1-1

McGraw-Hill/Irwin
2008 The McGraw-Hill Companies,
All Rights Reserved

C
H
A
P
T
E
R

ONE


Market-Oriented
Perspectives
Underlie Successful
Corporate,
Business, and
Marketing
Strategies
1
1-2 1-2
What is a strategy?
A strategy is a fundamental pattern
of present and planned objectives,
resource deployments, and
interactions of an organization with
markets, competitors, and other
environmental factors

1-3 1-3
Scope
Goals and objectives
Resource deployments
Identification of sustainable
competitive advantage
Synergy
Components of Strategy
1-4 1-4
The Hierarchy of Strategies
Three major levels of strategy are:
Corporate strategy
Business-level strategy
Marketing strategy
1-5 1-5
Market-Oriented Management
Follows a business philosophy
commonly called marketing concept
Consistent focus by personnel in all
departments and at all levels
Adopts a variety of organizational
procedures and structures:
To improve the responsiveness of
decision making
1-6 1-6
Exhibit 1.5
Guidelines for Market-Oriented
Management
Create customer focus throughout the
business
Listen to the customer
Define and nurture your distinctive
competence
Define marketing as market intelligence
Target customers precisely
Manage for profitability, not sales volume
Make customer value the guiding star
Let the customer define quality
1-7 1-7
Exhibit 1.5
Guidelines for Market-Oriented
Management (continued)
Measure and manage customer
expectations
Build customer relationships and loyalty
Define the business as a service business
Commit to continuous improvement and
innovation
Manage culture along with strategy and
structure
Grow with partners and alliances
Destroy marketing bureaucracy
1-8 1-8
Factors that Mediate Marketings
Strategic Role
Competitive factors affect a firms market
orientation
Influence of different development stages
across industries and global markets
Strategic inertia
1-9 1-9
Exhibit 1.7
Differences between Production-Oriented
and Market-Oriented Organizations
Business Activity
or Function
Production
Orientation
Marketing
Orientation
Product offering
Company sells what
it can make
Company makes
what it can sell
Product line Narrow Broad
Pricing
Based on
production and
distribution costs
Based on
perceived benefits
provided
Research
Focus on product
improvement and
cost cutting in
the production
process
Focus on
identifying new
opportunities and
applying new
technology to
satisfy
customer needs
1-10 1-10
Exhibit 1.7
Differences between Production-Oriented
and Market-Oriented Organizations
(continued)
Business
Activity or
Function
Production
Orientation
Marketing
Orientation
Packaging Protection for the
product;
minimize costs
Designed for
customer
convenience; a
promotional tool
Credit A necessary evil;
minimize bad debt
losses
A customer service;
a tool to attract
customers
Promotion Emphasis on
product features,
quality, and price
Emphasis on
product benefits and
ability to satisfy
customers needs or
solve problems
1-11 1-11
Recent Developments Affecting
the Strategic Role of Marketing
Globalization
Increased importance of service
Information technology
Relationships across functions and firms

1-12 1-12
Exhibit 1.8
Categories of E-Commerce
Source: Adapted from A Survey of E-Commerce: Shopping Around the Web, The Economist, February 26, 2000, p. 11.
Business Consumer
Business-to-Business
(B2B)
Business-to-Consumer (B2C)
Business Examples:
Purchasing sites of
Ford, Oracle, Cisco
Supply chain networks
linking producers
anddistribution channel
members, such as 3M
and Wal-Mart
Examples:
E-tailers, such as E*Trade,
Amazon, iTunes
Producers direct sales sites, such
as Dell, Ryanair, Safital Hotels
Web sites of traditional retailers,
such as
Sears, Lands End, Marks &
Spencer
Consumer-to-Business
(C2B)
Consumer-to-Consumer (C2C)
Consumer Examples:
Sites that enable
consumers to bid on
unsoldairline tickets and
other goods and services,
such as Priceline
Examples:
Auction sites, such as eBay, QXL
Blogs praising /criticizing
companies or
brands
1-13 1-13
Formulating and Implementing
Marketing Strategy Process
Decision-Making Focus
Analysis of the four Cs
Integrating firm's marketing strategy
with other strategies and resources
Market opportunity analysis
Understanding Market Opportunities
Measuring Market Opportunities
Market Segmentation, Targeting, and
Positioning Decisions
1-14 1-14
Formulating and Implementing
Marketing Strategy Process
(Continued)
Formulating strategies for specific
market situations
Implementation and control
1-15 1-15
The Marketing PlanA Blueprint
for Action
A marketing plan is a written
document detailing the current situation
with respect to customers, competitors,
and the external environment
1-16 1-16
Executive summary
Current situation and trends
Performance review
Key issues
Objectives
Marketing strategy
Action plans
Projected profit-and-loss statement
Controls
Contingency plans
Exhibit 1.10
Contents of a Marketing Plan