Marketing and corporate
strategies
Kinds of organizations
• Profit organizations. A privately owned
organization that serves its customers in order to
earn a profit
• Nonprofit organizations. A nongovernmental
organization that serves its customers but does
not have a profit as an organizational goal.
Levels in organizations
• Corporate level. Where top management
directs overall strategy for the entire
organization.
• Business Unit Level. Level at which business
unit managers set direction for their products
and markets.
• Functional level. Is where groups of
specialists create value for the organization.
(i.e. departments)
Three levels of strategy in an organization
Corporate strategy
• Vision
• Corporate goals
• Philosophy and culture
Business unit strategy
• Mission
• Business goals
• Competencies
Functional strategy
Information
systems
Research &
development
Finance
Manufacturing
Marketing
Human
resources
Combination of Customer
Relationships
The
Organization’s
Success
Quality
Customer
Relationships
Innovation
Efficiency
Strategy at the corporate level
Corporate vision is . . . .
a clear word picture of the organization’s
future, often with an inspirational theme.
It sets the overall direction for the
organization, describing what it strives to be-stretching the organization, but not beyond
reason.
A goal is . . . .
a targeted level of performance set in
advance of work.
Therefore, corporate goals provide strategic
performance targets that the entire
organization must reach to pursue its
vision.
Corporate goals may be articulated
in terms of:
- profits
- quality
- sales revenue
- employee welfare
- market share
- social responsibility
- unit sales
Corporate Philosophy and
Culture
Corporate philosophy establishes the
values and “rules of conduct” for running
the organization.
Corporate culture refers to a system of
shared attitudes and behaviors held by
the employees that distinguish it from
other organizations.
Strategy at the Business Unit
Level
Business Unit Mission and
Goal
The business unit mission is a statement
that specifies the markets and product lines
in which a business will compete. It
communicates the scope of a business unit.
A business unit goal is a performance
target the business unit seeks to reach in an
effort to achieve its mission. Goals that are
more specific, measurable and quantifiable
are called objectives.
Boston Consulting Group Growth-Share
Matrix
20%
Question
mark
Market growth rate
Star
High
?
A
10%
D
Low
B
Cash
cow
0%
10x
Dog
C
High
1x
Low
Relative market share
(share relative to largest competitor)
0.1x
Objectives for each SBU
• Build. Increase market
share through cash
injection. Make Starts
out of Question marks.
• Hold. Maintain market
share. Often used for
Cash Cows which are
already generating
large amounts of cash
• Harvest. Increase shortterm cash output of the
SBU. Pump cash from
Dogs or Cash Cows
into Stars or Question
Marks.
• Divest. Sell the SBU.
Question Marks and
Dogs are ideal
candidates
Specifying the SBU’s Competencies:
Some Important Definitions
competitive advantage is . . .
quality is . . .
benchmarking is . . . .
Strategy at the Functional
Level
Marketing and other functional
departments create their own
functional goals –really extensions
of corporate and business unit
goals.
The Strategic Marketing
Process
• Where are we now?
• Where do we want to go?
• How do we allocate our resources to get
where we want to go?
• How do we convert our plans into action?
• How do our results compare with our plans,
and do deviations require new plans and
actions?
Marketing Plan
• The strategic marketing process is
usually formalized in a Marketing Plan,
which is a road map for the marketing
activities of an organization for a
specified future period of time.
The strategic marketing process
Planning phase
Situation (SWOT)
analysis
Market-product focus
and goal setting
Implementation
Phase
Results
Control
Phase
Corrective Action
Marketing plan
Marketing
program
Planning phase
Situation (SWOT)
analysis
Strengths
Weaknesses
Opportunities
Threats
Market-product focus
and goal setting
Marketing
program
•Market Penetration /
New Markets
•Product Development
•Diversification
Planning phase
Situation (SWOT)
analysis
Market-product focus
and goal setting
Marketing
program
•Market Segmentation. Aggregating prospective
buyers into groups, or segments that have: common
needs and will respond similarly to a marketing action.
•Selecting the target markets.
•Finding points of difference for the product.
(Competitive advantage)
Planning phase
Situation (SWOT)
analysis
Market-product focus
and goal setting
Marketing
program
•Developing
the marketing
mix (4 Ps)
•Developing
the budget
Elements of the marketing mix that compose a cohesive
marketing program
Marketing
manager
Product
Price
Promotion
Place
Features
Brand name
Packaging
Service
Warranty
List price
Discounts
Allowances
Credit items
Payment period
Advertising
Personal selling
Sales promotion
Publicity
Outlets
Channels
Coverage
Transportation
Stock level
Cohesive marketing mix
Promotion
Promotion
Product
Price
Place
Place
Implementation
Phase
• The implementation phase involves
executing the marketing plan and
putting it into effect:
– Obtaining resources (money and
personnel)
– Designing the marketing organization
– Developing schedules
– Executing the marketing program (strategy
and tactics)
Organization of a Typical Manufacturing
Firm, Showing a Breakdown of the
Marketing Department
President
Vice President
Research and
Development
Department
Manager
Product
Planning
Vice President
Manufacturing
Department
Manager
Marketing
Research
Vice President
Marketing
Department
Vice President
Account and
Finance
Department
Manager
Sales
Manager
Advertising &
Sales Regions
and
Representatives
Sales Promotion
Vice President
Human
Resources
Department
Strategy versus Tactics
• Strategy means
by which a goal is
to be achieved,
characterized by
a specific target
market and a
marketing
program to reach
it
• Tactics are
detailed day-today operational
decisions
essential to the
overall success of
marketing
strategies
Control
Phase
• Comparing results with plans to identify
deviations
– Finding the planning gap
• Acting on deviations
– Performance less than expected –
Corrective action
– Performance greater than expected –
Uncover the reason