Strategic Business Unit PDF

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Strategic Business Unit...

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  Strategic Business Unit (SBU): unit of an organization that markets a set of related offerings to a clearly defined group of customers.  SBU are asked these questions: o What markets should we serve with what products: o Where can we get a sustainable competitive advantage? o How do we allocate resources among them? o SBU at the functional level: Marketing o Corporate levels have: a narrower scope, have similar questions to answer, and you can do a SWOT analysis.  Segmentation: dividing customers into groups (segments) so that those within a segment have similar needs and respond similarly to a marketing strategy. You segment classes by major.  Bicycle Market Segments: THERE ARE ALWAYS MULTIPLE WAYS TO SEGMENT o Racers, Commuters, Adult recreational, and children o High end, mid price, and budget  Targeting: Directing marketing effort towards a market or segment.  Positioning: You are trying to get a customer to get specific ideas about that product. (product, service, or idea) o Apple wants their customers to think their products are more innovative than other companies.  Points of Difference: characteristics that make a product superior to competitive substitutes o Example: Volvo: safety   The Business portfolio analysis: Considers businesses, SBU’s, brands as a portfolio of business  Categorize each by market attractiveness and relative competitive advantage.  Evaluate and decide resource by division. The business portfolio evaluates how results change if you define the market differently.  Looks for the balance between higher and lower risk, cash users and producers, profit now and for the future.   Marketing Strategy Process: organization allocates its marketing mix resources to reach its target markets.  Planning Phase

1) SWOT Analysis  Strengths: identify strengths, what is it that we do well? Leverage your strengths. Examples: COKE: strong brand names, infrastructure and scale, presence in emerging economies  Weaknesses: improve and turn weaknesses into strengths, or offset the weakness by offering them more services. Examples COKE: recent recalls, which makes the image looks bad.  Opportunities: decide which to pursue and which to let go. Examples: COKE: global growth, developing economies, vertical integration. Examples: the recession is a threat for most, but for stores like the dollar store, was a opportunity for them because they offer cheap alternatives  Threats: how to counter competitors. COKE examples: evolving customer preferences, water quality. The demand for water is growing worldwide, while Coke’s main ingredient is water. 2) Market-Product Focus and Goal Setting  Market Segmentation: involved aggregating prospective buyers into groups, or segments that have common needs, and will respond similarly to a marketing action.  Select the target market  Find points of difference and position  Select marketing program: marketing mix o A good marketing mix has to be logical: high quality product, and exclusive channels (very few of them, one per geographic location). o Be internally consistent o Having a nice designer bag is one thing but having it in a exclusive store with a high price tag just validates the quality. o Have synergy (one part of the mix makes another more effective) mixing a company’s money into partly sales calls, and some into advertising.  3) Marketing Program  Product: features, brand name, packaging, service and warrantee.  Price: list price, discounts, allowances, and credit terms  Promotion: advertising, personal selling, public relations, and promotions  Place: outlets, channels, coverage, and transportation. o Individuals and institutions involved in making the good available to customers. Example: Coke to bottlers to retailers to customers. These are the channel members of the channel of distribution o Direct Channel: Nike goes right to the customers. o Indirect Channel: Nike to Specialty or department stores to the customers.   Implementation phase  1) Obtain resources: transform SBU’s to develop and market new products  2) Develop schedules: members of marketing development hold meetings to identify the tasks which should be don. 

 3) Designing the organization: responsible for converting these marketing plans to reality as a part of the corporate marketing team.  3) Execute the program: implementing the marketing program with marketing tactics: detailed day-to-day decisions essential to success of marketing strategies.   Evaluation phase  1) Compare results to plans:  Planning Gap: the difference between projection of the path to reach a new goal and the projection of the path of the results.  The ultimate purpose of the forms marketing program is to fill in the planning gap.  2) Act on deviations: when actual performance failed to meet expectations.  Exploiting a positive deviation: taking the failed expectations and selling them to international customers.  Correcting a negative deviation: reduce prices to those products which did not meet expectations. ...