Chapter 1: Foundations of Strategic Marketing Management
Strategic Marketing Management: consists of 5 interrelated processes: 1) Defining the organization’s business, mission and goals 2) Identifying and framing organizational growth opportunities 3) Formulating product-market strategies
4) Budgeting marketing, financial and production resources 5) Developing reformulation and recovery strategies
Business definition: type of customers it wishes to serve, the needs of the customers that it wishes to satisfy, and the means or technology that the organization will use to satisfy these needs.
Business mission: reflects management’s vision of what the organization seeks to do. It describes an organization’s purpose with reference to its customers, products or services, markets, philosophy and technology. A mission: 1) crystallizes management’s vision of the organization’s long-term direction and character 2) provide guidance in identifying, pursuing and evaluating market and product opportunities 3) inspire and challenge employees to do those things that are valued by the organization/customers
Business goals: converts the mission into tangible actions. Three categories: 1) Production
Converting Environmental Opportunities into Organizational Opportunities
1) What might we do?
* Environmental opportunity unmet / changing customer needs, unsatisfied buyer groups, new means of technology 2) What do we do best?
* Organizational capability / distinctive competency
* Distinctive competency: organization’s unique strengths or qualities, including skills, technologies, or resources that make it unique from other orgs * In order for a strength to be a true competitive advantage, it: * Cannot be replicated
* Provide superior value to customers
3) What must we do?
* Success requirements: basic tasks that an organization must perform in a market or industry to compete successfully * Examples include distribution and inventory control or continuous innovation for a computer company
Linkages between these three questions are necessary to be successful.
SWOT Analysis: identifies organizational growth opportunities through internal (Strengths & Weaknesses) and external; (Opportunities and Threats) factors
Formulating Product-Market Strategies
Product-market strategy: plans for matching an organization’s existing or potential offerings with the needs of markets, informing markets that the offerings exist, having offerings available at the right time / place to facilitate change, and assign prices to offerings.
| Market penetration
| Marketing development
| New offering development
Market-penetration strategy: an organization seeks to gain greater dominance in a market in which it already has an offering. * Increase present buyers’ usage or consumption rates
* Attract buyers of competing offerings
* Stimulate product trial among potential customers
* Marketing activities include: lower prices, expanded distribution, heavier promotional efforts
What must be considered?
* Growth market
* Consider competitive reaction
* Capacity of the market to increase usage & the availability of new buyers.
Market development strategy: an organization introduces its existing offerings to markets other than those its currently serving. * Introduce existing products to different geographical areas * Marketing activities include: modification of the basic offering, different distribution outlets, or change in sales effort and advertising
What must be considered?
* Number of new buyers
* Motivation of new buyers
* Buying patterns
* Strength of adapting to new markets
Marketing development takes 1 of 4 forms:
1) Exporting: marketing the same offering in another country either directly...
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