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Chapter 3Chapter 3

Marketings Strategic Role in theMarketings Strategic Role in theOrganizationOrganization

Marketings Strategic Role in theMarketings Strategic Role in theOrganizationOrganization

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After studying this chapter,

you should be able to:

Discuss the three basic levels in an organizationand the types of strategic plans developed at eachlevel.

Understand the organizational strategic planningprocess and the role of marketing in this process.

Describe the key decisions in the development ofcorporate strategy.

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Understand the different general business

strategies and their relationship to

business marketing, product marketing,and international marketing strategies.

Realize the importance of relationshipsand teamwork in executing strategic

plans.

After studying this chapter,

you should be able to:

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Organizational Levels

The Corporate Level is the

highest level in any organization.

The Functional Level includes all the

various functional areas within a business unit.

The Business Levelconsists of units within the

overall organization that are generally managed

as self-contained businesses.

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Organizational Strategic Planning

Lower-level plans are developed

to execute higher-level plans.

Higher organizational level strategic

plans provide direction for strategic

plans at lower levels.

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Types of Strategic Plans

Organizational Level Type of Strategic Plan Key Strategic Decisions

Corporate Corporate strategic Corporate vision

plan Objectives & resource

allocation

Growth strategies

Business Business strategic Market scope

plan Competitive advantage

Marketing Marketing strategic Target market

plan Marketing mix

Product marketing Specific target market

plan Specific marketing mix

Execution action plan

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The Strategic Role of Brand Loyalty

Generating

Market Share

Developing a Strong

Customer Base

Customer Equity

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The Strategic Planning Process

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The Role of Marketing

Strategic Marketing: Marketing activities that affect corporate,

business, and marketing strategic plans.

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The Role of Marketing

Marketers orient everyone in the organization

toward markets and customers.

Marketers analyze the current situation,

identify trends in the marketing environment,

and assess the potential impact of these trends.

Marketers development corporate, business,

and marketing strategic plans.

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The Role of Marketing

Marketing

Management:

Relates to specificproduct marketing

strategies.

Networks: Comprise strategic

alliances among

suppliers, distributors,

and the marketing firm.

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Corporate Strategy Decisions

Corporate Vision

Corporate Objectives & Resource Allocation

Corporate Growth Strategies Business-unit Composition

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Corporate Vision

Corporate Vision: The basic values of an organization.

The vision specifies what

the organization stand for,where it plans to go, andhow it plans to get there.

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What Comprises Corporate Vision?

Markets

Products and services

Geographic domain Core competencies

Organizational objectives

Organizational philosophy Organizational self-concept

Desired public image

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Core Purpose: A Companys Reason for

Being

3M:To solve problems innovatively.

Hewlett-Packard:To make technical contributions for theadvancement and welfare of humanity.

Mary Kay Cosmetics:To give unlimited opportunity to women.

Merck:To preserve and improve human life.

Sony:To experience the joy of advancing and applying technology

for the benefit of the public.

Wal-Mart:To give ordinary folks the chance to buy the same thingsas rich people.

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Core Purpose

Core Competency: A bundle of skills that are possessed by

individuals across the organization.

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Questions Leading to an Effective Corporate Vision

1. Which customers will you beserving in the future?

2. Through which channels will youreach customers in the future?

3. Who will be your competitors inthe future?

4. Where will your margins comefrom in the future?

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Questions Leading to an Effective Corporate Vision

5. In what end-product markets

will you participate in the

future?

6. What will be the basis for your

competitive advantage in the

future?

7. What skills or capabilities will

make you unique in the

future?

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Corporate Objectives and Resource

Allocation

Corporate objectives specify the

achievement of desired levels of

performance during particular timeperiods.

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Corporate Objectives and Resource Allocation

Corporate objectives and

resource allocation affect

marketers in 2 basic ways:

1) In setting the

objectives for different

organizational levels.

2) Providing guidance

for the development

and Implementation of

marketing strategies.

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Corporate Growth Strategies

MarketPenetration

Product

Expansion Diversification

MarketExpansion

Products

Same New

Markets

N

ew

Sam

e

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Business-Unit Composition

Strategic Business Unit

(SBU):

Focuses on a single productor brand, a line of products, or

mix of related products that

meets a common market need

or a group or related needs,

and the units management isresponsible for all (or most) of

the basic business functions

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Business-Unit Composition

Companies often organize around

competency-based SBUs to

establish Sustained CompetitiveAdvantage.

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Business Strategy Decisions

The basic objective of a business strategy is

to determine how the business unit will

compete successfully.

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Business Strategy Decisions

Dimensions of

Strategy:

Market scope.

How broadly the

business views its

target market.

Competitive

advantage.

Competitive

Advantage:

The way a businesstries to get consumers

to purchase its

products over those

offered by

competitors.

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General Business Strategies

Easyjet

Jet Blue

Conair

Alaskan Airlines Midwest

American

Delta United Jet Blue

Southwest

Market Scope

Focused Broad

Compe

titiveAdvanta

ge

Differen

tiation

Low

pri

ce

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The Rule of Three

TheRule of Three: Naturally occurring

competitive forces willcreate a consistent

structure in many

mature markets.

Three major players often

compete by offering a wide

range of related products

and services and servemost major market

segments.

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Marketing Strategy Decisions

A Marketing

Strategy Addresses: Selection of a

target market.

Development of amarketing mix.

Functional strategies

are at the

business-unit level.

Operating strategies

are at the product level.

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Business & Product Marketing Strategies

Target market Segmented or mass approach Specific definition of target market

Product Number of different products Specific features of each product

Price General competitive price level Specific price

Distribution General distribution policy Specific distributions

Marketing

communications General emphasis on marketing Specific marketing

communications tools communications program

Decision Area Business Marketing Strategy Product Marketing Strategy

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International Marketing Strategies

Entry Strategy: The approach used

to market products in

an international

market.

The Basic Options: Exporting

Joint Ventures Direct Investment

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International Marketing Strategies

Customized Marketing Strategy:A different marketing mix for each

target market country.

Standardized Marketing Strategy:

The same product, price, distribution, & promotion

programs in all international markets.

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Executing Strategic Plans with Teamwork

1. Cross-Functional Teamwork

2. Marketing Teamwork

3. Co-Marketing Alliances

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Business Function Orientations

Function Basic Orientation

Marketing To attract and retain customers

Production To produce products at lowest costFinance To keep within budgets

Accounting To standardize financial reports

Purchasing To purchase products at lowest cost

R&D To develop newest technologies

Engineering To design product specifications