Chapter 1

1. Chapter 1 Strategic Planning and the Marketing Management Process

2. The Marketing Concept • An organization should seek to make a profit by serving the needs of customer groups • The purpose is to rivet the attention of marketing managers on customer orientation, rather than on product orientation or selling orientation • The principal task of the marketing function - Find effective and efficient means of making the business do what suits the interests of customers

4. Figure 1.1 - Major Types of Marketing

5. Strategic Planning and Marketing Management • Strategic planning: • All the activities that lead to the development of a clear organizational mission • Organizational objectives • Appropriate strategies to achieve the objectives for the entire organization

6. Figure 1.2 - The Strategic Planning Process

7. Organizational Mission • In developing a statement of mission, management must take into account three key elements: • The organization’s history • The organization’s distinctive competitiveness • The organization’s environment

8. Organizational Mission • An effective mission statement should be: • Focused on markets rather than products • Achievable • Motivating • Specific

9. Organizational Objectives • Objectives must be: • Specific • Measurable • Action commitments

10. Organizational Objectives • If formulated properly, organizational objectives: • Can be converted into specific action • Will provide direction • Can establish long-run priorities for the organization • Can facilitate management control

11. Figure 1.3 - Sample Organizational Objectives

12. Organizational Strategies • Organizations can pursue various strategies based on: • Products and markets • Competitive advantage • Value

13. Figure 1.4 - Organizational Growth Strategies

14. Organizational Strategies Based on Competitive Advantage • Cost leadership strategy - A firm would focus on being the low-cost company in its industry • Strategy based on differentiation - A firm seeks to be unique in its industry or market segment along particular dimensions that the customers value

15. Strategies Based on Value • Three value strategies: • Best price • Best product • Best service

16. Choosing an Appropriate Strategy • Management should: • Select those strategies consistent with its mission • Capitalize on the organization’s distinctive competencies • Sustainable competitive advantage can be based on either the assets or skills of the organization

17. Organizational Portfolio Plan • The first step in this approach is to identify the various divisions, product lines, and so on that can be considered a business • Also called strategic business units (SBUs) • The next step is to establish methods to determine how resources should be allocated among the various SBUs • Known as portfolio models

19. Figure 1.5 - Strategic Planning and Marketing Planning

20. Situation Analysis • Involves analysis of the past, present, and likely future in six major areas of concern: • Cooperative environment - Includes all firms and individuals who have a vested interest in the firm’s accomplishing its objectives • Competitive environment - Includes primarily other firms in the industry that rival the organization for both resources and sales

21. Situation Analysis • Economic environment - State of the macroeconomy and changes in it also bring about marketing opportunities and constraints • Social environment - Includes general cultural and social traditions, norms, and attitudes • Political environment - Includes the attitudes and reactions of the general public, social and business critics, and other organizations

22. Situation Analysis • Legal environment - Includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights

23. Marketing Planning • Produces three outputs: • Establishing marketing objectives • Selecting the target market • Developing the marketing mix • Marketing mix: A set of controllable variables that must be managed to satisfy the target market and achieve organizational objectives

24. Implementation of the Marketing Plan • Involves putting the plan into action and performing marketing tasks according to the predefined schedule

25. Control of the Marketing Plan • Involves three basic steps: • Measuring results of implemented marketing plan • Comparing results with objectives • Making decisions on whether plan is achieving objectives

26. Marketing Information Systems and Marketing Research • Throughout the marketing management process, current, reliable, and valid information is needed to make effective marketing decisions • Providing this information is the task of the marketing information system and marketing research

27. The Strategic Plan, The Marketing Plan, and Other Functional Area Plans • Strategic planning is a top-management responsibility • Ways in which marketing executives are involved in the strategic planning process: • They influence the process by providing important inputs in the form of information and suggestions relating to customers, products, and middlemen • They must always be aware of what the process of strategic planning involves as well as the results

28. Marketing’s Role in Cross-Functional Strategic Planning • More organizations are bringing managers and employees together to participate in cross-functional teams • All personnel working in a cross-functional team participate in creating a strategic plan to serve customers • The greatest advantage of cross-functional team is the ability of team members to consider a situation from a number of viewpoints

29. Marketing’s Role in Cross-Functional Strategic Planning • Strategic planning results in a clearly defined blueprint for management action in all functional areas of the organization

30. Figure 1.6 - The Cross-Functional Perspective in Planning

31. Figure 1.7 - A Blueprint for Management Action