Download Business Unit Level

CHAPTER
LINKING
MARKETING AND
CORPORATE
STRATEGIES
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
LEVELS OF STRATEGY IN
ORGANIZATIONS
• Kinds of Organizations
• Business firms
 Profit
• Non-profit organizations
• Levels in Organizations and How Marketing
Links to Them
• Corporate level
• Business unit level
 Business unit
• Functional level
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
CROSS FUNCTIONAL TEAMS
• Where Things Happen: Functional Areas
and Cross-Functional Teams
A small number of people from different
departments in an organization who are
mutually accountable to a common set of
performance goals.
• Also known as core teams
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
STRATEGY ISSUES IN
ORGANIZATIONS
• The Business
• The Mission
• Values and Culture
• Stakeholders
• Goals or Objectives
• Profit
• Sales revenue
• Market share
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-2 Medtronic’s mission
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
MORE ORGANIZATIONAL
GOALS
• Goals or Objectives
•
•
•
•
•
Unit sales
Quality
Customer satisfaction
Employee welfare
Social responsibility
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
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 inspirational
theme. In contrast, a culture is a system of
shared values, attitudes and behaviors that
distinguish the organization from others.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-8 The strategic marketing process
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
STEP 1: SITUATION ANALYSIS
• A Look Around: Where Are We Now?
• Customers
• Competencies
 Competitive advantage
 Quality
 Benchmarking
• Competitors
• SWOT Analysis
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Application
Designing a car is expensive and time-consuming, even
with the use of computers, because until recently there
was no way for all the varied departments that are
involved in new car development to work together.
DaimlerChrysler has created a central, Web-based system
that cuts the design and production process by at least two
years. This is an example of a(n):
A.
B.
C.
D.
E.
benchmarking project.
innovation-oriented mission.
action program.
operational goal implementation.
competency.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Application
The competency of a central, Web-based system
that cuts the design and production process by at
least two years gave DaimlerChryler :
A.
B.
C.
D.
E.
a competitive advantage.
benchmarking experience.
a tactical innovation.
leapfrogging capabilities.
a viable mission.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-3 Lands’ End’s competitors? They go
far beyond traditional catalog companies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-9
Ben & Jerry’s:
a “SWOT” to
get it growing
again
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
STEP 2: SETTING GOALS
• The Portfolios of Businesses: BCG
Analysis
• Market-Product Analysis
• Market segmentation
• Points of difference
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-5 Boston Consulting Group growthshare matrix for a strong, diversified firm
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
MARKET-PRODUCT ANALYSIS
Product/ Market (Expansion) Grid
Existing
Products
Existing
Markets
1. Market
Penetration
New
Markets
2. Market
Development
New
Products
3. Product
Development
4. Diversification
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
APPLICATION: WHAT STRATEGY?
• McDonald’s:
• Opens its first restaurants in China
• Develops a line of McDonald’s toys to be sold
through Toys R Us stores
• Adds a new line of deli sandwiches to its menu
• Runs a promotion based on the Monopoly game
• Gives coupons for free fries for a subsequent
visit
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-6 Four market-product strategies:
alternative ways to expand sales revenues
for Ben and Jerry’s
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
STEP 3: PLANNING
• Develop a Marketing Program
• Decide on implementation of the Marketing
Mix
• Set budgets
 Estimate revenues
 Estimate expenses
 Estimate profits
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-10 Elements of the marketing
mix that comprise a cohesive marketing program
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
1. What is the difference between a
strength and an opportunity in a SWOT
analysis?
A: Both are positive factors for the
organization, but a strength is an
internal factor whereas an opportunity
is an external one.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
2. What is market segmentation?
A: This involves aggregating
prospective buyers into groups, or
segments, that (1) have common
needs and (2) will respond similarly to
a marketing action.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
3. What are “points of difference” and
why are the important?
A: Points of difference are those
characteristics of a product that make
it superior to competitive substitutes.
They are the single most important
factor in the success or failure of a
new product.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
THE STRATEGIC MARKETING
PROCESS: IMPLEMENTATION
•
•
•
•
Obtaining Resources
Designing the Marketing Organization
Develop Schedules
Execute!!
 Marketing strategy
 Marketing tactics
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
TYPICAL MARKETING
ORGANIZATION
Replace Figure 2-11
VP of
Marketing
Product/Brand
Management
Product
Marketing
Marketing
Communications
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Market
Research
THE STRATEGIC MARKETING
PROCESS: CONTROL
• Compare results to plan
• Identify deviations
• Correct where possible
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 2-12 Evaluation and control of Kodak’s
marketing program
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
1. What is the control phase of the
strategic management process?
A: This is the phase that seeks to keep
the marketing program moving in the
direction set for it.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
2. How do the objectives set for a
marketing process in the planning phase
relate to the control phase of the strategic
marketing process?
A: The planning phase objectives are
used as the benchmark with which the
actual performance results are
compared in the control phase.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin