chapter 2 marketingstephanielarkin.com/ncc/files/chapter_2_marketing.pdf · 2019. 9. 30. · 2–1...

© 2019 Cengage. All rights reserved.© 2019 Cengage. All rights reserved.

Chapter 2

Planning, Implementing, and Evaluating

Marketing Strategies

© 2019 Cengage. All rights reserved.

Learning Objectives (1 of 2)

2–1 Explain the strategic planning process. 2–2 Understand the importance of a firm’s mission

statement and corporate and business-unit strategy.

2–3 Assess how analyzing organizational resources and the marketing environment can help identify opportunities and create competitive advantage.

2–4 Explore how a firm develops marketing objectives and strategies that contribute to overall objectives.


Learning Objectives (2 of 2)

2–5 Identify what is necessary to manage the effective implementation of marketing strategies.

2–6 Describe the four major elements of strategic performance evaluation.

2–7 Describe the development of a marketing plan.


Strategic Marketing Management

!Strategic marketing management – the process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently " Effectiveness – degree to which long-term

customer relationships help achieve an organization’s objectives

" Efficiency – minimizing the resources an organization uses to achieve a specific level of desired customer relationships


The Strategic Planning Process

!Strategic planning – the process of establishing an organizational mission and formulating: " " " " "

!Should be guided by market orientation


Figure 2.1 – Components of the Strategic Planning Process


Developing Organizational Mission and Goals

"Mission statement – a long-term view, or vision, of what the organization wants to become

"Mission statements, goals, and objectives must be properly implemented to achieve the desired result.

"An organization’s goals and objectives, derived from its mission statement, guide its planning efforts.


Figure 2.2 – Levels of Strategic Planning


Developing Corporate and Business-Unit Strategies (1 of 2)

"Corporate strategy – a strategy that determines the means for utilizing resources in the various functional areas to reach the organization’s goals " Outlines business scope as well as:

! ! !

" Addresses two questions: ! !


Developing Corporate and Business-Unit Strategies (2 of 2)

"Strategic business unit (SBU) – a division, product line, or other profit center within the parent company " Market – a group of individuals and/or organizations

that have needs for products in a product class and have the ability, willingness, and authority to purchase those products

" Market share – the percentage of a market that actually buys a specific product from a particular company

" Market growth/market share matrix – a helpful business tool, based on the philosophy that a product’s market growth rate and its market share are important considerations in determining its marketing strategy


Figure 2.3 – Growth Share Matrix Developed by the Boston Consulting Group


Competitive Growth Strategies

!Market penetration – increasing sales in current markets with current products

!Market development – increasing sales of current products in new markets

!Product development – increasing sales by improving present products or developing new products for current markets

!Diversification – developing new products to be sold in new markets


Assessing Organizational Resourcesand Opportunities (1 of 2)

!Strategic planning must take into account: " Organization’s available resources " Organization’s capabilities " Core competencies – things a company does

extremely well, which sometimes give it an advantage over its competition

!Market opportunity – a combination of circumstances and timing that permits an organization to take action to reach a particular target market


Assessing Organizational Resourcesand Opportunities (2 of 2)

!Strategic windows – temporary periods of optimal fit between: " Key requirements of a market " Particular capabilities of a company competing in

that market !Competitive advantage – the result of a

company matching a core competency to opportunities it has discovered in the marketplace


SWOT Analysis

!SWOT analysis – assessment of an organization’s strengths, weaknesses, opportunities, and threats

! Indicates how marketers must seek to convert weaknesses into strengths and threats into opportunities

!Provides insight for marketers to match internal strengths with external opportunities to develop competitive advantages


Figure 2.5 – The Four-CellSWOT Matrix

Source: Adapted from Nigel F. Piercy, Market-Led Strategic Change. Copyright 1992, Butterworth-Heinemann Ltd., p. 371. Reprinted with permission.


First-Mover and Late-Mover Advantage (1 of 4)

!First-mover advantage – the ability of a company to achieve long-term competitive advantages by being the first to offer an innovative product in the marketplace

!Being the first mover has benefits: " " "



!Being the first mover also has risks: " " " "



!Late-mover advantage – the ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a product in a marketplace

!Late movers have several advantages: " " " "



!Being a late mover also has disadvantages: " " " "


Developing Marketing Objectives and Marketing Strategies (1 of 2)

!Marketing objective – a statement of what is to be accomplished through marketing activities

!Based on a careful study of the SWOT analysis !Must have specific characteristics:

" " " "


Developing Marketing Objectives and Marketing Strategies (2 of 2)

!Marketing strategy – a plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market " Articulates the best use of the company’s

resources to accomplish its marketing objectives " Directs resource deployment to boost competitive

advantage " May be adapted as the environment changes


Selecting the Target Market

!Provides a foundation on which the company can develop its marketing mix

!Marketing information focuses on the chosen target customers. " Determine whether selected target market aligns

with the company’s mission and objectives. " Assess resources needed to develop the

marketing mix for the target market. " Consider the competition. " Evaluate product demand by the target market.


Creating Marketing Mixes

!Conduct research to select the most appropriate target market, then create a marketing mix that satisfies the needs of that market.

!Marketing-mix decisions require two characteristics: " "

!Sustainable competitive advantage – an advantage that the competition cannot copy


Managing Marketing Implementation

!Marketing implementation – the process of putting marketing strategies into action

!Provides purpose and direction for marketing !Requirements for effective implementation:

" " " "


Organizing the Marketing Unit

!Centralized organization – a structure in which top-level managers delegate little authority to lower levels

!Decentralized organization – a structure in which decision-making authority is delegated as far down the chain of command as possible


Coordinating and Communicating (1 of 2)

To achieve objectives, marketing managers must: !Coordinate diverse employee actions !Work closely with management in several areas

to ensure activities align with firm functions !Coordinate activities of internal marketing staff

with marketing efforts of external organizations !Communicate with upper-level management


Coordinating and Communicating(2 of 2)

!Effective training: " Provides employees a forum to learn " Results in employees who are empowered and

can be held accountable for their performance !To motivate marketing personnel, managers

must address needs to maintain high level of workplace satisfaction.

!Motivation/reward program characteristics: " "


Establishing a Timetable for Implementation

1.

2.

3.

4.

5.


Evaluating Marketing StrategiesStrategic performance evaluation – consists of: ! Establishing performance standards

" Performance standard – an expected level of performance against which actual performance can be compared

" Derived from marketing objectives ! Measuring actual performance

" Sales analysis – analysis of sales figures to evaluate a firm’s performance

" Marketing cost analysis – analysis of costs to determine which are associated with specific marketing efforts

! Comparing actual performance with established standards ! Modifying the marketing strategy, if needed


Sales Analysis

!Must compare current sales data with: " " " "

!Basic unit of measurement is sales transaction !Market share analysis lets a company compare

its marketing strategy with competitors’ strategies.


Marketing Cost Analysis!Compare the costs of previous marketing

activities with results to better allocate resources in the future.

!Can provide a competitive advantage !Categorize costs:

" ! !

"


Comparing Actual Performance with Performance Standards

!When actual performance exceeds performance standards: " Marketing strategy deemed effective

!When actual performance fails to meet performance standards: " Determine why marketing strategy was less

effective than expected " Determine whether marketing objective is realistic


Creating the Marketing Plan (1 of 2)

!Marketing plan – a written document that specifies the activities to be performed to implement and control the organization’s marketing strategies " Provides a uniform marketing vision for the firm " Forms basis for internal communication " Delineates marketing responsibilities and tasks " Outlines schedules for implementation " Presents objectives " Specifies resource allocation " Helps managers monitor and evaluate performance of

marketing strategy


Creating the Marketing Plan (2 of 2)

!Companies often develop marketing plans for specific brands or products.

!Key is to make sure plan aligns with corporate and business-unit strategies.

!Marketing plan provides a framework; implementation is an adaptive response.

!Every marketing plan is unique. !Plan is only as good as the information it

contains—high-quality data is vital.


Table 2.1 – Components of theMarketing Plan (1 of 3)

Plan Component

Component Summary Highlights

Executive Summary

One- to two-page synopsis of the entire marketing plan

1. Stress key points 2. Include one to three key points that

make the company uniqueEnvironmental Analysis

Information about the company’s current situation with respect to the marketing environment

1. Assess marketing environment factors

2. Assess target market(s) 3. Assess current marketing

objectives and performance



Plan Component


SWOT Analysis Assessment of the organization’s strengths, weaknesses, opportunities, and threats

1. Company strengths 2. Company weaknesses 3. Opportunities in the environment

and industry 4. Threats in the environment and

industryMarketing Objectives

Specification of the company’s marketing objectives

1. Qualitative measures of what is to be accomplished

2. Quantitative measures of what is to be accomplished



Plan Component


Marketing Strategies

Outline of how the company will achieve its objectives

1. Target market(s) 2. Marketing mix

Marketing Implementation

Outline of how the company will implement its marketing strategies

1. Marketing organization 2. Activities and responsibilities 3. Implementation timetable

Performance Evaluation

Explanation of how the company will evaluate the performance of the implemented plan

1. Performance standards 2. Financial controls 3. Monitoring procedures (audits)

chapter 2 marketingstephanielarkin.com/ncc/files/chapter_2_marketing.pdf · 2019. 9. 30. · 2–1...

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