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CHAPTER

DEVELOPING
SUCCESSFUL
MARKETING
AND
CORPORATE
STRATEGIES
Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-1

AFTER READING THIS CHAPTER


YOU 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.

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Slide 2-2

AFTER READING THIS CHAPTER


YOU 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.

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Slide 2-3

WHERE CAN AN A IN
ICE CREAM MAKING LEAD?

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Slide 2-4

ORGANIZATIONS AND THEIR


LEVELS OF STRATEGY
Profit
Kinds of Organizations
Business Firm
Nonprofit Organization
Firm, Company, Corporation, Organization

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Slide 2-5

ORGANIZATIONS AND THEIR


LEVELS OF STRATEGY
Levels in Organizations and How
Marketing Links to Them
Corporate Level
Strategic Business Unit (SBU)
Business Unit Level
Functional Level
Department
Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-6

FIGURE 2-1 The three levels of strategy


in organizations: corporate, business unit,
and functional

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Slide 2-7

ORGANIZATIONS AND THEIR


LEVELS OF STRATEGY
Strategy Issues in Organizations
The Business
The Mission (Mission Statement/Vision)
Organizational Culture
Stakeholders
Organizational Culture

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Slide 2-8

Medtronics Rising Figure Mural


What does it signify to stakeholders?

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Slide 2-9

ORGANIZATIONS AND THEIR


LEVELS OF STRATEGY
Strategy Issues in Organizations
Goals or Objectives
Profit

Customer Satisfaction

Sales

Employee Welfare

Market Share

Social Responsibility

Quality

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-10

Concept Check

1. What are the three levels in todays


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

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-11

Concept Check

2. What is the meaning of an


organizations mission?
A: Mission is a statement of the
organizations scope, often
identifying its customers, markets,
products, technology, and values.

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-12

Concept Check

3. How do an organizations goals


relate to its mission?
A: Goals or objectives measure how
well the organizations mission is
being accomplished.

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-13

SETTING STRATEGIC DIRECTIONS


A Look Around: Where Are We Now?
Customers
Competencies
Competitive Advantage

Competitors

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Slide 2-14

Lands End Unconditional Guarantee


What is the strategic focus?

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-15

SETTING STRATEGIC DIRECTIONS


Growth Strategies: Where Do We Want
to Go?
Business Portfolio Analysis (BCG)
Market Growth Rate
Relative Market Share
Cash Cows

Question Marks or Problem Children

Stars

Dogs

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-16

FIGURE 2-2 Boston Consulting Group


portfolio analysis for Kodak, as it might
appear in 2006

Kodak digital
camera

Kodak digital
photo printer

Kodak film sales: US,


Canada, & W. Europe

Kodak selfservice kiosk


Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-17

Kodak Traditional Film Cartridge


What SBU type in the BCG growth-share matrix?

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Slide 2-18

Kodak Digital Camera


What SBU type in the BCG growth-share matrix?

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Slide 2-19

Kodak Digital Photo Printer


What SBU type in the BCG growth-share matrix?

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Slide 2-20

Kodak Picture Maker Self-Service Kiosk


What SBU type in the BCG growth-share matrix?

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Slide 2-21

SETTING STRATEGIC DIRECTIONS


Growth Strategies: Where Do We Want
to Go?
Market-Product Analysis
Market Penetration
Market Development
Product Development
Diversification

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Slide 2-22

FIGURE 2-3 Four market-product strategies:


alternative ways to expand sales revenues
for Ben & Jerrys

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Slide 2-23

Concept Check

1. What are competencies and why are


they important?
A: Competencies are an organizations
special capabilities, including skills,
technologies, and resources that
distinguish it from other organizations,
which if exploited, can lead to the
organizations success.
Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-24

Concept Check

2. What is business portfolio analysis?


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

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-25

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.

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Slide 2-26

THE STRATEGIC MARKETING


PROCESS
How do we allocate our resources to get where
we 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?
Strategic Marketing Process
Marketing Plan
Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-27

FIGURE 2-4 The strategic marketing


process

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Slide 2-28

THE STRATEGIC MARKETING


PROCESS
Strategic Marketing Process:
The Planning Phase
Step 1: Situation (SWOT) Analysis
Situation Analysis
SWOT Analysis
Strengths

Weaknesses

Opportunities

Threats

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Slide 2-29

FIGURE 2-5 Ben & Jerrys: a SWOT analysis


to get it growing again

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Slide 2-30

Ben & Jerrys One Sweet Whirled Campaign


What is the impact of a SWOT analysis?

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Slide 2-31

THE STRATEGIC MARKETING


PROCESS
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
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Slide 2-32

Medtronics Champion Heart Pacemaker


What features are important to the Asian market?

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Slide 2-33

THE STRATEGIC MARKETING


PROCESS
Strategic Marketing Process:
The Planning Phase
Step 3: Marketing Program
Product Strategy
Price Strategy
Promotion Strategy
Place (Distribution) Strategy

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Slide 2-34

FIGURE 2-6 Elements of the marketing mix


that comprise a cohesive marketing program

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-35

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.

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Slide 2-36

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.

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Slide 2-37

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.

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Slide 2-38

THE STRATEGIC MARKETING


PROCESS
Strategic Marketing Process:
The Implementation Phase
Obtaining Resources
Designing the Marketing Organization
Developing Schedules

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Slide 2-39

FIGURE 2-7 Organization of a typical


manufacturing firm showing a breakdown of
the marketing department

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-40

THE STRATEGIC MARKETING


PROCESS
Strategic Marketing Process:
The Implementation Phase
Executing the Marketing Program
Marketing Strategy
Marketing Tactics

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-41

Kodak EasyShare Cameras in China


What marketing strategy & tactics are used?

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-42

THE STRATEGIC MARKETING


PROCESS
Strategic Marketing Process:
The Control Phase
Comparing Results With Plans to Identify
Deviations
Planning Gap

Acting on Deviations
Exploiting a Positive Deviation
Correcting a Negative Deviation
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Slide 2-43

FIGURE 2-8 Evaluation and control of


Kodaks marketing program

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-44

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.

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Slide 2-45

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.
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Slide 2-46

GOING ONLINE
MEDTRONICS MISSION
STATEMENT

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Slide 2-47

Going Online

1. What stakeholders are specifically


mentioned or implied in Medtronics
mission? What values are associated
with each stakeholder?

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Slide 2-48

Going Online

2. What is the scope of Medtronics


mission? Why does Medtronic limit
its scope?

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-49

Going Online

3. Why does Medtronic NOT define


itself as being in the medical
device business?

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-50

VIDEO CASE 2
BP: ALLOCATING RESOURCES
TO BRING YOU GASOLINE
AND FRESH BREAD!

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Slide 2-51

VIDEO CASE 2
BP

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Slide 2-52

VIDEO CASE 2
BP

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 BPs mission and
values? Explain.

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-53

VIDEO CASE 2
BP

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.

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Slide 2-54

VIDEO CASE 2
BP

3. In addition to features such as hightech 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.

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Slide 2-55

SUPPLEMENTAL
LECTURE NOTE 2-1
MARKETING VERSUS
BUSINESS PLANS

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Slide 2-56

FIGURE A-1 Elements in typical marketing


and business plans targeted at different
audiences

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Slide 2-57

SUPPLEMENTAL
LECTURE NOTE 2-2
PLANNING VS.
IMPLEMENTATION ISSUES

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Slide 2-58

FIGURE 2-A Results of good and bad


marketing planning and implementation

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Slide 2-59

SUPPLEMENTAL
LECTURE NOTE 2-3
ORGANIZING FOR
MARKETING

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Slide 2-60

FIGURE 2-B Organization of a business unit


in a typical consumer packaged goods firm,
showing two product or brand groups

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Slide 2-61

FIGURE 2-C Units with which the product


manager and product group work

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Slide 2-62

SUPPLEMENTAL
LECTURE NOTE 2-4
PROJECT SCHEDULING
USING GANTT CHARTS

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Slide 2-63

FIGURE 2-D Tasks to complete a term


project

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Slide 2-64

FIGURE 2-E Gantt chart for scheduling the


term project

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Slide 2-65

IN-CLASS ACTIVITY 2-1


MARKETING YOURSELF

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Slide 2-66

Yahoo!/Hot Jobs TV Ad

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Slide 2-67

Sample Rsum

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Slide 2-68

Sample Cover Letter

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Slide 2-69

IN-CLASS ACTIVITY 2-2


MARKETING PLANNING
WORKSHEET

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Slide 2-70

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Slide 2-71

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Slide 2-72

Profit

Profit
Profit is
is the
the reward
reward to
to aa business
business firm
firm for
for
the
the risk
risk itit undertakes
undertakes in
in offering
offering aa
product
product for
for sale.
sale. ItIt is
is also
also the
the money
money left
left
over
over after
after aa firms
firms total
total expenses
expenses are
are
subtracted
subtracted from
from its
its total
total sales.
sales.

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-73

Mission

Mission
Mission is
is aa statement
statement of
of the
the
organizations
organizations scope,
scope, often
often identifying
identifying its
its
customers,
customers, markets,
markets, products,
products, technology,
technology,
and
and values.
values.

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-74

Organizational Culture

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

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-75

Goals or Objectives

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

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-76

Market Share

Market
Market share
share is
is the
the ratio
ratio of
of sales
sales revenue
revenue
of
of the
the firm
firm to
to the
the total
total sales
sales revenue
revenue of
of all
all
firms
firms in
in the
the industry,
industry, including
including the
the firm
firm
itself.
itself.

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-77

Strategic Marketing Process

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

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-78

Marketing Plan

A
A marketing
marketing plan
plan is
is aa road
road map
map for
for the
the
marketing
marketing activities
activities of
of an
an organization
organization for
for
aa specified
specified future
future period
period of
of time,
time, such
such as
as
one
one year
year or
or five
five years.
years.

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Slide 2-79

Situation Analysis

Situation
Situation analysis
analysis involves
involves taking
taking stock
stock
of
of where
where aa firm
firm or
or product
product has
has been
been
recently,
recently, where
where itit is
is now,
now, and
and where
where itit is
is
headed
headed in
in terms
terms of
of the
the organizations
organizations
plans
plans and
and the
the external
external factors
factors and
and trends
trends
affecting
affecting it.
it.

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Slide 2-80

SWOT Analysis

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

Copyright 2007 by The McGraw-Hill Companies, Inc.

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Slide 2-81

Market Segmentation

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

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Slide 2-82

Points of Difference

Points
Points of
of difference
difference are
are those
those
characteristics
characteristics of
of aa product
product that
that make
make itit
superior
superior to
to competitive
competitive substitutes.
substitutes.

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Slide 2-83

Marketing Strategy

A
A marketing
marketing strategy
strategy is
is the
the means
means by
by
which
which aa marketing
marketing goal
goal is
is to
to be
be achieved,
achieved,
usually
usually characterized
characterized by
by aa specific
specific target
target
market
market and
and aa marketing
marketing program
program to
to reach
reach
it.
it.

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Slide 2-84

Marketing Tactics

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

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