Chapter 5 Marketing

Chapter 5 Marketing
Introduction
How organizations organize themselves to make
sales, achieve profits, and keep stakeholders
happy?
Strategic Context (necessary to
understand before developing marketing
strategy)
Resorces and Capabilities
Target Customers
Competitors
The external environment
Elements defined on a framework of
intended performance
Vision
Oragnization's future
Mission
What the organization wishes to
achieve long term
Should be realistic and market oriented
Values
How people should behave within the
organization to help shape how the goals will be
achieved
Organizational Goals
represent what should be achieved
at strategic levels
Articulated in terms of profit, market share, share
value, return on investment, or number of cusomers
served
Organization/Corporate Strategy
means by which organizational resources are matched
with the needs of the organization's operations
environment
Strategic Business Units
Exist when organizations operate in different
markets and the planing process is
complicated
Strategic Markting Planning
according to Mc Donalds
A series of logical steps to be
worked through to arrive at a
marketing plan
Phases of those steps
Setting the right mission and corporate goals
Reviewing the context on which the
organization is operating
Formulate an strategy
Allocation of resources necessary to
implemnet and monitor the plan
Strategic Marketing Planning steps
Organizations set out its vision,
mission and values
Measurable corporate goals are stablished
Analysis of the strategic context and
resources available
Determination of strategies and
probable outcomes
Set SBUs if the organization is big
Each business and/or offering develops
functional and competitive strategies and
plans
The plan is implemented and the
results are measured
Marketing Planning
Definition
Sequential processinvolving a series of activitiesleading
to the setting of marketing objectivesand the
formulation of plans for achieving them
Should include
Executive summary
Overall Objectives
product/market background
Marketing analysis
Marketing strategies
marketing goals
Marketing programmes
Implementations
Supporting documentation
Managing and
controling marketing Programs
The marketing strategy
effectiveness and efficiency
Effectiveness
measured by
Market growth
Revenue Groth
Market Positio
Efficiency
Measured by
sales
marketing expenses
companies that succeed in one
dimension succeed less on the other
dream: be effecient and effective
Implementation
Characteristics of companies
maarketing implementation
capabilities
Timespecifific
Culturespecific
Partial
Latent
Internally Consitent
Strategy Specific
Person Specific
Elements that impact the
implementation
The structre and type of marketing function and the
degree to which marketing orientation prevails across
the organization
The amount of available finatial
rsources and how they are distributes
Marketing Metrics
the costs used to measure the
effectiveness of the impemetntation
process
Structures and Typs of Marketing
Organziations
Types of Marketing Organization
Finance and Budgeting
Marketing Metrics
Profit/Profitability
Sales
Gross Margin
percent of profit
Awareness
of the existence of the brand
Market Shares
salesd revenueX100/total inductry
sales revenue
Number of New Products
Relative Price
your price/ market leaders price
Number of consumer complaints or
relative dissatisfaction
consumer Satisfaction
Distribution/availability
Customer advocacy
nurturing loyal customers
Strategic Marketing PlanningActivities
Necessary activities when considering
the development of marketing
strategy
Strategic Marketing Goals
Necessary to
Determine what the marketing
strategy should achieve
Main types of strategic objectives
Niche
suitable whenfirms operate in a market dominated
by a major competitor and finantial resources are
limited
small segment or small part of a segment that
is not economic for leading competitors to
target
requires highly differentiated
products and high level of service to
succeed
Hold
Designed to prevent and
counterattack agressive competitors
likely to be adopted by market leaders
Harvest
likely to be adpoted by mature markets
Goal: maximize short term profit
Divest
Necessary when offerings continue to
incur losses and generate negative cash
flow
by selling it of withdrwaing it from
the market
Namely Growth
considered to be a primary objective
by most organizations
Types
Intensive
Intensifying activities
Integrative
an organization continues to do the same AND performs
other activities in the value chain that were undertaken
by others
Diversification
developments outside the current
chain of values
Ansoffs Product Market Matirx
Present porducts
Present Markets
Market Penetration
New Markets
Market Development
New Products
Present Markets
Product Development
New Market
Diversification
Strategic Marketing Action
Necessary to
Determine how the strategies should be developed
as plans and how this plans should be
implemented
Competitive Advantage
Definition
Prolonged benefit of implementing some unique valuecreating strategy
not simultaneously being implemented by any current or potential
competitors along with the inability to duplicate the benefts of this
strategy
Ssuteinable Competitive Advantage (SCA)
When an organization has a significant and
sustainable edge over its competitors when attracting
buyers
Conditions necessary to achieve it
A positive difference betweem the offerings of a
company and those of its competitors is
perceived
Those perceived differences result
from the company's greater
capability
The perceived difference persists for
a reasnable period of time
Generic Strategies
Cost Leadership
Not equal to lower price
Lowest cost structure,
Differentiation
requires that all value chain activities arevgeared to the
creation of offerings thatare valued by and staisfy the
needs of, a partivular broad segments
Focus Strategies
Help to seek unfulfilled market needs
stratgies (have to occur in a particular
narrow segment)
Cost leadership
Differentiaion
Competitive Positioning
the position that a porduct adpots in the
market is a general reflection of its market
share
Poisitions
Market Leader
has the single largest share of the market
Market Challenger
Products that aspire to the leadership
position
Market Followers
Low market shares and are not
serious competitors
Market Nichers
Strategic Intent
How firms engage strategically with
their chosen markets?
Perspectives on the subject
Strategic Competition and Warfare
Apporaches
Attack
Used to achieve groth objectives
Types
Frontal Attack
Flanking
Encirclement
Bypass
Guerrilla
Deffence
should be in place at all times
Types
Position
Mobile
Flanking
Counteroffensive
Contraction
Preemptive
The overall size market is static. Individual companies can
grow by taking a market share from its compeititors and
the defending it
Strategic Cooperatio and Relationship
How customer value can be
increased through cooperation
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