Professional Documents
Culture Documents
Strategic Marketing
Management
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Expanding Responsibilities
of Marketing Managers
They no longer function solely to direct
day-to-day operations. They must make
strategic decisions as well.
Expanded responsibilities include:
Charting the direction of the
organization
Contributing to decisions that will
create and sustain a competitive
advantage and affect long-term
organizational performance
1-5
Evolution of the
Marketing Manager
From being only an
implementer.
to being a maker of
organization strategy.
This has prompted the emergence of
strategic marketing management as
a course of study and practice.
1-6
Processes in Strategic
Marketing Management
1. Defining the organizations business,
mission, and goals
2. Identifying and framing
organizational growth opportunities
3. Formulating product-market
strategies
4. Budgeting marketing, financial, and
production resources
5. Developing reformulation and
recovery strategies
1-7
Process One
Defining the
Organizations Business,
Mission, and Goals
1-8
Business Definition
By defining a business from a
customer or market perspective
an organization is appropriately
viewed as:
a customer - satisfying endeavor
not
a product-producing or service
delivery enterprise.
1-9
Business Mission
Underscores the scope of an
organizations operations apparent in
its business definition
Reflects managements vision of
what the organization seeks to do
Most statements describe:
the organizations purpose
customers, products/services,
markets, philosophy, and technology
1-11
Benefits of Mission
Statements
1. Crystallizes managements vision of the
organizations long-term direction and
character
2. Provides guidance in identifying, pursuing,
and evaluating market and product
opportunities
3. Inspires and challenges employees to do
those things that are valued by the
organization and its customers
4. Provides direction for setting business goals
or objectives
1-12
Business Goals
Goals or objectives convert the organizations
mission into tangible actions and results that
are to be achieved, often within a specified
time frame.
Three major categories of goals:
1. Production
2. Financial
3. Marketing
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Production Goals
Apply to the use of
manufacturing and service
capacity and to product
and service quality.
Marketing Goals
market share
marketing productivity
sales volume
profit
customer satisfaction
customer value creation
Financial Goals
Focus on return on
investment, return on
sales, profit, cash flow,
and shareholder wealth.
1-14
Process Two
1-15
Converting Environmental
Opportunities into
Organizational Opportunities
What might we do?
Sources of environmental opportunity:
Unmet or changing customer needs
Unsatisfied buyer groups
New means or technology for delivering
value to prospective buyers
1-16
Converting Environmental
Opportunities into
Organizational Opportunities
What do we do best?
Distinctive Competency describes an
organizations unique strengths or qualities
including:
Skills
Technologies
Resources
that distinguish it from other organizations.
1-17
Converting Environmental
Opportunities into
Organizational Opportunities
What must we do?
Success Requirements are basic tasks
that an organization must perform in a
market or industry to compete
successfully.
If what must be done is inconsistent with
what can be done to capitalize on an
environmental opportunity, an organizational
growth opportunity will fail to materialize.
1-18
SWOT Analysis
A formal framework for identifying and
framing organizational growth opportunities
Strengths
Weaknesses
internal
Opportunities
Threats
external
1-19
SWOT Analysis
Framework for focusing attention on the
fact that an organizational growth
opportunity results from
a good fit between an organizations
INTERNAL CAPABILITIES
(Strengths & Weaknesses)
and
its EXTERNAL ENVIRONMENT
(Opportunities & Threats)
1-20
SWOT Analysis
Strength
Weakness
Opportunities
Developments or conditions in
the environment that have
favorable implications for the
organization
Threats
Process Three
Formulating
Product-Market Strategies
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Product-Market Strategies
Existing
products
New
products
Existing
markets
Market
Market
Penetration
Penetration
Product
Product
Development
Development
New
market
s
Market
Market
Development
Development
Diversification
Diversification
1-24
Market Penetration
Strategy
Seeking a larger market share in a market in
which organization already has an offering
This strategy involves:
Attempts to increase present buyers
usage or consumption rates of the
offering
Attracting buyers of competing offerings
Stimulating product trial among potential
consumers
1-25
Market Development
Strategy
Introducing its existing offerings to markets
other than those that the organization is
currently serving.
Reaching new markets requires:
Carefully considering competitor strengths
and weaknesses and competitor retaliation
potential
Modification of the basic offering
Different distribution outlets
Change in sales effort and advertising
1-26
Market Development in
the International Arena
Exporting
Licensing
Joint Venture
or Strategic
Alliance
Direct
Investment
1-27
Product Development
Strategy
Creating new offerings for existing markets.
This approach may be taken for:
Product Innovation develop totally new
offerings
Product Augmentation enhance the
value to customers of existing offerings
Product line extension broaden the
existing line of offerings by adding different
sizes, forms, flavors, etc.
1-28
Diversification Strategy
Development or acquisition of offerings
new to the organization and introducing
those offerings to publics not previously
served by the organization.
Growing trend in recent years
High-risk strategy because both the
offering and market served are new to
the organization
1-29
Response
Outcome
Aggressive
competition
Estimated profit of
$2 million
Passive
competition
Estimated profit of
$3 million
Market-penetration
strategy
Aggressive
competition
Estimated profit of
$1 million
Passive
competition
Estimated profit of
$4 million
Market-development
strategy
Product
Strategy
Communications
Strategy
Customer
Price
Strategy
Channel
Strategy
1-31
Process Four
Budgeting Marketing,
Financial, and Production
Resources
1-32
The Budget
A formal, quantitative expression of an
organizations planning and strategy
initiatives expressed in financial terms
A well-prepared budget meshes and
balances an organizations
Financial,
Production, and
Marketing Resources
so that overall organizational goals or
objectives are attained.
1-33
Components of a Budget
1. Operating Budget
Also referred to as a pro forma
Income Statement
Focuses on an organizations income
statement
2. Financial Budget
Focuses on the effect that the
operating budget and other initiatives
will have on the organizations cash
position
1-34
Process Five
Developing Reformulation
and Recovery Strategies
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