Magnus Elofson
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Sammanfattning 310
S1 Företagets Oklara Gränser (också marknader och marknadssystem)
Läsning (Jaffee 89-92 + 245-251, Kotler 3 + 20, Scherer, Coase, Mattson)
Mentioned = mentioned/discussed in seminar (extra important)
Mattson ”Relationships and Networks”
There are three basic forms of market systems:
 Marketing Mix (also known as transactional, perfect market etc..)
One transaction, short-term. Seller has control of the 4 Ps (price, product,
promotion, place)
 Relationships—mutual dependencies between buyer/seller.
4 bases (Mentioned):
1. Seller has modified product/logistics to suit the client
2. Mutual development of ordering/delivery systems (J.I.T.)
3. Development easier through relationships
4. Lower risks through mutual dependency than a contract (also
cheaper)
 Networks—“Interconnected exchange relationships”
-All discussed in relationships is true but in a deeper sense
-Firm’s net = firm’s relationships
-Everyone is related, sellers share suppliers, buyers share sellers etc through
contracts and also other more invisible bonds.
- Relationships are immaterial assets, cultivating them is very important for a
firm’s position.
Basically firms are usually more connected than portrayed in transactional models, mutual
dependency affects most market related decisions. Segments of the networks can be
working against each other, like ICA and Konsum.
Coase “The Nature of the Firm”
Coase discusses the fact that transactions do not only occur on the open market as results of
the price mechanism, firms are created to coordinate production through the giving of orders.
(Mentioned) Why do firms exist?—Because the market isn’t friction free, there are transaction
costs (contracts, finding buyer/seller, risk) that come with market transactions. Through firms
(vertical integration) can minimize the transaction costs.
Diminishing returns to management—a firm stops expanding when a transaction on the open
market cost the same as it would if conducted within the firm. When firms get too big, the
organization costs too much. – new technology allows bigger firms.
Jaffee (Weber)
There are 6 central parts of an organization (Mentioned):
1. Clear divisions of labour
2. Offices in hierarchical order
3. Written guidelines for objectives and performance
4. Meritocracy—recruiting based on merits not friendship for ex.
5. Career and promotions—a way of rewarding good/long work
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6. Authority and duty is associated with position/rank not with person
From these we can derive three crucial principals (Mentioned) :
1. Formalization—Rules, procedures, and tasks should be written down so
that the “position makes the person.”
2. Instrumentalism—organizations are machines with objectives to reachmeans to an end.
3. Rational legal authority—authority is based on position, and meritocracy
is implemented—this causes the “wise” decisions
Weber’s model is an ideal form, no organizations actually live up to it, but it is a good way of
generally rating orgs.
Scherer
He discusses industrial organization which basically is how the market takes care of demand.
He states that society wants good performance from producers, which is:
 Efficiency (use of production factors, ect..)
 Progressive (using new technology)
 Employment of workers
 Equitable (income distribution to be ok—Bosses don’t get to much bonus for ex.)
The table below shows the S-C-P model (Mentioned) where the structure affects the conduct,
and the conduct affects the performance. Politics such as government and NGOs affect this
model also.
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Grundläggande förhållanden
Utbud
Efterfrågan
Råmaterial
Priselasticitet
Teknologi
Substitut
Fackets styrka
Tillväxt (av E)
Produkthållbarhet
Cykliska variationer
Värde/vikt
Köpmetod
Business attityder
Marknadföringstyp
Lagar
Marknadsstruktur (structure)
Antal säljare & köpare
Produktdifferentiering
Barriärer för inträde
Kostnadsstrukturer
Vertikal integration
Diversifikation
Politik
Beteende (conduct)
Prissättning
Produktstrategi och marknadsföring
Forskning och uppfinningar
Anläggningsinvestering
Lagtolkning
Skatter och subventioner
Internationell handelsrätt
Regler
Priskontroll
Antitrust
Tillhandahålla information
Prestation (performance)
Produktion-och allokeringseffektivitet
Framsteg
Full sysselsättning
Rättvisa
Kotler Ch. 3 The Marketing Environment
The marketing environment affects the company’s possibility to conduct business with
success. It can be divided into two sub-groups:
Microenvironment—Internal forces
Suppliers (strikes, delays)
Marketing Intermediaries (banks, distributors)
Customers
Competitors (see what offers they have)
Publics (groups that can affect the company—media, politicians)
Macroenvironment—External forces
Demography (age, education, family status)
Economic (business cycle “konjunktur”, how much money people
have, etc..)
Natural (resources, pollution)
Technological (new technology)
Political (laws, pressure groups)
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Cultural (values and preferences)
Kotler Ch. 20 Managing and Marketing Channels
Marketing channel – independent organizations that work on the same product/service.
Purposes:
Info gathering
Promotion
Distribution
Financing
Contact (buyer)/Match (needs to offers)/Negotiate
Every intermediary = a channel level, 1 level = direct marketing
Several levels = indirect marketing:
-Conventional distribution channel: every channel level wants to maximize its
profits, no common objectives for the channel
-Vertical Marketing System (VMS) = different channel levels (producer, wholesaler, retailer)
work together and own each other or have some sort of
contract. Benefits are increased bargaining power,
economies of scale (stordriftsfördelar), and maximize
the use of different channels
-Corporate VMS—single ownership
-Contractual VMS—independent channel levels bounded by contracts
franchise-McDonalds
retailer cooperative
wholesaler sponsored (share wholesaler)
-Administered VMS- one channel level dominates through power (IKEA)
-Horizontal MS-same channel level
-Hybrid MS- mix of above
Channel design- analyze customer’s needs and producers goals
3 Types:
Direct marketing—through email, TV, Radio
Sales force—selling through your own sales force (Dell)
Intermediaries—
Wholesaler, Brokers, Retailers (self-service/limited service/full service)
Number of intermediaries depends on strategy:
Intensive distribution: as many sellers as possible
Exclusive distribution: a few selected
Selective distribution: a mix of the above
You have to choose a combination of above mentioned things in order to show what you
want, what the customer wants, the price of the product, the intended target group.
Additional info of Markets from lectures/seminars
Market as a Price mechanism
Market as Networks
-price competition
-limited knowledge/insecurity
-many buyer/seller with full knowledge
-development of unique relations
-single transactions
-a seller can be someone else’s buyer
-homogenous products
-repeated transactions
Systems
-clearly defined companies
-common goals
-focus on system effectiveness
vs.
Networks
-unclear divisions between firm andrest
-dynamic
-subjective divisions
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S2 “Purchases”
Literature (Kotler Ch. 7,8,11,15, Axelsson 2005, Lain and Laing)
Mentioned = mentioned/discussed in seminar (extra important)
Kotler Ch. 7 “Consumer Markets” (B2C)
Consumer Market—buying for personal use.
It’s important for marketing people to know how people buy things in order to influence them
at the right time, so the people will buy more.
Buyer Characteristics—4 main things that influence a buyer (Mentioned)
 Culture = the widest and most fundamental factor. It includes values, opinions,
learned behaviour from family, etc..
Subculture—religion, gang
Social Class—social position, job, pay, education
People may want to attain a certain social class buy buying product or proclaim their
gang membership, etc..
 Social =
-Member group—family, friends, neighbours (a group with a lot of influence)
-Reference group—a group with which one compares oneself, one doesn’t have
to actually be a member of the group
-Aspiration group—group that one strives to become a member of
Maybe some one aspires to join a group and tries to do so by buying products or if
someone wants to fit in with his reference group.
 Personal =
-Age
-Lifestyle
-Financial situation
-Job
 Psychological =
-Motivation = the will to satisfy needs and is driven by
Freud—Unconscious
Maslow—Needs hierarchy
-Perception = how one sees the world, what one notices
-Learning = one’s actions depend on one’s past actions and experience
-Attitudes/Beliefs = what feelings on has towards a product and what values one
believes in.
Buying decision behaviour (Mentioned)
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-Complex buying behaviour = often expensive/risky, buyer doesn’t know a lot about the
products/genre, have to help with good information
-Dissonance-reducing =
buyer looks at price and convenience.
-Habitual =
what matters is brand familiarity/habit, price, and promotional
offers.
-Variety seeking = buyer often switches brand, market leader tries to dominate shelves, other
brands try with low prices and promotional offers.
Buying Decision Process (Mentioned):
Need recognition—notice the need, can be through external/internal stimuli (visual stimulimost powerful)
Information Search- buyer looking for information about solutions, can be in a heightened
state of attention or active info search mode, most powerful influencer is
family
Evaluation of Alternatives- the buyer considers product attributes, degrees of importance of
the attributes, brand beliefs, and the utility of each attribute.
Purchase Decision – attitudes of family/friends matter, try to minimize the risk, companies try
to understand what gives the feeling of risk and minimize it (warranty).
Post-purchase Behaviour – See if the buyer expectations equal actual benefits, the bigger the
buy the more Cognitive Dissonance (even if one is pleased, one
wonders about the benefits of buying other product or saving
money), companies have to minimize this because keeping old
customers is vital.
New products = buyers go through awareness, interest, evaluation, trial and adoption.
Marketing has to focus on early adopters and opinion leaders.
Consumer Buying Roles (Mentioned)
Usually happens within one’s social group
Initiator- the one who comes up with the idea of a purchase
Influencer- people who affect the choice of a product/service
Decider – decides which product is bought
Buyer – the one who pays for the product
User – the ultimate user of the product
This model shows how other people can influence purchase decisions and where marketers
should put the focus of advertising and promotion.
Kotler Ch. 8 Business Buying (B2B)
Business market- all organizations that buy product/services to use in their production or
resell.
Characteristics of B2B (Mentioned):
 Fewer but larger buyers
 More knowledgeable
 More people involved in buying process and the process is more complex
 Relationships develop between buyer/seller
3 Types of Buying Situations:
 Straight re-buy – re-ordering a product without modifications
 Modified re-buy – some specification of the order is changed
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
New task – first time buying the product
risk/research
Members of the buying process-Buying Centre:
 Users—part of company that is going to use the product
 Influencers—usually people with technical knowledge
 Buyers—formal authority to buy and to negotiate
 Deciders—final OK
 Gatekeepers—control the flow of information in/out of company
Business Buying Process:
 Problem recognition – wish or problem that needs solving
 General need description – what you need/how much
 Product specification – deciding on product and technical specifications (value
analysis)
 Supplier search – finding the best supplier
 Proposal solicitation – suppliers send price proposals
 Supplier selection – choosing supplier
 Order routine specification – the order is sent and finalized
 Performance review – how good the suppliers performance was
Kotler Ch. 11 “Relationship Marketing”
In order to be competitive, companies have to be customer-orientated.
Customers want to maximize the customer delivered value = customer value – customer cost,
after the buy the customer compares the delivered value to the expected value = satisfied/not
satisfied.
Satisfied customers: are loyal, buy more, care less about price increases, and tell their social
group.
Measure satisfaction: complaints/suggestions, surveys, ghost shopping, lost
customer analysis
Customer value chain = all the activities in a company that bring a product to the buyer. With
special importance of product development, warehousing, order-to-payment, and customer
service.
Relationship Marketing- you want to create and maintain a relationship with profitable
customers
-When deciding which customers are profitable, you look at their lifetime value,
not just their present one.
-There are 5 different post-purchase behaviours of companies:
 Basic- no follow-up
 Reactive – encourages customers to call if they have problems
 Accountable – the seller calls and sees how the product is working
 Proactive – seller calls now and again to see progress of the product
 Partnership – working continuously with the client
-You decide the level according to their lifetime value
Relationship marketing is beneficial when the customers/sellers have a long relationship and
it is hard/expensive to change one’s supplier.
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Kotler Ch. 15 “Marketing Services” (as a product)
The 5 properties of services:
 Intangibility = cannot be seen before purchase/no prior quality control (try to make it
more tangible – recommendations)
 Inseparability = cannot be separated from the producer (important to have good
employees)
 Variability = the quality varies with the person producing the service
-motivate employees
-recruit good people and train them well
- use more machines and standardize
 Perishability = cannot save a services, must be consumed on spot (hard to react to a
change in demand raise/lower prices)
 lack of ownership = cannot own the service (only for limited time) so cannot resell
(have to use customer clubs and etc in order to get clients to come back)
Service profit chain: internal service quality (successful recruiting and training)
satisfied/productive employees
greater service value
satisfied/loyal customers
Healthy profits and growth
3 ways of successfully marketing services:
Differentiation – have to be different than the competitor’s offer, delivery
(people, physical environment, and process), and image.
Quality – through TQM (Total Quality Management), and reliability, security,
knowledge, competence, and communication.
Productivity – educated employees, quality, standardized production, let
customer do some of the job, technology.
Axelsson 2005 “Purchasing as Supply Management”
The development of purchasing:
1. Regular buying – just saying that you have to buy certain goods
2. Procurement – bulk buying, optimizing the price of materials
3. Supply management – improving administrative routines, the structures
of buyers/sellers are converged
J.I.T., VMS, and joint production
development.
Nowadays there is more outsourcing, which forces companies to use the supply management
model.
Different approaches to purchasing:
Mentioned
Transaction Oriented (Procurement)
-Many suppliers
-Single transactions/short-term
Relationship Oriented (Supply Management)
-Few suppliers
-Several transactions/long-term –every
purchase is a part of the relationship
-Existing products that are standardized
-Tailor made offers/products –every
relationship is unique
-Stimulates competition
-Stimulates cooperation
-Splits deals into small pieces
-System solutions
-Price is the focus
-Joint value creating is the focus
The Iceberg model (Mentioned) = it’s not just the price that costs, there are many other things
– administrative, warehousing, handling.
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When the supply risk increases (risk of not getting the ordered goods or not getting exactly
what you ordered) it is more likely that companies will use the relationship model in order to
ensure their access to the good. However, when the supply risk is low, companies will use the
transaction model in order to get the lowest price (often by letting the suppliers bid).
Many companies use the jigsaw method = having a few suppliers but letting the quantity of
ordered goods vary among them, thus ensuring access to the goods and stimulating
competition (lower prices).
Lian & Laing – Public purchasing vs. Private purchasing
Transaction Oriented
-one off transaction
-competition through bidding
the price down
pushes
Relationship Oriented
-buyer is very active, product modified to
suit the buyer
-informal contacts = a network of
professional and social relationships
-fewer suppliers
Public sector purchasing = formal contracts and cutthroat competition
transactional
Purchasing Services:
 intangibility – quality hard to see
need good relations
 heterogeneity (“variability” Kotler) – important to know what the client
expects/wants
relationships important
 inseparability – “intimate” contact between buyer/seller
 perishability – cannot store a service
clients need incentive to return
Clearly when one is purchasing services it is much better to use the relationship model.
Differences between Public/Private
Public
-More rules and protocol
transactional
model cos the public sector must have very
strict/formal contracts that can bare the
scrutiny of the public (which posses many
different opinions and often would like to
find errors in public servant’s actions)
-Receive offers from many different
suppliers who don’t modify their product for
the need
Private
More freedom/flexibility (society/gov has
less insight to their affairs)
more
effective to use the relationship model
-Receive specialized offers from a few
suppliers who can do the job
So, basically public purchases are more bound by rules and they must answer to the
public/other politicians; they use a formal way of purchasing (transactional) where the most
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important thing is to get the lowest price (so you do not have to justify your purchase), not the
quality of the service/product. While the private sector emphasizes the quality of a
product/service and thus uses the relationship model in order to get the maximum benefit.
These facts even apply better to the purchasing of services, where it is hard to judge the
quality and what you are getting, so it’s even more important to use the relationship model.
Extra Info (Mentioned)
When people buy, there is a need
to make a want into demand (lån)
want
demand. The company has to figure out how
S3 Product Development & Competition
Literature (Kotler Ch. 12-14, Coase, Easton, Levitt, Lian & Laing, Nyberg
& Lundgren)
Mentioned = mentioned/discussed in seminar (extra important)
Kotler Ch. 12 ”Competitive Strategy”
Companies have to analyze their strategies in order to get a competitive advantage.
Competitor Analysis:
1. Identify your competitors – by a market point of view, which
need/problem are you solving?
2. Identify their goals – know what they want
3. Identify their strategies
4. Estimate the competitor’s strength/weakness
5. Estimate the competitor’s reaction pattern
6. Choose which competitor to attack – not always good to pick the
weakest, sometimes you can gain more from attacking stronger
opponents
Competitive positioning strategies:
 Overall cost leadership = lowest production/distribution cost
lowest product
price
 Differentiation = diversified product line so that you hit many individual segments
(car maker – small, medium, large sizes)
 Focus = focus on one segment and serve them the better than competitors
Market positions:
 Market leader = wants to stay number 1
1. Expand total market = find new users, more usage, new usage areas.
2. Expanding market share = win customers, win loyalty, win competitors
3. Improving productivity = lower cost, more value
4. Defending position = attack others first, expand to other markets, improve
weaknesses.

Market challenger = they can either attack others or play along nicely
1. Attacking – frontal attack (other’s strengths), flanking attack (other’s weaknesses),
encirclement (attack from all areas)
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2. Bypass – reach new markets with for ex. New technology
3. Guerrilla – small raids, like temporary price cuts
Market follower = in order to reduce their own costs, they can copy or “follow” the
leader. They are also often attacked by the market challengers
Market nicher = often very profitable because they can satisfy their customer’s needs
successfully. So, they have to focus and specialize on their target segment.
Kotler Ch. 13 “Product and Branding Strategy”
Product (Mentioned):
 Core product = problem-solutions
benefits
 Actual product = features, styling, design, quality, brand name, packing
 Augmented product = warranty, delivery, installation
Consumer goods:
 Convenience – buy often
 Shopping – compares product to
others
 Specialty – take an extra purchase
effort
 Unsought – products the consumer
doesn’t think of/know
Industrial goods:
 Materials/parts – needed for further
process
 Capital – helps producer in
production (machines)
 Supplier/Service – things that are
not directly connected to final
product
Individual Product Components:
 Attributes: quality, style, design, finesse
 Brand: differentiates product/service with name/design (more further down the page)
 Packaging: protection, promotion, labels
 Product support: customer service = satisfaction/value
Product line = group of similar products (functions, price, customers)
To fill holes:
Stretch up = higher price
Down = lower price
Both
Product mix = Width (number of product lines)
Length (number of products)
Depth (number of versions)
Consistency (how different product lines are)
Brands:
Brand equity = the value of a “brand” based on loyalty, quality, name awareness
 Brand Positioning = should say something about the following of their products
-attributes
-benefits
-values
-personality
 Brand Name = should do/include the following
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-suggest benefits
-easy to say/remember
-distinctive
-translate well
Brand Sponsor = owner of brand
manufacturer’s, private brand (owned by
reseller), licensed brand, Co-brand (two brands combine)
Brand developments =
-line extension = existing brand, existing product (just a new kind/flavour)
-brand extension = existing brand, new product
-multibrands = new brand, existing product (car models)
-new brand = new brand, new product (new market)
Kotler Ch. 14 “New Product developments and product life-cycles strategies”
Risks with new products: expensive, long development process, delays, not many
innovations succeed.
New Product Development Process (Mentioned):
1. New product strategy = make a strategy for developing new products
2. Idea generation = systematic search for new product (customers, competitors, etc..)
3. Idea screening = a primary deduction of poor ideas
4. Concept development and testing = you develop a concept, what the product
should have/do and then test it with a target group.
5. Marketing strategy development = define the target group,
price/distribution/budget, and long run profit
6. Business analysis = projection of sales/costs/profits
7. Product development = concept into physical product, then tested
8. Test marketing = standard test (launch it in a city), controlled test (let some
retailers carry it), simulated (see what actual people think of it), trade show
9. Commercialization = introduction of new product – when/where/whom/how
Product life Cycle (Mentioned):
1. Product development
2. Introduction stage = slow growth/ low profits
3. Growth stage = rapid sales growth/ increasing profits
4. Maturity stage = growth slows/ profit stabilizes
5. Decline stage = growth down/sales down – decide whether to keep going, harvest,
drop product.
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Easton “Competition and Market Strategy”
It is hard to know who your competitors are. Different sizes, market sectors, and target
groups produce the effect that companies that are de facto competing do not see each other
as competitors.
5 Processes of Competition (Mentioned)
 Conflict = try to destroy competitors.
-not good because this means that you base your decisions on
others actions and expected actions; you lose focus of the most
important thing – the customer
 Competition = parallel striving
-competitors have the customer in focus; they are competing in
best satisfying the customer’s needs.
 Co-existence = competitors act independently of each other
-don’t know of each other’s existence (big/small)
-don’t care about each other (highly segmented market between a
few companies)
-peaceful, they recognize each other’s territories (geographical,
product, resource)

Co-operation = joint pursuit of common goals
Informal
-based on individual’s behaviour (people
changing companies, etc..)
-this leads to social codes within industries,
what can/not be said
-communication
Formal-planned/managed
-dyadic (one owns the other)
-joint
-investment (in a third party)
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
Collusion = co-operation with the intent to hurt a third party (consumer,
competitor)
Levitt “Marketing Myopia”
(Mentioned) Companies cannot simply be product oriented; they have to be customer
orientated and see what need they fulfil in order to correctly view their market/competition. If
you are the market leader (it’s very dangerous) cos you have to constantly develop/innovate
your product/company – otherwise someone else will.
Companies can live in a self-deceiving cycle which contains four elements (Mentioned):
1. Population myth = the belief that the increase in population and income will cause
your product to be bought – no incentive to develop/innovate
2. Indispensability = the belief that there is not/will not exist any better products – don’t
develop and someone else swoops in.
3. Over belief in mass production = the belief that profit lies in low costs – forgetting
that you are fulfilling a need of a customer and creating a benefit – lose focus on
customer.
4. Too focused on technical development = continuously improving one product – might
lose out when a new better kind of product is developed
Companies have to use creative destruction (develop your new products that kill your old
ones) and remember that you are in the customer satisfying process.
Nyberg & Lundgren “Så skapades Änglamark”
The article is basically about the fact that distributors (ICA, Konsum) have increased their
power in the food market at the expense of the producer. In the good old days one needed to
conduct big and costly market analyses to see what products that where demanded (which
only the big producers could afford) and they could influence the distributors to carry their
products , however, now, through the help of technology, distributors can quickly see which
products sell well and they have a very intimate contact with customers. This has given them
(distributors) an incentive to develop their own products, which they have. The distributors’
products have gone from being cheap variations (less quality) of other producers’ products, to
having the same quality but being priced lower, and ultimately the goal is to move away from
the price focus and compete heavily on quality.
Connects to – product development, “företagets oklara gränser”, “byta samordnings form”
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Extra Info (Mentioned)
Reasons for Product development:
 Customer’s preferences change
 New knowledge/technology
 Competitors gain an upper hand and you want to counter
 New laws
 Change in resource availability
S4 Globalization
Literature (Kotler Ch. 6, Jaffee p.117-118 147-154, Ritzer, Garsten)
Mentioned = mentioned/discussed in seminar (extra important)
Kotler Ch. 6
Global companies have lower costs and higher brand awareness; however, there are more
risks such as variable exchange rates, unstable governments, and tariffs/trade barriers.
The global marketing environment includes:
 Trade systems (tariffs/trade barriers)
 WTO, GATT
 Different economic environments
-subsistence = agriculture
-Raw materials (buy large machines)
-Industrializing (new rich class/growing middle cl.)
-Industrial (large exporters – consumers of
everything)

Political/legal = bureaucracy, political stability, laws

Culture = different cultures
Entering global markets
 Exporting = the simplest way, products are produced at “home” and transported to the
new market.
-indirect = use marketing intermediaries
-direct = transport products to own overseas sales department
 Joint venturing = you somehow cooperate with a company which is already
established in the market that you want to enter.
-Licensing = the foreign company pays a royalty and then gets to use the
brands/trademarks, it’s very risk free but you lose control and much of the
profit.
-Contract manufacturing = local company produces the product, the “home”
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

company takes care of the marketing part, lose control of production but you
don’t have to build a factory
-Management contracting = the local company provides the “know-how” and
the foreign provides the capital.
-Joint ownership = local and foreign company create a third party, lower risk but
all cooperation is hard since it’s difficult to please the different companies.
Direct investment = develop own production facilities and own supply lines.
-Positive = lower costs (labor/material)
improves image (employment)
full control
-Negative = riskiest way
Usually the progress of entering a new market has 4 stages=
1. No export activity
2. Export through independent intermediaries
3. A few local offices
4. Local production facilities
Adapt or Standardize the Marketing Programme (Mentioned) (4Ps)
Same Promotion
Adapt Promotion
Same Product
Straight product extension –
no extra costs
Communication adaptation –
different values
Adapt Product
Product adaptation
Dual adaptation
When you create a totally new product = product invention
-Price changes because of higher costs (transport, tariff, retailer margins), however, treaties
like the EU create less price differentiation.
-Place is also changed through the different types of distribution channels
Ritzer “McDonaldization of Society”
This article is about how the concept of McDonald’s has spread to most corners of the earth.
Dimensions of McDonaldization (Mentioned):
 Efficiency = the need is satisfied fast and conveniently (increasingly important in a
fast-pace society)
 Calculability = you can measure what you get for your money, and it seems like you
get a lot! So what is important is not the quality but the quantity.
 Predictability = you know exactly what you get – no surprises/disappointment – this
has to do with risk minimizing behaviour
 Control = McDonald’s controls everyone who eats/works there. Uncomfortable chairs
make people eat and leave fast, employees have strict conduct rules. McDonald’s gets
people to do what they want them to do (which usually means more profit). The
increasing use of technology furthers this.
(Mentioned) The critique of the McDonaldization is “the irrationality of rationality”. Rational
systems are very inhuman and thus McDonaldization denies the human factor of life. Ritzer
also goes on to say that McDonaldization impedes people’s ability to reach their potential,
since they have to follow strict rules and cannot be creative, thus, in a way, McDonaldization
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can be seen as self-defeating. It is supposed to make life work better/easier/faster but it denies
people the right to live life. There are also reactions against McDonaldization such as Slow
City and others.
(Mentioned)The basic idea here is that McDonaldization leads to homogeneity, an
increasingly uniform world due to globalization (the spread of McDonaldization).
Garsten “Bland äpplen och änglar i translokala organisationer”
Garsten talks about translocal organizations which are organizations that do not have any real
home base and are spread all over the world. There is a lot of bs in the article but the
important thing to remember is that global companies adapt to their local surroundings. Even
though the main office might try to make all of the foreign offices the same, there is always
some sort of adaptation to the local culture/values. One example was the in the States Apple
has some sort of get-together every week and they drink beer, however, in France that didn’t
really work, they had to have wine and cheese instead. The term used for this is Creolization-I
think (kreolisering). (Mentioned)
Jaffee p. 117-118 147-154
The first part refers to McDonaldization, which is discussed further up the page.
The Flexibility Paradigm
Hardcore bureaucracy (Weber, McDonaldization) can make an organization very “heavy”
and inflexible. Especially if you are a niche targeting company you need to be very flexible in
order to be able to adapt to the ever changing consumer tastes. You need to have flexible
specialization where flexible means that you can change production volumes/specifications
and specialization means that you make products for a niche market. Another way to avoid
the rigidity of bureaucracy is by using lean production, which means that you use things like
J.I.T. (just in time deliveries), multi-tasking, and well developed communication systems in
order to reduce delays.
S5 Segmentation
Literature (Kotler 10, 11, 15, Mattson, and Norman)
Mentioned = mentioned/discussed in seminar (extra important)
Kotler Ch. 10 Segmentation and Positioning
(Mentioned)
1 Market segmentation(Mentioned) = dividing a market by different consumer characteristics.
-Mass marketing = same product and promotion for all
-Target marketing = focused on market segments
 Geographical = countries/regions
 Demographical = sex, age, family size, income, education, religion
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

Psychographic = social class, lifestyle, personality
Behavioural =
-occasion = when you get the idea to buy/use something
-benefit = benefits that customers seek from a product
-user status
- user rate
Effective segmentation rests on these principles (Mentioned):
 Measurability = how well you can measure buying power/profiles
 Accessibility = how easy/expensive it is to reach a segment
 Substantiality = how profitable a segment is
 Actionability = how well you can design a promotional plan for a
segment.
2 Market Targeting = finding the segments to focus on based on:
 Segment’s size and growth
 Segment’s structural attractiveness (long-term profitability-old/young)
 Segment’s compatibility with company’s resources/objectives
Then you have to choose your Segment strategy which means that you decide which and how
many segments to focus on:
 Undifferentiated = choose a whole market – few differences between
consumers
mass marketing/distribution
 Differentiated = several market segments, each with an individual offer
 Concentrated = one offer for one sub-segment
niche markets
The chosen strategy depends on resources, product variability, etc..
For the segment you have to create a differential advantage which will produce a competitive
advantage.
Different industries have different competitive edge possibilities, some might have few
opportunities to get a competitive edge but if you find one there is a huge pay off (airline
industry), or there might be many possibilities but few profits (restaurants). Thus you have to
choose an industry that suits your possibilities.
What can you differentiate?
 Product
 Services
 Personnel
 Image
 Value positioning =
-more for more = luxury hotel
-more for same = lexus
-same for less = Amazon books
-less for much less = snowflake, euroshopper
-more for less = Dell
Differentiation helps a company compete effectively; it gives them a competitive edge.
3 Positioning = what consumers believe about a product/company
You can do 3 things (Mentioned):
1. Strengthen Current Position
2. Find a new position
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3. Reposition competitors – attack them
Positioning Strategies: You can position your products by using the following in your
advertising
-Product attributes (Ipod design)
-Benefits
(Colgate reduce cavities)
-Usage occasions (After-Eight chocolate)
-Users (young users)
-Activities associated with product (Sports)
-Personalities associated (Hugo Boss—successful people)
-Competitors – compare directly to competitor
Which differentiated point do you focus on?
Unique Selling Proposition (USP) = An attribute/part of product that you are
no. 1 in, usually some kind of function like best quality, best style, lowest price,
best technology etc….
Emotional Selling Proposition (ESP) = Usually a non functional part/attribute of
a product that appeals to a feeling/idea, like Ferrari might not be the fastest/most
luxurious car but it is still a Ferrari and they can use that.
(Mentioned) The points should be important, distinctive, superior, communicable, affordable,
profitable, pre-emptive (hard for competitors to replicate)
Norman “The client as a customer, the client as a co-producer”
When the client is a part of production/delivery of a service (mostly considering services), he
can be considered a co-producer, or in Norman’s words – prosumer (Mentioned)
What can the prosumer do?
 Specification of the service (what client wants –McDonald’s order)
 Co-production (client does something that producer could have)
 Quality control (that’s why cleaning is done outside of office hours)
 Maintenance of ethos (feedback cheers employees up)
 Development (of the order/delivery system)
 Marketing of service (by word of mouth)
Services can either be (Mentioned)
Relieving = outsourcing, the service is outside the customer’s core activity
(cleaning)
Or
Enabling = gives the consumer the tools he needs in order to do the job (gym)
Getting the client involved is very good, because the more the client is involved the more
gratification they get when the job is done. They will come back again and tell their
colleagues.
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S6 Institutional Environments (also Rules & Rationality)
Literature (Jaffee Ch.9, 5, Meyer & Rowan, Brunsson &Jacobsson,
Svedberg Nilsson)
Mentioned = mentioned/discussed in seminar (extra important)
Jaffee Ch. 5 (Rules & Rationality)
Weber and McDonaldization are discussed above.
(Gouldner) Bureaucracy states that the authority sets the rules and tells the workers what to
do. However, when the rules make production ineffective there a few consequences:
 Mock bureaucracy = both workers and authority do not believe in the rules and they
aren’t followed
 Representative bur. = both workers and authority agree with the rules and follow them
 Punishment-centred bur. = workers do not like the rules and follow as little as
possible.
(Simon) There are a few problems with rational thinking, mainly people don’t do it, here are
some more details (Mentioned):
 People cannot know all the info to make a rational decision
 People cannot know all of their alternatives
 People cannot predict all of the consequences of their actions
More objections (not by Simon)
 Unwillingness to make a decision
 Make short-term decisions
 Tend to simplify problems
 Group thinking
Jaffee Ch. 9 (The Environments of Organizations)
Contingency Theory = The organization is controlled by an ever changing environment,
especially the degree of uncertainty. The more certain the environment, the more bureaucratic
the organization.
Population Ecology Theory = Organizations are just a normal group of humans, and thus are
affected accordingly and the ones that fit in, thrive
Resource Dependence Theory = Resources control how an organization is managed.
(relationships)
Political – Economic Theory = Organizations controlled by things like the business cycle.
Institutional Environments (Mentioned)
Institution = “established order comprising of rule-bound and standardized behaviour” – like a
marriage, company, organization, individual, university, etc..
Institutional environment = basically an elaboration of rules and requirements to which
individual organizations must comply. If they don’t, they lose their legitimacy.
Institutionalized rules and procedures = rules/procedures that must exist in an organization
for it to be viewed as legitimate.
Rationalized myths = rational because you think the rules/procedures are
effective (rational) and myths because they are based on tradition and
conformity, not empirically based research.
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The technical environment rewards the organizations that are the most effective/productive,
however, the institutional environment rewards organizations that comply with
institutionalized rules/procedures – symbols become more important than actual output. This
happens more frequently in areas where output is hard to measure – services (banks have to
look big and imposing), public goods.
The fact that organizations must comply to be legitimate leads to the similarity of
organizations in the same institutional environment. This is called Institutional Isomorphism:
 Mimetic force = copy organizations with a higher level of legitimacy
 Normative pressure = Norms decide what/who is legitimate
 Coercive mechanisms = formal consequence if you don’t conform (laws)
There are 3 main institutional pillars (regulative vehicles)
 Regulative = formal pressure for a certain kind of behaviour (laws)
 Normative = social obligation and expected behaviour
 Cognitive = rules that are taken for granted
Meyer & Rowan “Institutionalized Organizations: Formal Structure as Myth and
Ceremony”
Rational Formal structure is a way of coordinating, specializing, and the larger firms become
–the more they need it. However, the formal structure doesn’t represent the normal day to day
activities. Rationalized myths (based on media, public policy, influential people, etc..—myths
have two main parts – rationalized (impersonal rules of behaviour) and institutionalized
(determined by the prevailing institution)) determine this formal structure, and the result
might not always be effective/productive, and thus it is unofficially not followed. More will
be explained below. (Mentioned)
Organizations can have two different relationships to their environments(Mentioned):
 Technical = the final product is important, productivity is the key word
 Institutional = following certain rules/procedures is important, legitimacy through
symbols is the key idea
The more complex relationship networks, the stronger rational-legal order (bureaucracy), and
the more pressure of local organizations -- the more institutionalized myths exist.
The Impact of Institutional Environments:
 Since institutional rules that determine structure of an organization usually aren’t
effective, the organizations follow them only in ceremony (not in their day-to-day
activities), this is called decoupling = when the official structure and procedures don’t
represent the actual behavior of the organization (Mentioned)
 People have good faith in the decoupled organizations, they want to think that the
organization is doing the right thing, and thus they minimize the amount of evaluation,
inspection, and they overlook things.
 Success and survival is not based on efficiency, but on the legitimacy (ability to
conform to the institutionalized rules) of the organization. (Mentioned)
 Stability and isomorphism are results of institutional environments. (Mentioned)
Svedberg Nilsson “Gränsomdragande reformer i den offentliga sektorn”
This article discusses how the market and the company in its normative sense has affected the
public sector. The market (with companies) is seen as the best way to allocate resources, and
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thus many public administrations are being transformed into private companies, to some
degree at least.
“bolagisering” = an organization becomes a joint-stock company – Telia AB, Posten AB
etc..(also means that a public organizations is no longer public). Boundary
transformation occurs because the public organization becomes more
similar to a company.
Privatisation = public organizations are sold to private owners, it can also be when a public
sector organization brings in contractors to do some of its activities. This
causes boundary transformation because the contractor is politicized and the
public organization is to some extent privatized (more similar to a company)
(These boundary transformations can also occur between different levels of public
organizations: municipal transformation (activity is moved from government to municipality),
regionalisation. And also within public organizations: “beställar-utförar” model (politicians
and the public activity are separated) “resultat enheter” (each organization has their own
responsibility to produce profit).) not sure if it’s needed
Motives behind boundary transformations:
 “Renodling” = not mixing different kinds of activities, like public and private. For
example if a private company was run as if it were a public sector department,
“renodling” would be to make it more like a “real” company (“bolagisering”)
 Efficiency = the market is the norm, and public organizations are seen to be more
effective if they are “bolagiserade” or privatized.
 Customer adapting = customers (citizens) want to be able to choose freely and have a
large selection to choose from, and thus if you see the citizens as customers, the public
sector will have to become more market-like in order to provide this
Brunsson & Jacobsson “Den viktiga standardiseringen”
Standardization is often seen as a negative occurrence, however, B&J believe that it is
positive because it makes life easier and more practical. Standards create similar coordination
(likriktning) and efficiency in the markets.
3 Types of Rules
 Directives = forces a kind of behavior with the threat of consequences if one brakes
them (law)-explicit
 Norm = obvious/unproblematic rules that are only noticed when broken --inexplicit
 Standard = explicit but not forced-voluntary membership.
Extra Info (Mentioned)
Players in the industry are carriers/”infectors” of institutional rules (owners, competitors,
media, management consults, unions, public authority). The boundaries between
organizations and their institutional environments aren’t definite, it’s very diffuse.
Technical Environment
Production system
Resources
Efficiency
Organization is like a machine
In practice—what you do
Institutional Environment
Norm system
Rules
Legitimacy
Organization is like a shop window
Presentation – what you say
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Rational Individual (Decision Making)
Rule-Following Individual (Decision Mak.)
Which are my preferences?
What is the situation?
Which are my options?
Who am I?
Which options coincide with my
What should a person like me do in this
preferences?
situation?
Choose the best option
Do the best
The rule following individual is influenced by institutional rules.
How do companies adjust to Institutional rules?
 Structure – decentralizing, outsourcing, privatization
 Process – budgets, goals, and result guided
 Thought mode – customer orientation, team building, etc..
S7 Changing Organizational Form
Literature (Brunsson, Donahue, Law & Akrich)
Mentioned = mentioned/discussed in seminar (extra important)
Brunsson “Politisering och Företagisering”
Brunsson objects to the notions of private and public organizations. He believes that all
organizations are public, since they are controlled by institutional rules which are determined
by society. Private (Companies) and public organizations are just controlled by different
institutions. He believes that there are three ideal types: Association (förening), Company
(företag), and Political organization. (Mentioned)
Private organization
Political Organization
(Company)
Goals
Profit
Political (qualitative) goals
Environment
Customers who have specific Citizens who all have
demands and can choose
different demands and the
which company to use. The
political org. must serve all
company can choose which
the demands the best they
customers to serve.
can.
-Institutional/technical
-Institutional demands
demands
Financing
Customers, highlight how
Citizens (tax), highlight how
well their business is going
bad it is going to be able to
to get a greater loan. They
take more tax. They “use”
“create” money.
money.
Organization form
Efficiency, coordination, and Reflects inconsistencies in its
specialization, problem
structure, problems (no
solutions. – unity –but hard
solutions) – conflict – but
to see problems
hard to solve problems
Ruler/control
Customer, satisfied through
Leaders and citizens who are
results – only concerned with both interested of how the
result not means
goals are attained not only
the results
Common values
Autonomy, efficiency, makes Bad results, problems that
money, produces solutions
cannot be solved, uses
others’ money, benefits for
society as a whole
(Mentioned)
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


Politicization (“Politisering”) (Mentioned)= a private company uses aspects of the
political organization. Often they try to win legitimacy through the use of some of the
political organizations ceremonies. This then leads to a conflict between efficiency
and legitimacy. The process becomes important.
Company-like (“Företagisering”) (Mentioned) = a political organization uses aspects
of a private company. More focused on results and efficiency instead of the process.
Sees the citizens as customers.
Association-like (“Föreningisering”) (Mentioned) = make the members more
important. IKEA club, HM club, etc….
Donahue “Den svåra konsten att privatisera”
In the US privatization does not mean that you sell public corporations and thus de-socialize,
it means that you use collective payment in the private sector (contracting – entreprenad
avtal). So privatization has two aspects, first you can sell government owned corporations and
secondly you can use collective money and spend it in the private sector.
When choosing between using public or private means in order to supply a service, it could be
helpful to visualize the two different ways:
Implementation
Public sector
Private sector
Financing
Collective (tax)
Schools, police
Police cars, military
aircraft, airplane tickets
for gov. officials
Individual
Nasa(borrow space
ship), Post
Your home TV
The basic rule here is to use the public sector when just the procedure is important and choose
the private sector when efficiency is important.
3 Key aspects for government buying services in the private sector:
 Specification = the public authority needs to be very specific in what it wants from
the private sector and it needs to evaluate what it receives
 Process burden = there might be great profits to reap from privatization, but one has
to remember that the contracts involved are extremely complicated because there is
no guarantee that the private companies will act in the best interest of the public
 Competition = the whole point with privatizing is that there is competition in the
private sector, which can make services more efficient/cheap, so there is no point of
privatizing in a industry that has very little competition
Law & Akrich “On customers and costs: a story from public sector science”
The article focuses on some research laboratory in England but that is not really important.
The importance lies in the problematic change from being a pure public service (it didn’t cost
anything to use the laboratory –as long as you were granted the amount of time) to letting
private sector companies buy time at their laboratory. At first the laboratory didn’t really have
to think about costs and profit, but as soon as private companies were involved, it was
important to account for all of the money spent, hours worked, etc... So, what basically
happened was that the laboratory went from having one set of institutional rules to being
forced to combine the public rules with the private institutional rules (like productivity,
accounting, taking fair prices, etc.).
-Good seller/customers had to be created/defined due to the change.
Changing coordination form (samordnings form) can have very adverse effects. New sets of
institutional rules/rationalized myths apply and thus it takes time to adapt.
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Extra Info (Mentioned)
Brunsson believes that all organizations have these three elements:
 Identity = the organization has boundaries and is independent
 Hierarchy = the organization has a control centre
 Rationality = the organization is driven by rationality to some extent
The course also discusses three alternatives to above:
 Market
 Network
 Hierarchy
Why do organizations change form?
Deterministic explanations:
 Institutional changes (deregulation, new norms, etc..)
 Technical changes (technology)
Voluntary explanations(want to improve their situation):
 Want more efficiency (“bolagisering”)
 Want to differentiate (get better relations – HM club)
 Want more legitimacy (politicization)
3 Effects of a coordination (samordning) change:
 Changed organizational activities/relationships with the environment
 The emergence of mixed forms (a little företag and a little politisk org.—HM club)
 Decoupling (only the structure/form changes – not the actual activities)
F 14 & F15 “Det offentligas roller” & “Corporate Social Responsibility”
Literature (Kotler Ch.5, Boddewyn, Donahue, Peterson & Söderlind,
Brunsson & Jacobsson, Meyer & Rowan)
Mentioned = Mentioned in seminar (important)
Boddewyn “Advertising Self-Regulation: Private Government and Agent of the Public
Policy”
Boddewyn talks about different ways that an industry can be regulated.
There are three main regulation types:

Laissez fair = the control of firms’ behavior is done by other firms and
the customers (no government intervention)—there is no direct
regulation. The problem with this is that private and public interests do
not always correspond, and the market doesn’t always take care of
abuses

Regulation = laws (government) regulate through penalties. The
negative part here is that it is ineffective because the industry is
constantly changing, while new laws take a long time to make

Self-Regulation (Mentioned)= control of behavior by the businesses
themselv
es.
Pro (as opposed to laws) = -effective – an industry
knows it own problems/solutions the best
-Greater moral adhesion – can regulate things that
law can’t (taste, decency)
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-Flexible – adapts to the changing industry
Cons = -can impose self-serving restraints
-make self-regulating rules less rigorous than laws would
have been
These can also be divided into sub-groups (Mentioned):
• Pure Regulation (regulation) – government sets laws
• Mandated Self-Regulation – government tells industry to develop norms/standards
• Negotiated Self-Regulation – the industry discusses with outsiders about which
norms/standards to use
• Co-opted Self-Regulation – outsiders are internalized and help to create
norms/standards
• Pure Self-Regulation—industry controls itself, outsiders are kept out
• Self-Discipline (laissez-faire) – individual customers and companies control
themselves, no collective measures
Basically a combination of self-regulation and normal regulation is good. Because selfregulating keeps the rules flexible and effective, while laws at least enforce a base of rules
that self-regulation cannot undermine.
Kotler Ch. 5 “Marketing and Society: Social Responsibility and Marketing Ethics”
Main criticism of marketing
 Impact on individual consumer welfare:
1. Too high prices
2. Deceptive practices
3. Planned obsolesce (purposely making a product “old” so people buy new ones)
4. Lack of quality/unsafe product
 Impact on society (Mentioned):
1. Creating false wants
2. Too few social goods as a result of too many private ones (cars-roads)
3. Cultural pollution (polluting people’s minds with messages everywhere)
4. Businesses have too much market/political power (create entrance barriers,
unfair competitive practices etc...)
There are a number of groups that actively work against these occurrences (consumerism,
environmentalism)
Businesses use enlightened marketing to redeem themselves:
1. Consumer orientation (see things through consumer’s eyes)
2. Innovative Marketing
3. Value Marketing (long-run goals, don’t want to piss off consumers)
4. Sense of Mission (define the mission statement in social terms rather than product
terms)
5. Societal Marketing ( make decisions that include society’s long-run interests)
Peterson & Söderlind
There are three different administrational (förvaltning) doctrines:
 Rättsstat = Comes from the civil rights ideology, law based administration. The
government is a coercive apparatus. The most important thing is legal security.
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
Democracy = Comes from the political right ideology, administration governed by the
people. The government is a way of realizing people’s will. The most important thing
is to represent people’s will.
 Welfare state = Comes from the social rights ideology, the administration is
controlled by the market. The government is a service producing entity. The most
important thing is efficiency.
There are four different means of control (rules):
 Physical = roads, airports (controls where people go)
 Regulative = laws
 Economical = taxes, fees, subsidies
 Informal = propaganda, selective information, advice
The important thing here is that one can generally say that civil rights came first, then political
rights, and finally social rights. Currently we are supposed to be in the social right realm, and
thus the most important thing is efficiency (the market – privatization (de-socializing and
outsourcing))
Extra Info (Mentioned)
The public administration’s roles:
• Regulator
• Provider of infrastructure
• Natural monopoly
• Monopoly by force and administrational coerciveness
• Responsible for allocation of resources
• Market player (buyer, seller, supplier)
S8 Market Strategy and Market Communication
Literature (Kotler 2, 10, 17, 18, Anderson & Narus, Axelsson 1996)
Mentioned = Mentioned in seminar (important)
Kotler Ch. 17 “Promotion and Communication Strategy”
The Promotion Mix has 5 different components:
 Advertising = non-personal promotion of ideas (TV, radio, etc..)
 Personal Selling = personal presentation by sales force in order to sell/build
relationship
 Sales Promotion = short-term incentive to encourage the purchase of a product
(coupon)
 Public Relations = building good relationships through favorable publicity, good
image, and fending of bad press (press-relations)
 Direct Marketing = direct connection with an important consumer
Effective Communication:
1. Identify the target audience and its characteristics
2. Determine what response you want – you want to push the consumer along the
buyer-readiness stages:
1. Awareness
2. Knowledge
3. Liking
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4. Preference
5. Conviction
6. Purchase (often final goal)
3. Designing the message
 AIDA – attention, interest, desire, and action
 Content – rational, emotional, moral appeals
 Structure/Format
4. Choosing Media Type (non personal) – media, environment, events etc..
5. Collecting Feedback
Promotion Budget:
 Affordable = what you think can be afforded – but excludes the effect on promotion by
sales
 Percentage of Sales = bad cos it sees sales as a cause for promotion rather than result
 Competitive Parity = look at what competitor does – hard to maximize own profit
 Objective – Task =
1. Define objectives
2. Determine tasks needed to reach objectives
3. Estimate costs of tasks
Setting the Promotion Mix:
-Depends on the type of market (no emotion in industrial goods), buyer-readiness stage, and
product life cycle
-Push strategy = focus on promotion to the channel members, who then promote to the final
customers
-Pull strategy = focus on promotion to the customers, who then demand the product from the
channel members.
Kotler Ch. 18 “Advertising, Sales Promotion, and Public Relations”
Advertising: paid media to inform, persuade, remind
 Setting Objectives = do you want to inform, persuade, or remind a target audience
 Budget discussed above but also : what stage in the product life , amount of
competition, frequency, market share
 Strategy :
 Creating the message: what should the msg communicate? It should be
meaningful, believable, distinctive
 Selecting the advertising media:
1. Reach (how many reached), frequency (how often reached), impact
2. Choose media type
3. Select media vehicle (specific tv show, or radio program)
4. Media timing (Christmas –Summer)
As usual you have to evaluate everything afterwards.
Sales Promotion: short-term incentive to buy (rea, coupon)
 Setting Objectives = increase sales, lure away from competitors, improve image,
reinforce the consumer relationship (most important)
 Promotional Tools = Consumer (samples, coupons, lotteries) Trade-intermediaries-get
them to open up more shelf space (discounts), Business (conventions/trade shows)
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
Strategy = size of incentive, length of promotion, conditions for participation,
evaluation, etc...
Public Relations: publicity, image, press-relations etc..—“Advertisement you pay for, PR you
pray for”
Can be a form of very cheap promotion, but also very dangerous.
PR Tools: news, speeches, special events, sponsorship, website
PR Decisions:
1. When and how to use PR tools
2. Objectives –what kind of image to show
3. Implementation/Evaluation
Kotler Ch. 2 “Strategic Marketing”
Strategic plan = long-run plan for survival and growth
The Strategic Plan (Mentioned):
1. The mission = statement of purpose—what it wants to accomplish
 What business are we in?, who are our customers?, what are we in business
for?, what sort of business are we?
 It should be realistic, specific, motivating, and most importantly be a part of
the vision statement (long-range dream)
2. Strategic Objectives = measurable goals (15% increase in sales)
3. Strategic Audit = gathering information

External = examination of the market, competition, economic env.

Internal = evaluation of the value chain (balance sheets,
sales/expenses)
4. SWOT Analysis = Using the audit to determine the Strengths, Weaknesses,
Opportunities, and Threats
 SW = critical success factors (relative to other firms)
 Guides the company in the right direction
5. Business Portfolio = Businesses and products that make up the company. You have to
evaluate the businesses/products that make up a company and determine which ones to
invest in:
 SBU- strategic business unit (business that is a part of the company).
You want to determine how attractive each SBU is and thus also how
much to invest in it.
 Attractiveness is determined by the market growth and share for that
SBU. The chart below is called the Boston Consulting Group Box
(BCG)
Låg
Marknadstillväxt
Hög
Magnus Elofson
30
This is exactly where you
want to be. But to get
here and stay here you
have to invest a lot.
Good –steady income,
however it is dangerous
because the market can
disapear.
Hög
If you are here you
have big
opportunities. But you
have to invest a lot to
get to the left box.
Get out of here!
Låg
Relativ marknadsandel
6. Growth Strategies:
Existing Market
New Market
Existing Product
Market penetration
Market development
New Product
Product development
Diversification
All of the functional departments in the company have to give input in order for the strategic
plan to work
The Marketing Plan (for specific product/service):
1. Executive Summary = quick overview of plan done by an executive
2. Marketing Audit = mostly external, pertaining to competition, distribution, objectives,
etc..
3. SWOT Analysis = discussed earlier, but now in a product point of view
4. Objectives = measurable goals
5. Marketing Strategy = actions needed to reach objectives
6. Action Program = what to do, who will do it, when, and its cost
7. Budget = profit/loss statement of plan
8. Controls = monitoring the process
Planning is the easy part! The actual implementation is very important and hard.
Anderson & Narus “Crafting Marketing Strategy”
This article takes into account the fact that resources are very important when developing
marketing strategy, which Kotler didn’t do to the same extent.
A resource based view:
Resource = anything that a firm values
-To be a resource of competitive advantage 5 tests must be passed:
1. Inimitability = how difficult it is to copy
2. Durability = how long can it provide value before innovation takes over
3. Appropriability = how well others can catch the value created by the resource
4. Substitutability = how a different resource can provide a similar function at a lower
cost
5. Competitive superiority = how well it compares to competitors
There are three basic kinds of resources:
 Core competency = something a firm does particularly well
-distinctive competency = better than competitors
Magnus Elofson
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
Capabilities = set of business processes that are well understood (skill),
superior coordination of functional activities
-distinctive capability = better than competitors
 Brand = a way of identifying a supplier and differentiating it from competitors
through name, logo, design, and features. Things included are:
-Brand equity = how a consumer sees a brand offering compared
to a competitors
-Branding strategy = which element to include in all products
-Brand hierarchy = how products are related to each other (IBM
Thinkpad X 30)
3 Fundamental Value-Based Strategies:
 Product leadership = offering leading-edge products
-Innovation is crucial (seek to obsolete own products before
competitors can)
 Customer intimacy = precise target marketing that tailors for the specific
needs of a segment
-retaining customers over time = more profit
 Operational Excellence = good products, competitive price, minimum
inconvenience (Dell—hard to keep this position up)
Strategy Making:
 Who makes the strategy? Often the top-management but the middle
management should be included more since they often have a better feel for
the market/employees
 You have to define the purpose of the company. Can be done by:
-mission/vision statement
-strategic intent (desired position and how to get there)
You have to have an ambition to develop/refine/renew the purpose in order to stay
ahead.
Axelsson 1996 “Marknader, marknads och marnadsförings placering”
Market vs. Network
Market (discussed way above-also basically Kotler) – Marketing (3 parts)
 Identify segments
 Describe and determine which are the most interesting
 Make offers for them:

Niche = meets one segment’s very specific demand

Lowest cost

Differentiation = (variation) meets several segments’ needs
Network (discussed above) Marketing
 Identify customers that you want to work with for a longer period of time (see if they
fit in with your business portfolio). And then be able to develop a system to make
exchanges effective
 Describe different customers
 Take the most interesting one and work them: same niche, lowest cost, and
differentiation as above.
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The network view also includes two different aspects (to the market perspective) to
marketing. When determining if a relationship is good, you have to look at both the content
(profitability) and the function (where does the customer position you in the network)
Market planning (strategy making) important questions (Mentioned):
1. What have we done before?
 How do things usually get done, are our expectations fulfilled, what is out
market share, how did we get to the point at which we are now
2. Where are we now? – assessment of the market/competitors
 Segment your clients and see which have the largest growth, size, profitability.
 Asses the value produced by you product. If you develop your product further,
how much more value is created?
 Asses your own resources SWOT (discussed above)
3. Where do we want to go? What are we aiming for?
 Identify your segments and define their whishes for development.
 The balanced scorecard = complements financial data with other ratios which
show if the company is headed in the right direction.
-from the customer’s point of view (how many know our product,
think it is the best, quality perception)
- internally = for example the employee’s comfort/happiness
- innovation = how long does it take to develop a new product
-financial = growth, stock price
4. How do we get there?
 Marketing plan:
1. what activities do we need
2. which possibilities do we have to meet the goals
3. who is responsible
4. time objectives
5. budget
6. evaluation
5. How do we get it done?
 Two major risks with planning is that the plan only becomes a symbolic
gesture or that the plan becomes too controlling. The most important thing is
that you have a plan and thus have collectively thought through your strategy.
Axelsson determines that plans are good in order to take advantages of opportunities –
strategic windows. Thus if you don’t strictly follow the plan it’s ok. The learning process is
also important.
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Extra Info (Mentioned)
Motivation
Informational
In
vo
Low
lv
e
m
en
tHigh
Tuggummi
Transformational
Tuggummi
Hudkräm
Ögonskugga
Information
Pensionsförsäkring
Dammsugare
Motorcykel
Resa
-Informational = problem solving Transformational = pleasure giving
-The more informational a message of an advertisement is, the more information about the
problem-solving capabilities is needed.
-Lange & Dahlen:



Who is the target segment
-Demography
-Needs
-Attitudes
-Behavior (new users, brand loyal, other brand loyal, brand
switchers)
What is the message
-The message has to clearly relate to the brand position
(consistency is important)
-What do we want them to do?
-Big picture above
-Recall (when you have a need you remember the product) –
Recognition (have to be reminded of need)
-USP (Unique, Selling, Proposition)
Which media devices to use
- frequency/range/impact
- in accordance to product/target segment
Deliberate strategy = one that is followed meticulously
Emergent strategy = one that develops over time and process
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