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Lecture 3

MGMA01H3 Lecture Notes - Lecture 3: Southwest Airlines, Strategy First, Carbonated Water

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Sam J Maglio

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Lecture 3: The Company
- How do groups make decisions? They tend to be more rational.
- First step in marketing is knowing what type of company it is. Determine corporate
- Companies must know how to adapt to changes in the marketplace
- E.g. Canadian government legalizing marijuana, how will companies providing cigarettes
- Corporate strategy (U of T) versus business unit strategy (faculty of management)
Corporate strategy
- First, determine a mission statement. It could be to make people’s lies etter, or
anything as long as the company has meaning and the company is not only just making
products for profit.
- Net, ust fid opa’s ore opetee. What akes our opa etter tha
other competitors? In what areas are you competing with yourself or with competitors?
- A company can be broken down into smaller units (a main company that owns other
smaller companies)
- The analysis of current portfolio is to understand the role of the company in the market
(e.g. Southwest airlines, is a discount airline and would not hire an expensive
spokesperson) and must integrate its goals into SBUs (e.g. Apple owns Beats which are
Bluetooth headphones and so they eliminate the headphone jack from the new iPhone)
- The final step is to develop a plan for growth, which is to think of alternatives (e.g. Coke,
with new health concerns for sugary drinks, Coke may buy a carbonated water
company) and evaluate the results by looking at company performance and comparing
it to the goals of the company (SMAC)
- When there is a direct competition, the ethics can affect how a consumer perceives
these companies that engage in direct competition in its marketing materials
- If a company cannot eliminate its harm to society, it needs to show its effort in limiting it
- Engaging in competitive marketing is not illegal, but laws are usually created from
ethical problems
- People may not feel comfortable seeing certain ads in media, but in the perspective of
the marketer it works and it will sell the product
- Ways that companies respond to ethical concerns:
o Reaction strategy: Ignore/deny
o Defense strategy: Fight/give in
o Accommodation strategy: give in (NBC changing guidelines for alcohol ads)
o Proactive strategy: take responsibility without provocation (e.g. recalls)
- Ethical issue: product placement- is it ok to sho ads i a sho? Should’t produts e
in advertisements?
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