1. McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 2, YOU SHOULD BE ABLE TO:
Describe the kinds of organizations that exist and the three levels of strategy in them.
LO1
Describe how core values, mission, organizational culture, business, and goals are important to organizations.
LO2
Explain how organizations set strategic directions by assessing where they are now and seek to be in the future.
LO3
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3. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 2, YOU SHOULD BE ABLE TO:
Describe the strategic marketing process and its three key phases: planning, implementation, and evaluation.
Explain how the marketing mix elements are blended into a cohesive marketing program.
LO5
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4. AN “A” IN AN ICE CREAM MAKING COURSE! CAN THIS REALLY BECOME A BUSINESS?
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5. TODAY’S ORGANIZATIONS KINDS OF ORGANIZATIONS
LO1
Organization
Offerings
Business Firm
Profit
Nonprofit Organization
Industry
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6. TODAY’S ORGANIZATIONS WHAT IS STRATEGY?
LO1
Can’t Be “All Things to All People”
Strategy
Marketing’s Role
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7. TODAY’S ORGANIZATIONS STRUCTURE—CORPORATE
LO1
Corporate Level
Chief Marketing Officer (CMO)
Cammie Dunaway Yahoo!
Eduardo Conrado Motorola Networks
Leslie Short FUBU
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8. TODAY’S ORGANIZATIONS STRUCTURE—SBU
LO1
Strategic Business Unit (SBU)
Strategic Business Unit (SBU) Level
GE Commercial Finance (business loans, leases)
GE Industrial (appliances, lighting, factory automation)
GE Money (consumer home loans, credit cards)
GE Healthcare (imaging, diagnostics, life-support systems)
GE Infrastructure (aircraft engines, energy, transportation)
GE NBC Universal (television, music, film)
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9. TODAY’S ORGANIZATIONS STRUCTURE—FUNCTIONAL
LO1
Functional Level
Department
Cross-Functional Teams
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10. FIGURE 2-1 The board of directors oversees the three levels of strategy in organizations: corporate, business unit, and functional
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11. FIGURE 2-2 Visionary organizations: (1) establish a foundation, (2) set a direction, and (3) create strategies
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12. STRATEGY IN VISIONARY ORGANIZATIONS FOUNDATION (WHY)
LO2
Core Values
Stakeholders
Mission or Vision
Organizational Culture
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13. Star Trek Enterprise Why is a mission statement important?
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14. Medtronic’s “Rising Figure” Mural What does it signify to stakeholders?
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15. STRATEGY IN VISIONARY ORGANIZATIONS
DIRECTION (WHAT)
LO2
Business
What do we do?
What business are we really in?
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16. STRATEGY IN VISIONARY ORGANIZATIONS
DIRECTION (WHAT)
LO2
Goals or Objectives: S.M.A.R.T
Specific
Measurable
Attainable
Relevant
Time-based
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17. STRATEGY IN VISIONARY ORGANIZATIONS
DIRECTION (WHAT)
LO2
Goals or Objectives: Types
Profit
Customer Satisfaction
Sales ($ or #)
Employee Welfare
Market Share
Social Responsibility
Quality
Efficiency
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18. SETTING STRATEGIC DIRECTIONS
WHERE ARE WE NOW?
LO3
Competencies
Competitive Advantage
Fast Cycle Time
Quality
Benchmarking
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19. SETTING STRATEGIC DIRECTIONS
WHERE ARE WE NOW?
LO3
Customers
What is the Strategic Focus of Lands’ End?
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20. SETTING STRATEGIC DIRECTIONS
WHERE ARE WE NOW?
LO3
Competitors
Who are the Competitors of Lands’ End?
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21. SETTING STRATEGIC DIRECTIONS
WHERE DO WE WANT TO GO?
LO3
Business Portfolio Analysis (BCG)
Market Growth Rate
Stars
Cash Cows
Dogs
Question Marks
Relative Market Share
High
Low
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22. Kodak digital photo printer Kodak self-service kiosk
Kodak Consumer-Related Products What SBU type in the BCG growth-share matrix?
Kodak digital camera
Kodak digital photo printer
Kodak film
Kodak self-service kiosk
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23. FIGURE 2-3 BCG business portfolio analysis for Kodak’s consumer SBUs for 2003 (solid circle) and 2010 (hollow circle) ② ③
Kodak digital camera
Kodak digital photo printer ① ④
Kodak film sales: US, Canada, & W. Europe
Kodak self- service kiosk
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24. SETTING STRATEGIC DIRECTIONS
WHERE DO WE WANT TO GO?
LO3
Hedgehog Analysis
Illustration courtesy of Jon Keegan
What Can We Be the Best At in the World?
What Drives Our Economic Engine?
What Are We Deeply Passionate About?
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25. SETTING STRATEGIC DIRECTIONS
WHERE DO WE WANT TO GO?
LO3
Blue Ocean Analysis
Copyright 2005 W. Chan Kim and Renée Mauborgne
Red Oceans
Blue Oceans
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Copyright 2005 W. Chan Kim and Renée Mauborgne

26. SETTING STRATEGIC DIRECTIONS TRACKING WITH MARKETING DASHBOARDS
LO3
Car Dashboards and Marketing Dashboards
Marketing Metrics and Graphics in Designing Marketing Dashboards
Marketing Plan
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27. FIGURE 2-4 An effective marketing dashboard like Oracle’s helps managers assess a business situation at a glance
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28. USING MARKETING DASHBOARDS Which States are Underperforming?
Annual Percent Change in Unit Volume by State
Change in Growth
> 10%
0 – 10%
< 0%
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29. FIGURE 2-5 (Condensed) The strategic marketing process has three phases: planning, implementation, and evaluation
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30. THE STRATEGIC MARKETING PROCESS
LO4
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?
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31. THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
LO4
Step 1: Situation (SWOT) Analysis
Situation Analysis
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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32. THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
LO4
Step 1: Situation (SWOT) Analysis
SWOT Analysis Study
Identify Industry Trends
Analyze Competitors
Assess the Organization
Research Present and Prospective Customers
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33. FIGURE 2-6 Ben & Jerry’s SWOT analysis that serves as the basis for management actions regarding growth
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34. THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
LO4
Step 1: Situation (SWOT) Analysis
SWOT Analysis Study
Build on a Strength
Correct a Weakness
Exploit an Opportunity
Avoid a Disaster- Laden Threat
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35. THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
LO4
Step 2: Market-Product Focus and Goal Setting
Market Segmentation
Points of Difference
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36. THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
LO4
Example: Medtronic’s Pacemaker
Set Marketing & Product Goals
Select Target Markets
Find Points of Difference
Position the Product
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37. THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
LO5
Step 3: Marketing Program
Product Strategy
Price Strategy
Promotion Strategy
Place (Distribution) Strategy
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38. FIGURE 2-7 The elements of the marketing mix must be blended to produce a cohesive marketing program
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39. THE STRATEGIC MARKETING PROCESS THE IMPLEMENTATION PHASE
LO5
Obtaining Resources
Designing the Marketing Organization
Developing Schedules
Executing the Marketing Program
Marketing Strategy
Marketing Tactics
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40. FIGURE 2-8 Organization of a typical manufacturing firm, showing a breakdown of the marketing department
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41. THE STRATEGIC MARKETING PROCESS
THE EVALUATION PHASE
LO5
Comparing Results with Plans to Identify Deviations
Planning Gap
Acting on Deviations
Exploiting a Positive Deviation
Correcting a Negative Deviation
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42. FIGURE 2-9 The evaluation phase of the strategic marketing process that compares actual results with goals to identify and act on deviations to fill in the “planning gap”
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43. BP: TRANSFORMING ITS STRATEGY “BEYOND PETROLEUM”
VIDEO CASE 2
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44. VIDEO CASE 2 BP
1. (a) What is BP’s “Helios” strategy? (b) How does this strategy relate to BP’s mission and values?
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45. VIDEO CASE 2 BP
2. Conduct a SWOT (strengths, weaknesses, opportunities, and threats) analysis for BP’s “Helios” initiative—looking forward globally to the next three years.
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46. VIDEO CASE 2 BP
3. What are some ways BP could use to effectively communicate its “Helios” strategy to consumers?
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47. VIDEO CASE 2 BP
4. What are the long-term benefits to (a) society and (b) BP of its “Helios” initiative?
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48. VIDEO CASE 2 BP
5. Looking at BP’s Helios Power marketing strategy and its “street team” marketing tactic: (a) What objectives would you set for this tactic? (b) How would you propose BP measure the results?
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49. GENERAL ELECTRIC’S BUSINESS SCREEN SUPPLEMENTAL LECTURE NOTE 2-1
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50. FIGURE 2-A General Electric’s spotlight strategy chart
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51. MARKETING VS. BUSINESS PLANS SUPPLEMENTAL LECTURE NOTE 2-2
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52. FIGURE 2-B Elements in typical marketing and business plans targeted at different audiences
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53. MARKETING YOURSELF
IN-CLASS ACTIVITY 2-1
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54. Yahoo!/Hot Jobs TV Ad
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55. Sample Cover Letter
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56. Sample Résumé
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57. 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.
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58. Strategy
Strategy is an organization’s long-term course of action designed to deliver a unique customer experience while achieving its goals.
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59. Corporate Level
The corporate level is the level in an organization where top management directs overall strategy for the entire organization.
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60. Strategic Business Unit (SBU)
A strategic business unit (SBU) is a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly-defined group of customers.
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61. Strategic Business Unit (SBU) Level
The strategic business unit (SBU) level is the level in an organization where managers set a more specific strategic direction for their businesses to exploit value creating opportunities.
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62. Functional Level
The functional level is the level in an organization where groups of specialists actually create value for the organization.
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63. Cross-Functional Teams
Cross-functional teams consist of a small number of people from different departments in an organization who are mutually accountable to accomplish a task or common set of performance goals.
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64. Core Values
Core values are the fundamental, passionate, and enduring principles of an organization that guide its conduct over time.
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65. Mission
A mission is a statement of the organization’s function in society, often identifying its customers, markets, products, and technologies. The term is often used interchangeably with vision.
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66. Organizational Culture
An organizational culture consists of a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization.
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67. Business
A business is the clear, broad, underlying industry category or market sector of an organization’s offering.
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68. Goals or Objectives
Goals or objectives are the statements of an accomplishment of a task to be achieved, often by a specific time.
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69. 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.
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70. Competencies
Competencies consist of an organization’s special capabilities, including skills, technologies, and resources, which distinguish it from other organizations and provide value to its customers.
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71. Competitive Advantage
A competitive advantage is an unique strength relative to competitors, often based on quality, time, cost, or innovation.
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72. Marketing Dashboard
A marketing dashboard is the visual display on a single computer screen of the essential information related to achieving a marketing objective.
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73. Marketing Metric
A marketing metric is a measure of the quantitative value or trend of a marketing activity or result.
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74. 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.
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75. Strategic Marketing Process
The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.
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76. Situation Analysis
A situation analysis involves taking stock of where the 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.
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77. SWOT Analysis
A SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.
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78. 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.
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79. Points of Difference
Points of difference are those characteristics of a product that make it superior to competitive substitutes.
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80. Marketing Strategy
Marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it.
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81. Marketing Tactics
Marketing tactics are the detailed day-to-day operational decisions essential to the overall success of marketing strategies.
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