Slide 2-1

DEVELOPING SUCCESSFUL MARKETING AND CORPORATE STRATEGIES CHAPTER DEVELOPING SUCCESSFUL MARKETING AND CORPORATE STRATEGIES Slide 2-2

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Describe the three organizational levels of strategy. Describe why business, mission, culture, and goals are important in organizations. Explain how organizations set strategic directions by assessing where they are now and seek to be in the future. Slide 2-3

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Describe the strategic marketing process and its three key phases: planning, implementation, and control. Explain how the marketing mix elements are blended into a cohesive marketing program. Slide 2-4

FIGURE 2-1 The three levels of strategy in organizations: corporate, business unit, and functional Slide 2-8

LEVELS OF STRATEGY IN ORGANIZATIONS Strategy Issues in Organizations The Business The Mission Organizational Culture Stakeholders Organizational Culture Slide 2-9

LEVELS OF STRATEGY IN ORGANIZATIONS Strategy Issues in Organizations Goals or Objectives Profit Customer Satisfaction Sales Employee Welfare Market Share Social Responsibility Quality Slide 2-10

Lands’ End Unconditional Guarantee What is the strategic focus? Slide 2-17

SETTING STRATEGIC DIRECTIONS Growth Strategies: Where Do We Want to Go? Market-Product Analysis Market Penetration Market Development Product Development Diversification Slide 2-26

THE STRATEGIC MARKETING PROCESS How do our results compare with our plans and do deviations require new plans? How do we convert our plans to actions? How do our results compare with our plans and do deviations require new plans? Strategic Marketing Process Marketing Plan Slide 2-31

FIGURE 2-5 The strategic marketing process Slide 2-32

SETTING STRATEGIC DIRECTIONS Strategic Marketing Process: The Planning Phase Step 1: Situation (SWOT) Analysis Situation Analysis SWOT Analysis Slide 2-33

SETTING STRATEGIC DIRECTIONS Strategic Marketing Process: The Planning Phase Step 2: Market-Product Focus and Goal Setting Market Segmentation Set Marketing and Product Goals Select Target Markets Points of Difference Position the Product Slide 2-37

SETTING STRATEGIC DIRECTIONS Strategic Marketing Process: The Planning Phase Step 3: Marketing Program Product Strategy Price Strategy Promotion Strategy Place (Distribution) Strategy Slide 2-39

FIGURE 2-7 Elements of the marketing mix that comprise a cohesive marketing program Slide 2-40

SETTING STRATEGIC DIRECTIONS Strategic Marketing Process: The Implementation Phase Obtaining Resources Designing the Marketing Organization Developing Schedules Slide 2-44

SETTING STRATEGIC DIRECTIONS Strategic Marketing Process: The Implementation Phase Executing the Marketing Program Marketing Strategy Marketing Tactics Slide 2-46

SETTING STRATEGIC DIRECTIONS Strategic Marketing Process: The Control Phase Comparing Results With Plans to Identify Deviations Planning Gap Acting on Deviations Exploiting a Positive Deviation Correcting a Negative Deviation Slide 2-48

SPECIALIZED BICYCLE COMPONENTS, INC.: RIDE THE RED “S” VIDEO CASE 2 Slide 2-62

VIDEO CASE 2 Specialized Bicycle Components Slide 2-63

VIDEO CASE 2 Specialized Bicycle Components 1. Do a SWOT analysis for Specialized. Use Figure 2-6 in Chapter 2 and Figure 1 in Appendix A as guides. In assessing internal factors (strengths and weaknesses), use the material provided in the case. In assessing external factors (opportunities and threats), augment the case material with what you see happening in the bicycle industry. Slide 2-64

VIDEO CASE 2 Specialized Bicycle Components 2. As part of step 2 of the planning phase, and using your SWOT analysis, select target markets on which you might focus for present and potential users. Slide 2-65

VIDEO CASE 2 Specialized Bicycle Components 3. As part of step 3 of the planning phase and using your answers in questions 1 and 2 above, outline Specialized’s marketing programs for the target market segments you chose. Slide 2-66

Profit Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses are subtracted from its total revenues. Slide 2-72

Corporate Level The corporate level is the level in an organization where top management directs overall strategy for the entire organization. Slide 2-73

Business Unit A business unit is an organization that markets a set of related products to a clearly defined group of customers. Slide 2-74

Business Unit Level The business unit level is the level in an organization where business unit managers set the direction for their products and markets to exploit value-creating opportunities. Slide 2-75

Functional Level The functional level is the level in an organization where groups of specialists actually create value for the organization. Slide 2-76

Cross-functional Teams Cross-functional teams are a small number of people from different departments in an organization who are mutually accountable to a common set of performance goals. Slide 2-77

Mission Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values. Slide 2-78

Stakeholders Stakeholders are the people who are affected by what the company does and how well it performs. Slide 2-79

Organizational Culture Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization. Slide 2-80

Goals or Objectives Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time. Slide 2-81

Market Share Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. Slide 2-82

Competencies Competencies are an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations. Slide 2-83

Competitive Advantage Competitive advantage is a unique strength relative to competitors, often based on quality, time, cost, or innovation. Slide 2-84

Quality Quality consists of those features and characteristics of a product that influence its ability to satisfy customer needs. Slide 2-85

Benchmarking Benchmarking involves discovering how others do something better than your own firm so you can imitate or leapfrog competition. Slide 2-86

Strategic Marketing Process The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets. Slide 2-87

Marketing Plan A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years. Slide 2-88

Situation Analysis Situation analysis involves taking stock of where a firm or product has been recently, where it is now, and where it is headed in terms of the organization’s plans and the external factors and trends affecting it. Slide 2-89

SWOT Analysis SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats. Slide 2-90

Market Segmentation Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Slide 2-91

Points of Difference Points of difference are those characteristics of a product that make it superior to competitive substitutes. Slide 2-92

Marketing Strategy A marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it. Slide 2-93

Marketing Tactics Marketing tactics are detailed day-to-day operational decisions essential to the overall success of marketing strategies. Slide 2-94