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Chapter 5

Chapter 5

6 Pages
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Department
Management (MGM)
Course Code
MGMA01H3
Professor
Ingrid L.Stefanovic

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Thursday, September-17-09 Principles of Marketing Chapter 5
INTRODUCTION
Long-term success implies that managers understand and adapt to the environment, that
the organization operates in
STRATEGY FOR THE ORGANIZATION AS A WHOLE
Corporate Strategy is the overall purpose and direction of the organization that is
established in light of the challenges and opportunities found in the environment, as well
as available organizational resources
oStart by analyzing market and environmental opportunities and threats
oExamine the internal strengths and weaknesses
oCompany generates lists of possible alternative courses of action
oEvaluate and select the most appropriate course of action
oImplementation and control programs are planned for the strategy that has been
developed
Strategy chosen is expressed in a mission statement.
MARKETING STRATEGY
Marketing Strategy is based on the strategy set for the company as a whole, it focuses on
developing a unique long-run competitive position in the market by assessing consumer
needs and the firms potential for gaining competitive advantage
After receiving input from corporate-level strategies, the strategic marketing planning
process has 4 main steps
oSituation Analysis considers the internal circumstances of the organization or
product, the external environment, competitive activity, and characteristics of the
customer that may be relevant to the marketing plan
oMarketing Objectives and Strategy flows from the situation analysis. They are a
statement of what the organization intends to accomplish with its marketing
program and the general strategic approach it will take
oMarketing Plan is a specific detailed statement of how the marketing mix will be
used to realize the marketing strategy
oImplementation and control consists of putting the marketing plan into action as
well as doing ongoing monitoring and gathering feedback on how well the plan is
accomplishing the stated marketing objectives
SITUATION ANALYSIS
Internal Analysis
Sustainable Competitive Advantage (SCA) is some aspect of a product that will give it
value in the marketplace that cannot be easily duplicated by other companies
oExample: Harley Davidson and its legendary mystique in the bikes they build
Companies should make sure they have the right amount of resources
Managers should review past market performances and reputation of a product
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Thursday, September-17-09 Principles of Marketing Chapter 5
Product Portfolio is the complete collection of products or services that a company
produces
oPortfolio analysis is a very useful tool
BCG growth-share matrix plots market share relative to the market share of the largest
competitor, against market growth rate
oAll of a firms various businesses or products can be plotted in four quadrants
Cash Cows
Main source of earnings
Maintain this position as long as possible
Maximize cash flow while maintaining market share
Stars
Requires heavy cash consumption to maintain a leading market
position
Can be high dollar earners if maintained until growth of market
slows
Dogs
Consumes too much management attention
Minimize position in this market area
Question Mark
Must achieve a dominant position before growth slows
Firms should pull out of these markets unless they can be
converted to stars
oEmphasizes importance of having common agreed-upon goals for all products in a
firms portfolio
oWhether a product is labelled a dog or a cash cow depends on how the products
market is defined
GE Business Screen is a 3 x 3 matrix that considers business strengths and industry
attractiveness
oProvides an effective method of evaluating SBUs at the corporate level and
individual product opportunities at the SBU
Usually summarized as a light of strengths and weaknesses
Environmental Analysis
Opportunities are environmental issues or trends that a company can use to its advantage
Threats are issues or trends that may interfere with an organizations ability to thrive
SWOT Analysis is the combined summary of the internal analysis and the environmental
analysis. Stands for Strengths, Weaknesses, Opportunities, and Threats.
Customer Analysis
Seven questions marketers should ask about their customers
oWho are our actual and potential customers?
oWhy do they buy our product?
oWhy do noncustomers not buy our product?
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Description
Thursday, September-17-09 Principles of Marketing Chapter 5 INTRODUCTION Long-term success implies that managers understand and adapt to the environment, that the organization operates in STRATEGY FOR THE ORGANIZATION AS A WHOLE Corporate Strategy is the overall purpose and direction of the organization that is established in light of the challenges and opportunities found in the environment, as well as available organizational resources o Start by analyzing market and environmental opportunities and threats o Examine the internal strengths and weaknesses o Company generates lists of possible alternative courses of action o Evaluate and select the most appropriate course of action o Implementation and control programs are planned for the strategy that has been developed Strategy chosen is expressed in a mission statement. MARKETING STRATEGY Marketing Strategy is based on the strategy set for the company as a whole, it focuses on developing a unique long-run competitive position in the market by assessing consumer needs and the firms potential for gaining competitive advantage After receiving input from corporate-level strategies, the strategic marketing planning process has 4 main steps o Situation Analysis considers the internal circumstances of the organization or product, the external environment, competitive activity, and characteristics of the customer that may be relevant to the marketing plan o Marketing Objectives and Strategy flows from the situation analysis. They are a statement of what the organization intends to accomplish with its marketing program and the general strategic approach it will take o Marketing Plan is a specific detailed statement of how the marketing mix will be used to realize the marketing strategy o Implementation and control consists of putting the marketing plan into action as well as doing ongoing monitoring and gathering feedback on how well the plan is accomplishing the stated marketing objectives SITUATION ANALYSIS Internal Analysis Sustainable Competitive Advantage (SCA) is some aspect of a product that will give it value in the marketplace that cannot be easily duplicated by other companies o Example: Harley Davidson and its legendary mystique in the bikes they build Companies should make sure they have the right amount of resources Managers should review past market performances and reputation of a product www.notesolution.com
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