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Chapter 2

Marketing Chapter 2.docx

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McMaster University
Ambika Badh

Marketing Chapter 2 Planning • Process of anticipating future events and conditions and of determining the best way to achieve organizational goals Marketing planning • Implementing planning activities devoted to achieving marketing objectives • Establishes the basis for any marketing strategy Many companies now include relationship-building goals and strategies in their plans. Strategic Planning Versus Tactical Planning • Strategic planning o Process of determining an organization’s primary objectives and adopting courses of action that will achieve these objectives o Includes allocation of necessary resources • Tactical planning o Planning that guides the implementation of activities specified in the strategic plan o Address shorter-term actions that focus on current and near-future activities that a firm must complete to implement its larger strategies o Requires swift decision making and actions Planning at Different Organizational Levels • Top management focus on long-range strategic issues • Middle-level managers tend to focus on operational planning, which includes creating and implementing tactical plans for their own units Defining the Organization’s Mission and Objectives • Mission Marketing 2MA3: Chapter 2 1 o Essential purpose that differentiates one company from others o Specifies the organization’s overall goals and operational scope and provides general guidelines for future management actions o Key objectives in a mission statement guide development of supporting marketing objectives and plans Assessing Organizational Resources and Evaluating Environmental Risks and Opportunities • Organizational resources include the capabilities of the firm’s production, finance, marketing, technology, and employees Formulating, Implementing and Monitoring a Marketing Strategy • Marketing strategy o Overall company-wide program for selecting a particular target market and then satisfying consumers in that market through the marketing mix • Example: Sun Chips introduced a new biodegradable bag, after one year they decided to remove it after consumers complaining that the bags were noisy Porter’s Five Forces Model • Identifies five competitive forces that influence planning strategies: o The threat of new entrants  Blocked by the cost or difficulty of entering a market  The Internet has reduced the barriers to market entry in many industries o The threat of substitute products o Rivalry among competitors o The bargaining power of buyers o The bargaining power of suppliers First Mover and Second Strategies • First mover strategy 2 Marketing 2MA3: Chapter 2 o Theory advocating that the company that is first to offer a product in a marketplace will be long-term market winner o Example: Samsung “SmartWatch”, Virgin Galactic trips • Second mover strategy o Theory that advocates observing closely the innovations of first movers and then introducing that improve on the original offering to gain advantage in the marketplace SWOT Analysis • Analysis that helps planners compare internal organizational strengths and weaknesses with external opportunities and threats • Provides managers with a critical view of the organization’s internal and external environemtns and helps the evaluate the firm’s fulfillment of its basic mission • Core competencies are capabilities that customers value and competitors find difficult to duplicate The Strategic Window • Strategic windows o Limited period during which the key requirements of a market and the particular competencies of a firm best fit together o The view through a strategic window shows planners a way to relate potential opportunities to company capabilities o Such a view requires a thorough analysis of: 1. Current and projected external environmental conditions 2. Current and projected internal company capabilities 3. How, whether, and when the firm can feasibly reconcile environmental conditions and company capabilities by implementing one or more mar
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