencies and why are they important?

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.


Concept Check

2. What is business portfolio analysis?

A: Business portfolio analysis studies a firm’s business units as though they were a collection of separate investments.


Concept Check

3. What are the four market-product strategies?

A: (1) market penetration; (2) market development; (3) product development; and (4) diversification.


THE STRATEGIC MARKETING PROCESS

Strategic Marketing Process

• How do we allocate our resources to get wherewe want to go?

• How do we convert our plans to actions?

• How do our results compare with our plans,and do deviations require new plans?

Marketing Plan


FIGURE 2-4FIGURE 2-4 The strategic marketing process


• Strategic Marketing Process:The Planning Phase

Step 1: Situation (SWOT) Analysis

• Situation Analysis

• SWOT Analysis

Opportunities

Strengths

Threats

Weaknesses



FIGURE 2-5FIGURE 2-5 Ben & Jerry’s: a SWOT analysis to get it growing again


Ben & Jerry’s One Sweet Whirled CampaignWhat is the impact of a SWOT analysis?



Step 2: Market-Product Focus and Goal Setting

• Market Segmentation

• Set Marketing and Product Goals

• Select Target Markets

• Find Points of Difference

• Position the Product



Medtronic’s Champion Heart PacemakerWhat features are important to the Asian market?



Step 3: Marketing Program

• Product Strategy

• Price Strategy

• Promotion Strategy

• Place (Distribution) Strategy



FIGURE 2-6FIGURE 2-6 Elements of the marketing mix that comprise a cohesive marketing program


Concept Check

1. What is the difference between a strength and an opportunity in a SWOT analysis?

A: Both are positive factors for the organization, but a strength is an internal factor whereas an opportunity is an external one.


Concept Check

2. What is market segmentation?

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.


Concept Check

3. What are points of difference and why are they important?

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.


• Strategic Marketing Process:The Implementation Phase

Obtaining Resources

Designing the Marketing Organization

Developing Schedules



FIGURE 2-7FIGURE 2-7 Organization of a typical manufacturing firm showing a breakdown of the marketing department


• Strategic Marketing Process:The Implementation Phase

Executing the Marketing Program

• Marketing Strategy

• Marketing Tactics



Kodak EasyShare Cameras in ChinaWhat marketing strategy & tactics are used?


• Strategic Marketing Process:The Control Phase

Comparing Results With Plans to IdentifyDeviations

Acting on Deviations

• Planning Gap

• Exploiting a Positive Deviation

• Correcting a Negative Deviation



FIGURE 2-8FIGURE 2-8 Evaluation and control of Kodak’s marketing program


Concept Check

1. What is the control phase of the strategic marketing process?

A: This is the phase that seeks to keep the marketing program moving in the direction set for it.


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?

A: The planning phase objectives are used as the benchmarks to which the actual performance results are compared in the control phase.


MEDTRONIC’S MISSIONSTATEMENT

GOING ONLINE


1. What stakeholders are specifically mentioned or implied in Medtronic’s mission? What values are associated with each stakeholder?

Going Online


2. What is the scope of Medtronic’s mission? Why does Medtronic limit its scope?

Going Online


3. Why does Medtronic NOT define itself as being in the “medical device” business?

Going Online


BP: ALLOCATING RESOURCES TO BRING YOU GASOLINE

AND FRESH BREAD!

VIDEO CASE 2


VIDEO CASE 2BP


VIDEO CASE 2BP

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.


VIDEO CASE 2BP

2. Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis for the BP Connect concept—looking forward globally to the next three years.


VIDEO CASE 2BP

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?


MARKETING VERSUS BUSINESS PLANS

SUPPLEMENTALLECTURE NOTE 2-1


FIGURE A-1FIGURE A-1 Elements in typical marketing and business plans targeted at different audiences


PLANNING VS. IMPLEMENTATION ISSUES



FIGURE 2-A FIGURE 2-A Results of good and bad marketing planning and implementation


ORGANIZING FOR MARKETING



FIGURE 2-B FIGURE 2-B Organization of a business unit in a typical consumer packaged goods firm, showing two product or brand groups


FIGURE 2-C FIGURE 2-C Units with which the product manager and product group work


PROJECT SCHEDULINGUSING GANTT CHARTS



FIGURE 2-D FIGURE 2-D Tasks to complete a term project


FIGURE 2-E FIGURE 2-E Gantt chart for scheduling the term project


MARKETING YOURSELF

IN-CLASS ACTIVITY 2-1


Yahoo!/Hot Jobs TV Ad


Sample Résumé


Sample Cover Letter


MARKETING PLANNING WORKSHEET

IN-CLASS ACTIVITY 2-2




Profit

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.

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.


Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.

Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.

Mission


Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization.

Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization.

Organizational Culture


Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time.

Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time.

Goals or Objectives


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.

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.

Market Share


The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.

The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.

Strategic Marketing Process


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.

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.

Marketing Plan


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.

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.

Situation Analysis


SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.

SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.

SWOT Analysis


Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

Market Segmentation


Points of difference are those characteristics of a product that make it superior to competitive substitutes.

Points of difference are those characteristics of a product that make it superior to competitive substitutes.

Points of Difference


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.

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.

Marketing Strategy


Marketing tactics are detailedday-to-day operational decisions essential to the overall success of marketing strategies.

Marketing tactics are detailedday-to-day operational decisions essential to the overall success of marketing strategies.

Marketing Tactics

Chapter 2

Documents

organizations goals

organizations mission

organizations scope

organizations success

marketproduct strategies

marketing links

successful marketing

marketing plan