Chap 8 developing marketing objectives and goals

Defining Objectives and Goals: Chapter Organization TM 8-1 2.. Problems with Defining Objectives TM 8-2 B.. Corporate Strategic Direction: An Example TM 8-5 4.. DEFINING OBJECTIVES AND G

A Intoduction

1 Defining Objectives and Goals: Chapter Organization (TM 8-1)

2 Problems with Defining Objectives (TM 8-2)

B Corporate Strategic Direction

1 Meansing of Corporate Strategic Direction (TM 8-3)

2 Usefulness of Corporate Strategic Direction (TM 8-4)

3 Corporate Strategic Direction: An Example (TM 8-5)

4 Changing an Established Direction (TM 8-6)

C SBU Mission

1 Defining Business Mission – Traditional Viewpoint (TM 8-7)

2 Defining Business Mission – A New Approach (TM 8-8)

3 Defining Business Mission – Narrow Scope (TM 8-9)

4 Defining Business Mission – Broader Scope (TM 8-10)

D SBU Objectives and Goals

1 Defining Objectives (TM 8-11)

2 Illustration of an SBU’s Objectives (TM 8-12)

E Product/Market Objectives

1 Bases of Product/Market Objectives (TM 8-13)

2 Sources for Generating Objectives (TM 8-14)

3 Validity Test for Objectives (TM 8-15)

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DEFINING OBJECTIVES AND GOALS:

CHAPTER ORGANIZATION

 Corporate strategic direction

 SBU mission

 SBU objectives and goals

 Product/market objectives

PROBLEMS WITH DEFINING OBJECTIVES

 Lack of credibility, motivation, and/or

practicality

 Poor information inputs

 Defining objectives without considering

different options

 Lack of consensus regarding corporate

values

 Disappointing committee effort to define

objectives

 Sterility (lack of uniqueness and competitive

advantage)

MEANING OF CORPORATE STRATEGIC DIRECTION

Broad statements that represent a company’s

position on various matters and serve as an

input in defining objectives and formulating

strategy at lower echelons in the organization

USEFULNESS OF CORPORATE

STRATEGIC DIRECTION

 Identifies what “fits” and what needs the

company is well suited to meet

 Analyzes potential synergies

 Undertakes risks that simply cannot be

justified on a project basis For example,

willingness to pay for what might appear, on

a purely financial basis, to be a premium for

acquisition

 Provides the ability to act fast The presence

of strategic direction not only helps

companies adequately and quickly scan

opportunities in the environment, but helps

companies capitalize on them without

waiting

 Focuses the search for opportunities and

options more clearly

CORPORATE STRATEGIC DIRECTION:

AN EXAMPLE Hewlett-Packard Corporation Profit — Achieve sufficient profit.

Customers — Provide products of greatest

value

Field of interest — Enter new fields

judiciously

Growth — Should be related to satisfaction of

real customer needs

People — Help our people share in company’s

success

Management — Foster initiative and creativity.

Citizenship — Honor our obligations to society

CHANGING AN ESTABLISHED DIRECTION

 Need for change

 Awareness

 Broad support

 Pockets of commitment

 Clear focus

 Definite commitment

 New strategic direction

DEFINING BUSINESS MISSION—

TRADITIONAL VIEWPOINT

Traditionally, the mission of a business

corporation was framed around its product line

and expressed in mottoes such as “our

business is textiles,” “we manufacture

cameras,” and so on

DEFINING BUSINESS MISSION—

A NEW APPROACH

Business is defined in terms of three measures:

 Scope (breadth of a business)

 Differentiation of the business unit offerings,

one from another, across segments

 Differentiation of the business unit offerings

from those of competitors

The above three measures are viewed in four

dimensions:

 Customer group served

 Customer functions served

 Technologies utilized

 Level of production/distribution

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DEFINING BUSINESS MISSION—

NARROW SCOPE

(Thermometer)

DEFINING BUSINESS MISSION—

BROADER SCOPE

(Thermometer)

DEFINING OBJECTIVES

 Activities (manufacturing a specific product,

selling in a particular market)

 Financial indicators (targeted ROI)

 Desired positions (market share, quality

leadership)

I SBU

Cooking Appliances

II Mission

To market to individual homes cooking appliances that perform such functions as baking, broiling, and roasting, using electric fuel technology.

III Objectives (general statements in the following areas):

B Growth/Survival

C Constraint

technologies

obsolescence

IV Goals

Specific targets and time frame for achievement of each objective listed above.

BASES OF PRODUCT/MARKET OBJECTIVES

 Profitability

 Market share

 Growth

 Other

— Technological leadership

— Social contribution

— Strengthening of national security

— International economic development

SOURCES FOR GENERATING OBJECTIVES

 Focus on material resources (e.g., oil,

minerals, forest)

 Concern with fabricated objects (e.g., paper,

nylon)

 Major interest in events and activities,

handling emergencies (Emery Air Freight)

 Emphasis on the kind of person whose needs

are to be met: “babies are our business”

(Gerber)

 Catering to specific parts of the body, i.e.,

eyes (Maybelline), teeth (Dr West), feet

(Florsheim), skin (Noxzema), hair (Clairol),

beard (Gillette), and legs (Hanes)

 Examination of wants and needs and seeking

to adapt to them, i.e., generic use to be

satisfied (nutrition, comfort, energy,

self-expression, development, conformity, etc.)

VALIDITY TEST FOR OBJECTIVES

 Is it, generally speaking, a guide to action?

 Is it explicit enough to suggest certain types

of action?

 Is it suggestive of tools to measure and

control effectiveness?

 Is it ambitious enough to be challenging?

 Does it suggest cognizance of external and

internal constraints?

 Can it be related to both the broader and the

more specific objectives at higher and lower

levels in the organization?