C H A P T E R
3
Marketing’s
Strategic
Role in the
Organization
McGraw-Hill/Irwin
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
After studying this chapter, you should be able to:
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Discuss the three basic levels in an organization and the
types of strategic plans developed at each level.
Understand the organizational strategic planning process
and the role of marketing in this process.
Describe the key decisions in the development of corporate
strategy.
Understand the different general business strategies and
their relationship to business marketing, product marketing,
and international marketing strategies.
Realize the importance of relationships and teamwork in
executing strategic plans.
Bearden Marketing 5th Ed
3-2
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Disney
Disney’s long-run
objective is to become
the world’s premier
family entertainment
company through the
ongoing development of
its powerful brand and
character franchises. Its
business is “making
people happy by turning
fantasy into reality.”
Bearden Marketing 5th Ed
3-3
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Organizational Levels
Corporate
Level
The highest level in any
organization.
Business
Level
Units within the organization that
are generally managed as selfcontained businesses.
Functional
Level
Includes all of the various
functional areas within a business
unit.
Bearden Marketing 5th Ed
3-4
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Organizational Strategic Planning
Strategic planning for multibusiness, multiproduct
organizations typically occurs at each organizational
level. Strategic plans at higher organizational levels
provide direction for strategic plans at lower levels.
Bearden Marketing 5th Ed
3-5
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The Strategic Role of Brand Loyalty
Brand Loyalty
Name Awareness
Perceived Quality
Brand
Equity
Competitive
Advantage
Brand Assets
Cognitive
Associations
Bearden Marketing 5th Ed
3-6
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
The Strategic Planning Process
This process applies to strategic planning at every level.
In the business world, most organizations are involved in
different stages of the process simultaneously and do
not necessarily follow such a step-by-step approach.
Exhibit 3-2
Bearden Marketing 5th Ed
3-7
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The Role of Marketing
Exhibit 3-2
Bearden Marketing 5th Ed
3-8
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Marketing Strategy and the Internet
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The failure of many dot-com companies has raised many
important questions regarding the lessons firms should
learn from Internet business.
Internet usage continues to grow globally, and many
traditional firms have found viable applications of Web
technology.
Internet selling direct to consumers is frequently
employed as another channel of communication and
interaction.
One of the primary effects of the Internet has been the
increased availability of information and the emphasis on
price.
Bearden Marketing 5th Ed
3-9
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Corporate Strategy Decisions
Vision
Business
Unit
Composition
Corporate
Strategy
Decisions
Objectives &
Resource
Allocation
Growth
Strategy
Bearden Marketing 5th Ed
3-10
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Corporate Vision
A corporate vision represents the basic values of an
organization. The vision specifies what the organization
stands for, where it plans to go, and how it plans to get
there. Corporate Vision Components:
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Markets
Products and services
Geographic domain
Core competencies
Organizational objectives
Organizational philosophy
Organizational self-concept
Desired public image
Bearden Marketing 5th Ed
3-11
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Core Values and Purpose
Core values are the small set of guiding principles that
represent the enduring tenets of an organization. Core
purpose reflects the company’s reason for being or its
idealistic motivation for doing work.
Bearden Marketing 5th Ed
3-12
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Unilever’s Mission Statement
Unilever's mission is to add Vitality to life. We meet everyday needs for
nutrition, hygiene and personal care with brands that help people feel
good, look good and get more out of life.
Our deep roots in local cultures and markets around the world give us
our strong relationship with consumers and are the foundation for our
future growth. We will bring our wealth of knowledge and international
expertise to the service of local consumers — a truly multi-local
multinational.
Our long-term success requires a total commitment to exceptional
standards of performance and productivity, to working together
effectively, and to a willingness to embrace new ideas and learn
continuously.
To succeed also requires, we believe, the highest standards of
corporate behaviour towards everyone we work with, the communities
we touch, and the environment on which we have an impact.
This is our road to sustainable, profitable growth, creating long-term
value for our shareholders, our people, and our business partners.
Bearden Marketing 5th Ed
3-13
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Corporate Vision
Core competency reflects a bundle of skills that
are possessed by individuals across the
organization.
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3-14
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Objectives and Resource Allocation
Corporate objectives
specify the achievement
of desired levels of
performance during
particular periods.
Exhibit 3-7
Corporate objectives are
established for many
areas, but the most visible
tend to be financial
objectives.
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3-15
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Customer Relationship Management
Customer Relationship Management (CRM)
initiatives are designed to achieve a continuing
dialogue with customers, across all contact and
access points, with personalized treatment of
the most valuable customers designed to
increase customer retention and the
effectiveness of marketing strategies.
Bearden Marketing 5th Ed
3-16
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Corporate Growth Strategies
Corporate growth strategies describe the
general approach for achieving corporate
growth objectives.
Exhibit 3-8
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3-17
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Corporate Growth Strategies
Market
Penetration
A market penetration strategy
represents a decision to achieve
corporate growth objectives with existing
products within existing markets.
Market
Expansion
A market expansion strategy entails
marketing existing products to new
markets.
Product
Expansion
A product expansion strategy calls for
marketing new products to the same
market.
more
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5th
Ed
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Corporate Growth Strategies (con’t)
Diversification
A diversification strategy requires the
firm to expand into new products and
new markets.
Unrelated diversification means that the
new products and markets have nothing in
common with existing operations.
Related diversification occurs when the
new products and markets have something
in common with existing operations.
Bearden Marketing 5th Ed
3-19
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Business Unit Composition
A strategic business unit (SBU) focuses on:
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a single product or brand
a line of products, or
mix of related products that meets a common market
need or a group of related needs,
The unit’s management is responsible for all (or
most) of the basic business functions.
Bearden Marketing 5th Ed
3-20
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SBU Evaluation
SBUs can be evaluated in terms of market share
and market growth using some variation of the
Boston Consulting Group growth share matrix.
Exhibit 3-9
Bearden Marketing 5th Ed
3-21
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Business Strategy Decisions
Market
Scope
Market scope refers to how broadly the
business views its target market. Two
basic strategies exist: Focused or
Broad.
Competitive
Advantage
Competitive advantage refers to the
way a business tries to get consumers to
purchase its products over those offered
by competitors. Two basic strategies
exist: Differentiation or Low Price
Bearden Marketing 5th Ed
3-22
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General Business Strategies
Combining the market scope and competitive
advantage decisions produce four general
business strategies.
Exhibit 3-10
Bearden Marketing 5th Ed
3-23
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Marketing Strategy Decisions
Developed as functional strategies at the
business unit level and as operating strategies
at the product level.
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Business strategy decisions provide direction for all
business-level marketing activities.
Product strategy decisions guide the execution of
marketing activities for individual products.
Bearden Marketing 5th Ed
3-24
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Social Responsibility as a Strategy
The principles underlying socially responsible
corporate and marketing strategy include the
following:
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Treating customers with fairness, openness, and quick
response to inquiries and complaints.
Treating employees, suppliers, and distributors with
fairness.
Caring about the environmental impact of the firm’s
activities and supply chain.
Behaving in a consistently ethical manner.
Bearden Marketing 5th Ed
3-25
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
International Entry Strategies
An entry strategy is the approach used to market
products in an international market.
Exporting
Exporting is a method of selling
products to buyers in international
markets.
Direct
Investment
Direct investment is where the
marketer invests in production,
sales, distribution, or other
operations in the foreign country.
Joint
Ventures
Bearden Marketing 5th Ed
Joint ventures include any
arrangement between two or more
organizations to market products
internationally.
3-26
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International Strategic Orientation
Firms operating in international markets can use two
different orientations toward marketing strategy.
Standardized
Marketing
Strategy
Customized
Marketing
Strategy
Bearden Marketing 5th Ed
With a standardized marketing
strategy, a firm develops and
implements the same product, price,
distribution, and promotion programs
in all international markets.
With a customized marketing
strategy, a firm develops and
implements a different marketing
mix for each target market country.
3-27
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Executing Strategic Plans
CrossFunctional
Teamwork
Routes to
Effective
Execution
Marketing
Teamwork
Comarketing
Alliances
Bearden Marketing 5th Ed
3-28
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Summary
After studying this chapter, you should be able to:





Discuss the three basic levels in an organization and the
types of strategic plans developed at each level.
Understand the organizational strategic planning process
and the role of marketing in this process.
Describe the key decisions in the development of corporate
strategy.
Understand the different general business strategies and
their relationship to business marketing, product marketing,
and international marketing strategies.
Realize the importance of relationships and teamwork in
executing strategic plans.
Bearden Marketing 5th Ed
3-29
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.