Marketing ConceptsMarketing & Strategy MKTG 3110-090 Fall 2013 Mrs. Tamara L. Cohen Class #2
Review: Bonus Points • Bonus Points are awarded for worthwhile contributions made in class. • It is YOUR responsibility to confirm your bonus point(s) before midnight on the day of the award. • Email me, stating: • purpose (“Bonus Point Confirmation”) in the email’s subject line; • Brief reason for receiving bonus point(s) in body of email • I will acknowledge your email within 24 hours • Maximum +4% from Bonus Points on final grade
Textbook Clarification • The ONLY required text for this class is the textbook "Marketing" by Kerin, Hartley & Rudelius, 11th edition • You do NOT need to buy the Connect software offered by the publisher.
KEY TERMS • Profit • Strategy • Culture • Core competency • Unique Selling Point (Unique Selling Proposition/USP) • Market segment • Target market • Marketing Dashboard
KEY CONCEPTS • Strategic planning • Strategic Business Unit (SBU) • Core values • Mission statement • Marketing metric • Market growth strategies Strategic marketing process: • Planning • SWOT analysis • market segmentation • Implementing • marketing strategy • Evaluating BCG’s growth-share matrix
Strategy = organization’s long-term course of action designed to deliver value to customer while achieving organization's goals These goals should include PROFIT (in conventional businesses) or some other METRIC (in non-profits).
Strategy in Organizations The board of directors oversees the 3 levels of strategy in organizations: corporate, business unit, and functional
Strategy in Organizations EXAMPLE: Nestlé Board of Directors Corporate level mission SBU level 7 worldwide SBUs (global product groups) Functional level marketing/finance/production/etc departments
How Strategy Happens Visionary organizations:(1) establish a foundation; (2) set a direction; and (3) create strategies to successfully develop and market their offerings marketing
Mission Statements Star Trek EnterpriseWhy is a mission statement important?
more Mission Statements Medtronic’s “Rising fig.” MuralWhat does it signify to stakeholders? “At Medtronic, we're committed to Innovating for Life by pushing the boundaries of medical technology and changing the way the world treats chronic disease.” www.medtronic.com Founder, Earl Bakken
Vision? What business are we really in? Do we have a viable business model?
Goals(Objectives) • Customer satisfaction/ serve the public good • Employee welfare • Social responsibility • Efficiency • Profit • Sales • Market share • Quality
Goals should be S.M.A.R.T. • Specific • Measurable • Attainable (Achievable) • Relevant • Time-based
Strategy Variations Variation by OFFERING: • Product • Service • Idea Variation by LEVEL: • Corporate • SBU • Function
Dashboards Car dashboard shows in one quick glance all essential information about status of key indicators, e.g. fuel gauge, temperature Marketing dashboard shows in one quick glance all essential information about status of key indicators, e.g. top customers, revenue, sales trends, prices. Marketing metrics on dashboard are linked to marketing objectives, which come from the marketing plan.
Hard to Measure: Metrics for Non-Profits “Every nonprofit organization should measure its progress in fulfilling its mission, its success in mobilizing its resources, and its staff's effectiveness on the job.” * • Define mission narrowly; success will be easier to measure. • Research effectiveness of programs. • Develop ‘microlevel’ goals, and extrapolate results.
Marketing Plan vsBusiness Plan Elements in typical Marketing & Business Plans targeted at different audiences
Strategic Planning • Where are we now? • Core competencies • competitive advantage? • Unique Selling Point (USP)? • Customer identification • managing expectations, e.g. quality • Competitors • in different shapes and forms Lands’ End
Strategic Planning EXAMPLE: • Where are we now? Competitor Assessment
Strategic Planning • Where do we want to go? • Business portfolio analysis • quantify performance of SBUs on growth share matrix • Diversification analysis • Search for new opportunities among current & new products, current & new markets
Strategic Planning High Stars Question Marks Cash Cows Dogs Market Growth Rate Relative Market Share Low High Low • Where do we want to go? • Business Portfolio Analysis
BCG business portfolio analysis for Kodak’s consumer SBUs for 2003 (solid circle) and 2010 (hollow circle) ② ③ Kodak digitalpicture frame Kodak digitalphoto printer ④ ① Kodak digitalcamera Kodak film sales: US,Canada, & W. Europe
Strategic Planning • Where do we want to go? • Diversification Analysis • Market Penetration • Market Development • Product Development • Diversification
Four alternative market-product strategies for Ben & Jerry’s to expand sales revenues using diversification analysis
Strategic Marketing Process 3 vital phases of strategic marketing: • PLANNING - How do we allocate our resources to get where we want to go? • IMPLEMENTATION - How do we convert our plans to actions? • EVALUATION - How do our results compare with our plans and do deviations require new plans?
Strategic Marketing Process:PLANNING phase Step 1: Situation Analysis (SWOT) • Strengths • Weaknesses • Opportunities • Threats
SWOT analysis serves as basis for management actions regarding growth
Strategic Marketing Process:PLANNING phase Step 2: Market-Product Focus & Goal-Setting • Market segmentation • Set marketing & product goals • Select target markets • Points of difference • Position product
Strategic Marketing Process:PLANNING phase Step 3: Marketing Program • Product • Price • Promotion • Place (distribution) 4 P’s
Elements of marketing mix are blended to produce a cohesive marketing program
Strategic Marketing Process:IMPLEMENTATION phase • Obtaining Resources • Designing theMarketing Organization • Developing Planning Schedules • Executing the Marketing Program • Marketing Strategy • Marketing Tactics
Strategic Marketing Process:EVALUATION phase • Comparing results with plans to identify deviations • “planning gap” • Act on deviations • exploit or correct
in-class exercise This slide will be posted AFTER class.
Next class: Marketing Environment Social Responsibility & Ethics Preparation: Read Ch. 3p.63 Facebook; p.65 fig.3-2 Ch. 4pp.89-91; p.94 Pepsi-Coke; p.95 Transparency Int’l; pp.100-101 Homework #1:Marketing Ethics