AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Define an organizations business, mission, and goals.
2. Identify and frame organization growth opportunities. 3. Formulate product-market strategies.
AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 5. Develop reformulation and recovery strategies. 6. Draft a marketing plan. 7. Emphasize marketing ethics and social responsibility.
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INTRODUCTION
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PURPOSE OF MARKETING
To create long-term and mutually beneficial exchange relationships between an entity and the publics (individuals and organizations) with which it interacts.
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RESPONSIBILITIES OF CMOs
Define the business mission.
Analyze environmental, competitive, and business situations. Develop business objectives and goals. Define customer value propositions and their respective marketing strategies.
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Sense customer and competitor motivations. Frame strategic marketing initiatives in light of implementation considerations and financial targets/results.
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BUSINESS DEFINITION
Answers the question, What business are we in?
What business an organization is in is neither obvious nor easy. An organization defines its business by:
The type of customer served and the specific needs to be satisfied The means or technology used to satisfy these customer needs
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BUSINESS DEFINITION
Customer groups and needs are more enduring than the offerings and means or technologies to produce and deliver them. What business is the Encyclopedia Britannica in?
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BUSINESS MISSION
Consists of a written statement that:
Underscores the scope of an organizations operations apparent in its business definition. Reflects managements vision of what the organization seeks to do.
Describes an organizations purpose regarding its customers, products/services, markets, philosophy, and technology.
Crystallizes managements vision of the organizations long-term direction and character.
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BUSINESS MISSION
Consists of a written statement that (continued):
Provides guidance in identifying, pursuing, and evaluating market-product opportunities. Inspires and challenges employees to do what is valued by the organization and its customers. Provides direction for setting goals or objectives. Also applies to not-for-profit organizations.
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BUSINESS MISSION
Our strategic intent is to help people find better ways to do great work by constantly leading in document technologies, products, and services that improve our customers work processes and business results.
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BUSINESS MISSION
To improve the quality of human life; to enhance self-reliance and concern for others; and to help people avoid, prepare for, and cope with emergencies.
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Production
Financial
Shareholder wealth
Market share Sales volume Profit Marketing productivity Customer satisfaction Customer value creation Customer lifetime value
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Marketing
A situation analysis is an appraisal of operations to determine reasons for the gap between what was or is expected and what has happened or will happen.
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WHAT DO WE DO BEST?
A distinctive competency describes an organizations unique strengths or qualities, including skills, technologies, or resources that distinguish it from other organizations.
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WHAT DO WE DO BEST?
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Success requirements are basic tasks that an organization must perform in a market or industry to compete successfully.
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SWOT ANALYSIS
SWOT analysis is a formal framework for identifying and framing organizational growth opportunities.
- Type of Factor Organization Favorable Unfavorable
Internal Capabilities
Strengths
Weaknesses
External Environment
Opportunities
Threats
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SWOT ANALYSIS
Strengths What the organization is good at doing or some characteristic that gives it an important capability. What an organization lacks or does poorly relative to other organizations.
Weaknesses
Opportunities
Developments or conditions in the environment that have favorable implications for the organization.
Pose dangers to the welfare of the organization.
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Threats
Strengths
Weaknesses
Opportunities
Threats
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PRODUCT-MARKET STRATEGY
A product-market strategy involves selecting specific markets and profitably reaching them through an integrated program called a marketing mix.
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Existing
Market Development
Offerings
New
Diversification
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PRODUCT-MARKET STRATEGIES
A market-penetration strategy dictates that an organization seeks to gain greater dominance in a market in which it already has an offering (existing offerings existing markets).
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MARKET-PENETRATION STRATEGY
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MARKET-PENETRATION STRATEGY
PRODUCT-MARKET STRATEGIES
A market-development strategy dictates that an organization introduce its existing offerings to markets other than those it is currently serving (existing offerings new markets).
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MARKET-DEVELOPMENT STRATEGY
MARKET-DEVELOPMENT STRATEGY
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MARKET-DEVELOPMENT STRATEGY
Internationally, this strategy has four forms:
Exporting
Licensing
Direct Investment
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MARKET-DEVELOPMENT STRATEGY
Exporting
Involves marketing the same offering in another country through sales offices or intermediaries.
Licensing
Is a contract where one firm (licensee) is given the rights to patents, trademarks, etc. by the owner (licensor) in turn for a royalty or fee. Involves investment by both a foreign firm and a local company to create a new entity in the host country. The two forms share ownership, control, and profits of the entity.
Involves investing in a manufacturing and/or assembly facility in a foreign market. Is the most risky and requires the most commitment.
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PRODUCT-MARKET STRATEGIES
A product- (new offering-) development strategy dictates that an organization create new offerings existing markets.
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PRODUCT-DEVELOPMENT STRATEGY
Product Augmentation
PRODUCT-DEVELOPMENT STRATEGY
Factors to consider when adopting this strategy:
The market size and volume needed for profitability.
The magnitude and timing of competitors responses. The impact of the new product on the sales of existing offerings (cannibalization). The capacity of the organization to deliver the offerings to the market(s).
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PRODUCT-MARKET STRATEGIES
A diversification strategy involves the development or acquisition of offerings new to the organization and the introduction of those offerings to publics not previously served by the organization (new offerings new markets).
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STRATEGY SELECTION
STRATEGY SELECTION
A1
R1
O1
R2
R1
O2
O3
A2
R2
O4
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Outcome
Estimated profit of $2 million Estimated profit of $3 million
Marketdevelopment strategy
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Product Strategy
Customer
Aggressive competition
Channel Strategy
Passive competition
Price Strategy
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Communication Strategy
How the product, service, or Estimated idea will be profit communicated to buyers. Informs and assures of$3 million buyers that the offering will meet their needs.
Method for distributing the product or service to buyers. Satisfies buyers shopping patterns and Aggressive purchase requirements. Provides information competition and offering availability. Estimated profit of $4 million Amount buyers will pay for the offering. Represents the value or benefits provided.
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Channel Strategy
Price Strategy
Delivers customer value in market space , Estimated profit of$3 million the new interactive capabilities of the Internet.
Must be both the needs of the markets and the organizations Estimated profit of $4 million capacity. Is as much art and science.
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BUDGETING
A budget is a formal, quantitative expression of an organizations planning and strategy initiatives expressed in financial terms.
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BUDGETING
Financial Budget
Special Budgets
Focuses on developing advertising, sales, and other budgets that support the master budget.
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MARKETING AUDIT A marketing audit is a comprehensive, systematic, and periodic examination of a firms or business units marketing environment, objectives, strategies, and activities to determine problem areas and opportunities and recommend a plan of action to improve the firms marketing performance.
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MARKETING AUDIT
Operational
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MARKETING PLAN
A marketing plan is a formal, written document that describes the context and scope of an organizations marketing effort to achieve defined goals or objectives within a specific future time period.
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MARKETING PLAN
Consists of:
Business Plan Marketing Plan Product Plan
Long-term
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ETHICS AND SOCIAL RESPONSIBILITY Most marketing decisions involve some degree of moral judgment.
Marketers should take actions that are legal, ethical, and socially responsible.
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