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CHAPTER
TWO
LINKING MARKETING AND
CORPORATE STRATEGIES
Irwin/McGraw-Hill
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
AFTER READING THIS CHAPTER YOU SHOULD
BE ABLE TO:
• Describe the three organizational levels
of strategy and their components.
• Describe how the three organizational
levels of strategy relate to each other and
how they influence the marketing
function.
• Describe the strategic marketing process
and its three key phases: planning,
implementation, and control.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
AFTER READING THIS CHAPTER YOU SHOULD
BE ABLE TO:
• Understand how organizations search for
new marketing opportunities and select
target markets.
• Explain how the marketing mix elements
are blended into a cohesive marketing
program.
• Describe how marketing control compares
actual results with planned objectives and
acts on deviations from the plan.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-1 Three levels of strategy in an organization
Corporate strategy
• Vision
• Corporate goals
• Philosophy and culture
Business unit strategy
• Mission
• Business goals
• Competencies
Functional strategy
Information
systems
Research &
development
Finance
MARKETING, 6/e
BERKOWITZ
Manufacturing
Marketing
KERIN
HARTLEY
RUDELIUS
Human
resources
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-AA Concept Check
1. What are the three levels in
today’s large organizations?
2. What is the difference between
corporate vision and corporate
goals?
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-2
The
Organization’s
Success
Quality
Customer
Relationships
MARKETING, 6/e
BERKOWITZ
KERIN
Efficiency
Innovation
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-BB Definition of Corporate Vision
Corporate vision is . . . .
a clear word picture of the organization’s
future, 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.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-CC Definition of Corporate Goals
A goal is . . . .
a targeted level of performance set in
advance of work.
Therefore, corporate goals provide strategic
performance targets that the entire
organization must reach to purse its vision.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-DD Types of Corporate Goals
Corporate goals may be articulated in
terms of:
- profits
- quality
- sales revenue
- employee welfare
- market share
- social responsibility
- unit sales
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-EE Corporate Philosophy and Culture
Corporate philosophy establishes the
values and “rules of conduct” for
running the organization.
Corporate culture refers to a system of
shared attitudes and behaviors held by
the employees that distinguish it from
other organizations.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-FF Business Unit Mission and Goal
The business unit mission is a statement that
specifies the markets and product lines in
which a business will compete. It
communicates the scope of a business unit.
A business unit goal is a performance target
the business unit seeks to reach in an effort to
achieve its mission. Goals that are more
specific and quantifiable are called objectives.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-3 Mission and Goals of Domestic Merchandising Group,
Sears, Roebuck & Co.
BUSINESS UNIT MISSION
To be a compelling place to shop, work, and invest.
BUSINESS UNIT GOALS (Strategic Initiatives)
•
•
•
•
•
Focus on core businesses
Serve the target customer
Be market driven
Achieve consistent productivity improvement
Drive organizational transformation
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-GG The Boston Consulting Group Matrix
The Boston Consulting Group (BCG) Matrix
The BCG business portfolio analysis analyzes
a firm’s business units (SBUs) as though they
were a collection of separate investments.
The technique locates SBUs on a market
growth-relative market share matrix. Then
the SBUs are classified as either “question
marks,” “stars,”“cash cows,” or “dogs.”
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-4 Boston Consulting Group growth-share matrix
20%
Question
mark
Market growth rate
Star
High
?
A
10%
D
Low
B
Cash
cow
0%
10x
Dog
C
High
1x
Low
0.1x
Relative market share
(share relative to largest competitor)
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-HH Specifying the SBU’s Competencies: Some
important definitions
competitive advantage is . . .
quality is . . .
benchmarking is . . . .
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-II Concept Check
1.
2.
3.
“Make Sears a compelling place to
shop, work, and invest” is an example
of what kind of business unit
statement?
What is business portfolio analysis?
What is a competitive advantage, and
why is it important?
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-5 The strategic marketing process
Planning phase
Situation (SWOT)
analysis
Step 2
Market-product focus
and goal setting
Marketing
program
Corrective Action
Marketing plan
Implementation
Phase
Results
Control
Phase
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-6 Ben & Jerry’s: A “SWOT” Analysis to
Get It Growing Again
TYPE OF FACTOR
Location
of Factor
Favorable
Unfavorable
Internal
-Prestigious, well known brand
-Danger that B&J’s social responsi-
name among U.S. consumers
bilities actions may add costs,
-40% share of the U.S. super
reduce focus on core business
premium ice cream market
-Need for experienced managers to
-Strong position among customers
help growth
built on reputation for pure
-Flat sales & profits in recent years
ingredients & social responsibility
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-6 Ben & Jerry’s: A “SWOT” Analysis to
Get It Growing Again
TYPE OF FACTOR
Location
of Factor
External
MARKETING, 6/e
Favorable
-Growing demand for quality
ice cream in overseas markets
-Increasing U.S. demand for
frozen yogurt & other low fat
desserts
-Success of many U.S. firms in
extending successful brand in
one product category to others
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Unfavorable
-Consumer concern with fatty
desserts; B&J’s customers are
the type who read new
government-ordered
nutritional labels
-Competes with giant Pillsbury
& its Haagen-Dazs brand
-International downturns
increase the risks for B&J in
European & Asian markets
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-7 Four market-product strategies: alternative ways to
expand sales revenues for Ben & Jerry’s
PRODUCTS
MARKETS CURRENT
NEW
Current
Market Penetration
Product Development
New
MARKETING, 6/e
Selling more Ben & Jerry’s
super premium ice cream
to Americans
Selling a new product
such as children’s
clothing under the Ben
& Jerry’s brand to
Americans
Market Development
Diversification
Selling B&J’s super
premium ice cream to Asian
markets for the first time
Selling a new product
such as children’s
clothing in Asian markets
for the first time
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-8 Elements of the marketing mix that compose a cohesive
marketing program
Marketing
manager
Product
Price
Promotion
Place
Features
Brand name
Packaging
Service
Warranty
List price
Discounts
Allowances
Credit items
Payment period
Advertising
Personal selling
Sales promotion
Publicity
Outlets
Channels
Coverage
Transportation
Stock level
Cohesive marketing mix
Promotion
Promotion
Product
Place
Place
Price
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-JJ Concept Check
1.
2.
3.
What is the difference between a
strength and an opportunity in a
SWOT analysis?
What is market segmentation?
If Ben & Jerry’s attempts to enter
Asian markets with its super premium
ice cream, which market-product
strategy would it be using?
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-A General Electric’s stoplight strategy chart
Green band = “Go” signal = Build
Yellow band = “Caution” signal = Hold
Market attractiveness
C
High
Medium
Red band =
“Stop” signal = Divest
B
A
Low
Strong
Medium
Weak
Business position
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-B PIMS chart showing impact of relative market share
expense/sales revenue ratio on a firm’s ROI
Relative market share
Low
20
13
7
21
19
19
34
31
34
26%
63%
High
6%
Low
11%
High
Marketing expense/sales revenue ratio
Note: Numbers in cells represent ROI.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-C Sears Ad Reflecting Its Search for a New Mission
and Focus
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
Courtesy
of Sears, Roebuck
& Inc.,
Co. 2000
©
The McGraw-Hill
Companies,
PP2-D Nokia Digital Cellular Phone Ad
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
Courtesy
of Nokia
Americas.Inc., 2000
© The
McGraw-Hill
Companies,
PP2-E Kodak Enhance Station Ad
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
of Eastman
Kodak Co.
©Courtesy
The McGraw-Hill
Companies,
Inc., 2000
PP2-F Elements in typical marketing and business plans
targeted at different audiences
Marketing plan
Element of the plan
For internal
audience
(to direct
firm)
For external
audience
(to raise
capital)
For internal
audience
(to direct
firm)
For external
audience
(to raise
capital)
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
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








1. Executive summary
2. Description of organization
3. Strategic plan/focus
4. Situation analysis


5. Market-product focus
6. Marketing program strategy and tactics
7. R&D and operations program

8. Financial projections
9. Organization



10. Implementation plan
11. Evaluation and control
A. Appendices
MARKETING, 6/e
BERKOWITZ
KERIN
Business plan
HARTLEY
RUDELIUS

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Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-9 Organization of a Typical Manufacturing Firm, Showing a
Breakdown of the Marketing Department
President
Vice President
Research and
Development
Department
Manager
Product
Planning
Vice President
Manufacturing
Department
Vice President
Marketing
Department
Vice President
Account and
Finance
Department
Manager
Sales
Manager
Advertising &
Manager
Marketing
Research
Vice President
Human
Resources
Department
Sales Promotion
Sales Regions
and
Representatives
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-10 Evaluation & Control of Kodak’s Marketing Program
Target sales revenues
with new plans and actions
$32
28
+
Actual sales
revenues
24
20
16
12
8
+
A
4
+
+
D
+
+
B+
+
+
+
+
+
+ Planning Gap
B
+ +
+
+
C
Sales revenues without new
plans and actions
Past
Future
0
1993
MARKETING, 6/e
1995
BERKOWITZ
1997
KERIN
HARTLEY
1999
RUDELIUS
2001
2003
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-KK Steps 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, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-LL Marketing 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.
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000
PP2-MM Concept Check
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?
MARKETING, 6/e
BERKOWITZ
KERIN
HARTLEY
RUDELIUS
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2000