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2

Planning, Implementing, and Controlling Marketing Strategies

Part One

Marketing Strategy and Customer Relationships

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Objectives

To describe the strategic planning process
To explain how organizational resources and opportunities affect the planning process
To understand the role of the mission statement in strategic planning
To examine corporate, business-unit, and marketing strategies

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Objectives (cont’d)

To understand the process of creating the marketing plan
To describe the marketing implementation process and the major approaches to marketing implementation

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Chapter Outline

Understanding the Strategic Planning Process
Assessing Organizational Resources and Opportunities
Establishing an Organizational Mission and Goals
Developing Corporate, Business-Unit, and Marketing Strategies
Creating the Marketing Plan
Implementing Marketing Strategies

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Understanding the Strategic Planning Process

Strategic Planning

The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan

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Components of Strategic Planning

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FIGURE 2.1

Source: Figure adapted from Marketing Strategy, Second Edition, by O. C. Ferrell, Michael Hartline, and George Lucas, Jr.�Copyright © 2002. Reproduced with permission of South-Western, a division of Thomson Learning.

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Marketing Strategy and Marketing Plan

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

Marketing Plan

A written document that specifies �the activities to be performed to �implement and control an �organization’s marketing activities

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Assessing Organizational Resources and Opportunities

Core Competencies

Things a firm does extremely well (strengths), which sometimes give it an advantage over its competition

Financial and human resources
Reputation, goodwill, and brand names

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Assessing Organizational Resources and Opportunities (cont’d)

Market Opportunity

A combination of circumstances and timing that permits an organization to reach a target market

Core competencies are matched to opportunities
Strategic windows—�temporary periods of optimal �fit between the key requirements �of a market and the particular �capabilities of a firm

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Assessing Organizational Resources and Opportunities (cont’d)

Competitive Advantage

The result of a company’s matching �a core competency (superior skill �or resources) to opportunities �in the marketplace

Manufacturing skills
Technical skills
Marketing skills

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SWOT Analysis

An assessment of the organization’s strengths, weaknesses, opportunities, and threats

Strengths—competitive advantages or core competencies
Weaknesses—limitations on competitive capability
Opportunities—favorable conditions in the environment
Threats—conditions or barriers to reaching objectives

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The Four-Cell SWOT Matrix

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FIGURE 2.2

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Establishing an Organizational Mission and Goals

Mission Statement

A long-term view, or vision, of what the organization wants to become
Mission statement answers two questions:

Who are our customers?
What is our core �competency?

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Establishing an Organizational Mission and Goals (cont’d)

Marketing Objective

A statement of what is to be accomplished through marketing activities to match strengths to opportunities, or to provide for the conversion of weaknesses to strengths

Should be stated in clear, simple terms
Should be accurately measurable
Should specify a time frame for accomplishment
Should be consistent with business-unit and corporate strategy

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Levels of Strategic Planning

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FIGURE 2.3

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Corporate Strategy

A strategy that determines the means for utilizing resources in the various functional areas to reach the organization’s goals

Determines the scope of the business
Guides its resource deployment
Identifies its competitive advantages
Provides overall coordination of functional areas

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Corporate Strategy (cont’d)

Issues Influencing Corporate Strategy Development

Corporate culture
Competition
Differentiation
Diversification
Interrelationships among business units
Environment concerns and social issues

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Business-Unit Strategy

Strategic Business Unit (SBU)

A division, product line, or other profit center within a 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

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Business-Unit Strategy (cont’d)

Market-Growth/Market-Share Matrix

A strategic planning tool based on the philosophy that a product’s market growth rate and market share are important in determining marketing strategy
Factors determining SBU/product’s position within a matrix

Product-market growth rate
Relative market share

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Growth-Share Matrix Developed by the Boston Consulting Group

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FIGURE 2.4

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Business-Unit Strategy (cont’d)

Market-Growth/Market-Share Matrix (cont’d)

BCG Classification

Star—high growth market, dominant market share

requires additional resources for continued growth

Cash cow—low growth, dominant market share

generates surplus resources for allocation to other SBUs

Dog—low/declining market, subordinate market share

has diminished prospects and represents a drain on the portfolio

Question mark—high growth market, low market share

represents a high-risk/cost opportunity requiring a large commitment of resources to build market share

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Marketing Strategy

Target Market Selection

Defining/understanding the target market by

focusing on specific profitable customer groups/market segments.
recognizing changes occurring in the market.

Creating the Marketing Mix

Analyze customer needs, preferences, and behavior
Have the skills and resources required for product design, pricing, distribution, and promotion
Maintain strategic consistency and flexibility in marketing mix decisions

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Net Sights

Corporate executives and marketing managers must stay informed to develop successful strategies. CEO Express (www.ceoexpress.com) provides access to newspapers, business journals, special-interest publications, and syndicated news services as well as a variety of other resources.

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Creating the Marketing Plan

Marketing Planning

The systematic process of assessing opportunities and resources, determining objectives, defining strategies, and establishing guidelines for implementation and control of the marketing �program

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Creating the Marketing Plan (cont’d)

Benefits of Planning

Provides the basis for internal communication among employees
Defines the assignment of responsibilities and tasks and sets the schedules for implementation
Presents objectives and specifies resource allocations
Helps in monitoring and evaluating the performance of the marketing strategy

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Implementing Marketing Strategies

Marketing Implementation

The process of putting marketing strategies into action

Intended Strategy

The strategy that the company decides on during the planning phase

Realized Strategy

The strategy that actually takes place

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Intended�Strategy

Realized�Strategy

Implementation

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Approaches to Marketing Implementation

Internal Marketing

Coordinating internal exchanges between the firm and its employees to achieve successful external exchanges between the firm and its customers
Helping employees understand and accept their roles in the marketing strategy
External customers

Individuals who patronize a business

Internal customers

A company’s employees

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Total Quality Management

Total Quality Management (TQM)

A philosophy that uniform commitment to quality in all areas of the organization will promote a culture that meets customers’ perceptions of quality

Benchmarking

Comparing the quality of the firm’s goods, services, or processes with that of the best-performing competitors

Empowerment

Giving customer-contact employees authority and responsibility to make marketing decisions on their own

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Components of Total Quality Management

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Total Quality�Management

Continuous Quality Improvement

Empowered

Employees

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Organizing Marketing Activities

The Role of Marketing in an Organization

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Close coordination of organizational units

Understanding customer needs and desires

Organizational goals for customer value and firm profitability

Marketing Concept

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Organizing Marketing Activities (cont’d)

Centralized Organization

A structure in which top management delegates little authority to levels below it

Decentralized Organization

A structure in which decision-making authority is delegated as far down the chain of command as possible

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Organizing the Marketing Unit

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Product�Groups

Centralized�or�Decentralized

Marketing�Functions

Geographic�Regions

Customer�Types

Alternatives for Organizing�the Marketing Unit

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The Marketing Control Process

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FIGURE 2.5

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Controlling Marketing Activities

Marketing Control Process

Establishing performance standards and trying to match actual performance to those standards

Establishing Performance Standards

Expected levels of performance

Taking Corrective Action

Improve actual performance
Reduce or change the performance standards
Do both

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Controlling Marketing Activities (cont’d)

Problems in Controlling �Marketing Activities

Lack of the information �required to control activities
Uncontrollable influence of market environment changes on marketing activities
Time lag that occurs between marketing campaigns and their results delays corrective actions

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After reviewing this chapter you should:

Be able to describe the strategic planning process.
Know how organizational resources and opportunities affect the planning process.
Understand the role of the mission statement in strategic planning.

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After reviewing this chapter you should:

Be familiar with corporate, business-unit, and marketing strategies.
Understand the process of creating a marketing plan.
Be able to describe the marketing implementation process and the major approaches to marketing implementation.

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