Download July 22nd

How often do you eat a bowl of
Cereal?
A)
B)
C)
D)
Hardly Ever
1 to 2 times a week
3 or 4 times a week
More than 3 or 4
times a week
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How often do you eat cereal other
than for breakfast?
A)
B)
C)
D)
Never
Every so often
Once a week
More than once
a week
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Cereality
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Chapter 2
Planning, Implementing,
and Controlling
Marketing Strategies
1. STRATEGIC PLANNING
The process of establishing an
organizational mission and formulating
goals, corporate strategy, marketing
objectives, marketing strategy, and a
marketing plan.
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
Coca-Cola’s
Strategic Priorities
1. Accelerate carbonated soft-drink growth, led by
Coca-Cola.
2. Selectively broaden our family of beverage brands
to drive profitable growth.
3. Grow system profitability and capability together
with our bottling partners.
4. Serve customers with creativity and consistency to
generate growth across all channels.
5. Direct investments to highest-potential areas across
markets.
6. Drive efficiency and cost effectiveness everywhere.
Coca-Cola, “Six Strategic Priorities(2002), http://www2.coca-cola.com/investors/annualreport/2002/sixstrateg.htm
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Marketing Strategy
A plan of action for
identifying and analyzing
a target market and
developing a marketing
mix to meet the needs of
that market.
– Marketing Plan
(Lipton targets health-concious consumers. Page 29)
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2. ASSESSING ORGANIZATIONAL
RESOURCES AND OPPORTUNITIES
• Assessing financial and human
resources
– Capabilities vs. changes
– Marketing and financial affect
• Goodwill, reputation and brand
as resources
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Core Competencies
Things a firm does
extremely well, which
sometimes give it an
advantage over its
competition.
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Market Opportunity
A combination of circumstances and timing
that permits an organization to take action to
reach a particular target market.
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Strategic Windows
Temporary periods of optimal fit between
the key requirements of a market and the
particular capabilities of a firm competing
in the market.
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Competitive Advantage
The result of a company’s matching a
core competency to opportunities it has
discovered in the marketplace.
Dell vs. Apple
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Figure 2.2
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• New Brand
Monk Ad
Second life
Solid Ink
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3. ESTABLISHING AN ORGANIZATIONAL
MISSION AND GOALS
• Mission Statement Answers:
– Who are our customers?
– What is our core competency?
• Corporate Identity
– Unique Symbols
– Personalities
– Philosophies
Celestial Seasonings complete mission statement
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Marketing
Objective Characteristics
 Clear, simple terms
 Measurable
 Specify time frame
 Consistent with unit and corporate strategy
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Which of the following would be a
good objective?
A) Increase Market
share
B) Increase Brand
Awareness
C) Increase Sales
D) Increase Market
Penetration by 10%
over the next
quarter
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
Promotional Elements at
Jordan’s Furniture
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
Microsoft Announces Shift In
Corporate Strategy
• “Trustworthy Computing”
• Emphasize security and privacy over new
capabilities
• Highest priority is to ensure that computer users
continue to venture across an increasingly
Internet-connected world
• “Microsoft announces corporate strategy toward
security and privacy”
Information Security News, “Microsoft announces corporate strategy toward security and privacy”, Jan. 2002,
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http://seclists.org/lists/isn/2002/Jan/0092.html
2 | 20
Which video game console maker
was the “winner” last year?
A) Microsoft
B) Sony
C) Nintendo
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Business-Unit Strategy
• Strategic Business Unit (SBU)
– A division, product line, or other profit center
within the parent company.
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
Band-Aid is a
strategic business
unit of
Johnson&Johnson
Reprinted with permission of Johnson & Johnson Consumer Companies, Inc.
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Growth Share Matrix
Figure 2.4
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5. THE MARKETING PLAN
The process of assessing marketing
opportunities and resources, determining
marketing objectives, defining marketing
strategies, and establishing guidelines
for implementation and control of the
marketing program.
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6. MARKETING IMPLEMENTATION
The process of putting marketing strategies
into action.
– Intended Strategy
– Realized Strategy
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Components Of
The Marketing Plan
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Controlling Marketing Activities
Figure 2.5
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The Marketing Environment
The Natural Environment
– Concern for the natural
environment has grown
steadily, increasing the
importance of these trends:
• Shortage of raw materials
• Increased pollution
• Increased green
marketing/emphasis on
sustainability
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China Looming (2004)
• China second largest consumer of oil
(after the U.S.) Currently at 8%
• China has been responsible for nearly
two-fifths of the increase in global
consumption since 2000.
• China's surge in energy demand is also
the main reason for the doubling in the
world price of coal over the past year. Last
year China consumed 40% of all the coal
and 30% of all the steel in the world.
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1. THE MARKTING ENVIRONMENT
•Environment Scanning: The process of
collecting information about the forces in the
marketing environment.
•Environmental Analysis
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
Objectives Of
Environmental Scanning
 Detect scientific, technical, economic, social
and political trends/events
 Define potential threats, opportunities, or
changes implied by trends/events
 Promote future orientation in management/staff
thinking
 Alert management/staff to trends converging,
diverging, speeding up, slowing down or
interacting
Horizon Site, “Environmental Scanning” by James Morrison, 1992,
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http://horizon.unc.edu/courses/papers/enviroscan/
2 | 33
Responding To
Environmental Forces
• Accept as
uncontrollable- passive
and reactive
• Attempt to influence and
shape them-proactive
– Constructive
– Bring desired results
– Are limits
(Toyota responding to environmental forces. Page 59)
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2. COMPETITIVE FORCES
• Competition
– Brand Competitors
– Product Competitors
– Generic Competitors
– Total Budget
Competitors
(Volvic brand competitors include
Fiji and Evian. Page 60)
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Competitive Structures
Royal Mail Monopoly
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Monitoring Competition
• Price- most competitors monitor
• Do more than analyze information
• Develop ongoing system for gathering
information
• Understand market - customer needs
• Helps in recognition of own strategy flaws
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3. ECONOMIC FORCES
• Economic Conditions
• Buying Power
• Willingness to Spend
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Buying Power
•Income
– Disposable Income
– Discretionary Income
•Wealth
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2000 Median Household income
All
$37,000
African-American
$29,500
Hispanic
$28,600
Caucasian
$48,100
Asian-Pacific Islander $54,100
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2004 Mean Household income
All
African-American
Hispanic
Caucasian
Asian-Pacific Islander
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$60,500
$40,700
$45,900
$65,300
$76,700
2 | 41
Willingness To Spend
An inclination to buy because of
expected satisfaction from a
product, influenced by the ability
to buy and numerous
psychological and social forces.
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
American Consumer
Satisfaction Index
Figure 3.1
Source: “American Customer Satisfaction Index,” University of Michigan Business School, Sept. 2005, www.theacsi.com
“U.S. Automakers Slipping
in Consumer Satisfaction”
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4. POLITICAL FORCES
• Legislation enacted
• Legal decisions interpreted by courts
• Regulatory agencies created and operated
• Marketers
– Adjust to conditions
– Influence through contributions
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Top Corporate Donors
By Political Party
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5. LEGAL AND
REGULATORY FORCES
• Procompetitive legislation- preserves competition
• Consumer Protection legislation
– Protect people from harm
– Prohibit hazardous products
– Information disclosure
– Particular marketing activities
• Encourage compliance
• Regulatory Agencies
• Self-Regulatory forces
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Regulatory Agencies
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Self-Regulatory Forces
•
•
•
•
Trade Associations
Better Business Bureau
National Advertising Review Board
Advantages
– Less expensive
– More realistic
• Limitations
– Nonmember firms do not have to abide
– Lack of enforcement tools
– Often less strict
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6. TECHNOLOGICAL FORCES
•Impact of Technology
– Effects include:
• Dynamics
• Reach
• Self-Sustaining
•Adoption and Use of
Technology
(Monster.com has changed the way
people search for jobs. Page 72)
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Who is the number one seller of
music in the world?
A)
B)
C)
D)
Wal-Mart
I-tunes
Hear Music/Starbucks
Columbia House
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7. SOCIOCULTURAL FORCES
The influences in a society
and its culture(s) that change
people’s attitudes, beliefs,
norms, customs, and
lifestyles.
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Issues Of Sociocultural Forces
• Demographic and diversity characteristics
– Age, gender, race, ethnicity
– Marital/parental status, income, education
• Cultural Values
– Health
– Family
– Environment
• Consumerism- efforts to protect consumers’ rights
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
Marketing to
changing
demographics
# of People age
65 an older will
double by 2050
Reprinted with permission by Allianz
Life Insurance Company of North America
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Costco
• Markups only 14%
• Hourly employees $40,000 after 4 years
• Generous return policy
– “Costco continues to be a company that is better
at serving the club member and employee than
the shareholder”
• Axioms
–
–
–
–
1. Obey the law
2. Take care of your customers
3. Take care of your employees
4. Practice the intelligent loss of sales (SKUs)
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Organizational Culture
2-1
• Organizational culture
shared values and beliefs
that underlie a company’s
identity.
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
A Conceptual Framework for Understanding
Organizational Culture
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Layers of Organizational Culture
2-3
Observable
Artifacts
Espoused
Values
Basic
Underlying
Assumptions
Source: Adapted from E H Schein, Organizational Culture and
Leadership, 2nd ed (San Francisco: Jossey-Bass, 1992), p 17.
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Four Functions of Organizational Culture
2-4 Figure 2-2
Organizational
identity
Sense-making
device
Organizational
culture
Collective
commitment
Social system
stability
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Types of Organizational Culture
2-5 Table 2-1
General Types
of Culture
Normative
Beliefs
Organizational
Characteristics
Constructive
Achievement Goal and achievement
oriented
Value self-development
and creativity
Constructive Selfactualizing
Constructive Humanistic- Participative, employeeencouraging centered, and supportive
High priority on constructive
Constructive Affiliative
interpersonal relationships,
and focus on work group
satisfaction
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Types of Organizational Culture (Cont.)
2-6 Table 2-1
General Types Normative
of Culture
Beliefs
Organizational
Characteristics
Passivedefensive
Approval
Avoid conflict, strive to
be liked by others and
approval oriented
Passivedefensive
Passivedefensive
Convention
al
Dependent
Conservative, bureaucratic
and people follow the rules
Passivedefensive
Avoidance
Negative reward
system and avoid
accountability
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Nonparticipative, centralized
decision-making, and
employees do what they’re
told
2 | 61
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Types of Organizational Culture (Cont.)
2-7 Table 2-1
General Types Normative
of Culture
Beliefs
Organizational
Characteristics
Confrontation and
negativism awarded
Aggressivedefensive
Aggressivedefensive
Oppositional
Aggressivedefensive
Aggressivedefensive
Competitive Winning is valued and a win-
Power
Nonparticipative, take
charge of subordinates and
responsive to superiors
lose approach is used
Perfectionis Perfectionistic,
tic
persistent and hardworking
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
What researchers have learned
• Constructive culture is positively related with
employee behavior and attitude (DUHHHH)
• People felt more comfortable in companies whose
culture matched their personal value systems
(Double Duhhhh)
• No correlation between company culture and financial
performance (Whatttt?)
• Flexible cultures more likely to yield higher financial
performance (Interesting)
• 7 of 10 mergers and acquisitions fail to meet their
financial promise (can culture be an issue?
HP/Compaq)
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Embedding Organizational Culture
2-8
1. Formal statements of organizational philosophy,
mission, vision, values, and materials used for
recruiting, selection
and socialization
2. The design of physical space, work
environments, and buildings
3. Slogans, language, acronyms, and sayings
4. Deliberate role modeling, training programs,
teaching and coaching by managers and
supervisors
5. Explicit rewards, status symbols (e.g., titles),
and promotion criteria
6. Stories, legends, and myths about key people
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Embedding Organizational Culture (Cont.)
2-9
7. The organizational activities, processes, or
outcomes that leaders pay attention to,
measure, and control
8. Leader reactions to critical incidents and
organizational crises
9. The workflow and organizational structure
10.Organizational systems and procedures
11.Organizational goals and the associated
criteria used for recruitment, selection,
development, promotion, layoffs, and
retirement of people
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
HR Embeds
Organizational Culture
L2-1
HR is the keeper of:
• Selection
• Socialization
• Training and Development
• Evaluation Systems
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Embedding a Culture Based on a
Founder’s Personality
L2-2
HR Benefits when:
• The founder’s personality is charismatic,
vibrant, honest and ethical
• Leonard Gentine of Sargento Foods: after his
death, the family keeps his spirit alive through
his image and presenting a Founder’s Ring to
employees best displaying Sargento culture
• Charles Schwab believed that employees
should follow the company’s values or be fired:
his own son was fired after giving investment
advice: a no-no in Schwab culture
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Embedding a Culture Based on a
Founder’s Personality
L2-3
HR is challenged when:
• The founder is involved in scandal or
engages in questionable public activity
• Henry Ford stepped down from the
company and got involved in politics and
anti-Semitism
• Martha Stewart carefully crafted her brand
based on her image as a wholesome
homemaker only to be convicted of
securities fraud
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
HR and Employee Ownership
L2-4
•
•
•
•
Our
Culture
HR builds employee ownership of
culture:
Peg employee recognition to the
corporate culture.
Connect culture to the bottom line.
Emphasize the company’s history.
Communicate constantly with all levels
of employees.
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
A Model of Organizational Socialization
2-10 Figure 2-3
Phases
1. Anticipatory Socialization
Learning that occurs prior
to joining the
organization
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Perceptual and
Social Processes
• Anticipating realities
about the organization
and the new job
• Anticipating organization’s
needs for one’s skills
and abilities
• Anticipating organization’s
sensitivity to one’s needs
and values
2 | 70
©©2006
2005 The McGraw-Hill Companies, Inc. All rights reserved.
A Model of Organizational Socialization (Cont.)
2-11 Figure 2-3
Phases
2. Encounter
Values, skills and
attitudes start to shift
as new recruit
discovers what the
organization is truly
like
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Perception and
Social Processes
• Managing lifestyleversus-work conflicts
• Managing intergroup
role conflicts
• Seeking role definition
and clarity
• Becoming familiar
with task and group
dynamics
2 | 71
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
A Model of Organizational Socialization (Cont.)
2-12 Figure 2-3
Phases
3. Change and acquisition
Recruit masters skills and
roles and adjusts to work
group’s values and norms
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Perception and
Social Processes
• Competing role demands
are resolved
• Critical tasks are
mastered
• Group norms and values
are internalized
2 | 72
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Examples of Socialization
• Good
• Bad
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Socialization Tactics
2-14 Table 2-2
Tactic
Collective vs.
Individual
Formal vs. Informal
Sequential vs.
Random
Description
Collective: consists of grouping
newcomers and exposing them to a
common set of experiences; Individual:
exposing each individually to a set of
unique experiences
Formal: Segregating newcomer from
regular organization members; Informal:
not distinguishing between newcomer
and experienced members
Sequential: fixed progression of steps
that culminate in the new role; Random:
ambiguous or dynamic progression
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Socialization Tactics (Cont.)
2-15 Table 2-2
Tactic
Fixed vs. Variable
Description
Serial vs.
Disjunctive
Serial: newcomer is socialized by an
experienced member; Disjunctive: does
not use a role model
Investiture vs.
Divestiture
Investiture: affirmation of newcomer’s
incoming global and specific role
identities and attributes; Divestiture:
denial and stripping away of the
newcomer’s existing sense of self to
rebuild in the organization’s image
Fixed: provides a timetable for the
assumption of the role; Variable: does
not provide timetable
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2005 The McGraw-Hill Companies, Inc. All rights reserved.
Mentoring and Functions of Mentoring
2-16
 Mentoring is the process of forming and
maintaining developmental relationships
between a mentor and a junior person
Functions of Mentoring
• Career Functions
- Sponsorship
- Exposure-and-visibility
- Coaching
- Protection
- Challenging assignments
• Psychosocial Functions
- Role modeling
- Acceptance-and-confirmation
- Counseling
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2005 The McGraw-Hill Companies, Inc. All rights reserved.