ICU: INTRODUCTION TO MARKETING
Vladimir V. Bulatov. bbe@voliacable.com
LECTURE 3. STRATEGIC MARKETING I.
Reading: Ch. 2, 22, addendum (sent to your e-mail).
Management vs. marketing:
Management: complex organizational activity, which includes planning, organizing,
staffing, leading, motivating, and controlling, necessary to form and achieve organizational
goals.
Analyzing a large organization, its structure can be defined as follows:
Org. Mission (managerial) = the purpose of existence (statement of what a company
intends to do and whom and how to serve).
It is the statement, describing what an organization IS TO ACCOMPLISH.
Org. Vision: is a metaphorical (but NOT going beyond imagination) expression of what an organization
STRIVES TO BE/COME. (e.g. Coca-Cola’s vision: “to put a Coke within arm’s reach of every consumer in
the world.”).
Org. Goals: are aims (targeted levels of performance) the organization seeks to achieve,
which realization ensures the accomplishment of the company’s business mission and
makes possible measurement of performance.
(There exist short, medium, and long term goals; different SBUs have various specific
goals).
Strategic planning is the process of forming and selecting organizational goals and
methods of its attainment (in terms of management it is the overall organizational
planning).
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ICU. Intro to Marketing. Strategic marketing
Strategic marketing planning (a functional strategic process) ensures development and
attainment of marketing functional goals.
Marketing is a very important part of the organizational managerial process and marketing
goals are often perceived as overall organizational goals.
Objective is a very specific (short-term) target, which addresses a certain organizational
task and has a list of people responsible for its accomplishment; its realization process is
scheduled and has a fixed deadline. (E.g. installation and calibration of new equipment).
STRATEGIC MARKETING PROCESS is the process of allocating marketing resources to
viable marketing positions and programs.
It may include plenty of specific managerial activities, of which planning, implementation,
and control seem to be generalizing and all-inclusive.
Non-profit organizations experience everything expressed above, but in a special form,
which will be discussed later.
Profit is the reward a company is granted (sometimes) for the risk of creating and offering
a product for sale. It equals total revenues minus total expenses.
(Again, marketing is most closely related to profit generation; this is also why marketing objectives are often
regarded as general organizational objectives of profit-generating organizations).
<discussion: what management objectives can be; what marketing objectives can be>
Classical marketing objectives of business organizations:
1. Profit (targeted or maximized).
2. Sales revenue or units of sale (targeted or maximized).
3. Market share (targeted or maximized).
4. Survival
(choosing the minimum pay-off with the purpose of maintaining a position on the market).
5. Social responsibility
(e.g. improving accidentally spoiled impression about the company’s goods [Worms in McDonalds’
hamburgers; toxic mineral water] even at the expense of profits. This goal type also includes ways to
resolve conflicting goals of other critical parties as consumers, shareholders, general public, etc.).
6. Quality.
7. Employee welfare (guarantees to employees in return for quality work).
Non-profit organizations have non-classical marketing goals.
Political parties: public acknowledgement;
Clubs: common interests;
Churches: common public opinion; etc.
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ICU. Intro to Marketing. Strategic marketing
MARKETING PLANNING:
I. Situational Analysis and goal setting (where we are and where we want to be)
<example of the totally decentralized policy of Sears, which led the organization to
become “first in none”>
II. Segmenting, targeting, positioning.
III. Developing marketing program (4P planning, budgeting [revenue, expenses, profit]).
I. SITUATIONAL ANALYSIS
1. SWOT analysis.
SWOT involves specifying the objective of the business venture or project and identifying
the internal and external factors that are favorable and unfavorable to achieving that
objective.
If a SWOT analysis does not start with defining a desired end state or objective, it runs the
risk of being useless.
If the objective seems attainable, the SWOTs are used as inputs to the creative generation
of possible strategies, by asking and answering each of the following questions:
- How can we use and capitalize on each strength?
- How can we improve each weakness?
- How can we exploit and benefit from each opportunity?
- How can we mitigate each threat?
(See Kotler, Berkowitz; review Open Office Marketing Plan, SWOT part; read extra files).
2. Ansoff’s matrix of opportunities.
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ICU. Intro to Marketing. Strategic marketing
Market Penetration.
Trying to sell more of the same things to the same people.
Approaches.
- Advertise, to encourage more people within the existing market to choose existing
products, or to use it more frequently.
- Introduce a loyalty scheme.
- Launch price or other special offer promotions.
- Increase sales force activities (or even buy a competitor company [particularly in
mature markets]).
Product Development.
Selling more things to the same people.
Approaches.
- Extend the product by producing product versions; develop new packaging.
- Develop related products or services (e.g. construction services for an interior design
studio).
Market Development.
Targeting new markets or new areas of the market, selling more of the same products to
different people.
Approaches.
- Target different geographical markets at home or abroad.
- Use different sales channels (e.g. going from traditional to on-line).
- Target different groups of people.
Diversification.
Trying to sell completely different products or services to different customers.
Approaches.
- Use environmental scanning, R&D, idea-generation procedures to search for radically
new opportunities for the business.
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ICU. Intro to Marketing. Strategic marketing