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Chapter 2

Management and Organizational Studies 2320A/B Chapter Notes - Chapter 2: Customer Relationship Management, Competitive Advantage, Human Resource Management


Department
Management and Organizational Studies
Course Code
MOS 2320A/B
Professor
John White
Chapter
2

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CHAPTER 2 DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN
MARKETING STRATEGY
Marketing strategy identifies (1) a firm's target market(s), (2) a related marketing mix
the four Ps, and (3) the bases upon which the firm plans to build a sustainable
competitive advantage.
Sustainable competitive advantage is an advantage over the competition that is not
easily copied and thus can be maintained over a long period of time
o important to investors
o building competitive advantage firms can sustain their advantage, minimize competitive
pressure, and boost profits for a longer time
o establishing a sustainable competitive advantage is key to long-term financial
performance.
o ex. Nike = strong brand (swoosh)
FOUR OVERARCHING STRATEGIES OF THE MARKETING MIX TO DELIVER VALUE - COLP
CUSTOMER EXCELLENCE: Focuses on retaining loyal
customers and excellent customer service.
Loyal customers:
o more than simply preferring to purchase from
one firm instead of another; it means that
customers are reluctant to patronize competitive
firms.
o Loyal customers buy Nike apparel for all their
sporting and casual needs, even if adidas goes on
sale or opens a new store right around the
corner from their home.
o Viewing customers with a lifetime value
perspective, rather than on a transaction-by-
transaction basis
o loyalty programs: customer relationship management (CRM)- points, companies can
combine membership data with customer purchase data to develop a deeper
understanding of the customer.
Customer service:
o Firms that offer good customer service must instill its importance in their employees
over a long period of time so that it becomes part of the organizational culture
OPERATIONAL EXCELLENCE: Achieved through efficient operations and excellent supply chain
and human resource management.
o get their customers the merchandise they want, when they want it, in the required
quantities, and at a lower delivered cost than that of their competitors
o efficient operations enable firms to provide their consumers with lower-priced
merchandise
o Firms achieve efficiencies by developing sophisticated distribution and information
systems as well as strong relationships with vendors

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o firms with strong relationships may gain exclusive rights to:
-sell merchandise in a particular region
-obtain special terms of purchase that are not available to competitors
-receive popular merchandise that may be in short supply
PRODUCT EXCELLENCE: Having products with high perceived value and effective branding and
positioning.
o understand customer needs
o investing in their brand itself; positioning their product or service by using a clear,
distinctive brand image
LOCATIONAL EXCELLENCE: Having a good physical location and Internet presence
o competitive advantage based on location is sustainable because it is not easily
duplicated.
-Firms require multiple strategies
THE MARKETING PLAN
Marketing plan: written document composed of an analysis of the current marketing situation,
opportunities and threats for the firm, marketing objectives and strategy specified in terms of
the four Ps, action programs, and projected or pro forma income (and other financial)
statements.
THREE MAJOR PHASES: - PIC
PLANNING
STEP 1: MARKETING EXECUTIVES + OTHER TOP MANAGERS, DEFINE THE MISSION AND
OBJECTIVES OF THE BUSINESS
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o mission statement, a broad description of a firm's objectives and the scope of activities
it plans to undertake, attempts to answer two main questions: (1) What type of business
are we? (2) What do we need to do to accomplish our goals and objectives?
o Firms: maximize share-holders wealth by dividends, small firms: achieving specific level
of income, non-profit: nonmonetary objectives
STEP 2: EXECS+MANAGERS EVALUATE THE SITUATION BY ASSESSING HOW VARIOUS
PLAYERS, BOTH INSIDE AND OUTSIDE THE ORG AFFECT FIRMS POTENTIAL FOR SUCCESS
o Using SWOT: assessment of its resources, capabilities, organization, strategies, and
performance in relation to competitors
o Internal = SW inside the control of the firm, external = OT outside the control of the firm
o Situation analysis also includes market trends, customer analysis, and competitive
analysis.
o firms should assess the opportunities and uncertainties of the marketplace due to
changes in Cultural, Demographic, Social, Technological, Economic, and Political forces
(CDSTEP),
IMPLEMENTATION
STEP 3: MARKETING MANAGERS IDENTIFY AND EVALUATE DIFFERENT OPPORTUNITIES BY A
PROCESS KNOWN AS SEGMENTATION, TARGETING, AND POSITIONING (STP)
- first understand customer needs and wants through market research
-SEGMENTATION: divide the market or customers into distinct subgroups or segments
o market segment: consumers who respond similarly to a firm's marketing efforts.
o market segmentation: process of dividing the market into distinct groups of customers
where each individual group has similar needs, wants, or characteristicswho therefore
might appreciate products or services geared especially for them in similar ways
o ex. men's training, women's training, running, basketball, football (soccer), action
sports, sportswear, and golf.
-TARGETING: determine which of those segments it should pursue or target
-POSITIONING: decide how it should position its products and services to best meet the needs
of those chosen targets
o Market positioning involves the process of defining the marketing mix variables
o target customers have a clear, distinct, desirable understanding of what the product
does or represents in comparison with competing products
-eval each strategic opp with the STP model, most successful when focusing on strengths
compared to competitor
STEP 4: THEY THEN ARE RESPONSIBLE FOR IMPLEMENTING THE MARKETING MIX BY USING
THE FOUR PS
o makes important decisions about how it will allocate its scarce resources to its various
products and services.
o Each element of the four Ps must be fully integrated to achieve a coherent strategy.
o Product: product and value creation - develop products and services that customers
perceive as valuable enough to buy.
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