Strategic Marketing Strategic Marketing ManagementManagement

Chapter 1Chapter 1

Foundations and OverviewFoundations and Overview

Defining the Organization’s Defining the Organization’s Business, Mission, and GoalsBusiness, Mission, and Goals

The practice of strategic marketing management The practice of strategic marketing management begins with a clearly stated business definition, begins with a clearly stated business definition, mission statement, and goals/objectives to fulfill mission statement, and goals/objectives to fulfill the missionthe mission

A business definition outlines the scope of a A business definition outlines the scope of a particular organization’s operationsparticular organization’s operations

The mission statement defines the The mission statement defines the organization’s purpose.organization’s purpose.

Goals/objectives specify what an organization Goals/objectives specify what an organization intends to achieve.intends to achieve.

What business are we in? What basic consumer What business are we in? What basic consumer needs/wants do we fulfill?needs/wants do we fulfill?

ExampleExampleThe Hallmark CompanyThe Hallmark Company

What needs/wants do they fulfill?What needs/wants do they fulfill?

Generic versus product marketsGeneric versus product markets

The search for growth opportunitiesThe search for growth opportunities

Greeting cards versus the “personal Greeting cards versus the “personal expression” market.expression” market.

Business MissionBusiness Mission An organization’s business mission An organization’s business mission

complements its business definition.complements its business definition.

It reflects management’s vision of what the It reflects management’s vision of what the organization seeks to do.organization seeks to do.

Some are general statements, others may be Some are general statements, others may be very specific.very specific.

Clearly stated mission statements add focus to Clearly stated mission statements add focus to the organization’s efforts.the organization’s efforts.

ExampleExampleThe Saturn Corporation’sThe Saturn Corporation’s

Mission StatementMission Statement

“ “ Market vehicles developed and Market vehicles developed and manufactured in the United States that are manufactured in the United States that are world leaders in quality, cost, and world leaders in quality, cost, and customer satisfaction through the customer satisfaction through the integration of people, technology, and integration of people, technology, and business systems and to transfer business systems and to transfer knowledge, technology, and experience knowledge, technology, and experience throughout General Motors”throughout General Motors”

Business GoalsBusiness Goals

Goals/objectives convert the Goals/objectives convert the organization’s mission into tangible actions organization’s mission into tangible actions that are to be achieved within a specific that are to be achieved within a specific time frame.time frame.

Includes production, financial, and Includes production, financial, and marketing goals.marketing goals.

Examples of Business GoalsExamples of Business Goals

Achieve a 10% annual growth rate in sales.Achieve a 10% annual growth rate in sales.

Introduce new products at the rate of 3 per year.Introduce new products at the rate of 3 per year.

Pursue only new product ventures that will have Pursue only new product ventures that will have a payback period of 5 years or less.a payback period of 5 years or less.

Engage in research and development that Engage in research and development that complements existing product lines.complements existing product lines.

Identifying Growth OpportunitiesIdentifying Growth Opportunities Environmental (market) opportunities…Environmental (market) opportunities…

boundless. Which are opportunities for us?boundless. Which are opportunities for us?

What are our distinctive competencies as an What are our distinctive competencies as an organization?organization?

What are the success requirements in the What are the success requirements in the market under consideration?market under consideration?

A matching processA matching process

SWOT AnalysisSWOT Analysis

Formal framework for identifying growth Formal framework for identifying growth opportunities.opportunities.

Helps focus the matching process.Helps focus the matching process.

Goes beyond just developing lists.Goes beyond just developing lists.

Examples of StrengthsExamples of Strengths

Reputation/brand imageReputation/brand imageDistribution channelsDistribution channelsResearch and development skillsResearch and development skillsExperienced management talentExperienced management talentExperienced sales forceExperienced sales force

***Note that all of the above are ***Note that all of the above are “sustainable” strengths.“sustainable” strengths.

Examples of WeaknessesExamples of Weaknesses

Includes the lack of the previousIncludes the lack of the previous

High debtHigh debt

Lack of manufacturing capacity/capabilityLack of manufacturing capacity/capability

Examples of OpportunitiesExamples of Opportunities

Upturn in consumer confidenceUpturn in consumer confidence

Trends in consumer needs/wantsTrends in consumer needs/wants

Demographic trendsDemographic trends

Changes in distribution patterns/consumer Changes in distribution patterns/consumer shopping behaviorshopping behavior

Formulating Product/Market Formulating Product/Market StrategiesStrategies

MARKETSMARKETS Existing NewExisting New

ExistingExisting Market penetration Market Market penetration Market

development development

OFFERINGSOFFERINGS NewNew New offering development Diversification New offering development Diversification

Selecting Product/Market Selecting Product/Market StrategiesStrategies

Is the strategy consistent with organization Is the strategy consistent with organization mission, goal, and capabilities.mission, goal, and capabilities.

What are the costs and benefits of alternative What are the costs and benefits of alternative strategies and their probabilities of success?strategies and their probabilities of success?

Includes an analysis of competitive structure, Includes an analysis of competitive structure, market growth or decline factors, and market growth or decline factors, and opportunity costs.opportunity costs.

Developing Product/Market Developing Product/Market StrategiesStrategies

Selecting Target MarketsSelecting Target Markets

Determining the Marketing MixDetermining the Marketing Mix

Product/ServiceProduct/Service

PricePrice

Promotion/CommunicationPromotion/Communication

Place/DistributionPlace/Distribution

Budgeting for the StrategyBudgeting for the Strategy

Formal, quantitative expression of the Formal, quantitative expression of the organization’s plan in financial terms. organization’s plan in financial terms. What will it cost???What will it cost???

Important so that organization goals are Important so that organization goals are attained.attained.

Developing Reformulation and Developing Reformulation and Recovery StrategiesRecovery Strategies

Plans seldom go exactly as expected since they Plans seldom go exactly as expected since they are based on assumptions regarding consumer are based on assumptions regarding consumer response, competitive reaction, and response, competitive reaction, and environmental factors.environmental factors.

Important to periodically conduct marketing Important to periodically conduct marketing audits to determine problem areas.audits to determine problem areas.

Preplanning of reformulation/recovery strategies Preplanning of reformulation/recovery strategies allows faster response times in determining allows faster response times in determining remedial action (contingency plans).remedial action (contingency plans).