s t u

chapter

15
1

d y

c a

Marketing & Strategic Planning

Describe how strategy is developed at the corporate, business

unit, and functional levels in an organization.

market-product
analysis, and
asking questions like How
will we get
there? that
uses marketing
plans.

Todays large organizations, both business firms and not-for-profit organizations, are often divided into three levels: the corporate, business unit, and
functional levels.
l Marketing has a role in all three levels by keeping a focus on customers and
finding ways to add genuine customer value. At the lowest level, marketing
serves as part of a team of functional specialists whose day-to-day actions
actually involve customers and create customer value.
profit The excess of revenues over costs, the reward to a business for the risk it
undertakes in offering a product for sale

strategy A plan of action to achieve specific goals

Figure 151

Figure 153

Four market-product strategies: alternative ways to

expand sales revenues for Ben & Jerrys
PRODUCTS
Markets

New

Current

Current

Product development
Market penetration
Selling a new product such as
Selling more Ben & Jerrys super
premium ice cream in North America frozen yogourt under the Ben
& Jerrys brand in North America

New

Market development
Selling Ben & Jerrys super
premium ice cream in Australia
for the first time

Diversification
Selling a new product such as
breakfast cereal in China for the
first time

Describe the strategic marketing process and its three key

phases: planning, implementation, and evaluation.

Figure 154

The three levels of strategy in organizations: corporate, business unit,

and functional

The strategic marketing process

Planning phase

Corporate-level strategy

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goals

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Business unitlevel strategy

Functional-level strategy

Step 1

Step 2

Step 3

Situation (SWOT)
analysis
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Market-product focus
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Marketing program
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Finance

Research &
development

Marketing

Human
resources

Manufacturing

Implementation phase
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Explain the concepts of business, mission, and goals and why

they are important in organizations.

Results

Organizations exist to accomplish something for someone. To give itself focus,

an organization continuously assesses its business, mission, and goals.

Evaluation phase
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goals (objectives) Targets of performance to be achieved within a specific time

frame

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market share Ratio of a firms sales to the total sales of all firms in the industry
mission Statement of the organizations purpose and direction

Understand how
organizations
formulate their
strategies.
Setting strategic directions
for an organization involves
asking Where are we
now? to assess the organizations customers, competencies, and competitors.
It also involves asking
Where do we want to
go? and using techniques
like portfolio analysis and

Boston Consulting Group growth-share

matrix for a strong, diversified firm showing some strategic plans
Question
marks

Stars

Bu

ild

High

Hold
Low

Div
D

B
Cash
cows
High

Harvest

Figure 155
The strategic
marketing process Ben & Jerrys: A SWOT analysis
involves an orgaTYPE OF FACTOR
Location
nization allocating
Favourable
Unfavourable
of Factor
its marketing mix
Strengths
Weaknesses
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resources to reach
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mentation, and
Opportunities
Threats
evaluation.
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Figure 152

Market growth rate

Dogs

C
Low

Relative market share

(share relative to largest competitor)

est

Corrective Actions

Information
systems

Figure 156

Elements of the marketing mix that comprise a cohesive marketing program

Figure 157

Organization of a typical manufacturing firm, showing a breakdown of the

marketing department

Marketing
manager

Product
Features
Brand name
Packaging
Service
Warranty

Price
List price
Discounts
Allowances
Credit terms
Payment period

President

Promotion
Advertising
Personal selling
Sales promotion
Publicity

Place
Outlets
Channels
Coverage
Transportation
Stock level

Cohesive marketing program

Vice
President
Information
Systems

Vice
President
Research and
Development
Department

Manager
Product
Planning

Vice
President
Manufacturing
Department

Manager
Marketing
Research

Vice
President
Marketing
Department

Manager
Sales

Vice
President
Accounting
and Finance
Department

Vice
President
Human
Resources
Department

Manager
Advertising
and Promotion

Promotion
Place

Product
Price

specific elements: situation (SWOT) analysis, market-product focus and goal

setting, and marketing program.
l The implementation phase of the strategic marketing process has four key
elements: obtaining resources, designing the marketing organization, developing schedules, and executing the marketing program.
l The evaluation phase of the strategic marketing process involves comparing
results with the planned targets to identify deviations and taking actions to
correct negative deviations and exploit positive ones.
competitive advantages Those characteristics of a product or service that
make it superior to competing substitutes
market segmentation Sorting potential buyers into groups that have common
needs and will respond similarly to a marketing action

Sales Regions
and
Representatives

marketing plan Road map for the marketing activities of an organization for a
specified future period of time
marketing strategy Means by which a marketing goal is to be achieved
marketing tactics Detailed day-to-day operational decisions essential to the
overall success of marketing strategies
situation analysis Taking stock of a firm or products past performance, where
it is now, and where it is headed
strategic marketing process Approach whereby an organization allocates its
marketing mix
SWOT analysis Organizations appraisal of its internal strengths and weaknesses and its external opportunities and threats