Chapter 2

Marketing: Linking Marketing and Corporate Strategies

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AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
  • •Describe the three organizational levels of strategy and how they relate to each other and the marketing function.
•
  • •Describe why business, mission, culture, and goals are important in organizations.
  • •Understand how organizations set strategic directions by assessing where they are now and seek to be in the future.
•
  • •Describe the strategic marketing process and its three key phases:  planning, implementation, and control.
  • •Explain how the marketing mix elements are blended into a cohesive marketing program.
•
  • •Describe how marketing control compares actual results with planned objectives and acts on deviations from
    the plan.
 

 

 

LINKING MARKETING AND CORPORATE STRATEGIES
WHERE DOES A CORRESPONDENCE SCHOOL “A” IN ICE CREAM MAKING LEAD?  PLEASE STAY TUNED!
 

 

 

LEVELS OF STRATEGY IN ORGANIZATIONS
•Today’s Organizations:  Kinds, Levels, and Teams
•Kinds of Organizations
•Levels in Organizations and How Marketing Links to Them

 

Profit
The reward to a business firm for the risk it undertakes in offering a product for sale; the money left over after a firm’s total expenses are subtracted from its total revenues.
 

 

Corporate level
The corporate level is where top management directs overall strategy for the entire organization.

 

 

Business Unit
The business unit refers to an organization that markets a set of related products to a clearly defined group of customers. 

 

 

Business Unit Level
The business unit level is the level at which business unit managers set the direction for their products and markets.

 

 

 

Functional Level
The functional level is where groups of specialists actually create value for the organization.

 

 

 

FIGURE 2-1  The three levels of strategy:  corporate, business unit, and functional.

 

LEVELS OF STRATEGY IN ORGANIZATIONS
•Today’s Organizations:  Kinds, Levels, and Teams (cont)
•Strategy Issues in Organizations
 

 

Cross-Functional Teams
Cross functional teams include a small number of people from different departments in an organization who are mutually accountable to a common set of performance goals.
 

 

 

Mission
A mission is a statement of the organization’s scope. 

 

 

 

FIGURE 2-2  Medtronic’s mission

LEVELS OF STRATEGY IN ORGANIZATIONS
 
•Strategy Issues in Organizations
(cont)
 
•Strategy Issues in Organizations
•Goals or Objectives (cont)
  • §Unit sales
  • §Quality
  • §Customer satisfaction
  • §Employee welfare
  • §Social responsibility
 

 

 

Culture
A culture is a system of shared values, attitudes, and behaviors.

 

 

Stakeholders
Stakeholders are individuals or groups within or outside an organization that relate to what it does and how well it performs.
 

 

Goals
Goals or objectives convert the mission into targeted levels of performance to be achieved.
 

 

 

Market Share
Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry.
 

 

Concept Check
1.  What are the three levels in today’s large organizations?
 
A:  The three levels are the corporate, business unit, and functional levels. 
 

2.  What is the difference between an organization’s mission and its culture?

 
A:  A mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.  It often has an inspiration al theme.  In contrast, a culture is a system of shared values, attitudes and behaviors that distinguish the organization from others.
 

3.  Give an example of a goal for a business and a goal for a nonprofit organization.

A:  Profit is an example of a goal for a business -- maximizing shareholder value and improving stock performance.  Serving consumers with the greatest efficiency and least cost is an example of a goal for a nonprofit organization.
 

 

 

SETTING STRATEGIC DIRECTION
•A Look Around:  Where Are We Now?
 

 

 

Competencies
Competencies are an organization’s special capabilities, including skills, technologies, and resources.
 

 

 

 

Competitive Advantage
A competitive advantage is a unique strength relative to competitors.

 

 

 

Quality
Quality means the features and characteristics of a product that influence its ability to satisfy customer needs.

 

 

 

Benchmarking
Benchmarking is discovering how others do something better than your own firm so you can imitate or leapfrog competition.
 

 

FIGURE 2-3  Lands’ End’s competitors?  They go far beyond traditional catalog . . .

 

FIGURE 2-4  How some big-name Internet retailers
compare on “conversion rates”

 

SETTING STRATEGIC DIRECTION
•Growth Strategies:  Where Do We Want to Go?
  • •The Portfolios of Businesses:  BCG Analysis

 

 

 

FIGURE 2-5  Boston Consulting Group growth-share matrix for a strong, diversified firm

SETTING STRATEGIC DIRECTION
•Growth Strategies:  Where Do We Want to Go? (cont)
  • •Market-Product Analysis
 

 

 

FIGURE 2-6  Four market-product strategies:  alternative ways to expand sales revenues

 

SETTING STRATEGIC DIRECTION
  • •Building Blocks for an Organization’s Success
 

 

 

 

FIGURE 2-7  A combination of customer relationships, innovation, quality, and efficiency . . .

 

Concept Check
1.  What are “competencies” and why are they important?
A:  Competencies are an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations.  They are important because exploiting these competencies can lead to the organization’s success.
 

 

 

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