Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-2 McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 Marketing’s Strategic Role in the Organization

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-3 Organizational Levels The Corporate Level is the highest level in any organization. The Functional Level includes all the various functional areas within a business unit. The Business Level consists of units within the overall organization that are generally managed as self-contained businesses.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-4 Organizational Strategic Planning Lower-level plans are developed to execute higher-level plans. Higher organizational level strategic plans provide direction for strategic plans at lower levels.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-5 Types of Strategic Plans Organizational LevelType of Strategic PlanKey Strategic Decisions CorporateCorporate strategic Corporate vision planObjectives & resource allocation Growth strategies BusinessBusiness strategic Market scope planCompetitive advantage MarketingMarketing strategic Target market planMarketing mix Product marketing Specific target market planSpecific marketing mix Execution action plan CorporateCorporate strategic Corporate vision planObjectives & resource allocation Growth strategies BusinessBusiness strategic Market scope planCompetitive advantage MarketingMarketing strategic Target market planMarketing mix Product marketing Specific target market planSpecific marketing mix Execution action plan

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-6 The Strategic Role of Brand Loyalty Generating Market Share Developing a Strong Customer Base Customer Equity

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-7 The Strategic Planning Process

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-8 The Role of Marketing Strategic Marketing:  Marketing activities that affect corporate, business, and marketing strategic plans.  Look at the activities now…

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-9 The Role of Marketing Marketers orient everyone in the organization toward markets and customers. Marketers analyze the current situation, identify trends in the marketing environment, and assess the potential impact of these trends. Marketers development corporate, business, and marketing strategic plans.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved The Role of Marketing Marketing Management:  Relates to specific product marketing strategies.  Develop marketing plans  Execute product marketing plans Networks:  Comprise strategic alliances among suppliers, distributors, and the marketing firm.  Change is taking place

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Marketing Strategy and Internet 24/7 Personalized Custom Relationship New Competitors who had no chance before More information is available

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved What Comprises Corporate Vision? Markets Products and services Geographic domain Core competencies Organizational objectives Organizational philosophy Organizational self-concept Desired public image

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Core Values: A company’s core values are the small set of guiding principles that represent the enduring tenets of an organization. Core Purpose: Core purpose reflects the company’s reason for being or its idealistic motivation for doing work.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Corporate Objectives and Resource Allocation Corporate objectives and resource allocation affect marketers in 2 basic ways: 1) In setting the objectives for different organizational levels. 2) Providing guidance for the development and Implementation of marketing strategies.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Corporate Growth Strategies Market Penetration Market Expansion Diversification Product Expansion Products SameNew Markets New Same

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Business Unit Composition To pursue corporate growth strategy, organizations operate in different product and market areas. A strategic business unit focuses on a single product or brand, a line of products, or mix of related products that meet common market or a group of related needs. The management of SBU is responsible for most of the basic business functions.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved High Star Question Mark Low Cash CowDog Sample growth-share matrix Product-market growth (percent) Market Share Large Small

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Business Strategy Decisions Dimensions of Strategy:  Market scope.  How broadly the business views its target market.  Competitive advantage. Competitive Advantage:  The way a business tries to get consumers to purchase its products over those offered by competitors.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved General Business Strategies Easyjet Ryanair Jet Blue Comair Alaskan Airlines Midwest American Delta United Jet Blue Southwest Market Scope FocusedBroad Competitive Advantage Differentiation Low price

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Marketing Strategy Decisions A Marketing Strategy Addresses: Selection of a target market. Development of a marketing mix. Functional strategies are at the business-unit level. Operating strategies are at the product level.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Business & Product Marketing Strategies Target marketSegmented or mass approachSpecific definition of target market ProductNumber of different productsSpecific features of each product PriceGeneral competitive price levelSpecific price DistributionGeneral distribution policySpecific distributions Marketing communicationsGeneral emphasis on marketingSpecific marketing communications toolscommunications program Decision AreaBusiness Marketing StrategyProduct Marketing Strategy

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved International Marketing Strategies Entry Strategy:  The approach used to market products in an international market. The Basic Options:  Exporting  Joint Ventures  Direct Investment

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved International Marketing Strategies Customized Marketing Strategy: A different marketing mix for each target market country. Customized Marketing Strategy: A different marketing mix for each target market country. Standardized Marketing Strategy: The same product, price, distribution, & promotion programs in all international markets. Standardized Marketing Strategy: The same product, price, distribution, & promotion programs in all international markets.

Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Business Function Orientations FunctionBasic Orientation MarketingTo attract and retain customers ProductionTo produce products at lowest cost FinanceTo keep within budgets AccountingTo standardize financial reports PurchasingTo purchase products at lowest cost R&DTo develop newest technologies EngineeringTo design product specifications