-Once an organization has assessed its resources and opportunities, it can begin to establish goals and strategies to take advantage of those opportunities; these goals are derived from the mission statement.
1. The goals of any organization derive from its mission statement, which is a long-term view, or vision, of what the organization wants to become; A mission statement can be valuable if it shows employees what the organization aims to achieve and guides their work activities in the right direction. An organization's mission really answers two questions:
a. Who are our customers?
b. What is our core competency?
(-Defining customers' needs and wants gives direction to what the company must do to satisfy them)
-A well-formulated mission statement helps give an organization a clear purpose and direction, distinguish it from competitors, provide direction for strategic planning, and foster a focus on customers. An organization's goals, which focus on the end results sought, guide the remainder of its planning efforts.
2. A company's mission, goals, and objectives must be properly implemented to achieve and communicate the desired corporate identity—a company's unique symbols, personalities, and philosophies to support all corporate activities, including marketing.
a. An organization's goals and objectives should guide its planning efforts.
b. Goals focus on the end results sought by the organization.
a. Corporate strategy determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development (R&D), and human resources to reach the organization's goals; Corporate strategy determines the scope of the business and its resource development, competitive advantages, and overall coordination of functional areas.
b. Corporate strategy planners are concerned with broad issues (corporate culture, competition, differentiation, diversification, interrelationships between business units, and environmental and social issues).
c. They are also concerned with defining the scope and role of the organization's business units so the units coordinate efforts to reach the desired ends.
Corporate strategy planners are concerned with broad issues such as:
-Interrelationships among business units
-Environmental and social issues
-Corporate strategy planners attempt to match the resources of the organization with the opportunities and threats in the environment
--The broadest of the three levels of strategy (corporate, business unit, and marketing) and should be developed with the organization's overall mission in mind; Corporate strategy doesn't solely apply to corporations, simply refers to the top-level (highest) strategy developed within an organization.
Addresses the two questions posed in the mission statement:
-Who are our customers?
-What is our core competency?
-The market-growth/market-share matrix, the Boston Consulting Group (BCG) approach, is based on the philosophy that a product's market growth rate and its market share are important considerations in determining its marketing strategy.
-The market growth/market share matrix integrates a company's products or SBUs into a single, overall matrix for evaluation to determine appropriate strategies for individual product and business units.
(1) All the organization's SBUs and products should be integrated into a single, overall matrix and evaluated to determine appropriate strategies for individual products and overall portfolio strategies.
(2) Managers can use this model to determine and classify each product's expected future cash contributions and future cash requirements.
(3) This model classifies an organization's products into four basic types:
(a) Stars have a dominant share of the market and good prospects for growth; they use more cash than they generate to finance growth, add capacity, and increase market share. Example: Apple's iPod
(b) Cash cows have a dominant share of the market but low prospects for growth; typically they generate more cash than is required to maintain market share. Example: Procter & Gamble's Bounty paper towels
(c) Dogs have a subordinate share of the market and low prospects for growth; these products are often found in established markets. Example: General Motors' (now defunct) Oldsmobile brand
(d) Question marks, sometimes called "problem children," have a small share of a growing market and generally require a large amount of cash to build market share. Example: Mercedes mountain bikes
-The market growth/market share matrix is a helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its market strategy; Developed by the Boston Consulting Group (BCG)
-All the companies SBUs and products should be integrated into a single, overall matrix and evaluated to determine appropriate strategies for individual products and overall portfolio strategies
-The long-term health of an organization depends on having some products that generate cash (and provide acceptable profits) and others that use cash to support growth.
-To achieve its marketing objectives, an organization must develop a marketing strategy, which includes identifying a target market and developing a plan of action for developing, distributing, promoting, and pricing products that meet the needs of customers in the target market.
-A marketing strategy is the selection of a target market and the creation of a marketing mix that will satisfy the needs of target market members.
-Marketing strategies, the most detailed and specific of the three levels of strategy, are composed of two elements: selecting a target market and the creation of a marketing mix that will satisfy the needs of the of the target market members; the selection of the target market serves as the basis for the creation of the marketing mix to satisfy the needs of that market. Marketing mix decisions should also be consistent with business-unit and corporate strategies and be flexible enough to respond to changes in market conditions, competition, and customer needs. Different elements of the marketing mix can be changed to accommodate different marketing strategies
a. Selecting the Target Market
(1) Selecting a target market is the most important decision a company makes in the strategic planning process.
(2) Identification and analysis of a target market provide a foundation on which a marketing mix can be developed.
(3) When exploring possible target markets, marketing managers try to evaluate how entering them would affect the company's sales, costs, and profits.
(4) Marketers should also assess whether the company has the resources to develop the right marketing mix to meet the needs of a particular target market. The size and number of competitors is also a concern.
(1) The decisions made in creating a marketing mix are only as good as the organization's understandings of the target market.
(2) Understanding comes from careful in-depth research into demographics as well as customer needs, preferences, and behavior with respect to product design, pricing, distribution, and promotion.
(3) Marketing mix decisions should also be flexible and consistent with the business-unit and corporate strategies.
(4) The organization details how it will achieve a competitive advantage at the marketing mix level.
(5) It is important that the organization attempt to make this advantage sustainable. *A sustainable competitive advantage is one that cannot be copied by the competition.
-Decisions made in creating a marketing mix are only as good as the organization's understanding of its target market
-In-depth research into the characteristics of the target market
-Analysis of customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion
-How has Kimberly-Clark's marketing researchers met the varied needs of customers who buy Kleenex tissues?
-All marketing mix decisions should be:
-Consistent with the business-unit and corporate strategies
-Flexible to permit the organization to alter the marketing mix in response to changes in market conditions, competition, and customer needs
-Motivating marketing employees is crucial to effectively implementing marketing strategies. Marketing managers
1. To motivate personnel, Managers must discover their employees' needs and then develop different methods to motivate those employees to help the organization meet its goals.
2. A firm can motivate its workers by directly linking pay with performance, informing workers how their performance affects department and corporate results, following through with appropriate compensation, implementing a flexible benefits program, and adopting a participative management approach.
-Rewards to employees should be tied to organizational goals and be fair, ethical, and well understood by employees
3. Managers should also use a variety of other tools, including nonfinancial rewards such as prestige or recognition, job autonomy, skill variety, task significance, increased feedback, or even a more relaxed dress code.
-Selecting effective motivational tools has become more complex because of greater differences among workers in terms of race, ethnicity, gender, and age
-Proper communication within the marketing unit is a key element in successful marketing implementation. Communication should go both downward (from top management to the lower-level employees) and upward (from lower-level employees to top management)
1. With good communication, marketing managers can motivate personnel and coordinate their efforts.
2. Marketing managers must be able to communicate with the firm's upper-level management to ensure marketing activities are consistent with the company's overall goals.
3. Communication that flows upward from the frontline of the marketing unit to higher-level marketing managers provides important information about the needs of customers and employees.
4. Training helps employees to learn, ask questions, and become accountable for marketing performance.
5. Marketers need an information system to support a variety of activities, such as planning, budgeting, sales analyses, performance evaluations, report preparation, and improving communication.
Communication is facilitated by an:
-Effective training program where employees can learn, ask questions, and become accountable for marketing performance
-Information system within the marketing unit and with other departments in the organization
-strategic performance evaluation consists of establishing performance standards, analyzing actual performance, and modifying the marketing strategy. When actual performance is compared with performance standards, marketers must determine whether a discrepancy exists and if so, whether it requires corrective action, such as changing the performance standard or improving actual performance. Two possible ways to evaluate the actual performance of marketing strategies are sales analysis and marketing cost analysis.
1. A performance standard is an expected level of performance against which actual performance can be compared, such as a reduction in customer complaints, a sales quota, or an increase in customer accounts.
2. Marketing objectives directly or indirectly set forth performance standards, usually in terms of sales, costs, or communication dimensions.
-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
1. Sales analysis uses sales figures to evaluate a firm's current performance;
a.most common method because sales data partially reflect the target market's reactions to the marketing mix.
b. Marketers use current sales data to monitor the impact of current marketing efforts and compare them to forecasted sales, industry sales, a competitor's sales, or related costs.
-Marketers analyze sales by comparing current sales to forecasted sales, industry sales, specific competitor's sales, or the costs incurred to achieve the sales volume. Companies can analyze sales in terms of the dollar volume or market share*.
c. The basic unit of measurement is the sales transaction, which includes the quantity, terms, the salesperson or sales team, and the date.
d. Firms frequently use dollar volume in their sales analyses, but price increases and decreases affect total sales figures, and those effects should be factored out.
e. Market share analysis lets a company compare its marketing strategy with competitor's strategies and estimate whether sales changes have resulted from the firm's marketing strategy or from uncontrollable environmental forces. However, the results must be interpreted carefully.
8th EditionN. Gregory Mankiw 2nd EditionDavid Anderson, Margaret Ray 8th EditionAlan J. Marcus, Alex Kane, Zvi Bodie