Strategic Marketing Management Chapter 1 Foundations and Overview

Defining the Organization’s Business, Mission, and Goals The practice of strategic marketing management begins with a clearly stated business definition, mission statement, and goals/objectives to fulfill the mission A business definition outlines the scope of a particular organization’s operations The mission statement defines the organization’s purpose. Goals/objectives specify what an organization intends to achieve. What business are we in? What basic consumer needs/wants do we fulfill?

Example The Hallmark Company What needs/wants do they fulfill? Generic versus product markets The search for growth opportunities Greeting cards versus the “personal expression” market.

Business Mission An organization’s business mission complements its business definition. It reflects management’s vision of what the organization seeks to do. Some are general statements, others may be very specific. Clearly stated mission statements add focus to the organization’s efforts.

Example The Saturn Corporation’s Mission Statement “ Market vehicles developed and manufactured in the United States that are world leaders in quality, cost, and customer satisfaction through the integration of people, technology, and business systems and to transfer knowledge, technology, and experience throughout General Motors”

Business Goals Goals/objectives convert the organization’s mission into tangible actions that are to be achieved within a specific time frame. Includes production, financial, and marketing goals.

Examples of Business Goals Achieve a 10% annual growth rate in sales. Introduce new products at the rate of 3 per year. Pursue only new product ventures that will have a payback period of 5 years or less. Engage in research and development that complements existing product lines.

Identifying Growth Opportunities Environmental (market) opportunities…boundless. Which are opportunities for us? What are our distinctive competencies as an organization? What are the success requirements in the market under consideration? A matching process

SWOT Analysis Formal framework for identifying growth opportunities. Helps focus the matching process. Goes beyond just developing lists.

Examples of Strengths Reputation/brand image Distribution channels Research and development skills Experienced management talent Experienced sales force ***Note that all of the above are “sustainable” strengths.

Examples of Weaknesses Includes the lack of the previous High debt Lack of manufacturing capacity/capability

Examples of Opportunities Upturn in consumer confidence Trends in consumer needs/wants Demographic trends Changes in distribution patterns/consumer shopping behavior

Formulating Product/Market Strategies Existing New Existing Market penetration Market development OFFERINGS New New offering development Diversification

Selecting Product/Market Strategies Is the strategy consistent with organization mission, goal, and capabilities. What are the costs and benefits of alternative strategies and their probabilities of success? Includes an analysis of competitive structure, market growth or decline factors, and opportunity costs.

Developing Product/Market Strategies Selecting Target Markets Determining the Marketing Mix Product/Service Price Promotion/Communication Place/Distribution

Budgeting for the Strategy Formal, quantitative expression of the organization’s plan in financial terms. What will it cost??? Important so that organization goals are attained.

Developing Reformulation and Recovery Strategies Plans seldom go exactly as expected since they are based on assumptions regarding consumer response, competitive reaction, and environmental factors. Important to periodically conduct marketing audits to determine problem areas. Preplanning of reformulation/recovery strategies allows faster response times in determining remedial action (contingency plans).