linking marketing and corporate · pdf filelinking marketing and corporate strategies. 2-2...

2-1© 2000 McGraw-Hill Ryerson Limited

C H A P T E R T W O

LINKING MARKETING ANDCORPORATE STRATEGIES


AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:

� Describe the three organizational levelsof strategy and their components.

� Describe how the three organizationallevels of strategy relate to each other andhow they influence the marketingfunction.

� Describe the strategic marketing processand its three key phases: planning,implementation, and control.


AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:

� Understand how organizations search fornew marketing opportunities and selecttarget markets.

� Explain how the marketing mix elementsare blended into a cohesive marketingprogram.

� Describe how marketing control comparesactual results with planned objectives andacts on deviations from the plan.


PP2-1 Three levels of strategy in an organizationPP2-1 Three levels of strategy in an organization

Research &development

Informationsystems

Finance Marketing

Manufacturing

Humanresources

Business unit strategy� Mission� Business goals� Competencies

Business unit strategy� Mission� Business goals� Competencies

Corporate strategy� Vision� Corporate goals� Philosophy and culture

Corporate strategy� Vision� Corporate goals� Philosophy and culture

Functional strategy


Concept CheckConcept Check

1. What are the three levels in

today�s large organizations?

2. What is the difference between

corporate vision and corporate

goals?


PP2-2 PP2-2 A Combination of Customer Relationships

TheOrganization�s

Success

Quality

CustomerRelationships

Efficiency

Innovation


Definition of Corporate VisionDefinition of Corporate Vision

Corporate vision is . . . . Corporate vision is . . . .

a clear word picture of the organization�sfuture, often with an inspirational theme.

It sets the overall direction for the

organization, describing what it strives to be--

stretching the organization, but not beyond

reason.

a clear word picture of the organization�sfuture, often with an inspirational theme.

It sets the overall direction for the

organization, describing what it strives to be--

stretching the organization, but not beyond

reason.


Definition of Corporate GoalsDefinition of Corporate Goals

A goal is . . . . A goal is . . . .a targeted level of performance set inadvance of work.

Therefore, corporate goals providestrategic performance targets that theentire organization must reach to pursue itsvision.

a targeted level of performance set inadvance of work.

Therefore, corporate goals providestrategic performance targets that theentire organization must reach to pursue itsvision.


Types of Corporate GoalsTypes of Corporate Goals

Corporate goals may be articulated interms of:

- profits - quality

- sales revenue - employee welfare

- market share - social responsibility

- unit sales


Corporate Philosophy and CultureCorporate Philosophy and Culture

Corporate philosophy establishes thevalues and �rules of conduct� forrunning the organization.

Corporate culture refers to a system ofshared attitudes and behaviors held bythe employees that distinguish it fromother organizations.


Business Unit Mission and GoalBusiness Unit Mission and Goal

The business unit mission is a statement thatspecifies the markets and product lines inwhich a business will compete. Itcommunicates the scope of a business unit.

A business unit goal is a performance targetthe business unit seeks to reach in an effort toachieve its mission. Goals that are morespecific, measurable and quantifiable arecalled objectives.


PP2-3 Mission and Guiding Principles of the Holiday InnBurlington

BUSINESS UNIT MISSIONWe are dedicated to providing quality hospitality product

and service..

Guiding Principles� If a customer has a need or want, we fill it.

� If a customer has a question, we find the answer.

� If a customer has a concern, we resolve it.

� If a customer is lost, we show them the way.


The Boston Consulting Group MatrixThe Boston Consulting Group Matrix

The Boston Consulting Group (BCG) Matrix

The BCG business portfolio analysis analyzesa firm�s business units (SBUs) as though theywere a collection of separate investments.

The technique locates SBUs on a marketgrowth-relative market share matrix. Thenthe SBUs are classified as either �questionmarks,� �stars,��cash cows,� or �dogs.�


PP2-4 Boston Consulting Group Growth-Share MatrixPP2-4 Boston Consulting Group Growth-Share MatrixM

arke

t gro

wth

rat

e

10x High 1x Low 0.1xRelative market share

(share relative to largest competitor)

?

Cashcow

Star

Dog

Questionmark

B

C

D

A

20%

High

10%

Low

0%


Specifying the Specifying the SBU�s SBU�s Competencies: Some Important DefinitionsCompetencies: Some Important Definitions

benchmarking is . . . . benchmarking is . . . .

quality is . . . quality is . . .

competitive advantage is . . .competitive advantage is . . .



1. What is business portfolio analysis?

2. What is a competitive advantage, and

why is it important?


PP2-5 The strategic marketing processPP2-5 The strategic marketing process

Marketing plan

Market-product focusand goal setting

Situation (SWOT)analysis

Marketingprogram

ImplementationPhase

ControlPhase

Results

Planning phase

Corrective A

ction


PP2-6a A �SWOT� Analysis for PP2-6a A �SWOT� Analysis for RollerbladeRollerblade, Inc., Inc.

TYPE OF FACTOR

Location

of Factor Favourable Unfavourable

Internal -Industry leader -Premium-priced position

-Innovative, in products and puts off the �value

design conscious� consumer

-Strong brand awareness -Limited distribution in

-Strong position in sporting mass merchandising

goods and specialty outlets outlets


PP2-6b A �SWOT� Analysis for PP2-6b A �SWOT� Analysis for RollerbladeRollerblade, Inc., Inc.

TYPE OF FACTOR

Location

of Factor Opportunities Threats

External -Identify new market -Fierce competition at

segments to serve both the premium and

-Develop a brand for the low-end of market

�value-conscious� consumer -Brand name may become

-Expand distribution globally a generic term for in-line

-Expand accessories line skates


PP2-7 Four market-product strategies: alternative ways to PP2-7 Four market-product strategies: alternative ways to expand sales revenue for expand sales revenue for RollerbladeRollerblade, Inc., Inc.

PRODUCTS

MARKETS CURRENT NEW

Current Market Penetration Product Development

Selling more in-line skates Selling a new product like

to Canadians the Xten-plus to Canadians

New Market Development Diversification

Selling in-line skates in Selling in-line skating

Australia accessories like helmets andclothing, or entering the

bicycle business


PP2-8 Elements of the marketing mix that compose a cohesive PP2-8 Elements of the marketing mix that compose a cohesive marketing programmarketing program

PlaceOutletsChannelsCoverageTransportationStock level

PlaceOutletsChannelsCoverageTransportationStock level

PromotionAdvertisingPersonal sellingSales promotionPublicity

PromotionAdvertisingPersonal sellingSales promotionPublicity

PriceList priceDiscountsAllowancesCredit itemsPayment period

PriceList priceDiscountsAllowancesCredit itemsPayment period

ProductFeaturesBrand namePackagingServiceWarranty

ProductFeaturesBrand namePackagingServiceWarranty

Marketingmanager

Marketingmanager

Cohesive marketing mix

PromotionPlace

Price

PromotionPlace

Product


Concept CheckConcept Check1. What is the difference between a

strength and an opportunity in a

SWOT analysis?

2. If Rollerblade, Inc. attempts to enter Australia with its in-line skates, whichmarket-product strategy would it be using?

3. What is market segmentation?


PP2-9 Organization of a Typical Manufacturing Firm, Showing aPP2-9 Organization of a Typical Manufacturing Firm, Showing aBreakdown of the Marketing DepartmentBreakdown of the Marketing Department

President

Vice President Research and Development Department

Vice PresidentManufacturingDepartment

Vice PresidentMarketingDepartment

Vice PresidentAccount andFinanceDepartment

Vice PresidentHumanResourcesDepartment

Manager Product Planning

Manager Marketing Research

Manager Sales

ManagerAdvertising &Sales Promotion

Sales Regionsand

Representatives


PP2-10 Evaluation & Control of Kodak�s Marketing ProgramPP2-10 Evaluation & Control of Kodak�s Marketing Program

1993 1995 1997 1999 2001 2003

$32

28

24

20

16

12

8

4

0Past Future

++ + + + +

++

++

+

Planning Gap

D

Actual salesrevenues

Target sales revenueswith new plans and actions

Sales revenues without newplans and actions

A

BB

C+ + + + + +


Steps in the Strategic Marketing ProcessSteps in the Strategic Marketing Process

Step 1: Situation (SWOT) Analysis

Step 2: Market-Product Focus & Goal Setting

Step 3: Marketing Program

Step 4: Implementation Phase

Step 5: Control Phase


Marketing Strategy and TacticsMarketing Strategy and Tactics

A marketing strategy is a means by which a

marketing goal is to be achieved, usually

characterized by a specific target market and

a marketing program to reach it.

Marketing tactics are detailed day-to-day

operational decisions essential to the overall

success of marketing strategies.



1. What is the control phase of the

strategic marketing process?

2. How do the objectives set for a

marketing program in the

planning phase relate to the

control phase of the strategic

marketing process?


PP2-A General Electric�s stoplight strategy chartM

ark

et a

ttra

ctiv

enes

s

Business positionStrong Medium Weak

High

Medium

Low

Green band = �Go� signal = Build Yellow band = �Caution� signal = Hold

High

over

all at

tract

ivenes

s

over

all

Low ov

erall

attr

activ

enes

s

Med

ium

attra

ctive

ness

B A

C

Red band =�Stop� signal = Divest


PP2-B PIMS chart showing impact of relative market share PP2-B PIMS chart showing impact of relative market share expense/sales revenue ratio on a firm�s ROI expense/sales revenue ratio on a firm�s ROI

202020

212121

131313 777

343434

191919 191919

313131 343434Rel

ativ

e m

arke

t sh

are

Marketing expense/sales revenue ratioNote: Numbers in cells represent ROI.

Low

26%

63%

HighLow 6% 11% High


PP2-C Elements in typical marketing and business plans PP2-C Elements in typical marketing and business plans targeted at different audiences targeted at different audiences

Element of the planElement of the planMarketing planMarketing plan Business planBusiness plan

For internalaudience(to direct

firm)


firm)

Forexternalaudience(to raisecapital)



firm)


firm)



1. Executive summary 1. Executive summary

2. Description of organization 2. Description of organization

3. Strategic plan/focus 3. Strategic plan/focus

4. Situation analysis 4. Situation analysis

5. Market-product focus 5. Market-product focus

6. Marketing program strategy and tactics 6. Marketing program strategy and tactics

7. R&D and operations program 7. R&D and operations program

8. Financial projections 8. Financial projections

9. Organization 9. Organization

10. Implementation plan10. Implementation plan

11. Evaluation and control11. Evaluation and control

A. Appendices A. Appendices

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