2 Kinds of organizations Profit organizations. A privately owned organization that serves its customers in order to earn a profitNonprofit organizations. A nongovernmental organization that serves its customers but does not have a profit as an organizational goal.
3 Levels in organizations Corporate level. Where top management directs overall strategy for the entire organization.Business Unit Level. Level at which business unit managers set direction for their products and markets.Functional level. Is where groups of specialists create value for the organization. (i.e. departments)
4 Three levels of strategy in an organization Corporate strategyVisionCorporate goalsPhilosophy and cultureBusiness unit strategyMissionBusiness goalsCompetenciesFunctional strategyInformationsystemsResearch &developmentManufacturingFinanceMarketingHuman resources
5 Combination of Customer Relationships TheOrganization’sSuccessQualityEfficiencyCustomerInnovationRelationships
7 Corporate vision isa clear word picture of the organization’s future, often with an inspirational theme.It sets the overall direction for the organization, describing what it strives to be--stretching the organization, but not beyond reason.
8 a targeted level of performance set in advance of work. A goal isa targeted level of performance set in advance of work.Therefore, corporate goals provide strategic performance targets that the entire organization must reach to pursue its vision.
9 Corporate goals may be articulated in terms of: - profits quality- sales revenue employee welfare- market share- social responsibility- unit sales
10 Corporate Philosophy and Culture Corporate philosophy establishes the values and “rules of conduct” for running the organization.Corporate culture refers to a system of shared attitudes and behaviors held by the employees that distinguish it from other organizations.
12 Business Unit Mission and Goal The business unit mission is a statement that specifies the markets and product lines in which a business will compete. It communicates the scope of a business unit.A business unit goal is a performance target the business unit seeks to reach in an effort to achieve its mission. Goals that are more specific, measurable and quantifiable are called objectives.
13 ? Boston Consulting Group Growth-Share Matrix Market growth rate 20%High10%Low0%?QuestionmarkStarAMarket growth rateDBCashcowDogC10x High 1x Low 0.1xRelative market share(share relative to largest competitor)
14 Objectives for each SBU Build. Increase market share through cash injection. Make Starts out of Question marks.Hold. Maintain market share. Often used for Cash Cows which are already generating large amounts of cashHarvest. Increase short-term cash output of the SBU. Pump cash from Dogs or Cash Cows into Stars or Question Marks.Divest. Sell the SBU. Question Marks and Dogs are ideal candidates
15 Specifying the SBU’s Competencies: Some Important Definitions competitive advantage is . . .quality is . . .benchmarking is
16 Strategy at the Functional Level Marketing and other functional departments create their own functional goals –really extensions of corporate and business unit goals.
17 The Strategic Marketing Process Where are we now?Where do we want to go?How do we allocate our resources to get where we want to go?How do we convert our plans into action?How do our results compare with our plans, and do deviations require new plans and actions?
18 Marketing PlanThe strategic marketing process is usually formalized in a Marketing Plan, which is a road map for the marketing activities of an organization for a specified future period of time.
19 The strategic marketing process Market-product focus and goal setting Planning phaseSituation (SWOT)analysisMarket-product focus and goal settingMarketingprogramCorrective ActionMarketing planImplementationPhaseResultsControlPhase
20 Market-product focus and goal setting Planning phaseSituation (SWOT)analysisMarket-product focus and goal settingMarketingprogramStrengthsWeaknessesOpportunitiesThreatsMarket Penetration / New MarketsProduct DevelopmentDiversification
21 Market-product focus and goal setting Planning phaseSituation (SWOT)analysisMarket-product focus and goal settingMarketingprogramMarket Segmentation. Aggregating prospective buyers into groups, or segments that have: common needs and will respond similarly to a marketing action.Selecting the target markets.Finding points of difference for the product. (Competitive advantage)
22 Market-product focus and goal setting Planning phaseSituation (SWOT)analysisMarket-product focus and goal settingMarketingprogramDeveloping the marketing mix (4 Ps)Developing the budget
23 Elements of the marketing mix that compose a cohesive marketing program managerProductFeaturesBrand namePackagingServiceWarrantyPriceList priceDiscountsAllowancesCredit itemsPayment periodPromotionAdvertisingPersonal sellingSales promotionPublicityPlaceOutletsChannelsCoverageTransportationStock levelCohesive marketing mixPromotionPlacePriceProduct
24 ImplementationPhaseThe implementation phase involves executing the marketing plan and putting it into effect:Obtaining resources (money and personnel)Designing the marketing organizationDeveloping schedulesExecuting the marketing program (strategy and tactics)
25 Organization of a Typical Manufacturing Firm, Showing a Breakdown of the Marketing Department PresidentVice PresidentResearch andDevelopmentDepartmentVice PresidentManufacturingDepartmentVice PresidentMarketingDepartmentVice PresidentAccount andFinanceDepartmentVice PresidentHumanResourcesDepartmentManagerMarketingResearchManagerProductPlanningManagerSalesManagerAdvertising &Sales PromotionSales RegionsandRepresentatives
26 Strategy versus Tactics Strategy means by which a goal is to be achieved, characterized by a specific target market and a marketing program to reach itTactics are detailed day-to-day operational decisions essential to the overall success of marketing strategies
27 Comparing results with plans to identify deviations ControlPhaseComparing results with plans to identify deviationsFinding the planning gapActing on deviationsPerformance less than expected –Corrective actionPerformance greater than expected –Uncover the reason