Transcript chp1 - courses.psu.edu

J. Paul Peter
•
James H. Donnelly, Jr.
6th Edition
Marketing
Management
P 1-1
Knowledge and Skills
Chapter 1
P 1-2
Strategic Planning and
the Marketing Process
The Strategic Planning Process
The Environment
Cooperative
Competitive
Economic
Social
Political
Legal
The organization’s strategic plan
INFORMATION
Organizational
Mission
Organizational
Objectives
Organizational
Strategies
Organizational
Portfolio Plan
P 1-3
IMPLEMENTATION
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Mission Statements
Organization
Mission
• Goodyear
Our mission is constant improvement in products and
services to meet our customers’ needs. This is the only
means to business success for Goodyear and prosperity
for its investors and employees.
P 1-4
• Intel Corporation Do a great job for our customers, employees, and
stockholders by being the preeminent building block
supplier to the computing industry.
(continued)
SOURCE: Patricia Jones and Larry Kahaner, Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark (New York: Doubleday, 1995).
P 1-5
Mission Statements
Organization
Mission
• Levi Strauss & Co.
The mission of Levi Strauss & Co. is to sustain
responsible commercial success as a global
marketing company of branded casual apparel. We
must balance goals of superior profitability and
return on investment, leadership market positions,
and superior products and service. We will conduct
our business ethically and demonstrate leadership in
satisfying our responsibilities to our communities
and to society. Our work environment will be safe
and productive and characterized by fair treatment,
teamwork, open communications, personal
accountability, and opportunities for growth and
development.
(continued)
SOURCE: Patricia Jones and Larry Kahaner, Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark (New York: Doubleday, 1995).
P 1-6
Mission Statements
Organization
Mission
• Merck & Co., Inc.
The mission of Merck & Co., Inc., is to provide
society with superior products and services—
innovations and solutions that satisfy customer needs
and improve their quality of life—to provide
employees with meaningful work and advancement
opportunities and investors with a superior rate of
return.
• Marriott
Grow a worldwide lodging business using total
quality management (TQM) principles to
continuously improve preference and profitability.
Our commitment is that every guest leaves satisfied.
SOURCE: Patricia Jones and Larry Kahaner, Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark (New York: Doubleday, 1995).
Sample Organizational Objectives (manufacturing firm)
Area of Performance
Possible Objective
To make our brands number one in their
field in terms of market share.
2. Innovations
To be a leader in introducing new
products by spending no less than 7
percent of sales for research and
development.
3. Productivity
To manufacture all products efficiently
as measured by the productivity of the
workforce.
4. Physical and financial resources
To protect and maintain all resourcesequipment, buildings, inventory, and
funds.
P 1-7
1. Market standing
(continued)
Irwin/McGraw-Hill
Figure 1-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Sample Organizational Objectives (manufacturing firm)
Area of Performance
Possible Objective
To achieve an annual rate of return on
investment of at least 15 percent.
6. Manager performance and
responsibility
To identify critical areas of
management depth and succession.
7. Worker performance
and attitude
To maintain levels of employee
satisfaction consistent with our own and
similar industries.
8. Social responsibility
To respond appropriately whenever
possible to societal expectations and
environmental needs.
P 1-8
5. Profitability
Irwin/McGraw-Hill
Figure 1-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Potential Sources of Cross-Functional Conflict for
Marketers
What They May
Want to Deliver
What Marketers May
Want Them to Deliver
Research and
development
Basic research projects
Product features
Few projects
Products that deliver customer value
Customer benefits
Many new products
Production/
operations
Long production runs
Standardized products
No model changes
Long lead times
Standard orders
No new products
Short production runs
Customized products
Frequent model changes
Short lead times
Customer orders
Many new products
P 1-9
Functions
(continued)
SOURCE: G. A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers (Burr Ridge, IL: Irwin/McGraw-Hill, 1998), p. 15.
Potential Sources of Cross-Functional Conflict for
Marketers
Functions
Finance
What They May
Want to Deliver
What Marketers May
Want Them to Deliver
Rigid budgets
Flexible budgets
Budgets based on return Budgets based on need to
on investment increase sales
High sales commissions
Accounting
Standardized billing
Strict payment terms
Strict credit standards
Custom billing
Flexible payment terms
Flexible credit standards
Human resources
Trainable employees
Low salaries
Skilled employees
High salaries
P 1-10
Low sales commissions
SOURCE: G. A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers (Burr Ridge, IL: Irwin/McGraw-Hill, 1998), p. 15.
Organizational Growth Strategies
Products
Present
Products
New
Products
Present
customers
Market
penetration
Product
Development
New
customers
Market
Development
P 1-11
Markets
Irwin/McGraw-Hill
Figure 1-3
Diversification
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Planning and Marketing Planning
The strategic plan
Organizational mission
Organizational objective
Organizational strategies
Organizational portfolio
The marketing plan
Situation analysis
Marketing objectives
Target market selection
Marketing mix
Product strategy
Promotion strategy
Pricing strategy
Distribution strategy
Marketing information
system and marketing
research
P 1-12
Implementation and control
Irwin/McGraw-Hill
Figure 1-4
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Criteria for Setting Marketing Objectives
P 1-13
Criteria
Poor Goal
Good Goal
Overall marketing
objectives are clearly
stated.
To get people to buy our
new Betty Crocker
Microwave Bread Shop
products.
To obtain 5 percent of the freshbacked bread market in 12 months
Behavioral objectives
are clearly stated.
To have sales increase.
To stimulate 30 percent of all U.S.
households to try one loaf of Betty
Crocker Microwave bread.
Expectations are
realistic.
To obtain half the freshbaked bread market.
Given the strong name of Betty
Crocker in the baked bread goods
market and that Americans consume
50 lbs. of bread a year, we hope to
achieve an 18 percent share of the
fresh-baked bread market.
(continued)
SOURCE: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Principles of Marketing, p. 27. Reproduced with the permission of the South-
Criteria for Setting Marketing Objectives
Criteria
P 1-14
Adequate support
exists for the program.
Poor Goal
No mention of budget
dollars in the program
statement. No check to
make sure the program
meshes with corporate
goals.
Good Goal
Given the commitment by General
Mills to grow in the baked goods
market, the budget for Betty
Crocker’s Microwave Bread Ship
over the next three years is $45
million, $41 million, and $35
million, respectively.
SOURCE: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Principles of Marketing, p. 27. Reproduced with the permission of the SouthWestern Publishing Co. © 1992, Cincinnati, by South-Western Publishing Co. All rights reserved.
The Cross-Functional Perspective in Planning
The strategic plan
Mission
Objectives
Strategies
Portfolio plan
Functional area plans derived from strategic plan
P 1-15
Production plan Marketing plan
Objectives
Forecast
Budgets
Strategies
and program
policies
Irwin/McGraw-Hill
Objectives
Forecast
Budgets
Strategies
and program
policies
Figure 1-5
Human
resource plan
Objectives
Forecast
Budgets
Strategies
and program
policies
Finance plan
Objectives
Forecast
Budgets
Strategies
and program
policies
Facilities plan
Objectives
Forecast
Budgets
Strategies
and program
policies
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
A Blueprint for Management Action: Relating the Market
Plan to the Strategic Plan and the Production Plan
Achieve an annual
rate of return
on investment of at
least 15 percent
One organizational
objective (the
profitability objective)
from Figure 1-2
P 1-16
Two possible
organizational
strategies from the
product-market
matrix, Figure 1-3
1. Market penetration
Improve position of present products
with present customers
2. Market development
Find new customers for present
products
(continued)
Irwin/McGraw-Hill
Figure 1-6
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
A Blueprint for Management Action: Relating the Market
Plan to the Strategic Plan and the Production Plan
Two possible
marketing
objectives and
two possible
production
objectives
derived from
the strategic
plan
P 1-17
Specific course
of action of the
marketing and
production
departments
designed to
achieve the
objective
1. Marketing
department
objective
Increase rate of
purchase by existing
customers by 10
percent by year
end
Marketing
strategy and
programs
Irwin/McGraw-Hill
Figure 1-6
2. Production
department
objective
1. Marketing
department
objective
2. Production
department
objective
Design additional
features into product
that will induce new
uses by existing
buyers
Increase market share
by 5 percent by
attracting new market
segments for existing
use by year end.
Design additional
features into product
that will open
additional markets
with new uses.
Marketing
strategy and
programs
Production
strategy and
programs
Production
strategy and
programs
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Experience Curve and Resulting Profit Curve
Experience curve
RIO
Cost
P 1-18
Market share
Irwin/McGraw-Hill
Profit curve based
on experience curve
Figure A-1
Market share
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Boston Consulting Group Portfolio Model
Relative Market Share
P 1-19
Market
Growth
Rate
Irwin/McGraw-Hill
High
Low
High
Stars
Question
Marks
Low
Cash
cows
Dogs
Figure A-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The General Electric Portfolio Model
Business Strength
P 1-20
Industry
Attractiveness
Irwin/McGraw-Hill
Figure A-3
Strong
Average
Weak
High
A
A
B
Medium
A
B
C
Low
B
C
C
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Components of Industry Attractiveness and Business
Strength at GE
Industry Attractiveness
Market size
Market Growth
Profitability
Cyclicality
Ability to recover from inflation
P 1-21
World scope
Irwin/McGraw-Hill
Figure A-4
Business Strength
Market Position
Domestic market share
World market share
Share growth
Share compared with
leading competitor
Competitive strengths
Quality leadership
Technology
Marketing
Relative profitability
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.