Marketing Chapter 2

1. Marketing Chapter 2

2. Difference between a company, organization and firm • A company is any form of business whether it is small or large.Generally the term "company" indicates a particular kind of business dealing in a specific product. • An organization is the larger form and generally comprises of anumber of companies. Simply, a company is an organization, but an organization is not just a company. • An industry is the combination of companies in same line ofbusiness. • Firm, corporation and business are synonyms of "company". • An Agency is a particular kind of company, which serves as an intermediary between clients (other companies or individuals).

3. Companywide strategic planning: defining marketing's role • Strategic planning: the process of developing and maintaining a strategic fit between the organization’s goals and capabilities, and its changing marketing opportunities. • Annual and long-range plans vs. strategic plans.

5. Defining a market-oriented mission • Mission statement is a statement of the organization’s purpose- what it wants to accomplish in the larger environment. • Mission statements should be market-oriented and defined in terms of satisfying basic customer needs. • Products and technologies may become outdated, but basic customer needs remain forever. • Nokia’s mission is not to sell phone, but to “connect people”. • The mission statements should be meaningful and motivating. • Never mention ‘making profits’ or ‘sales’ in the mission statement.

6. Mission statements •  "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. • When Larry Page and Sergey Brin founded Google in 1998, they gave it a straightforward mission statement: "to organize the world's information and make it universally accessible and useful.“ • At Microsoft, our mission is to enable people and businesses throughout the world to realize their full potential. We consider our mission statement a commitment to our customers. • At Oracle we foster an inclusive environment that leverages the diverse backgrounds and perspectives of all our employees, suppliers, customers, and partners to drive a sustainable global competitive advantage.

7. Setting company objectives and goals • Goals and objectives are described based on the mission statement. • Goals are defined at each managerial level.

8. Designing the business portfolio • Business portfolio: the collection of businesses and products that make up the company. • Portfolio analysis: the process by which management evaluates the products and businesses that make up the company. • First step is to identify the key business, called strategic business units (SBUs). • Most popular portfolio analysis is conducted using BCG matrix (next page)

10. Problems with matrix approach • Costly, time consuming • Focus on present SBUs, not clear about future plans • More modern approaches are being utilized by organizations today • Strategic planning is decentralized to divisional managers who are managing cross functional teams

11. Developing strategies for growth and downsizing • Growth is essential for any organization • Marketing has the main responsibility for achieving profitable growth for the company. • Marketing needs to identify, evaluate and select market opportunities and lay down strategies to capture them. • The product/market expansion grid helps identify growth opportunity.

12. The product/market expansion grid

13. Case example: National Foods Limited. • First year sales (Rs. 16,487) was not very impressive. • First strategy they utilized was market penetration. They improved their marketing mix (4 Ps) • Second, National’s management considered possibilities for market development. Managers explored new geographical markets. It expanded into the Middle East and North America. In Australia it entered with the brand name Raj. In 2007, National entered India. • Third, management considered product development. It added condiments such as tomato ketchup, various Chinese sauces and variety of pickles to its product line. Jams and jellies were introduced next. Along with popular dessert mixes like custards and kheer. • Fourth National considered diversification. It introduced Ronaq brand of ready-to-eat meals. • Today National has become Pakistan’s leading multi-category food company manufacturing over 250 innovative products and marketing them in over 35 countries.

14. Downsizing • There are many reasons that a firm might want to abandon products or markets: • Market environment might change • Firm may have grown too fast or entered areas where it lacks experience • Some products or business units simply age and die

15. Marketing strategy and the marketing mix • Customer driven marketing strategy • Market segmentation: dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs. • Market targeting: the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. • Market differentiation and positioning • Positioning: arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.

17. Developing an integrated marketing mix • Marketing mix: the set of controllable tactical marketing tools- product, price, place and promotion- that the firm blends to produce the response it wants in the target market.

19. Marketing strategy • Market analysis • Market planning • implementation • Marketing control