Lecture Marketing: The core (5/e): Chapter 2 – Kerin, Hartley, Rudelius

Chapter 2: Developing successful marketing and organizational strategies. In this chapter, you learned to: Describe two kinds of organizations and the three levels of strategy in them; describe how core values, mission, organizational culture, business, and goals are important to organizations; explain why managers use marketing dashboards and marketing metrics;...

Describe two kinds of organizations and the three levels of strategy in

them.

LO1

Describe how core values, mission, organizational culture, business, and goals are important to organizations.

Explain why managers use marketing dashboards and marketing metrics.

LO3

LO2

LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 2, YOU SHOULD BE ABLE TO:

LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 2, YOU SHOULD BE ABLE TO:

Discuss how an organization assesses where it is now and where it seeks to be.

Explain the three steps of the planning phase of the strategic marketing

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FIGURE 2-A How an industry is structured

TODAY’S ORGANIZATIONS

What is Strategy?

• Limited Resources to Market Offerings

 Can’t Be “All Things to All People”

LO1

FIGURE 2-1 The board of directors oversees

the three levels of strategy in organizations:

corporate, business unit, and functional

 Corporate Level

TODAY’S ORGANIZATIONS

STRUCTURE—CORPORATE & SBU

LO1

 Chief Marketing Officer (CMO)

 Strategic Business Unit (SBU) Level

• Perfume

• Leather Goods

• Luggage

FIGURE 2-2 Visionary organizations:

(1) establish a foundation, (2) set a direction,

and (3) create strategies to successfully

develop and market their offerings

STRATEGY IN VISIONARY ORGANIZATIONS

ORGANIZATIONAL FOUNDATION (WHY)

Star Trek Enterprise

Why is a mission statement important?

LO2

• What do we do?

• What business

are we really in?

STRATEGY IN VISIONARY ORGANIZATIONS

ORGANIZATIONAL DIRECTION (WHAT)

LO2

 Business Model

MARKETING MATTERS

The Netflix Launch and Its Continually Changing Business Model!

LO2

STRATEGY IN VISIONARY ORGANIZATIONS

ORGANIZATIONAL DIRECTION (WHAT)

LO2

STRATEGY IN VISIONARY ORGANIZATIONS

ORGANIZATIONAL DIRECTION (WHAT)

STRATEGY IN VISIONARY ORGANIZATIONS

ORGANIZATIONAL DIRECTION (HOW)

LO2

 Variation by Level

 Variation by Offering

• Corporate • SBU • Functional

• Product • Service • Idea

 Marketing Dashboard

STRATEGY IN VISIONARY ORGANIZATIONS

DASHBOARDS, METRICS, AND PLANS

FIGURE 2-3 An effective marketing

dashboard like Sonatica’s helps managers

assess a business situation at a glance

Source: Dundas Data Visualization

FIGURE 2-3A Marketing Dashboard: Website

Traffic Sources

FIGURE 2-3B Marketing Dashboard: Sales

Performance by SBU

FIGURE 2-3C Marketing Dashboard: Monthly

Website Visits by State

USING MARKETING DASHBOARDS

How Well is Ben & Jerry’s Doing?

Dollar Sales and Dollar Market Share

LO3

Dollar Market Share (%) = Ben & Jerry's Sales ($)

Total Industry Sales ($)

STRATEGY IN VISIONARY ORGANIZATIONS

TYPES OF MARKETING PLANS

LO3

 Annual Marketing Plans

 Long-Range Marketing Plans

FIGURE 2-B Elements in typical marketing

and business plans targeted at different

audiences

STRATEGY IN VISIONARY ORGANIZATIONS

GUIDELINES FOR EFFECTIVE MARKETING PLANS

LO3

 Have Complete and Feasible Plans

 Set Measurable, Achievable Goals

 Use a Base of Facts and Assumptions

 Use Simple, But Clear and Specific Plans

 Make Plans Controllable and Flexible

 Find the Right Person to Implement

 Work Toward Consensus-Building

• Competitive Advantage

SETTING STRATEGIC DIRECTIONS

WHERE ARE WE NOW?

LO4

 Competencies

 Customers

 Competitors

Who are Lands’ End’s Intertype Competitors?

SETTING STRATEGIC DIRECTIONS

WHERE ARE WE NOW?

LO4

SETTING STRATEGIC DIRECTIONS

WHERE DO WE WANT TO GO?

Kodak Consumer-Related Products

What SBU type in the BCG growth-share matrix?

Kodak digital photo printer Kodak digital camera

LO4

FIGURE 2-4 BCG business portfolio

analysis for Kodak’s consumer SBUs for

2003 (red circle) and 2012 (red arrow)

Kodak digital photo printer

Kodak Picture kiosk

④ ③

SETTING STRATEGIC DIRECTIONS

WHERE DO WE WANT TO GO?

FIGURE 2-5 Four alternative market-product

strategies for Ben & Jerry’s to expand sales

revenues using diversification analysis

THE STRATEGIC MARKETING PROCESS

LO5

• How Do We Allocate Our Resources to Get to Where We Want to Go?

• How Do We Convert Our Plans into Actions?

• How Do Our Results Compare With Our Plans and Do

Deviations Require New Plans?

FIGURE 2-6 The strategic marketing process

has three phases: planning, implementation,

and evaluation

THE STRATEGIC MARKETING PROCESS

THE PLANNING PHASE

THE STRATEGIC MARKETING PROCESS

THE PLANNING PHASE

 Analyze Competitors

 Identify Industry Trends

 Research Present and Prospective Customers

 Assess the Organization

LO5

• SWOT Analysis Study

 Step 1: Situation (SWOT) Analysis

FIGURE 2-7 Ben & Jerry’s SWOT analysis

that serves as the basis for management

actions regarding growth

 Correct a Weakness

 Build on a Strength

 Avoid a Laden Threat

Disaster- Exploit an Opportunity

• SWOT Analysis Actions

 Step 1: Situation (SWOT) Analysis

THE STRATEGIC MARKETING PROCESS

THE PLANNING PHASE

LO5

• Market Segmentation

 Step 2: Market-Product Focus and

Goal Setting

THE STRATEGIC MARKETING PROCESS

THE PLANNING PHASE

LO5

• Set Marketing & Product Goals

• Select Target Markets

• Find Points of Difference

• Position the Product

 Example: Medtronic’s Pacemaker

THE STRATEGIC MARKETING PROCESS

THE PLANNING PHASE

LO5

• Product Strategy

• Price Strategy

• Promotion Strategy

• Place (Distribution) Strategy

 Step 3: Marketing Program

THE STRATEGIC MARKETING PROCESS

THE PLANNING PHASE

LO5

FIGURE 2-8 The four Ps elements of the

marketing mix must be blended to produce

a cohesive marketing program

THE STRATEGIC MARKETING PROCESS

GUIDELINES FOR EFFECTIVE MARKETING PLANS

LO5

 Too Much Time Spent on Data Collection

and Writing Plans

 Bad News Gets Filtered Out Up the Line

 Plans Based on Poor Assumptions

 Plans Lost Sight of Customer Needs

 Plans Too Complex to Implement

 Line Managers Have No Ownership

FIGURE 2-E Results of good and bad

marketing planning and implementation

THE STRATEGIC MARKETING PROCESS

THE IMPLEMENTATION PHASE

 Executing the Marketing Program

FIGURE 2-9 Organization of a typical

manufacturing firm, showing a breakdown

of the marketing department

THE STRATEGIC MARKETING PROCESS

THE IMPLEMENTATION PHASE

• Product Line Groupings

• Geographical Groupings

• Market-Based Groupings

 Role of the Product/Brand Manager

FIGURE 2-F The organization of a business

unit in a typical consumer packaged goods

firm shows two product or brand groups

 Defining Precise Tasks,

Responsibilities, and Deadlines

THE STRATEGIC MARKETING PROCESS

THE IMPLEMENTATION PHASE

FIGURE 2-G Tasks and time needed to

complete a term project

FIGURE 2-10 Gantt chart for scheduling a

term project that distinguishes sequential

and concurrent tasks

 Improving Implementation of Marketing Programs

THE STRATEGIC MARKETING PROCESS

THE IMPLEMENTATION PHASE

 Improving Implementation of Marketing Programs

THE STRATEGIC MARKETING PROCESS

THE IMPLEMENTATION PHASE

 Bias for Action  “Do It, Fix It, Try It”

 Surface Now  Avoid “NIH” Syndrome

THE STRATEGIC MARKETING PROCESS

THE EVALUATION PHASE

• Exploiting a Positive Deviation

• Correcting a Negative Deviation

 Acting on Deviations

• Planning Gap

 Comparing Results with

Plans to Identify Deviations

LO6

FIGURE 2-H The evaluation phase of the

strategic marketing process ties results and

actions to goals, often using marketing

metrics and dashboards

FIGURE 2-11 The evaluation phase requires

that Kodak compare actual results with

goals to identify and act on deviations to

fill in the “planning gap” by 2012

THE STRATEGIC MARKETING PROCESS

THE EVALUATION PHASE

LO6

 The Distribution Challenge

for Warm Delights Minis

 The Findings for Warm Delights Minis

 The Actions for Warm Delights

Minis

FIGURE 2-I The marketing dashboard for

the distribution channels for General Mills’

Warm Delights Minis (WDM)

FIGURE 2-I1 The marketing dashboard for

General Mills’ Warm Delights Minis (WDM):

Monthly unit sales by channel

FIGURE 2-I2 The marketing dashboard for

General Mills’ Warm Delights Minis (WDM):

Channel stores carrying WDM

FIGURE 2-I3 The marketing dashboard for

General Mills’ Warm Delights Minis (WDM):

Nov/Dec sales by channel

FIGURE 2-I4 The marketing dashboard for

General Mills’ Warm Delights Minis (WDM):

Average number of flavors carried