Strategic Marketing

CHAPTER
DEVELOPING
SUCCESSFUL
MARKETING
AND
CORPORATE
STRATEGIES
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 2-1
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
1. Describe the three organizational levels

of strategy.
1. Describe why business, mission,

organizational culture, and goals are
important in organizations.
1. Explain how organizations set strategic
directions by assessing where they are
now and seek to be in the future.
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
1. Describe the strategic marketing

process and its three key phases:
planning, implementation, and control.
1. Explain how the marketing mix
elements are blended into a cohesive
marketing program.
WHERE CAN AN “A” IN
ICE CREAM MAKING LEAD?
ORGANIZATIONS AND THEIR
LEVELS OF STRATEGY
• Profit
• Kinds of Organizations
 Business Firm
 Nonprofit Organization
 Firm, Company, Corporation, Organization
LEVELS OF STRATEGY
• Levels in Organizations and How

Marketing Links to Them
 Corporate Level
 Strategic Business Unit (SBU)
 Business Unit Level
 Functional Level
 Department
FIGURE 2-1 The three levels of strategy
in organizations: corporate, business unit,
and functional
LEVELS OF STRATEGY
• Strategy Issues in Organizations

 The Business
 The Mission (Mission Statement/Vision)
 Organizational Culture
• Stakeholders
• Organizational Culture
Medtronic’s “Rising Figure” Mural
What does it signify to stakeholders?
LEVELS OF STRATEGY
• Strategy Issues in Organizations

 Goals or Objectives
• Profit • Customer Satisfaction
• Sales • Employee Welfare
• Market Share • Social Responsibility
• Quality
Concept Check
1. What are the three levels in today’s

large organizations?
A: The corporate, business unit, and
functional levels exist in large
corporations.
Concept Check
2. What is the meaning of an

organization’s mission?
A: Mission is a statement of the
organization’s scope, often
identifying its customers, markets,
products, technology, and values.
Concept Check
3. How do an organization’s goals

relate to its mission?
A: Goals or objectives measure how
well the organization’s mission is
being accomplished.
SETTING STRATEGIC DIRECTIONS
• A Look Around: Where Are We Now?

 Customers
 Competencies
• Competitive Advantage
 Competitors
Lands’ End Unconditional Guarantee
What is the strategic focus?
• Growth Strategies: Where Do We Want

to Go?
 Business Portfolio Analysis (BCG)
• Market Growth Rate
• Relative Market Share

 Cash Cows  Question Marks or Problem Children
 Stars  Dogs
FIGURE 2-2 Boston Consulting Group
portfolio analysis for Kodak, as it might
appear in 2006
Kodak digital Kodak digital

camera photo printer
Kodak film sales: US, Kodak self-

Canada, & W. Europe service kiosk
Kodak Traditional Film Cartridge
What SBU type in the BCG growth-share matrix?
Kodak Digital Camera
Kodak Digital Photo Printer
Kodak Picture Maker Self-Service Kiosk
• Growth Strategies: Where Do We Want

to Go?
 Market-Product Analysis
• Market Penetration
• Market Development
• Product Development
• Diversification
FIGURE 2-3 Four market-product strategies:
alternative ways to expand sales revenues
for Ben & Jerry’s
Concept Check
1. What are competencies and why are

they important?
A: Competencies are an organization’s
special capabilities, including skills,
technologies, and resources that
distinguish it from other organizations,
which if exploited, can lead to the
organization’s success.
Concept Check
2. What is business portfolio analysis?

A: Business portfolio analysis studies a
firm’s business units as though they
were a collection of separate
investments.
Concept Check
3. What are the four market-product

strategies?
A: (1) market penetration; (2) market
development; (3) product
development; and (4) diversification.
THE STRATEGIC MARKETING
PROCESS
• How do we allocate our resources to get where

we want to go?
• 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
FIGURE 2-4 The strategic marketing
process
PROCESS
• Strategic Marketing Process:

The Planning Phase
 Step 1: Situation (SWOT) Analysis
• Situation Analysis
• SWOT Analysis
 Strengths  Weaknesses
 Opportunities  Threats
FIGURE 2-5 Ben & Jerry’s: a SWOT analysis
to get it growing again
Ben & Jerry’s One Sweet Whirled Campaign
What is the impact of a SWOT analysis?
PROCESS

The Planning Phase
 Step 2: Market-Product Focus and Goal Setting
• Market Segmentation
• Set Marketing and Product Goals
• Select Target Markets
• Find Points of Difference
• Position the Product

Medtronic’s Champion Heart Pacemaker
What features are important to the Asian market?
PROCESS

The Planning Phase
 Step 3: Marketing Program
• Product Strategy
• Price Strategy
• Promotion Strategy
• Place (Distribution) Strategy
FIGURE 2-6 Elements of the marketing mix
that comprise a cohesive marketing program
Concept Check
1. What is the difference between a

strength and an opportunity in a
SWOT analysis?
A: Both are positive factors for the
organization, but a strength is an
internal factor whereas an
opportunity is an external one.
Concept Check
2. What is market segmentation?
A: Market segmentation involves

aggregating prospective buyers into
groups, or segments, that (1) have
common needs and (2) will respond
similarly to a marketing action.
Concept Check
3. What are points of difference and

why are they important?
A: Points of difference are those
characteristics of a product that make
it superior to competitive substitutes.
They are the single most important
factor in the success or failure of a
new product.
PROCESS

The Implementation Phase
 Obtaining Resources
 Designing the Marketing Organization
 Developing Schedules
FIGURE 2-7 Organization of a typical
manufacturing firm showing a breakdown of
the marketing department
PROCESS

The Implementation Phase
 Executing the Marketing Program
• Marketing Strategy
• Marketing Tactics
Kodak EasyShare Cameras in China
What marketing strategy & tactics are used?
PROCESS

The Control Phase
 Comparing Results With Plans to Identify
Deviations
• Planning Gap
 Acting on Deviations
• Exploiting a Positive Deviation
• Correcting a Negative Deviation

FIGURE 2-8 Evaluation and control of
Kodak’s marketing program
Concept Check
1. What is the control phase of the

strategic marketing process?
A: This is the phase that seeks to keep
the marketing program moving in the
direction set for it.
Concept Check
2. How do the objectives set for a

marketing program in the planning
phase relate to the control phase of
the strategic marketing process?
A: The planning phase objectives are
used as the benchmarks to which the
actual performance results are
compared in the control phase.
GOING ONLINE
MEDTRONIC’S MISSION
STATEMENT
Going Online
1. What stakeholders are specifically

mentioned or implied in Medtronic’s
mission? What values are associated
with each stakeholder?
Going Online
2. What is the scope of Medtronic’s

mission? Why does Medtronic limit
its scope?
Going Online
3. Why does Medtronic NOT define

itself as being in the “medical
device” business?
VIDEO CASE 2
BP: ALLOCATING RESOURCES
TO BRING YOU GASOLINE
AND FRESH BREAD!
VIDEO CASE 2
BP
VIDEO CASE 2
BP
1. How does BP use its strategic

marketing process to allocate
resources to opportunities such as the
BP Connect concept? Is BP Connect
consistent with BP’s mission and
values? Explain.
VIDEO CASE 2
BP
2. Conduct a SWOT (strengths,

weaknesses, opportunities, threats)
analysis for the BP Connect concept
—looking forward globally to the
next three years.
VIDEO CASE 2
BP
3. In addition to features such as high-

tech pumps and twenty-first century
information technology, what other
marketing mix activities would you
recommend as part of Step 3 of the
planning phase?
SUPPLEMENTAL
LECTURE NOTE 2-1
MARKETING VERSUS
BUSINESS PLANS
FIGURE A-1 Elements in typical marketing
and business plans targeted at different
audiences
SUPPLEMENTAL
LECTURE NOTE 2-2
PLANNING VS.
IMPLEMENTATION ISSUES
FIGURE 2-A Results of good and bad
marketing planning and implementation
SUPPLEMENTAL
LECTURE NOTE 2-3
ORGANIZING FOR
MARKETING
FIGURE 2-B Organization of a business unit
in a typical consumer packaged goods firm,
showing two product or brand groups
FIGURE 2-C Units with which the product
manager and product group work
SUPPLEMENTAL
LECTURE NOTE 2-4
PROJECT SCHEDULING
USING GANTT CHARTS
FIGURE 2-D Tasks to complete a term
project
FIGURE 2-E Gantt chart for scheduling the
term project
IN-CLASS ACTIVITY 2-1
MARKETING YOURSELF
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Sample Résumé
Sample Cover Letter
IN-CLASS ACTIVITY 2-2
MARKETING PLANNING
WORKSHEET
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 sales.
Mission
Mission is a statement of the

organization’s scope, often identifying its
customers, markets, products, technology,
and values.
Organizational Culture
Organizational culture is a set of values,

ideas, and attitudes that is learned and
shared among the members of an
organization.
Goals or Objectives
Goals or objectives convert the mission

into targeted levels of performance to be
achieved, often by a specific time.
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.
Strategic Marketing Process
The strategic marketing process is the

approach whereby an organization
allocates its marketing mix resources to
reach its target markets.
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.
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.
SWOT Analysis
SWOT analysis is an acronym describing

an organization’s appraisal of its internal
Strengths and Weaknesses and its
external Opportunities and Threats.
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.
Points of Difference
Points of difference are those

characteristics of a product that make it
superior to competitive substitutes.
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.
Marketing Tactics
Marketing tactics are detailed

day-to-day operational decisions essential
to the overall success of marketing
strategies.

Strategic Marketing

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CHAPTER

1. Describe the three organizational levels

1. Describe why business, mission,

1. Describe the strategic marketing

• Levels in Organizations and How

• Strategy Issues in Organizations

• Strategy Issues in Organizations

• Sales • Employee Welfare

• Market Share • Social Responsibility

1. What are the three levels in today’s

2. What is the meaning of an

3. How do an organization’s goals

• A Look Around: Where Are We Now?

• Growth Strategies: Where Do We Want

• Relative Market Share

Kodak digital Kodak digital

Kodak film sales: US, Kodak self-

• Growth Strategies: Where Do We Want

1. What are competencies and why are

2. What is business portfolio analysis?

3. What are the four market-product

• How do we allocate our resources to get where

• Strategic Marketing Process:

• Strategic Marketing Process:

• Set Marketing and Product Goals

• Select Target Markets

• Find Points of Difference

• Position the Product

• Strategic Marketing Process:

• Place (Distribution) Strategy

1. What is the difference between a

2. What is market segmentation?

A: Market segmentation involves

3. What are points of difference and

• Strategic Marketing Process:

• Strategic Marketing Process:

• Strategic Marketing Process:

• Correcting a Negative Deviation

1. What is the control phase of the

2. How do the objectives set for a

1. What stakeholders are specifically

2. What is the scope of Medtronic’s

3. Why does Medtronic NOT define

1. How does BP use its strategic

2. Conduct a SWOT (strengths,

3. In addition to features such as high-

Profit is the reward to a business firm

Mission is a statement of the

Organizational culture is a set of values,

Goals or objectives convert the mission

Market share is the ratio of sales revenue

The strategic marketing process is the

A marketing plan is a road map for the

Situation analysis involves taking stock

SWOT analysis is an acronym describing

Market segmentation involves

Points of difference are those

A marketing strategy is the means by

Marketing tactics are detailed

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