Ategic Marketing Managem

8/14/2019 Ategic Marketing Managem

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LECTURE

1

tegic Marketing Manage


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1.Define an organizations business,mission, and goals.

2.Identify and frame organization growthopportunities.

3.Formulate product-market strategies.

AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

4.Budget marketing, financial, andproduction resources.


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5.Develop reformulation and recoverystrategies.

6.Draft a marketing plan.

7.Emphasize marketing ethics and social

responsibility.

AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:


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INTRODUCTION

FOUNDATIONS OF STRATEGIC MARKETINGMANAGEMENT


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To create long-term and mutually

beneficial exchange relationshipsbetween an entity and the publics(individuals and organizations)

with which it interacts.

PURPOSE OF MARKETING


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RESPONSIBILITIES OF MARKETINGMANAGERS

Make day-to-day decisions.Chart the organizations direction.

Create and sustain a competitive advantageand affect the organizations long-termperformance.


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RESULTS OF THE EVOLUTION OF THEMARKETING MANAGER

Created the Chief Marketing Officer(CMO) position in many organizations.

Increased popularity of strategicmarketing management.


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Analyze environmental, competitive, and

business situations.

Develop business objectives and goals.

Define customer value propositions andtheir respective marketing strategies.

RESPONSIBILITIES OF CMOs

Define the business mission.


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Interpret extensive market and operationalinformation.

Sense customer and competitormotivations.

Frame strategic marketing initiatives in

light of implementation considerations andfinancial targets/results.

SKILL SET OF CMOs


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Define an organizations business, mission,and goals.

Identify and frame organizational growth

opportunities.

Formulate product-market strategies.

Budget marketing, financial, andproduction resources.

Develop reformulation and recovery strategies.

STRATEGIC MARKETINGMANAGEMENT PROCESSES


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Lecture 01-2

Prof. Dr. MAK Chishty


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HE ORGANIZATIONS BUSINEAND GOALS



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Answers the question, What business arewe in?

An organization defines its business by:

The type of customer served and the specificneeds to be satisfied

The means or technology used to satisfy these

customer needs

BUSINESS DEFINITION

What business an organization is in isneither obvious nor easy.


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BUSINESS DEFINITION

Customer groups and needs are moreenduring than the offerings and meansor technologies to produce and deliverthem.

What business is theEncyclopedia

Britannica in?


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Underscores the scope of an organizations operationsapparent in its business definition.

Reflects managements vision of what the organizationseeks to do.

Describes an organizations purpose regarding its

customers, products/services, markets, philosophy, andtechnology.

Crystallizes managements vision of the organizationslong-term direction and character.

BUSINESS MISSION

Consists of a written statement that:


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Provides guidance in identifying, pursuing, and evaluatingmarket-product opportunities.

Inspires and challenges employees to do what is valued bythe organization and its customers.

Also applies to not-for-profit organizations.

Provides direction for setting goals or objectives.

Consists of a written statement that (continued):

BUSINESS MISSION


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BUSINESS MISSION

Our strategic intent is to help peoplefind better ways to do great workby constantly leading in document

technologies, products, and services thatimprove our customers work processesand business results.

CANNON PHOTO COPIER


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BUSINESS MISSION

To improve the quality of human life;to enhance self-reliance and concern forothers; and to help people avoid, prepare

for, and cope with emergencies.

EIDIH FOUNDATION


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Financial

Convert the organizations mission intotangible actions and results that are to beachieved within a specified time frame.

Are divided into three major categories:

MarketingProduction

BUSINESS GOALS OR OBJECTIVES


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Return on investment

Return on sales

Shareholder wealth

Profit

Cash flow

Production

Financial

Marketing

Market share

Sales volume

Marketing productivity

Customer satisfaction

Customer value creation

Profit Customer lifetime value


Manufacturing and service capacity

Product and service quality


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Asituation analysis is anappraisal of operations to

determine reasons for thegap between what was or

is expected and what hashappened or will happen.



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Lecture01-3

Prof.Dr. MAK Chishty


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MING ORGANIZATIONAL GR

STRATEGIC MARKETING MANAGEMENT


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CONVERTING ENVIRONMENTAL OPPORTUNITIESINTO ORGANIZATIONAL OPPORTUNITIES

What might we do?

Ask three questions:

What do we do best?

What must we do?


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Unmet or changing consumer needs.

Unsatisfied buyer groups.

New means or technologies for delivering

value to prospective buyers.

Sources ofenvironmental opportunities:

WHAT MIGHT WE DO?


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A distinctive competencydescribes an organizations

unique strengths or qualities,including skills, technologies,

or resources that distinguish itfrom other organizations.

WHAT DO WE DO BEST?


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Two criteria must be satisfied for adistinctive competency:

Competitors cannot replicate the skill easilyor without a sizeable investment in time,effort, and money.

It should make a significant contribution tothe benefits customers perceive, therebyproviding them with superior value.

WHAT DO WE DO BEST?


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Success requirements are basictasks that an organization

must perform in a market orindustry to compete

successfully.

WHAT MUST WE DO?


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Threats

Opportunities

Weaknesses

Strengths

Pose dangers to the welfare of theorganization

Developments or conditions in the

environment that have favorableimplications for the organization.

What an organization lacks or does

poorly relative to other organization

What the organization is good at doingor some characteristic that gives it animportant capability.

TOWS ANALYSIS

SAMPLE TOWS ANALYSIS


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SAMPLE TOWS ANALYSISFRAMEWORK

Strengths WeaknessesInternalFactors

OpportunitiesExternalFactors

Threats

Management

Marketing

Manufacturing

R&D

Finance

Offerings

Economic

Competition

Consumer

Technology

Legal/Regulatory

Industry/MarketStructure


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Which strengths represent distinctive

competencies? Do they compare favorably withwhat are believed to be market or industrysuccess requirements?

Does a pattern emerge from the SWOT analysis?

Which weaknesses disqualify the organizationfrom pursuing certain opportunities?

Questions to ask after a TOWS analysis:

TOWS ANALYSIS


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LECTURE 01-3


FOUNDATIONS OF STRATEGIC MARKETING


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FORMULATINGRODUCT-MARKET STRATEGI



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PRODUCT-MARKET STRATEGIES

MarketDevelopment

New Offering Development

MarketPenetration

Diversification

NewNewExistingExisting

ExistingExisting

NewNew

MarketMarketss

OfferinOfferin

gsgs


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A market-penetration strategy dictatesthat an organization seeks to gaingreater dominance in a market inwhich it already has an offering(existing offerings existing markets).



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This strategy involves:

Increasing present buyers usage or

consumption rates of the offering.

Attracting buyers of competing offerings.

Stimulating product trial among potentialcustomers.

MARKET-PENETRATION STRATEGY


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A market-developmentstrategydictates that an organization introduceits existing offerings to markets otherthan those it is currently serving(existing offerings new markets).



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This strategy involves:

Adjusting the marketing mix, such as:

Analyzing competitors strengths,weaknesses, and potential for retaliation.

Modifying the basic product offering

Using different distribution outlets

Changing the sales effort or advertising

MARKET-DEVELOPMENT STRATEGY


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This strategy involves (continued):

Identifying the number, motivation, and

buying patterns of new buyers.

Determining the organizations ability toadapt to new markets to evaluate success.



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Internationally, this strategy has four forms:

Licensing

Joint Venture/Strategic Alliance

Exporting

DirectInvestment



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Licensing

Exporting

DirectInvestment

Involves marketing the same offering in anothercountry through sales offices or intermediaries.

Is a contract where one firm (licensee) is given

the rights to patents, trademarks, etc. by theowner (licensor) in turn for a royalty or fee.

Involves investment by both a foreign firm and alocal company to create a new entity in the hostcountry. The two forms share ownership,control, and profits of the entity.

Involves investing in a manufacturing and/orassembly facility in a foreign market. Is the mostrisky and requires the most commitment.

Joint Venture/

Strategic Alliance



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Aproduct- (new offering-) developmentstrategy dictates that an organization

create new offerings existing markets.



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DIVERSIFICATION STRATEGY


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Considerations regarding this strategy:

Many firms have adopted this strategy to

take advantage of growth opportunities.

Is very risky because both the offerings andpubic/market are new to the organization.

Can be successful if the organizationapplies its distinctive competencies toreaching new markets with new offerings.

DIVERSIFICATION STRATEGY

STRATEGY SELECTION


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Product-market strategies are evaluatedbased on:

The organizations business definition,mission, and capabilities.

Market capacity and behavior.

Environmental forces.

Competitive activities.

STRATEGY SELECTION

STRATEGY SELECTION


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Product-market strategies are chosenbased on:

Costs and benefits of a strategy.

Analysis of competitive structure, marketdynamics, and opportunity costs.

Probabilities of success for a strategy.

The product itself.

STRATEGY SELECTION

DECISION TREE FORMAT


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Action Response Outcome

O1

O2

O3

O4

R1

R2

R1

R2

A2

A1

DECISION-TREE FORMAT

SAMPLE DECISION TREE


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Estimated profitof Rs.41 million


Action Response Outcome



Market-development

strategy

Aggressivecompetition

Passivecompetition


Passivecompetition

Market-

penetrationstrategy

SAMPLE DECISION-TREE

THE MARKETING MIX


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Passivecompetition


Price

Strategy

Communication

Strategy

Product

Strategy

Channel

StrategyCustomer

THE MARKETING MIX

THE MARKETING MIX


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Estimated profitof $4 million

Estimated profitof$3 million


Price

Strategy

CommunicationStrategy

Product

Strategy

Channel

Strategy

Kind of product, service, or idea offered.

How the product, service, or idea will be

communicated to buyers. Informs and assuresbuyers that the offering will meet their needs.

Method for distributing the product or service tobuyers. Satisfies buyers shopping patterns andpurchase requirements. Provides informationand offering availability.

Amount buyers will pay for the offering.Represents the value or benefits provided.

THE MARKETING MIX

FORMULATING THE MARKETING MIX


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Estimated profitof $4 million

Estimated profitof$3 million


Delivers customer value in marketspace,the new interactive capabilities of theInternet.

Depends on the success requirements of themarket.

Must be consistent with both the needs ofthe markets and the organizationscapacity.

Is as much art and science.

FORMULATING THE MARKETING MIX


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LECTURE01-4




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TING, FINANCIAL, AND PROD


BUDGETING


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A budgetis a formal,quantitative expression of an

organizations planning andstrategy initiatives expressed

in financial terms.

BUDGETING


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LECTURE01-5

Prof.Dr. MAK Chishty



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FORMULATION AND RECOVE


MARKETING AUDIT


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A marketing auditis a comprehensive,systematic, and periodic examination ofa firms or business units marketingenvironment, objectives, strategies, andactivities to determine problem areasand opportunities and recommend a

plan of action to improve the firmsmarketing performance.

MARKETING AUDIT

MARKETING AUDIT


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Addresses the following questions:

Are we doing the right things?

Are we doing things right?

MARKETING AUDIT

Strategic

Operational

REFORMULATION AND RECOVERY


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Have the following purposes:

Forces marketing managers to askWhat if? questions.

Allows for contingency plans, preplanningof reformulation and recovery strategies

that lead to faster reaction time inimplementing remedial action.

STRATEGIES


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LECTURE01-6

Prof Dr. MAK Chishty



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DRAFTING AMARKETING PLAN



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MARKETING PLAN


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Consists of:

Each has these time dimensions:

Focuses on a 1-year period.

Focuses on a 3- to 5-year period.

MARKETING PLAN

ProductPlan

BusinessPlan

MarketingPlan

Short-term

Long-term



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G ETHICS AND SOCIAL RESP


ETHICS AND SOCIAL RESPONSIBILITY


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Most marketing decisions involvesome degree of moral judgment.

Marketers should take actions that arelegal, ethical, and socially responsible.

ETHICS AND SOCIAL RESPONSIBILITY

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