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Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-1
DEVELOPING SUCCESSFUL MARKETING
AND CORPORATE STRATEGIES
CHAPTER
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-2
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-3
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-4
WHERE CAN AN “A” INICE CREAM MAKING LEAD?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-5
ORGANIZATIONS AND THEIRLEVELS OF STRATEGY
• Profit
Business Firm
• Kinds of Organizations
Nonprofit Organization
Firm, Company, Corporation, Organization
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-6
• Levels in Organizations and How Marketing Links to Them
Corporate Level
Strategic Business Unit (SBU)
Functional Level
Business Unit Level
ORGANIZATIONS AND THEIRLEVELS OF STRATEGY
Department
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-7
FIGURE 2-1FIGURE 2-1 The three levels of strategyin organizations: corporate, business unit, and functional
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-8
• Strategy Issues in Organizations
The Business
The Mission (Mission Statement/Vision)
Organizational Culture
• Stakeholders
• Organizational Culture
ORGANIZATIONS AND THEIRLEVELS OF STRATEGY
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-9
Medtronic’s “Rising Figure” MuralWhat does it signify to stakeholders?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-10
• Strategy Issues in Organizations
Goals or Objectives
• Profit
• Sales
• Market Share
• Quality
• Customer Satisfaction
• Employee Welfare
• Social Responsibility
ORGANIZATIONS AND THEIRLEVELS OF STRATEGY
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-11
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-12
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-13
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-14
SETTING STRATEGIC DIRECTIONS
Competencies
• A Look Around: Where Are We Now?
Customers
• Competitive Advantage
Competitors
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-15
Lands’ End Unconditional Guarantee What is the strategic focus?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-16
SETTING STRATEGIC DIRECTIONS
• 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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-17
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-18
Kodak Traditional Film CartridgeWhat SBU type in the BCG growth-share matrix?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-19
Kodak Digital CameraWhat SBU type in the BCG growth-share matrix?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-20
Kodak Digital Photo PrinterWhat SBU type in the BCG growth-share matrix?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-21
Kodak Picture Maker Self-Service KioskWhat SBU type in the BCG growth-share matrix?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-22
SETTING STRATEGIC DIRECTIONS
• Growth Strategies: Where Do We Want to Go?
Market-Product Analysis
• Market Penetration
• Market Development
• Product Development
• Diversification
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-23
FIGURE 2-3FIGURE 2-3 Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-24
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-25
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-26
Concept Check
3. What are the four market-product strategies?
A: (1) market penetration; (2) market development; (3) product development; and (4) diversification.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-27
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-28
FIGURE 2-4FIGURE 2-4 The strategic marketing process
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-29
• Strategic Marketing Process:The Planning Phase
Step 1: Situation (SWOT) Analysis
• Situation Analysis
• SWOT Analysis
Opportunities
Strengths
Threats
Weaknesses
THE STRATEGIC MARKETING PROCESS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-30
FIGURE 2-5FIGURE 2-5 Ben & Jerry’s: a SWOT analysis to get it growing again
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-31
Ben & Jerry’s One Sweet Whirled CampaignWhat is the impact of a SWOT analysis?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-32
• Strategic Marketing Process:The Planning Phase
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
THE STRATEGIC MARKETING PROCESS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-33
Medtronic’s Champion Heart PacemakerWhat features are important to the Asian market?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-34
• Strategic Marketing Process:The Planning Phase
Step 3: Marketing Program
• Product Strategy
• Price Strategy
• Promotion Strategy
• Place (Distribution) Strategy
THE STRATEGIC MARKETING PROCESS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-35
FIGURE 2-6FIGURE 2-6 Elements of the marketing mix that comprise a cohesive marketing program
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-36
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-37
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-38
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-39
• Strategic Marketing Process:The Implementation Phase
Obtaining Resources
Designing the Marketing Organization
Developing Schedules
THE STRATEGIC MARKETING PROCESS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-40
FIGURE 2-7FIGURE 2-7 Organization of a typical manufacturing firm showing a breakdown of the marketing department
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-41
• Strategic Marketing Process:The Implementation Phase
Executing the Marketing Program
• Marketing Strategy
• Marketing Tactics
THE STRATEGIC MARKETING PROCESS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-42
Kodak EasyShare Cameras in ChinaWhat marketing strategy & tactics are used?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-43
• 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
THE STRATEGIC MARKETING PROCESS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-44
FIGURE 2-8FIGURE 2-8 Evaluation and control of Kodak’s marketing program
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-45
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-46
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?
A: The planning phase objectives are used as the benchmarks to which the actual performance results are compared in the control phase.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-47
MEDTRONIC’S MISSIONSTATEMENT
GOING ONLINE
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-48
1. What stakeholders are specifically mentioned or implied in Medtronic’s mission? What values are associated with each stakeholder?
Going Online
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-49
2. What is the scope of Medtronic’s mission? Why does Medtronic limit its scope?
Going Online
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-50
3. Why does Medtronic NOT define itself as being in the “medical device” business?
Going Online
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-51
BP: ALLOCATING RESOURCES TO BRING YOU GASOLINE
AND FRESH BREAD!
VIDEO CASE 2
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-52
VIDEO CASE 2BP
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-53
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-54
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-55
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?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-56
MARKETING VERSUS BUSINESS PLANS
SUPPLEMENTALLECTURE NOTE 2-1
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-57
FIGURE A-1FIGURE A-1 Elements in typical marketing and business plans targeted at different audiences
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-58
PLANNING VS. IMPLEMENTATION ISSUES
SUPPLEMENTALLECTURE NOTE 2-2
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-59
FIGURE 2-A FIGURE 2-A Results of good and bad marketing planning and implementation
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-60
ORGANIZING FOR MARKETING
SUPPLEMENTALLECTURE NOTE 2-3
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-61
FIGURE 2-B FIGURE 2-B Organization of a business unit in a typical consumer packaged goods firm, showing two product or brand groups
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-62
FIGURE 2-C FIGURE 2-C Units with which the product manager and product group work
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-63
PROJECT SCHEDULINGUSING GANTT CHARTS
SUPPLEMENTALLECTURE NOTE 2-4
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-64
FIGURE 2-D FIGURE 2-D Tasks to complete a term project
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-65
FIGURE 2-E FIGURE 2-E Gantt chart for scheduling the term project
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-66
MARKETING YOURSELF
IN-CLASS ACTIVITY 2-1
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-67
Yahoo!/Hot Jobs TV Ad
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-68
Sample Résumé
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-69
Sample Cover Letter
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-70
MARKETING PLANNING WORKSHEET
IN-CLASS ACTIVITY 2-2
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-71
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-72
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-73
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.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-74
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-75
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-76
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-77
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-78
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-79
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-80
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-81
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-82
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-83
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-84
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
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-85
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