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After reviewing Chapter 1 from the textbook, post a 500-word synopsis of your understanding of the marketing concepts. In your posting, include questions about any marketing concepts that are unclear. chapter_1_strategic_planning_and_the_marketing_management_process.pptx Unformatted Attachment Preview 15 e Chapter 1 Strategic Planning and the Marketing Management Process © McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Chapter Outline • The marketing concept • What is marketing? • What is strategic planning? • The marketing management process • The strategic plan, the marketing plan, and other functional area plans © McGraw-Hill Education Marketing Concept • Organizations should seek to make profit by serving the needs of customer groups • Purpose: To keep the attention of marketing managers on customer orientation • Principal task of the marketing function: Find effective and efficient means of making the business cater to the interests of customers © McGraw-Hill Education Marketing Defined • Marketing: Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large © McGraw-Hill Education Figure 1.1: Major Types of Marketing Type Description Example Product Marketing designed to create exchange for tangible products Strategies to sell Gateway computers Service Marketing designed to create exchanges for intangible products Strategies by Allstate to sell insurance Person Marketing designed to create favorable actions toward persons Strategies to elect a political candidate Place Marketing designed to attract people to places Strategies to get people to vacation in national or state parks Cause Marketing designed to create support for ideas, causes, or issues or to get people to change undesirable behaviors Strategies to get pregnant women not to drink alcohol Organization Marketing designed to attract donors, members, participants, or volunteers Strategies designed to attract blood donors © McGraw-Hill Education Strategic Planning Activities that lead to the development of organizational mission, organizational objectives, and appropriate strategies to achieve organizational objectives Jump to Strategic Planning, Appendix © McGraw-Hill Education Organizational Mission Mission statement defines the direction in which the organization is heading and how it will succeed in reaching its desired goal Elements to consider when developing a mission statement • Organization’s history: Objectives, accomplishments, mistakes, and policies • Organization’s distinctive competencies: Things that an organization does well thereby giving it an advantage • Organization’s environment: Opportunities, constraints, and threats that must be identified before a mission statement is developed © McGraw-Hill Education Effective Mission Statement • Focused on markets rather than products • Achievable • Motivating • Specific © McGraw-Hill Education Organizational Objectives • Define what an organization seeks through its ongoing, longrun operations of the organization • Must be specific, measurable, action commitments • Can be converted into specific action • Provide direction • Establish long-run priorities for the organization • Facilitate management control © McGraw-Hill Education Figure 1.3: Sample Organizational Objectives Area of Performance Possible Objective Market standing To make our brands number one in their field in terms of market share Innovations To be a leader in introducing new products by spending no less than 7 percent of sales for research and development Productivity To manufacture all products efficiently as measured by the productivity of the workforce Physical and financial resources To protect and maintain all resources: equipment, buildings, inventory, and funds Profitability To achieve an annual rate of return on investment of at least 15 percent Manager performance To identify critical areas of management depth and succession and responsibility Worker performance and attitude To maintain levels of employee satisfaction consistent with our own and similar industries Social responsibility To respond appropriately whenever possible to societal expectations and environmental needs © McGraw-Hill Education Organizational Strategies • Involve the choice of major directions the organization will take in pursuing its objectives • Organizations can pursue various strategies based on products and markets, competitive advantage, and value © McGraw-Hill Education Organizational Strategies Based on Products and Markets Market penetration • Focuses primarily on increasing the sale of present products to present customers Market development • Focuses on finding new customers for present products Product development • Focuses on developing new products that would be directed primarily to present customers Diversification • Seeks growth through new products for customers not currently being served Jump to Organizational Strategies Based on Products and Markets, Appendix © McGraw-Hill Education Figure 1.4: Organizational Growth Strategies Jump to Figure 1.4: Organizational Growth Strategies, Appendix © McGraw-Hill Education Organizational Strategies Based on Competitive Advantage Cost leadership strategy: Firms to focus on being the low-cost company in its industry • Efficiency is stressed • No-frills products are offered Strategy based on differentiation: Firms seek to be unique in their industry or market segment along particular dimensions that customers value • Firms can charge a premium price © McGraw-Hill Education Organizational Strategies Based on Value Stresses on the concept of customer value Focuses on developing and delivering superior value to customers as a way to achieve organizational objectives Value strategies • Best price • Best product • Best service © McGraw-Hill Education Choosing an Appropriate Strategy Management should: • Select those strategies consistent with its mission • Capitalize on the organization’s distinctive competencies that lead to a sustainable competitive advantage • Sustainable competitive advantage can be based on either the assets or skills of the organization © McGraw-Hill Education Organizational Portfolio Plan Involves the allocation of resources across the organization’s product lines, divisions, or businesses • Initially, product lines that can be considered a business are identified and are called strategic business units or SBUs Characteristics of SBUs • Have a distinct mission and their own competitors • Are a single business or collection of related businesses • Can be planned independently of the other businesses of the total organization Portfolio models: Methods to determine how resources should be allocated among the various SBUs © McGraw-Hill Education Marketing Management Process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas • Creates exchanges with target groups that satisfy customer and organizational objectives Jump to Marketing Management, Appendix © McGraw-Hill Education Situation Analysis, 1 Analyzing the position of the firm and its marketing department in terms of its past, present, and future situation Major areas of concern • Cooperative environment: Includes all firms and individuals who have a vested interest in the firm’s accomplishing its objectives • Competitive environment: Includes primarily other firms in the industry that rival the organization for both resources and sales • Economic environment: Includes the state of macroeconomy and changes in it © McGraw-Hill Education Situation Analysis, 2 • Social environment: Includes general cultural and social traditions, norms, and attitudes • Political environment: Includes the attitudes and reactions of the general public, social and business critics, and other organizations • Legal environment: Includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights © McGraw-Hill Education Marketing Planning: Outputs, 1 Establishing marketing objectives: Provides the framework for the marketing plan Selecting the target market • Identifying customer needs and organizing resources accordingly • What do customers want or need? • What must be done to satisfy these wants or needs? • What is the size of the market? • What is its growth profile? © McGraw-Hill Education Marketing Planning: Outputs, 2 • Ranking the market according to profitability, present and future sales volume, and the match between what it takes to appeal successfully to the segment and the organization’s capabilities Developing the marketing mix • Marketing mix: Set of controllable variables that must be managed to satisfy the target market and achieve organizational objectives • Comprises product, price, promotion, and place © McGraw-Hill Education Implementation of the Marketing Plan Involves putting the plan into action and performing marketing tasks according to the predefined schedule Requires close monitoring and coordination • Measuring results of implemented marketing plan • Comparing results with objectives • Making decisions on whether plan is achieving objectives © McGraw-Hill Education Marketing Information System and Marketing Research Provides information needed to make effective marketing decisions • Information should be current, reliable, and valid © McGraw-Hill Education Strategic Plan, Marketing Plan, and Other Functional Area Plans Ways in which marketing executives are involved in the strategic planning process • Influencing the process by providing important inputs in the form of information and suggestions relating to customers, products, and middlemen • Being aware of what the process of strategic planning involves as well as the results © McGraw-Hill Education Figure 1.6: The Cross-Functional Perspective in Planning Jump back to Figure 1.6: The Cross-Functional Perspective in Planning, Appendix © McGraw-Hill Education Figure 1.7: A Blueprint for Management Action Jump to Figure 1.7: A Blueprint for Management Action, Appendix © McGraw-Hill Education ... 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