Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies

1. 1 C H A P T E R ONE Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies

2. What is a strategy? • A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors

3. Components of Strategy • Scope • Goals and objectives • Resource deployments • Identification of sustainable competitive advantage • Synergy

4. The Hierarchy of Strategies • Three major levels of strategy are: • Corporate strategy • Business-level strategy • Marketing strategy

5. Market-Oriented Management • Follows a business philosophy commonly called marketing concept • Consistent focus by personnel in all departments and at all levels • Adopts a variety of organizational procedures and structures: • To improve the responsiveness of decision making

6. Exhibit 1.4Guidelines for Market-Oriented Management • Create customer focus throughout the business • Listen to the customer • Define and nurture your distinctive competence • Define marketing as market intelligence • Target customers precisely • Manage for profitability, not sales volume • Make customer value the guiding star • Let the customer define quality

7. Exhibit 1.4Guidelines for Market-Oriented Management (continued) • Measure and manage customer expectations • Build customer relationships and loyalty • Define the business as a service business • Commit to continuous improvement and innovation • Manage culture along with strategy and structure • Grow with partners and alliances • Destroy marketing bureaucracy

8. Factors that Mediate Marketing’s Strategic Role • Competitive factors affect a firm’s market orientation • Influence of different development stages across industries and global markets • Strategic inertia

9. Business Activity or Function Production Orientation Marketing Orientation Product offering Company sells what it can make Company makes what it can sell Product line Narrow Broad Pricing Based on production and distribution costs Based on perceived benefits provided Research Focus on product improvement and cost cutting in the production process Focus on identifying new opportunities and applying new technology to satisfy customer needs Exhibit 1.6Differences between Production-Oriented and Market-Oriented Organizations

10. Business Activity or Function Production Orientation Marketing Orientation Packaging Protection for the product; minimize costs Designed for customer convenience; a promotional tool Credit A necessary evil; minimize bad debt losses A customer service; a tool to attract customers Promotion Emphasis on product features, quality, and price Emphasis on product benefits and ability to satisfy customers’ needs or solve problems Exhibit 1.6Differences between Production-Oriented and Market-Oriented Organizations (continued)

11. Recent Developments Affecting the Strategic Role of Marketing • Globalization • Increased importance of service • Information technology • Relationships across functions and firms

12. Business Consumer Business-to-Business (B2B) Business-to-Consumer (B2C) Business Examples: • Purchasing sites of Ford, Oracle, Cisco • Supply chain networks linking producers and distribution channel members, such as 3M and Wal-Mart Examples: • E-tailers, such as E*Trade, Amazon, iTunes • Producers’ direct sales sites, such as Dell, Ryanair, Safital Hotels • Web sites of traditional retailers, such as Sears, Lands’ End, Marks & Spencer Consumer-to-Business (C2B) Consumer-to-Consumer (C2C) Consumer Examples: • Sites that enable consumers to bid on unsoldairline tickets and other goods and services, such as Priceline Examples: • Auction sites, such as eBay, QXL • Blogs praising /criticizing companies or brands Exhibit 1.8Categories of E-Commerce Source: Adapted from “A Survey of E-Commerce: Shopping Around the Web, The Economist, February 26, 2000, p. 11.

13. Formulating and Implementing Marketing Strategy Process • Decision-Making Focus • Analysis of the four “Cs” • Integrating marketing strategy with the firm's other strategies and resources • Market opportunity analysis • Understanding Market Opportunities • Measuring Market Opportunities • Market Segmentation, Targeting, and Positioning Decisions

14. Formulating and Implementing Marketing Strategy Process (Continued) • Formulating strategies for specific market situations • Implementation and control of the marketing strategy

15. The Marketing Plan—A Blueprint for Action • A marketing plan is a written document detailing the current situation with respect to customers, competitors, and the external environment

16. Exhibit 1.10Contents of a Marketing Plan • Executive summary • Current situation and trends • Performance review • Key issues • Objectives • Marketing strategy • Action plans • Projected profit-and-loss statement • Controls • Contingency plans