Chapter 2 Notes PDF

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Professor was Holly Hapke....

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Learning Objectives

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LO 2-1 Explain the strategic planning process LO 2-2 Understand the importance of a firm's mission statement and corporate and business-unit strategy. LO 2-3 Describe how analyzing organizational resources and the marketing environment can help identify opportunities and create competitive advantage. LO 2-4 Explore how a firm develops marketing objectives and strategies that contribute to overall objectives.

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LO 2-5 Identify what is necessary to effectively manage the implementation of marketing strategies.

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LO 2-6 Describe the four major elements of strategic performance evaluation LO 2-7 Outline the development of a marketing plan

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: is the process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently.

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Strategic Planning:

• • •

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Should be guided by a market orientation

o

Components of Strategic Planning [See Figure 2.1]

Establishing Mission, Goal, and Strategies : a long-term vision of what the organization wants to become

• o o

What is our core competency? hould support all corporate activities

• o

,

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Developing Corporate and Business-Unit Strategies Levels of Strategic Planning [Fig 2.2]

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1.

a. Functional areas include marketing, production, finance, R&D, and human resources 2.

to determine future business directions and develop strategies for individual business units a.

: a division, product line, or other profit center within a parent company

b. Market: a group of individuals and/or organizations that have needs for products and the ability, willingness and authority to buy c.

: the percentage of a market that actually buys a specific product from a specific company

d. Example of a tool which allow an organization to classify and display strategic business units Growth Share Matrix by the Boston Consulting Group (Fig 2.3) i.

: dominant market share & good growth prospects

ii.

: dominant market share & low growth prospects

iii.

: low market share & low growth prospects

iv.

: small market share of a growing market & require significant cash to build market

e.

1.

(Fig 2.4)

: things a firm does extremely well, which give it an advantage over competition

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2.

: a combination of circumstances and timing that permits an organization to take action to reach a particular target market o

Many tech companies see a market opportunity in  

3.

Large potential market of over 2 billion people Growing wealth and middle class

: a temporary period of optimal fit between the key requirements of a market and the particular capabilities of a firm competing in the market : the result of a company’s matching a core competency (superior skill or resources) to opportunities in the marketplace o

e.g. cheaper, more widely available, stronger service support, higher quality

o

Example:

4. Draw the Four-Cell SWOT Analysis: assessment of an organization's strengths, weaknesses, opportunities, and threats. Figure 2.5

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: the ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace o

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Build a company’s reputation as a pioneer and market leader

: the ability of later market entrants to achieve long-term competitive advantages by not bring the first to offer a certain product in a marketplace

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a statement of what is to be accomplished through marketing activities

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Be stated in clear, simple terms

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Specify a time frame for accomplishment

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Be consistent with business-unit and corporate strategy : next step is the development of strategies for each functional

• area of the organization o

: selecting an appropriate target market may be the most important decision a company has to make in the strategic planning process

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: all marketing mix decisions should be consistent with the business unit and corporate strategies an advantage that the competition cannot easily copy in

o the foreseeable future

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Marketing Implementation: : the strategy the organization decides on during the planning

o phase and wants to use

: the strategy that actually takes place

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Organizations

o   

Authority is concentrated at the top level Very little delegation to lower levels Example:

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Organizations

o 

Decision making authority is delegated as far down the chain of command as possible

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Managers must discover their employees; needs and then develop motivational methods that will help employees satisfy those needs

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Strategic performance evaluation consists of: o   

Performance standard is an expected level of performance against which actual performance can be compared For example, a 20% reduction in customer complaints, a monthly sales quota of $150,000, or a 10% increase per month in new-customer accounts Performance standards are derived from marketing objectives that are set while developing marketing strategies actual performance

o 



uses sales figures to evaluate a firm’s current performance • Most common method of evaluation because sales data partially reflect the target market’s reactions to a marketing mix and often are readilyavailable • Current sales data must be compared with forecasted sales, industry sales, specific competitor’s sales, or the costs incurred to achieve the sales volume breaks down and classifies costs to determine which are associated with specific marketing efforts actual performance with established standards

o 

If actual performance exceeds performance standards: •

Marketing strategy is viewed as being effective

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• 

o

Try to gain an understanding of why the strategy is effective

If actual performance does not meet performance standards: • Determine why a marketing strategy was less effective • Determine whether the marketing objective, against which performance is measured, is realistic or not

Modifying the marketing strategy, if needed

Creating The o

A written document that specifies the activities to be performed to implement and control the organization’s marketing strategies

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The systematic process of: o Assessing marketing opportunities and resources o Determining objectives o Defining Strategies o Establishing guidelines for implementation and control of the marketing program

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Written in alignment with corporate and business-unit strategies and is accessible to and shared with all key employees

Components of the Marketing Plan (See Table 2.1)

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Ch 2 Practice Exam Questions: 1. The marketing plan is a) a plan of all aspects of an organization's business strategy. b) written differently for each SBU. c) a written document detailing activities to be performed to implement and control marketing actions. d) designed to specify not only marketing, but all other functional areas of business activities as well. e) updated only periodically. 2. The process of putting marketing strategies into action is called a) marketing implementation. b) marketing control. c) marketing action. d) marketing auditing. e) the marketing action plan. 3. An organization’s goals should be based on its the organization wants to become. a) SWOT analysis b) marketing plan c) mission statement d) strategic window e) sustainable competency

, which is a long-term view or vision of what

4. Groups of individuals and/or organizations that need products in a product class and have the ability, willingness, and authority to purchase those products are called . a) markets b) suppliers c) shareholders d) investors e) competitors 5. Procter & Gamble’s superb marketing distribution skills and R&D capabilities in five core technologies (fats, oils, skin chemistry, surfactants, and emulsifiers) have enabled it to build a strong reputation in the marketplace and drive down competition. It can be said that these skills and capabilities are examples of Procter & Gamble’s: a) market opportunities. b) marketing plan. c) core competencies. d) strategic windows. e) marketing objectives.

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