C H A P T E R ONE

McGraw-Hill/Irwin

MarketOriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

What is a strategy?
A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors
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Components of Strategy
o Scope o Goals and objectives o Resource deployments o Identification of sustainable competitive advantage o Synergy

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The Hierarchy of Strategies

o Three major levels of strategy are:
o Corporate strategy o Business-level strategy o Marketing strategy

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Market-Oriented Management
o Follows a business philosophy commonly called marketing concept o Consistent focus by personnel in all departments and at all levels o Adopts a variety of organizational procedures and structures: o To improve the responsiveness of decision making

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Exhibit 1.4

Guidelines for Market-Oriented Management

o Create customer focus throughout the business o Listen to the customer o Define and nurture your distinctive competence o Define marketing as market intelligence o Target customers precisely o Manage for profitability, not sales volume o Make customer value the guiding star o Let the customer define quality
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Exhibit 1.4

Guidelines for Market-Oriented Management (continued) o Measure and manage customer expectations o Build customer relationships and loyalty o Define the business as a service business o Commit to continuous improvement and innovation o Manage culture along with strategy and structure o Grow with partners and alliances o Destroy marketing bureaucracy

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Factors that Mediate Marketings Strategic Role

o Competitive factors affect a firms market orientation o Influence of different development stages across industries and global markets o Strategic inertia

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Exhibit 1.6

Differences between Production-Oriented and Market-Oriented Organizations

Business Activity or Function Product offering Product line Pricing Production Orientation Company sells what it can make Narrow Based on production and distribution costs Focus on product improvement and cost cutting in the production process Marketing Orientation Company makes what it can sell Broad Based on perceived benefits provided Focus on identifying new opportunities and applying new technology to satisfy customer needs
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Research

Exhibit 1.6

Differences between Production-Oriented and Market-Oriented Organizations (continued)

Business Activity or Function Packaging Production Orientation Protection for the product; minimize costs A necessary evil; minimize bad debt losses Emphasis on product features, quality, and price Marketing Orientation Designed for customer convenience; a promotional tool A customer service; a tool to attract customers Emphasis on product benefits and ability to satisfy customers needs or solve problems
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Credit

Promotion

Recent Developments Affecting the Strategic Role of Marketing

o Globalization o Increased importance of service o Information technology o Relationships across functions and firms

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Exhibit 1.8

Categories of E-Commerce
Business Business-to-Business (B2B) Consumer Business-to-Consumer (B2C)

Business

Examples: Purchasing sites of Ford, Oracle, Cisco Supply chain networks linking producers and distribution channel members, such as 3M and Wal-Mart

Examples: E-tailers, such as E*Trade, Amazon, iTunes Producers direct sales sites, such as Dell, Ryanair, Safital Hotels Web sites of traditional retailers, such as Sears, Lands End, Marks & Spencer

Consumer-to-Business (C2B)

Consumer-to-Consumer (C2C)

Consumer

Examples: Sites that enable consumers to bid on unsoldairline tickets and other goods and services, such as Priceline

Examples: Auction sites, such as eBay, QXL Blogs praising /criticizing companies or brands

Source: Adapted from A Survey of E-Commerce: Shopping Around the Web, The Economist, February 26, 2000, p. 11.

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Formulating and Implementing Marketing Strategy Process

o Decision-Making Focus o Analysis of the four Cs o Integrating marketing strategy with the firm's other strategies and resources o Market opportunity analysis
o Understanding Market Opportunities o Measuring Market Opportunities o Market Segmentation, Targeting, and Positioning Decisions
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Formulating and Implementing Marketing Strategy Process (Continued)

o Formulating strategies for specific market situations o Implementation and control of the marketing strategy

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The Marketing PlanA Blueprint for Action

o A marketing plan is a written document detailing the current situation with respect to customers, competitors, and the external environment

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Exhibit 1.10

Contents of a Marketing Plan

o o o o o o o o o o Executive summary Current situation and trends Performance review Key issues Objectives Marketing strategy Action plans Projected profit-and-loss statement Controls Contingency plans
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