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23 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 23 eting S tr k eti ng ateg ies

Contemporary Marketing 2013 Update 15th Edition Boone Solutions Manual Download:http://testbanklive.com/download/contemporary-marketing-2013-update15th-edition-boone-solutions-manual/ Contemporary Marketing 2013 Update 15th Edition Boone Test Bank Download:http://testbanklive.com/download/contemporary-marketing-2013-update15th-edition-boone-test-bank/ CH APTER 2 STR ATEGI C PL ANNI NG I N CONTEM POR ARY M AR K ETI NG CH AP TER O VERVI EW T oday’s m ark eter s f ace st r at eg ic q uest ions every day . Planning str ateg y is a cr it ical par t of t heir j ob s. T he m ark et place chang es continually in r esponse t o chang es in consum er t astes and expect at ions, t echnolog ical developm ents, com pet it or s ’ act ions, econom ic tr ends, and polit ical and leg al event s, as we ll as pr oduct innovations and pr essur es f r om suppliers and distr ibut or s. Alt houg h t he causes of these chang es of t en lie outside a m ark eter ’s cont rol, ef f ective planning can ant icipat e m any of t hem . For example when t he pr ice of g as and j et f uel soared r ecently, t r avelers opted t o st ay close t o hom e inst ead of enj oying vacat ions t o exotic, f araway places. T his r epr esented an oppor t unit y f or places like O cean Cit y, Maryland, and Branson, Missour i . Any dest inat ion s t hat pr om oted it self t o pot ent ial vacat ioner s wit hin a shor t drive could f ind it self adding up t he prof it s. T his chapter lays a f oundat ion f or analyzing all aspects of m ark eti ng by dem onstr ating t he im port ance of g at her ing r eliable inf ormation t o cr eat e an ef f ect ive plan. T hese act ivit ies pr ovide a str uctur e f or a fir m t o use it s uniq ue st r engths. Mark eting planning identif ies t he m ark et s a com pany can best serve as well as t he m ost appropriat e m ix of approaches t o sat isf y t he cust om ers in t hose m ark et s. W hile t his chapt er f ocuses on planning , in later chapter s t he t ask of m ark et ing research and decision m ak ing will be explored. Changes i n t he Updat ed Editi on T he chapter has b een updat ed and r evised , wit h new f eat ur es in several areas: The O pening Vi gnett e and Evolut i on of a Brand prof ile W endy’s, t he t hir d- larg est f ast -f ood chain in t he Unit ed St ates. T his f ast -f ood chain was st ar t ed by Dave T hom as in 1969. Af t er T hom as’s deat h in 2002, W endy’s sales beg an t o f alt er and in 2008 W endy’s was acq uir ed by Ar by’s G r oup. Now r evenue ear ned by W endy’s is m or e t han t hat ear ned by Ar by’s. As a r esult, t he W endy’s/ Ar by’s G r oup (f orm erly k nown as Ar by’s G r oup) has declared t hat it will sell Ar by’s and f ocus all it s m anag em ent and f inancial r esour ces on cont


24 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 24 eting S tr k eti ng ateg ies

inuing t o build t he W endy’s brand. T he sale of Ar by’s will g ive W endy’s t he cash it needs t o accelerat e growt h and expand t he org anization. W endy’s has sig ned agreement s t o develop r est aur ant f r anchises in t he Middle East and Nor t h Af r ica, Sing apore, T urk ey, Russia , and t he Easter n Car ibbean. T he W endy’s/ Ar by’s g roup has also ent ered into an ag r eem ent wit h DEG ASA, an investm ent company in Arg ent ina t o develop 50 W endy’s r estaur ant s in Arg ent ina. T he hig hs and lows exper ienced by W endy’s r emind us t hat all businesses m ust cr eat e str ateg ies t o address t he t urbulence –and, at t he same t im e, t hey need t o r ealize t hat out com es ar e f r equent ly unpredict able. T he com plet e st ory is in “W endy’s: A New Day Dawn ing ?” Solvi ng an Et hi cal Cont rovers y analyzes t he pros and cons of celebr it y endor sement s. T he NBA superst ar , LeBr on James, shot t o f ame while playing f or t he Clevelan d Cavaliers . W it h a sk y- hig h salary and numerous endor sem ent ag r eement s, Le Br on was earning close t o $44 m illion year —a dr eam - com e-t r ue st or y f or anyone who plays spor t s and f ant asizes about g oing pr o . Recently James announced t hat he would sig n wit h t he Miami Heat because he want ed t o play on a t eam t hat had a chance t o win a ch ampionship. As a r esult, James ’ popularity declined at least in Cleve land. T he cr it ical q uest ion t hat ar ises is “ Should com panies hold celebr it ies who endor se


25 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 25 eting S tr k eti ng ateg ies

t heir pr oducts r esponsible f or t heir per sonal decisions?” Pr os and cons ar e discussed in “T he NBA Superst ar Fans Love t o Hate. ” M arketi ng Success “In -N- O ut Burg er s Sell T hem selves ” descr ibes how t he f ast f ood chain t hat st art ed wit h a novel idea of a drive - t hroug h 60 year s ag o, cont inues t o off er j ust f our it em s in t heir m enu, and ar e r un by a t ig ht l y cont r olled m anag em ent. I t discusses t heir pr oduct str ateg y . It also illustr ates how t he employees are k ept sat isf ied, and why celebr it ies f r om Holl ywood pr ef er I n - N- out Burg er s. Career Readiness provides som e sim ple g uidelines t o ensure t he success of a conf er ence over t he phone or I nt ernet . For det ails, r ef er t o “ Plan t he Most Ef f ect ive Vir t ual Meet ing .” Chapter Case 2. 1 How a Stadi um Becomes Part of a M arketi ng St rat eg y f eat ures how st adiums have become one of t he m ost im port ant component s of m ark et ing str ateg y in prof essional spor t. It f ocuses on t he use of st adium s t o cr eat e winning m ark eting str ateg ies. Coll aborat i ve Learni ng Exerci ses ar e pr ovided in several areas r elated to str ateg ic planning and t he m ark eting pr ocess —Planning T hr oug h out t he O rg anization, Def ining t he Org anization ’s Mission and O bj ectives, St r ateg ic Planning , For mulating a Mark et ing Str ateg y, Pr omot ion St r ateg y and Pr icing Str at eg y, T he Mark eting Envir onm ent , and BCG Matr ix. Vi deo Case 2. 2 discusses t he consum er products com pany Pr eser ve. Preser ve was est ablished by Er ic Hudson and m anuf actur es t oot hbr ushes f rom r ecycled plastic. Due t o lack of r esources, Pr eser ve r elies heavily o n publicit y t o m ark et t heir brand. T he video case “St r ateg ic Planning and t he Mark et ing Pr ocess at Pr eser ve” g ives an overvie w of t he m arketing st rateg ies em ployed by Pr eser ve.

LECTURE O UTLINE O peni ng Vi gne tte and E vo l utio n of a Br and —“W end y’s : A N e w Da y D a wn in g?” , d es c r ibes ho w af ter ha vi ng a rol ler - c oas ter r u n i n th e v olat il e f as t - f ood in dus tr y, th e W end y’s / Ar b y’s gro up ha s entered in to an agr eem ent wit h D EG A SA, an i nv es tm ent c om pan y in Ar gen tin a, t o de ve lo p 5 0 W end y’s r es ta urants in Ar gen tin a. H ow w il l th is a ll i anc e h elp W endy ’s get off t he gro und in Ar g ent ina ? A n d how wi ll the Ch al li apt anc er e O b je ctiv e 1: Disti n g u ish b etw een strateg ic p lann ing and t act ic al p lan n ing . Ke y Tfit erms p la bene DEG :AS A?nn ing, m ark eting pl ann in g , s tr ate gic p l ann ing , tac tic a l p la nn ing Po w erPo int Bas ic: 4 Po w erPo int E xpan d ed: 4, 5


26 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 26 eting S tr k eti ng ateg ies 1. Mar k eting p la nni ng: the ba s is f or s tr ateg y a nd t ac tic s a. Def init ion of pla nn ing : th e p r oc es s of antic ip ati ng f utur e ev en ts a nd c ondit io ns and the n d eter m ini ng t he bes t wa y t o ac h ie ve organ i zati ona l o bj ec ti ves Car eer Re ad ines s — Pla nn ing V ir tua l Meet ings . As k s tudents t o pr ov i de a few ot her s ug ges ti ons to ens ure tha t par tic i pan ts s tay foc us ed d urin g v ir tu al meet ings .

b. Pla nn ing is im por tant f or b o th l arge a nd s m all c om pani es c. Mar k eting p la nni ng i. Mar k eting p la nni ng r ef ers t o im plem enting pl ann ing ac tiv it ies de vo ted to ac h ie v i ng m ark etin g o bj ec tiv es ii. An im por tant tren d i n m ark etin g p lan ni ng c e nter s on r elat ions h ip m ark eting d. G ood re lat ions h ips with c us tom ers c an arm a f irm with vit al s tr ategic weap ons


25 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 25 eting S tr k eti ng ateg ies

e. Man y c om panies n o w inc l u de r el ati ons h ip - b ui ldi ng goa ls and s tr ategi es in the ir m ark eting p l ans , m ainta in ing dat aba s es to trac k c us tom er pr ef erenc es 2. Str ate gic p la nni ng vers us t ac tic al pl ann in g a. Str ate gic p la nni ng is d ef in e d as th e pr oc es s of det erm inin g an organ i zati on ’s prim ar y obj e c tives and ado pti ng c o urs es of ac tion that wil l ac h ie ve thes e ob j e c tives b. Str ate gic p la nni ng inc l udes all oc ati on of r es our c es , and prov ides lon g- term dir ec tions f or the dec is io n m ak ers c. T ac tic al pl ann ing , a c om ple m entar y appro ac h to s tr ate gic pla nni ng, gu ides t he im plem entation of ac ti v iti es s pec i f ied in the s tr ategic p lan d. It ad dres s es s hor ter - term ac tions , f oc us ing on ac ti vit ie s that n eed to be c om pleted s o that lar ger s tr ateg ies c an be im ple m ented As se ssmen t chec k qu est i o n s 1. Def in e p lan nin g. Pl ann in g is th e pr oc es s of ant ic ip at ing future ev en ts and c ondit io ns and of deter mi ni ng th e b es t way to ac hi ev e organ i zati ona l o bj ec tiv es . Ch apt er O b je ctiv e 2: 2. EG xpli ve ainanh ex o wam market plan s pdlaif nni f erng at and v ariou s lev els an g. oT rgoaniz ple of ing s tr ategic tac tic alp laninnin s urvatio n. iv e in a c hall eng in g e nv ir on ment of s oar ing fue l c os ts , s ev eral air l ines Ke y T erms: n one hav e d ec id ed t o mer ge as par t of th eir s tr at egic p la nni ng. T ac tic a l p lan Po w erPo int Bas ic: 5 s inc lu de c utt in g th e nu mb e r of fl ig hts an d c har g ing pas s enger s ex tr a Po w erPo in t E xpan d ed: 7 k ed b agga ge. for c6,hec 1. Pla nn ing at dif f erent or ga ni zat ion al le ve ls a. Mana ger s at al l org an i zati o nal le ve ls de vot e s om e T able 2.1 P lan ni ng at Dif f erent Man ager of their atten tio n to pl ann in g ac t iv iti es ial Lev els . W hic h b. T he am ount of tim e s pent o n pl ann in g ac ti v iti es an d th e t mana ger s foc us mos yp es of pla nni ng var y b y or gan i zati ona l l ev el t on bro ad goa ls an d 2. T op m anage m ent ( CEO a n d f unc tion al v ic e - pres id ents ) lon g- term pla nn ing ? a. Spe nd m ore of their t im e on pl ann in g th an d o lo wer W hic h mana ger s foc l e ve l m anagers us mos t on pl an nin g b. Us ual l y f oc us m ore on l ong - r ange s tr ate gic is s ues for day - to- day tas k s ? 3. Mid dl e m anage m ent Note: Dis c us s how t wo c ompan ies appro ac hed a s im i lar probl em diff erent ly , with dif ferent r es ults . How Y ah oo a nd Mic r os oft appro ac hed c ompet in g ag ai ns t G oogl e is one goo d ex amp le.

a. T end to f oc us on o per at ion al p la nni ng, wh ic h i nc lud es c r eating and im plem enting t ac tic al p lans f or the ir o wn de par tm ents b. Sup erv is ors of ten de ve lo p s pec if ic program s to m eet goa ls in the ir areas of r es pons i bi lit y c. T o be m os t eff ec tive, th e p l ann ing proc es s inc l udes in put f r om a wide r ang e of s our c es , i nc l udi ng em plo yees , s u pp li ers and c us tom ers As se ssmen t chec k qu est i o n s 1. Ho w do m ark eting pl ans var y at dif f erent le ve ls of th e or ga ni zat io n? T o p mana ger s us ua lly f oc us th e ir pl ann in g ac tiv iti es on lon g - r ange s tr


27 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 27 eting S tr k eti ng ateg ies .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 26 26 eting S tr k eti ng ateg ies

c r eating an d i mp lem ent ing tac tic al pl ans for t he ir own units . Su per v is ors dev e lop s pec ific pr ogr ams t o m eet goa ls in the ir ar eas of r es p ons ib il ity . 2. W hy is i t im por tant t o g et inp ut f r om other s wh en p la nni ng? Inp ut fr o m a v ar iety of s our c es —ot her e mp loy e es , s upp liers , or c us tomers —he lps ens ur e th at m any ide as are c ons ider e d. I nv ol v ing t hos e p eop le in pl ann i ng c an als o turn t he m in to adv oc ates f or the pl an. Ch apt er O b je ctiv e 3: Iden t if y t h e step s in t h e mar k etin g plan n ing proc ess. Ke y T erm s: m is s ion, m ark etin g s tr ate g y Po w erPo int Bas ic: 6- 10 Po w erPo int E xpan d ed: 8- 12 1. Steps in t he m ark eting pl an nin g pr oc es s a. Def ine t he m is s ion b. Deter m ine obj ec ti v es c. As s es s r es our c es F igur e 2.1 T he Mar k eting Pl ann ing Pr oc es s . W hic h s tep mig ht b e m ore d iff ic ult than it s e ems ? W hic h s tep do y ou t hink c a n be e as ily ov er look e d?

d. Ev alu ate en vir o nm ental r is k s and op por tu nit ies e. F orm ulate a m ark eting s tr at eg y f. Im plem ent the s tr at eg y thr o ugh opera tin g p lans g. G ather f eedb ac k to m onitor and ada pt s tr ate gi es whe n nec es s ar y 2. Def inin g th e or g an i zati on ’s m iss ion an d o bj ec tiv es a. T he organi za tio na l m is s ion i. T he m is s ion is th e es s ent ia l pur p os e th at dif f ere ntiat es the organ i zati on f r om other s ii. T he m is s ion s tatem ent s pe c if ies the or g an i zati on ’s ov erall goa ls and op erati ona l s c op e an d pr o vi des g enera l gui del in es f or f utur e m anagem ent ac tions

Note: Cho os e a c o upl e of l oc al organ i zat ions and us e th eir m is s ion s tateme nts as c las s ex amp les

ii i. Adj us tm ents m ade to m is s ion s tat em ent ref lec ts c hangin g bus in es s env ir onm ents an d m anagem ent phil os op hies b. T he organi za tio na l o bj ec tiv es i. T he bas ic obj ec ti ves , or go als , i n a f ir m ’s m is s ion s tatem ent gui de t he de vel o pm ent of s uppor tin g m ark eting goa ls and pl ans ii. O bj ec tives s h oul d s tat e s pe c if ic inten tio ns an d s pec if y a tim e per iod f or s pec if ic ac h i evem ents 3. As s es s ing org an i zati ona l r e s our c es and ev alu ati ng en v ir onm ental r is k s and opp ortun iti es a. T his c ons is ts of a n as s es s m ent of an organ i zati on ’s s tr engths , weak nes s es , and a va i lab le oppor t un iti es

Do adv ert is em ents v iewed as per s ona li ze d by mar k eter s inv ade priv ac y ? Do y o u th ink the p ote nti al of m ob ile

b. O r gani zat io nal r es our c es in c lude c a pab il it ies of the f ir m ’s produc ti on, m ark eting, f ina nc e, tec h nol og y, a nd em ploye es c. En vir o nm ental ef f ec ts c an em erge both f r om with in t h e organ i zati on and f r om the e x ternal en vir o nm ent 4. F orm ulati ng, im plem enting and m onitor ing a m ark eting s tr ateg y


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 28 28 eting S tr k eti ng ateg ies .


27 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 27 eting S tr k eti ng ateg ies

a c omp etit iv e edg e?

bei ng m et 5. In th e t wo f inal s teps of the pla nni ng proc es s , m ark eters put th e m ark eting s tr ateg y in to ac t io n; th en t h e y m onitor per f orm anc e to ens u r e th at obj ec ti ves are ac hi ev ed 6. Som etim es s tr ategies nee d to b e m odif ied if th e pr od u c t’s or c om pan y’s ac tual per f orm anc e is not i n l ine wit h ex pec t ed r es u lts As se ssmen t chec k qu est i o n s 1. Dis t ing uis h bet wee n an organ i zati on ’s m is s ion and its obj ec ti ves . T he f ir m ’s mis s ion is th e es s en tia l p ur pos e th at d iff erent iat es the c ompany fr om o ther s . Its obj ec tiv es gu id e d ev elo pm ent o f s upp orti ng m ark eti ng obj ec tiv es a nd p la ns . Av on ’s mis s io n is t o b e “the c ompa ny for wo me n. ” O ne of its ob jec tiv es m ig ht b e c onv ert al l its pac k ag ing to r ec y c led mat eria ls .

2. W hat is the im por tanc e o f the f inal s t ep in t he m ark eting pl ann in g pr oc es s?In Ch apt er O b je ctiv e 4: De s cribe succ essfu l pl ann in g t o o ls and t ech n iqu e s, i n clud ing Po rt the f ina l s te p of the mar k et i ng p lan ni ng pr oc es s , man a ger s mon itor per e r ’s F iv e F o rces mo d el, f i rst an d sanc ecoent d mo vure er th stratateg ie s, O Tac analysis, form o ens o bj ec tivSW es are hiev e d.and t h e s t rateg ic w ind ow. Ke y T erms: Porter ’s Fiv e F orc es , f ir s t m over s tr ateg y, s ec ond m over s tr ateg y, S W OT anal ys i s , s tr ate gic wind o w Po w erPo int Bas ic: 11- 14 1. Suc c es s f ul s tr ategi es : to ols and tec hn iqu es Po w erPo int E xpan d ed: 13 - 18 a. F our too ls f or m ark eting pla nni ng inc lu de Port er ’s Fi ve F orc es m odel, f ir s t and s ec on d m over s tr ate gi es , SW OT anal ys is , and the s tr ategic win do w Sol v ing an Eth ic al Contr o vers y: T he NB A Sup ers tar F ans L ov e to Hat e

b. Al l of thes e pl ann in g s tr ate gies h av e th e g oal of c r eati ng a s us taina bl e c om p etiti ve ad van tag e f or a f irm , m eaning that oth er c om panies c a nnot pro vi de t he s am e val ue 2. Porter ’s F iv e For c es a. Porter ’s F iv e For c es is a m ode l wh ic h i de ntif ies f iv e c o m petitive f orc es that inf lue nc e p la nni ng s tr ate gies

F igur e 2.2 Port er ’s F ive For c es Mo del . Choos e one of t he forc es and t hi nk of t he way s it rel ates t o a r eal- w or ld m ark eti ng s ituat ion .

b. Porter later upd ate d h is m odel to inc lu de t he im pac t of the I nter ne t on th e s tr ate gi es that bus i n es s es us e c. T he f ive f orc es in th e P orte r ’s Fiv e For c es m odel are : i. T he thr eat of ne w en tr ants — is i nf luenc e d b y th e c os t and dif f ic ult y of enter i ng a m ark et. T he Int ernet has r ed uc e d the b arr iers to m ark et entr y in m an y ind us tr ies ii. Barga in ing po wer of bu yers —c an i nf luenc e the f irm ’s s tr ateg y as c us tom ers c an eas il y f in d a ltern ate s u ppl ie r s and do pr ic e c om par is ons and s witc h to a b etter s u pp l ier ii i. Barga in ing po wer of s upp li ers — is inf lu enc ed b y th e num ber and s i ze of s uppl ie r s iv. T he thr eat of s ubs ti tute pro duc ts —c an b e e ith er pr od u c ts f r om a c om peting f ir m or indus tr y v. Riv alr y am ong c om petitors — al l th e a bo ve f our f ac tors inf lue nc e ri va lr y


29 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 29 eting S tr k eti ng ateg ies .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 28 28 eting S tr k eti ng ateg ies 3. F ir s t m over and s ec on d m over s tr ate gi es a. A f ir s t m over s tr ateg y ad vo c ates that a c om pan y t hat i s f ir s t to of f er a produc t wi ll be t he lo ng - term m ark et win ner . Bei ng f ir s t m a y als o ref er to enter ing ne w m ark ets wit h ex is t ing prod u c ts or c r eating s ig nif ic ant in no vat i ons tha t ef f ec tive l y turn an old prod uc t into a n e w o ne F igur e 2.3 SW OT Ana l ys is . T hi nk of a wel l- k nown prod uc t and its pos s i ble weak nes s es an d threats . Th en c o ns ider its s tr engt hs and oppor t un iti es .

b. A s ec ond m over s tr ateg y a dvoc a tes c los e obs er vat ion of the inn ov ati ons of f ir s t m overs and t hen im provin g o n th e m to gain m ark et advanta ge 4. SW OT anal ys is a. SW OT anal ys is he lps p lan ner s c om par e inter na l orga ni zat ion al s tr engths a nd weak nes s es with ex terna l o pport un iti es and t hreats b. “ SW OT ” is an ac r on ym f or s tr engths , w eak nes s es , o p por tun iti es , and t hreats c. T his is an im por tant s tr at eg ic pl ann ing too l d. SW OT – s tr engths i. A s et of c ore c om petenc i es — what the orga ni zat io n do es wel l ii. Cor e Com petenc i es are c a pab il iti es that c us tom ers value and c om petit ors f ind dif f ic ul t to d up lic at e ii i. Matc hi ng an int e r na l s tr eng th wi th a n ex tern al op por tu nit y produc es a s itu ati on k no wn as le vera ge

Note: An ex am ple of a s tr ategic w in dow: Dur in g th e ex te nde d per io d wh en H P a nd Comp aq s tr ug gl ed t o c ompl ete t he ir mer g er, Del l Co mpu ter aggres s iv e ly c our ted Comp aq ’s larg e c orpor ate c us to mer s tr y ing to lev er age Del l ’s s tr en gths a nd tak e adv a nta ge o f th e c onfus io n c aus e d by the p end in g HP/Co mp aq mer ger .

e. SW OT – we ak nes s es i. En vir o nm ental thre ats c an attac k an orga ni zat ion ’s weak nes s es ii. Pla nn ers m us t antic ipat e c ons tr ain ts whe n i nter n al weak nes s es or lim itati ons p r even t th eir or g an i zati on f r o m tak ing ad va ntag e of op por t unit ies 5. Str ate gic wind o w a. T he s tr ategic wind o w r ef ers to th e l im ited per iods whe n k e y r equir em ents of a m ark et and th e p artic u lar c om peten c ies of a f irm bes t f it to geth er b. T he vie w thro ugh a s tr ate gi c wind o w s ho ws pl a nn ers a wa y to r elate pot ent ia l o pport uni tie s to a f ir m ’s c apabil iti es c. It requ ir es a t hor o ugh ana l ys is of thr ee e lem ents : i. Cur r ent a nd proj ec ted ex ter nal en vir o nm ental c on dit io n s ii. Cur r ent a nd proj ec ted int ernal c om pan y c apa bi lit ies ii i. Ho w, wheth er , a nd when th e f irm c an r ec onc il e env ir onm ental c ond it ions a nd c om pan y c a pab il iti es in order to im plem ent one of the s tr ate gies As se ssmen t chec k qu est i o n s 1. Br ief l y ex pl ain eac h of P orter ’s Fi ve F orc es . Porter ’s Fiv e For c es are t he t hreats of po tent ia l n ew e ntrants , w hic h inc r eas es c om pet iti on in a mar


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 29 29 eting S tr k eti ng ateg ies k et; bar g ai nin g power o f buy ers , whic h c a n depres s pric es ; bar g ain in g power of s up pl iers , wh ic h c an inc r e as e

c os t or r ed uc e s elec t ion ; thr e at o f s ubs ti t ute pro duc ts , wh ic h c a n l ure c us tomers to other produc t s ; and r iv a lr y am ong c omp etit ors , whic h c a n br ing ab o ut pric e war s or div ert c o mpa nies fro m th eir mai n g oa ls . 2. W hat ar e the b enef its a n d dr a wb ac k s of a f ir s t m over s tr ateg y ? Th e be nef it s of a fir s t mov er s tr at egy i nc lud e c apturin g th e gr e ates t mar k et s har e and dev e lo p in g lon g- term r e lat ions hips w ith c us tomers . D is adv ant ages inc l ude the pos s ib il ity th at

Cop yr ig ht Š 201 3 b y Sout h - W es tern, a di vis i on of Ceng age Learn in g. A ll r ig hts r es erved .


29 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 29 eting S tr k eti ng ateg ies

c ompan ies t hat f ol low c an l ear n fr o m m is tak es by f ir s t mov ers . App le has b een a fir s t mov er w ith its i Po d pr o duc ts . 3. W hat ar e the f our c om ponents of th e SW OT anal ys i s ? W hat is a s tr ateg ic wind o w? SW O T analy s is h elps p la nners c om par e int e r nal or gan i zati on al s tr en gth s and w eak nes s es w ith ex ter nal opp ortun it ies an d thr eat s . SW O T is an ac r ony m f or s tr engths , w eak nes s es , o p por tun iti es , a nd t hreats . A s tr ateg ic wi ndow def in e s the lim ite d p erio d s whe n th e k e y r equir e men ts of a mar k et and a fir m ’s p artic u lar c ompet enc i es bes t f it t Ch apt er O b je ctiv e 5: Iden t if y t h e b asic ele men t s of a mar ket ing str ateg y. oget her . Ke y T erms : m ark eting m ix , produc t, pr od uc t s tr ateg y, dis tr ib uti on s tr at eg y, pr om otion s tr ateg y, pric in g s tr ateg y Po w erPo int Bas ic: 1 5, 1 6 Po w erPo int E xpan d ed: 19 - 27 1. Elem ents of a m ark eting s tr ateg y a. An ef f ec tive m ark eting s tr at eg y do es s ever al t hi ngs : i. It reac hes t he r i ght bu yers at th e rig ht t im e ii. It pers ua des th em to bu y th e pr od Note: As k s tude nts uc t to c ompar e prod uc ts of a c ompany ai ii i. It de ve lops a s tr ong r ela tio ns hip wit h th em over med at diff erent t tim e b. T he bas ic el em ents of a m ark eting s tr ateg y c o ns arget mar k ets , i n is t of two terms of the m ark eti c onc epts : ng m ix v ariab les . Y i. the t arget m ark et ou c o ul d c ons ider ii. the m ark eting m ix varia bl es that c om bine to s at is f auto mob i les , c y the needs of the targ et m ark et omput ers , and mob il es as ex am pl es . F 2. T he tar get m ark et or ins ta nc e, netb ook a. T he tar get m ark et is a gro u p of c ons um ers toward who m the s , la pto ps for s f irm aim s its m ark eting ef f orts , and u ltim atel y its go ods an tudents and la ptops d s ervic es for bus i nes s c oul d b. Div ers it y p la ys an ev er - inc r eas in g rol e i n targ et ing b e c ompar e d . m ark ets i. T he His pan ic po pul ati on in the U nit ed Stat es has s urpas s ed Af r ic an Am eric ans as the larg es t m inor it y g r oup ii. T argeting c o ns um ers in s pec if ic glo bal m ark ets als o r epr es ents a c h al le nge —an d an opp ortun it y 3. Mar k eting m ix varia bl es Mar k eting Suc c es s — In- N - O ut B urger s S el l T hem s elves

a. Mar k eting d ec is io ns c an be di vi ded int o s e vera l v aria bl es or s tr ategi es wh ic h f orm the to tal pac k age, c al led the m ark eting m ix b. T he f our m ark eting m ix vari abl es are pro duc t, dis tr i but i on, prom otion, a nd pr ic in g s tr at egi es c. T he m ark eting m ix c ons is ts of a bl end of thes e f our var iab les to f it the n eeds and pref erenc es of a s pec if ic tar get m ark et 4. Pr oduc t s tr at eg y

F igur e 2.4 El em ents of a Mark eting Str a teg y and I ts En vir onm ental F r am

a. T he term produc t m eans m ore tha n a go od, s er vic e, or ide a — it r ef ers to a br oad c onc ep t th at a ls o enc om pas s es the s atis f ac tion of all c o ns um er needs in r el atio n to a g ood , s erv ic e, or ide a


31 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 31 eting S tr k eti ng ateg ies .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 30 30 eting S tr k eti ng ateg ies

r eac hes , pers u ades , and dev el ops a r elat ions h ip wit h buy ers .

ens ure th at c o ns um ers f ind produc ts i n th e pr o per q ua n tit ies at the r ight t im es and p lac es b. Dis tr ibu ti on d ec is io ns in vo l ve: i. Modes of t r ans por tat io n ii. W ar ehous ing ii i. Inv entor y c ontr ol iv. O r der proc es s ing v. Sel ec tio n of m ark eting c ha nne ls inc l ud ing in term ediari es

Note: As k s tude nts for ex amp les of c ompan ies t hat f orme d all ia nc es as a dis tr ib uti on s tr at egy .

c. T ec hnolog y h as op ene d up ne w c h ann els of dis tr ibut io n in m a n y ind us tr ies ( an ex am ple is o nli ne s e ll ing) . T he Intern et has c aus ed the b ig ges t re vo lut ion in dis tr ibut ion s inc e the m ail - ord er c atal og 6. Pr om otion s tr ate g y a. Pr om otion s tr ate g y r ef ers to the c om m unic ations l ink bet we en s ellers a nd bu yers b. In de ve lo pin g a pro m otion s tr ateg y, m ark eter s blend t he vario us elem ents of prom otion to c om m unic ate m os t eff ec tive l y wi th t he ir target m ark ets c. Integr a ted m ark eting c om munic at io n ( IMC) c o ordi nate s al l prom otional ac ti vi ti es s o th at th e c ons um er r ec eives a unif ie d a nd c ons is t ent m es s age 7. Pr ic in g s tr ate g y a. Pr ic in g s tr ate g y de als with t he m ethods of s etti ng prof it abl e an d j us tif iable pric es b. It is c los e l y r egu la ted and s ubj ec t to c o ns ider abl e p ubl i c s c r utin y c. O ne f ac tor that inf lu enc es a m ark eter ’s pric ing s tr ate g y is c om petiti on d. A go od pric in g s tr ate g y s ho uld c r ea te va lue f or c us tom ers , bui ld ing and s tr en gth en ing the ir r el a tions h ip wit h a f ir m and its produc t

Ch apt er O b je ctiv e 6: De s cribe t h e env i ro n men t al c h aract e risti cs t h at in f luen ce str ateg ic d eci sion s . As se ssmen t chec k qu est i o n s Ke y T erm : r ul e of thr ee Po w erPo int Bas ic: 17 1. W hat ar e the t wo c om ponents of e ver y m ark eting s t r ateg y? T h e b as ic el em ent s of a mar k eti ng s tr at egy are ( 1) the t arget mar k et a nd ( 2 ) the m Po w erPo int E xpan d ed: 28he, 29 1. m arkixeting e nv arkTetin gm v ariab lesir.onm ent a. Mar k eting d ec is io ns are not m ade in a vac u um Id entk eter if y the tr ateg ic elem arkets eting mm ix ark . T he mar k 2. Mar s mf our ak es dec is ions abouents t tarofg the et mmark and eting etin g m m ix ix c ons of bpro ducing t, dintis otrac ib u tion ,the pr od mot ion,ican d pr ic vari is abtsles y tak c ount yn am nature of e s tr ateg ies the . se f iv e dim ens ions of the m ark eting en vir o nm ent: a. Com petiti ve b. Pol it ic al- l ega l c. Ec onom ic d. T ec hnolog ic al


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 32 32 eting S tr k eti ng ateg ies .


31 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 31 eting S tr k eti ng ateg ies

e. Soc ia l- c ult ural f ac tors 3. Som e rec ent tren ds in the m ark eting env ir onm ent: a. Ex pan di ng into f oreign m ark ets b. T ec hnolog y— es pec ia ll y t he Intern et c. Mar k eter s are no w inc r eas i ng ef f orts to get t he ir m es sages to c ons um ers via s m artphone d. T he r ule of thr ee m eans that i n an y ind us tr y, t he t hree s tr onges t, m os t eff ic ient c om panies d om inate bet wee n 7 0 an d 9 0 perc ent of the m ark et e. T he im por tanc e of under s ta ndi ng pr ev ai lin g c ul tura l nor m s — bid din g f or auc ti on is an ex am ple f. T he entir e m ark eting en vir o nm ent pr ovi des a f r am ewor k f or all m ark eting ac tiv it y As se ssmen t chec k qu est i o n s 1. W hat ar e the f iv e d i m ensions of th e m ark eting en v ir onm ent? T he f iv e dim ens i ons of the mar k et in g env ir o nm ent are c om pet it iv e, p ol itic a l - le ga l, ec onom ic , tec hno log ic al , a nd s oc ial- c ult ural fac tors . 2. Ho w is c onc ern o ver th e natura l e nv ir onm ent af f ec ting th e ot her d im Ch apt er O b je ctiv e 7: ens De sions cribe t h e erns met ov h oerd tshe fonr atur m a arket ing n ing , includ ? Conc l env ir plan on men t hav e l ed in t o gnebuw siness and ti po rt f o lio r e gu lat ions o n pol lut ion , wh ic h af fec t th e p oli tic a l - le gal env ir anal ys is and t h e BCG ghter ma t rix. onm ent mar k, seter Effor ts to twar us sta, in absil ity are no Ke y T erms : s tr at egic bus in esins whic unit (hSBU) tarss ,ocper as at h ce.ows , ques ion dmsark dog w s oc ia l - c ult ural fac t ors as wel l b ec aus e c ons umer a war en es s is tur Po w erPo int Bas ic: 1 8- 20 nin g i nto c o ns umer prefere nc e. Po w erPo int E xpan d1.ed: 30 o- 35 Meth ds f or m ark eting pla n nin g a. Man y f ir m s have de ve lop ed pla nn ing m ethods t o h elp with m ark eting dec is io ns b. T wo of thes e t yp es of m ethods : th e s tr ateg ic b us ines s unit c onc ept , and t he m ark et s har e/m ark et gro wt h m atrix 2. Bus in es s por tf oli o a na l ys is a. T op m anagers at large f irm s need a m ethod f or s pott in g pr od uc t lin es tha t des er ve m ore in v es tm ent as we ll as l ines t ha t ar en ’t l i vi ng up to ex pec ta tio ns b. Portf oli o a nal ys is a ttem pts to e val uat e pr o duc ts an d de term ine the s tr onges t a nd weak es t c. Str ate gic b us in es s units i. A str ate gic b us ines s u nit ( S BU) is a k e y bus i nes s el em ent with in a d iv ers if ied f ir m ii. Eac h SBU has its o wn m anagers , res our c es , o bj ec ti ve s , and c om petitors ii i. Div is io ns , pr o duc ts l ines , or ev en a s ing le prod uc t m a y c ons titut e a s tr at eg ic bus i n es s unit iv. An SBU , a ls o c al le d a c at e gor y, f oc us att ent io n of c om pan y m anagers s o that t he y c an r es pond ef f ec tivel y t o c han ges with in lim ited m ark ets


33 Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 33 eting S tr k eti ng ateg ies .


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 32 32 eting S tr k eti ng ateg ies F igur e 2.5 BCG Mar k et Shar e/ Mar k et G r owt h M atrix . T h ink of a pas t or pr es ent produc t or s erv ic e , a wel l- k nown bus in es s , or ev en a broad in dus tr y that mig ht f it i nto eac h quadr ant.

3. Mar k et s har e/m ark et growt h m atrix ( BCG m atrix ) a. T he m ark et s har e/m ark et gr owt h m atrix ( or BCG m atrix ) plac es SBUs in a f our - quadr an t c h art that pl ots m ark et s har e — the per c enta ge of a m ark et that a f ir m c ontr ols —a gai ns t m ark et growt h pote nti al b. T he quadr a nts are lab el ed s tars , c as h c ows , ques t ion mar k s , and dogs c. Eac h of th e f our qu adr an t s r equir es a un iq ue m ark etin g s tr ateg y d. Stars : i. Stars r epr es e nt u nits with h igh m ark et s har es in hi gh g r owt h m ark ets ii. T he y g en erate c ons id erab l e inc om e, but r equ ir e e ve n m ore c as h to f ina nc e f urther gr o wt h e. Cas h c o ws : i. Cas h c o ws ha ve hi gh m ark et s har es i n l o w- gro wth m ark ets ii. F oc us is to m ainta in t his s t atus f or as lon g as pos s ib le ii i. T he bus ines s pro duc es s tr ong c as h f lo ws , wh ic h c ou l d be us ed to f inanc e gro wt h of o ther S BUs with hi gh p ote nti al f. Q ues tio n m ark s : i. Q ues tio n m ark s ac hieve lo w m ark et s har es in hi gh gr o wth m ark ets ii. Mar k eter s m us t dec ide whe ther to c o nti nu e s upp orti ng thes e produc ts or b us in es s es ii i. T he y r equ ir e m ore in ves tm ent t han the y g ener ate in c as h iv. If a ques ti on m ark c annot b ec om e a s tar, the f ir m s hould p ul l out of th e m ark et and targ e t oth er m ark ets with great er pote nti al g. Dogs : i. Dogs m anage lo w m ark et s har es in l o w- gro wt h m ark ets ii. Sinc e the y prom is e poor f utur e, m ark eter s s hould c ons ider with dra wi ng f r om thes e m ark ets as quic k l y as p os s ibl e 4. Str ate gic Im plic at ions of Mar k eting i n th e 21s t Cent ur y a. Pla nn ing is vit al t o s us ta in t o ga in a c om petiti ve ad van t age in t oda y’s glo bal m ark etplac e b. Mar k eter s need t o p lan c aref ull y, ac c urat el y, a nd quic k l y c. Mar k eter s need t o p lan wh en to ent er a m ark et, dif f erenti ate bet we en a s tar a nd a do g, and t ak e s uitab le ac tio ns As se ssmen t chec k qu est i o n s


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 33 33 eting S tr k eti ng ateg ies 1. W hat ar e SBUs ? Str at eg ic bus i nes s un its ( S BUs ) are k ey bus i nes s un its wit hi n div ers ifi ed fir m s . Eac h SB U has its own man agers , res our c es , ob jec tiv es , and c ompet itors . 2. Id ent if y the f our qua drant s in th e B CG m atrix . T he B CG matr ix lab els SBUs s tar s , c as h c ows , ques t ion mar k s , and do gs . St ars are th e pr oduc ts wi th h ig h m ark et s har es in hi gh - growt h m ark ets ; c as h c ows c om man d h igh mar k et s h ares in lo w - growth mar k ets ; q ues ti on mar k s ac hiev e low mar k et s har es in hi gh - growt h m ark ets ; and dogs m an age on ly low mar k et s har es in low - gro wt h mar k ets .

AN SWER S AN D TE AC HI NG NO TES TO CH AP TER EXER CI SES


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 34 34 eting S tr k eti ng ateg ies

Chapter 2 Assurance o f Learni ng Revi ew 1. St at e whet her each of t he f ollowing illustr at es str ateg ic or t act ical planning: a. G lobal aut om ak ers beg in set t ing up m anuf act ur ing plant s in I ndia—st r ategic planning b. T he m erg ing of Live Nat ion and T ick et m ast er —st r at egic planning c. T he New Eng land Patriots tr ade a back up q uarterback t o t he Kansas City Chief s —t actical planning d. A r eg ional air line looks f or ways t o expand t o ot her areas of t he count r y—t act ical planning 2. I m ag ine you had a chance t o inter view G oog le co -f ounders Larr y Pag e and Serg ey Br in. Pag e is now CEO . Br in is now president of t echnolog y. W hat q uest ions m ig ht you ask each about st r at eg ic planning f or his division and t he f irm overa ll? St udent answers w ill vary. Q uest ions w ill be f ocused on st r at egic planning. The senior execut ive may be qui zze d about organi zati on - w ide objectives , f undament al str ategies , long-t erm plans f or exist ing and new products, new business lines , possible pla ns f or inor ganic growt h , t ot al budget et c. Middle m anagers deal w it h shor t - t er m operat ional planning t hat addr esses action and f ocuses on curr ent and upcoming activit ies in support of t he overall st r at egic planning laid out by com pany executives. They set t hese plans in m otion by developing quar t er ly and sem i -annual plans, policies and pr ocedur es, and divisional budgets ( Example: m iddle m anagers of t he sam e lar ge depar tm ent st ore chain r eview t he budget and develop plans f or or der ing invent ory, hir ing new st af f, and opening various depar tm ents at new locat ions.) 3. W hat is the dif f erence bet ween a f irm ’s m ission and its obj ectives? W hy is it im por t ant t hat bot h ar e conveyed clear l y t o em ployees and t o custom er s? A f irm ’s m ission is t he essent ial pur pose and philosophy t hat dif f er ent iates it f r om ot her com panies . Adjustm ents in t his st atem ent r ef lect changing business envir onm ent s and m anagem ent philosophies. A f ir m ’s objectives are it s or gani zational goals , including specif ic intent ions that guide develop m ent of m arket ing objectives and plans, oft en st ated in t he com pany ’s m ission st at ement . These objectives guide developm ent of support ing m ar keting objectives and plans . Conveying t he m ission and vision clear ly t o t he cust om ers t o diff erent iate t hemselves f r om com pet it or s. Em ployees need t o know t hem so t hat t hey put t heir ef f or ts f or r eali zation of t hese goals, object ives. 4. O ver which of Por t er ’s Five Forces do consumers have t he g reat est inf luence? O ver which do t hey have t he least ? How m ight t hese f act ors af f ect a f ir m ’s overall m ark eting str ateg y? The gr eat est influence comes f r om t he bar gaining pow er of buyers and t he t hr eat of subst it utes. Consumer s have t he least influence bar gaining pow er of suppliers. W it h increased availabilit y of infor m at ion, w hich t ends t o level t he playing f ield, r ivalr y heat s up am ong compet it or s w ho tr y t o dif f erent iate t hem selves fr om t he cr ow d . The t op m anagement has t o keep t he consum er pref erences in m ind w hile f orm ulating any str ategy or plans. 5. W hy is it so im por t ant f or a f ir m t o identif y it s cor e com pet encies?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 35 35 eting S tr k eti ng ateg ies

A company’s st r engths reflect it s cor e compet encies —w hat it does w ell. Core com pet encies ar e capabilit ies t hat customer s value and com pet it ors f ind diff icult t o duplicate. Matching an inter nal strength w it h a n ext ernal opport unit y produces a sit uat ion know n as lever age. To m ake t he m ost of any oppor t unit y, f irm s m ust m ake sure t o t ake advant age of t heir core competencies. 6. How m ight an under standing of diversity help f orm ulate a f irm ’s m ark et ing str ateg y?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 36 36 eting S tr k eti ng ateg ies

The t ar get m ar ket is an essent ial element of any m arket ing st r at egy. Diversit y plays an ever - incr easing r ole in t ar get ing m ar kets. St r at egies t hat f ocus on satisfying t he needs of its m ost prom inent t arget group ensure m arketplace success. Under st anding of diversity helps f orm ulate str ategies t hat f ocus on groups w it h enorm ous buying pot ent ial. 7. Suppose you have been hir ed as a m ark eter by online r etailer Bluef ly or eBay t o help develop a new m ark et ing m ix. St ate one t hing you would do t o improve t he r eta iler’s posit ion t hr oug h each of t he f our st r at eg ic element s: pr oduct, distr ibut ion, prom otion, and pricing . eBay is an online r etailer w ith oper ations acr oss 30 countr ies(distr ibut ion) buying and selling variety of goods and services ( pr oduct ) w hich f ollow s com petitive pr icing / auct ion- style list ing/ bidding/ f ixed pricing f orm ats ( pr ice) and comm unicates it s m essage (prom ot ion) using a m ix of adver t ising m edia t hrough t elevision, r adio, pr int, and online ads. Pr oduct: Add m or e var iety by including m ore se rvices Place: St ar t operat ions in m or e count r ies, or in more cit ies of exist ing countr ies Price:Moreoffersmakingthe product s very compet it ively placed in t hemarket Promotion:Focusonsocialm edia m ar keting 8. W hat is the r ule of t hree? Suppose you work ed f or a sm all f irm in a larg e industr y — such as a sm all m anuf act urer of f ur nit ure. How m ig ht you actually use t he r ule of t hr ee t o enhance your f ir m ’s posit ion in t he m ark et place? The r ule of t hree m eans t hat in any industry, t he three st r ongest , m ost e ff icient com panies dom inate bet w een 70 and 90 per cent of t he m arket. Tr ying t o ent er t hat kind of m ar ket is dif f icult, especially for a sm all company w it h lim ited r esour ces. Som e st r at egies include low er pr ices ( gr eat er value) or new f eat ur es; or higher le vels of custom er ser vice. Hence, by adding m ore value t o m y product s, giving exceptional levels of customer service and of f er ing com pet it ive pr ices can be a st r at egy used t o enhance t he f ir m ’s posit ion in t he m arket place. 9. W hat is a portf olio analysis? W hat pur pose does it serve f or m arketer s? The business por tf olio analysis evaluat es a company ’s products and divisions, including str ategic business unit s ( SBUs) in or der t o det erm ine w hich ar e str ongest and w hich ar e w eakest. 10. How does the BCG m atr ix help m ark et er s decide which pr oducts t o of f er? According t o t he m at r ix, wh ich t ypes of product s are m ost desir able, and wh y? The m ar ket shar e/m arket gr owt h m at r ix places t he f irm ’s m arket shar e on one axis and t he m ar ket ’s growt h pot ent ial on t he ot her axi s. The r esult ing four quadr ant s are labeled: st ars ( high m ar ket shar e, high- growt h m ar ket) , cash cow s ( high m arket shar e, low - gr ow t h m ar ket ), quest ion m arks ( low m arket shar e, high- growt h m arket), and dogs ( low m ar ket shar e, low - growt h m arket). I n high gr ow t h industr ies, st ar s ar e t he m ost desirable, as t hey have a high m ar ket shar e. W hereas, in st able or low gr ow t h industr ies, cash cow s ar e desir able. They have a high m arket shar e and gener at e cash t hat can be used t o f und ot her SBUs of t he f irm t hat has t he pot ent ial f or success.


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Project s and Teamw ork Exerci ses 1. When st udents choose a com pany w hose goods and ser vices are f am iliar t o t hem and cr eat e a m ission st at em ent, t hey m ight st ar t w it h com panies t hey part icularly adm ire and check t heir Web sit es f or m ission st at em ent ideas. W hen f or m ulating a m ission st at ement , t hey should m ake sure t hat t he company’s over all broad objectives are spelled out , it s philosophy is st ated, and it s int ent ions are list ed in a clear - cut and st r aight f or w ar d w ay.


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2. St udent s should f ir st st udy Apple and it s str ategies t o be leader s in innovative pr oducts, and t hen they shouldresearchtheproductsofanotherfirmt hat produces eit her a digit al m usic player or a sm ar t phone tolearnaboutitsstrategy.Theymustunderst and t he benef its as w ell as the r isks involved in being a first mover.Theymustresearchthesalesprogressof t he second m over f irm s, and pr esent t he f indings. 3. St udent s are expect ed t o under st and t he str ategies of Sam sung and Sony. I n cr eat ing m ar ket ing st r at egies, a f ir m decides t o dir ect it s eff ort s t ow ard a par t icular group of consum ers called a t ar get m arket . St udent s w ill need t o narr ow t heir m arketing st r at egy t o f it cer t ain specif ic groups of people, keeping in m ind dem ographics, geogr aphical locat ion, lif est yle, etc. The st r at egies of Sony and Sam sung w ould be dif f er ent; hence, st udents should underst and t he dif f er ences in their approach in dept h. Such an eff ort w ill help t hem get clarit y on t he concept s r elated t o t he element s of m arket ing st r at egy. 4. The st udent s should select any industry of t heir choice and pref erence from t he f our opt ions. They m ust r esear ch t he various com panies in t he indust r y, bat t ling f or a higher m arket shar e. Fr om t he f indings, t he t op t hree com panies t hat have a m arket shar e t ot aling 70- 90 per cent are t o be list ed. Few st udent s can also explain t he r easons f or such domination by t hese big player s of t he industry. 5. St udent s m ust select any corpor ation fr om t he f our list ed out in t he t ext . From t he available pr oduct lines, t hey should select at least 6- 8 and categor ize t hem into st ars, cash cow s, quest ion m arks, and dogs. Their r esear ch should be accur ate enough to classif y t he product lines int o t he f our dist inct categories. St udents can also gr aphically r epr esent t he pr oduc t lines in t he f our quadr ant s f or a bet t er r epr esent ation of t heir f indings. There should be a discussion over a f ew product lines t hat m ay f all in m ore t han one categor y. Cri ti cal- Thinking Exerci ses 1. Suppose you are a mark eter f or a U. S. m anufactur er o f pet supplies. Two t op execut ives have proposed expanding t he company by opening r etail st ores and m arketing pet s on - sit e —puppies, k it t ens, r abbit s, bir ds, f ish, and the lik e. W hat are t he potent ial benef it s and dr awbacks of m ak ing a m ove lik e t his? How wou ld you advise your company t o pr oceed? A company’s st r engths reflect it s cor e compet encies —w hat it does w ell. They are capabilit ies t hat custom ers value and com pet it or s f ind diff icult t o duplicate. Str aying f r om core com pet encies m ay have pot ent ial r ew ar ds, such as expanding into more att r act ive m arket s, but is also r isky. O n t he other hand, even if a com pany f ocuses on its cor e com pet encies, som etimes it needs to br oaden it s off erings t o m aintain a compet it ive edge . The benef its could be bett er r each and cover age. Dr aw backs could be inabilit y of t he com pany to leverage t he decision. A compr ehensive SWO T analysis can help t he t op m anagement t o t ake t he r ight decision. St udent s answ ers m ay vary. 2. Netf lix has m ade t housands of st r eam ing videos available t o it s unlim it ed subscr iber s. How does t his st r at eg y dem onst r at e a st r at eg ic windo w f or t he company? The view t hr ough a st r ategic w indow show s planner s a w ay t o r elate pot ential oppor t unit ies to company capabilit ies. Netf lix is in a unique posit ion because unlike pr evious leader s in t he m ovie r ent al business, it delivers m ovies and TV series dir ect ly t o PCs via t he I nt ernet . A new system, intr


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oduced by t he com pany w ill allow t hem t o sidest ep com put ers and deliver m ovies dir ect ly t o t elevision sets. 3. Choose one of t he f ollowing products and descr ibe how it m ay ( or alr eady has) becom e vulner able t o subst it ut ion. T hen descr ibe an overall str ateg y —wit h t wo or t hree t actics—f or r educing t his vulner abilit y. a. pr inted copies of per iodicals or books b. t elevision


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c. t elephone landlines d. t r avel ag encies This exer cise asks st udents f or an opinion but suggest t hat st udent s t hink about pr oducts t hey use. Defending a pr oduct fr om com pet it ion m ight include adding f eat ures, delight ing cust omer s w it h bet t er service, im pr oving product qualit y, or low ering pr ices. 4. Resear ch t he W eb site of one of t he f ollowing r etail f irm s t o identif y it s targ et m ark et. T hen out line a st r at eg y f or expanding t hat t arg et m ark et. a. Q uiznos b. T arg et c. Trader Joe’s d. Nordstr om e. Dollar Tr ee St udent s are expect ed t o select any one am ong the f ollow ing r etail f ir ms. The t ar get groups m ust be clear ly def ined, explained, and a st r at egy t hat caters t o t hose groups m ust be out lined. I deas f or expanding t his t arget m ar ket m ust be f easible, and sho uld be applicable t o t he curr ent envir onm ent. A discussion on how t o improve t he of f er ings, and expand t he t ar get m arkets w ill help t he st udent s to under st and t he concept in a bet t er w ay. 5. Resear ch a com pany such as L.L. Bean or G ener al Mil lsthathasanumberofdifferentsuccessful SBUs.W hat f act ors do you t hink m ak e t hese units —and t his com pany—successf ul f r om a m ark et ing st andpoint? St udent answers m ay var y. To evaluat e each of their organi zation ’s st r ategic business unit s, st udents could use t he m a r ket share/m arket gr ow t h m at r ix developed by t he Boston Consult ing G r oup. Discussion could also f ocus on how t he select ed com pany manages its SBUs. Et hics Exerci ses A r ecent news st or y r epor t ed a st udy whose r esults r evealed t hat f ood at popular chain r est aur ant s and in f r ozen -f ood pack ag es at t he super m ark et cont ain m ore calories t han advert ised. Meals f r om r estaur ant s including Ruby T uesday and W endy’s were t est ed and f ound t o be m or e t han 18 percent hig her in calories t han list ed on t heir m enus. Frozen d iet m eals m ade by Lean Cuisine, W eig ht W atcher s, and Healt hy Choice, among ot her s, averag ed 8 percent hig her in


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calories t han list ed on t he package labels. Im ag ine t hat you are a m ark eter f or a f ood m anuf actur er t hat competes wit h t hese f ir m s. 1. Cr eat e an advert isement f or your f irm ’s f ood. Decide on a st r at eg y and t act ics. W ould you f ollow in t he f oot st eps of some of your com pet it ion, or use accurat e calorie count s? W ould you r ef er t o t he st udy t hat f ound discr epancies in your com pet it ors’ num bers? The ex ercise r aises some import ant issues and student s m ay come up w ith contr adict ing opinions . O n one hand, t he com pet it ors are gaining m ar ket shar e by such unethical pr act ices. O n t he other hand, beating com pet it ion w ould r equir e att r act ing consumer s using inn ovat ive, honest w ays. This exercise w ill put t he st udents in an ethical dilemm a, and give solutions t hat can beat compet it ion in eit her et hical or unethical w ays. Some student s m ay opt t o ignore t he st udies t hat have discr epancies in t he r esult s, w her eas, some m ight f ollow t hem .


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2. W ould you price your own f irm ’s f ood hig her or lower t han t he com pet it ion’s? W hy? St udent s can have diff ering opinions f or t his question. Some m ight pr ice the f ood higher, due t o t heir low calorie count. Som e m ight pr ice t he f ood it em s low er t o att r act consum ers. The st udent s should just if y t heir solut ions and elaborat e t he r easons f or t he pricing str ategies used f or t he f ir m ’s f ood item s.

I nternet Exerci ses 1. Busi ness portf oli o anal ysis. O ccasionally, companies sell par t s of t hemselves t o ot her f ir m s. O ne st ated m ot ive f or such divestitur es is t hat t he sold assets ar e a poor str ateg ic f it f or t he r est of t heir business portf olios. One r ecent example is t he sale of a cont r olling inter est in NBC Universal by G ener al Electr ic t o ca ble g iant Com cast . Using a m aj or search eng ine, r esear ch t he sale of NBC Universal. I n t he cont ext of business portf olio analys is, why did G E decide t o sell, and why did Com cast decide t o buy, NBC Universal? St udent answers w ill vary. St udent s are expect ed t o visit a f ew W ebsit es that pr ovide infor m at ion on business port f olio analysis, NBC Universal, Gener al Electr ic, and Comcast. The answ ers m ay include some of t he inform ation that f ollow s. NBC Universal is a m edia com pany — hom e t o a broadcast netw or k, m ovie st udio and a str ing of cable net w or ks —w hich is not a compet ency f or G ener al Electr ic. How ever, Comcast pr ovid es cable t elevision, broadband I nter net, and t elephone service to both r esidential and com m er cial custom ers . It m ay be in a bet t er posit ion t o ha ndle NBC ’s operat ions. 2. M i ssi on and O bject i ves. Visit t he W eb sit e of the Sara Lee Corpor ation ( ht t p: // www. saralee. com) , whose slog an is “ t he j oy of eat ing. " Def ine t he f irm ' s m ission and obj ect ives, and discuss how it s br and and act ivit ies support both. St udent answers m ay var y. The m ission st atem ent of Sara Lee, “ To sim ply delight you…ever y day” suggest s t hat t he f irm s aim s t o give it ’s custom ers a unique exper ience every t im e t hey use it s pr oduct s. The f irm ’s objectives can include f ast delivery of pr o duct s, eff icient supply chain m anagem ent, and so on. 3. SWO T Anal ysis . Visit t he W eb sit e of an org anization whose g oods and ser vices int er est you — such as Columbia Sport swear , Maj or Leag ue Baseball, T r avelocit y, Apple, or Urban O utf it t er s. Based on your r esearch, cr eat e a SW OT analysis f or your f irm . O utline your own ideas for increasing t he f irm ’s str eng t hs and r educing it s weak nesses. St udent answers w ill vary accor ding t o t he product and industr y t hey choose. I n a SWO T analysis, t he st r engt hs of a f ir m are typically inter nal and ar e t he cor e com pet encies of the f irm , like eff icient supply chain m anagem ent, just -in- t im e invent ory syst em , and so on . The w eaknesses ar e inter nal like lack of eff icient m anagem ent . The opport unit ies ar e usually exter nal like t he changing custom er pref erences and t he econom ic sit uat ion. The t hr eat s w ould norm ally include com pet it or s.


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Case 2. 1 How a St adi um Becomes Part of a Marketi ng Strat egy —Q uesti ons f or Cri ti cal Thinking 1. How would you descr ibe t he t arg et m ark et f or the Dal las Cowbo ys’ ne w st adium ? Do you t hink m ark et ers are t arg et ing the r ig ht consum ers? W hy or why not ? The t ar get m ar ket f or t he Dallas Cow boy’s new stadium w ould be t he die -har d f ans and suppor t er s w ho visit t he st adium t o cheer f or t heir f avor it e t eam( s) . They are dem ographically sim ilar. Their lif estyles, pref er ences, and t ast es also m at ch, m aking it easier t o r each t he r ight audiences. St udent s are expect ed t o give r easons how m arketing ar e t ar get ing t he r ight consum er s using st adiums in t heir overall st r a t egy.


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2. How does t he new Dallas Cowbo ys’ st adium f it into an overall m ark et ing m ix, in t erm s of product and pricing str ateg ies? The m ar keting m ix: ( 1) pr oduct: ent ert ainment t hrough gam es, t eam m erchandise, f ood, and beverages served at t he st adium . I n sh ort , t he exper ience of a live gam e. ( 2) Place w ould be t he st adium it self . ( 3) Pr ice is t he am ount charged f or t icket s, f ood, bever ages, m erchandise. They gener ally use premium pricing. Loyal consumer s, f ans, and support ers are r eady t o pay a higher pr ice f o r a live event , a pay - per- view , or t eam m er chandise. The r esponse show n by so m any big companies pr oves t hat it is a good idea t o t arget st adiums because t he support er s ar e dem ogr aphically sim ilar. Vi deo Case 2. 2 St rat egic Pl anning and t he M arket i ng Proces s at Preserve—Q uest i ons f or Cri ti cal Thinking 1. Do you consider Preserve' s st r at eg y f or t he Preser ve br and a f ir st m over or second m over str ateg y? Expla in. I f view ed as a m ere r ecycling company, Pr eserve is utili zing a second m over st r at egy —t he company is im proving upon prior f irst- m over r ecycling businesses. How ever , if t hought of as a r ecycled product s company, Pr eserve is using a f irst m over str ategy, f or t he com pany is a pioneer in t r ansf orm ing r ecycled m ater ial into new consum er- goods pr oduct s. I nt er e st ingly, by par t icipat ing in t he com pany's recycling program , Pr eser ve custom ers act ually supply t he r aw m at erials t hat ar e t r ansform ed int o Preserve brand products dur ing m anuf act uring. Eco -m inded consumer s have show n gr eat inter est in seeing t heir used plastics tr ansf orm ed into new pr oduct s. 2. Perf orm a SW OT analysis on Pr eser ve . I dent if y t heir cor e com pet ency and t heir weak nesses in t he m ark et place. A SW O T analysis com par es a f irm 's inter nal or gani zational st r engths and w eaknesses w it h exter nal oppor t unit ies and t hreat s. Pr eserve' s str engths: a compelling " green st ory" ; t he abilit y t o m ake high - qualit y eco-f r iendly pr oducts at compet it ive pr ice points; dist r ibut ion t hr ough W hole Foods and Trader Joe' s; st r ong r elationship m ar keting w it h gr een cust omer s v ia I nt ernet and e - m ail. Pr eserve ' s w eaknesses: lim it ed advert ising and prom otions budget; lim it ed r ange of m ater ials t hat can be r ecycled f or use in Pr eserve br and pr oduct s; r elat ively unknow n sm all business. Market opport unit ies: popular " green product s" tr end; gr ow ing netw ork of gr een supply chain part ners. Market t hr eat s: large compet it ors in personal-care pr oduct m arket ; potent ially f addish nat ure of green m arket ing. St udent s' answ ers about Pr eser ve's core com pet ency w ill vary, but t he com pany's abilit y t o m ake aff ordable, high - qualit y 100% r ecycled products is a sm all niche and is diff icult f or other com panies t o duplicate.

CO LL ABO R ATI VE LE ARNI NG EXERCI SES Pl anning Throughout the Organi zat i on Purpose:


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T o hig hlig ht a k ey challeng e in g ather ing inf or m at ion f or str ateg ic planning Backgr ound: Research clear ly st ates that when your ent ir e organization g ather s and shares inf or mation, t he planningprocessismoreeffectiveandbetter int eg rated into t he org anizational cult ure. But the bestwaytoachievefullemployeepart icipat ion is m uch less clear . T his exercise is designedto helpstudentsexplorepotential approaches t o achieve m ore widespread inf orm ation shar ing . Relationship t o T ext :


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Planning at Dif f er ent O rganization al Le vels Est im ated Class T ime: About 10 to15 m inut es Pr eparat ion/ Mater ials None needed Exercise: Ask your class why t hey t hink it is so dif f icult t o achieve a f r ee f low of inf orm ation and ideas in m ost com panies. As t hey shar e t heir t houg hts, you m ay want t o point out t hat m oney is n’t always t he answer; in f act, of f er ing m oney in exchang e for ideas can spawn a count erpr oductive, compet it ive dynam ic among em ployees at all levels. Ir onically, t echnology doesn ’t alwa ys help eit her . Joseph Pr iestley, a pioneer of m odern science, summ ed up a comm on issue by observing , “ T he m ore elaborat e our m eans of comm unication, t he less we com m unicat e. ” Af t er a br ief discussion, break your class int o small t eam s and g ive about f ive m inut es t o brainstorm possible solutions. W hen you r econvene as a cla ss, ask each g roup t o shar e t heir best idea ( possibilit ies usually r ang e f r om host ing week ly planning lunches wit h all employees, t o eng ag ing I ntr anet approaches, t o r aising overall pay) . T his of t en leads t o a helpf ul and spontaneous discussion about which m ethod work s best in which situat ion, and why. Q uest ions f or Ref lect ion: How does planning connect t o cor por at e cult ure? I s em ployee par t icipat ion lik ely t o become m or e or less im port ant as our economy evolves? W hy? Defi ning t he O rganization ’ s M i ssi o n and O bject i ves Purpose: T o g ive st udent s a per sonal per spect ive on m ission st at ement s Backgr ound: T his exercise is desig ned t o explore and ar t iculate t heir per sonal “m ission st at ement s. ” T ypicall y it is bot h int erest ing and inspir ing , and helps st udent s under st and how org anizations use t heir m ission st at em ent s t o dif f erent iate t hemselves and t o g uide t heir decision -m ak ing at a m or e visceral leve l. Relationship t o T ext : Def ining t he O rg anization ’s Mission and O bj ect ives Est im ated Class T ime: About 10 m inut es


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Pr eparat ion/ Mater ials: Each st udent will need paper and a pencil or pen. Exercise: Ask each st udent t o spend a f ew m oment s wr it ing a per sonal m ission st atement f or his or her lif e. For t he discussion t o be ef f ect ive, avoid pr oviding m any cues. Y ou can let t he discussion prog r ess on it s own and inter vene t o provide a direction when st udent s g et st uck. Af t er about f ive m inut es, ask f or volunt eer s t o shar e t heir st at em ents. If no one volunt eers, st ar t by calling on a


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f ew people who t end t o be art iculate in class. T he r esult s can be stagg ering . And t he d iscussion is t ypicall y spontaneous and livel y—but if not, ask student s t o ident if y sim ilarities and dif f er ences in t heir st atem ent s, possibly across g ender , ag e, hom etown, colleg e m aj or , or ot her dem og r aphic t r ait s and lif est yle char act eristics. W hat do t heir statem ent s say about et hics, values, and locus of cont r ol? How do t heir per sonal m issions inf luence t heir actions and decisions on a day - to- day basis? You m ay want t o close by calling t heir at t enti on t o t he obvious par allels bet ween per sonal and org anizational m issions. Q uest ions f or Ref lect ion: W hat are t he char act er ist ics of a str ong m ission st atem ent ? ( You m ig ht want t o pr ecede t his q uest ion wit h som e examples of cor por at e m ission st at ement s. Som e p ossibilit ies : Merck —t o preserve and im prove hum an lif e; Mary Kay—t o give unlim it ed oppor t unit ies f or women .) Ext end t he exercise by ask ing each st udent t o do a per sonal SW OT analysis, t he log ical next st ep in str ateg ic planning.

St rat egi c Pl anning Purpose: T o g ive your st udents hands - on exper ience wit h basic str ateg ic planning f or a very f am iliar ent it y— t hemselves! Backgr ound: At t em pting t o im plement st r at eg ic planning, st udents of t en st r ugg le t o f ind t he balance bet ween an approach t hat ’s t oo narr ow and an appr oach that ’s t oo broad. T his exercise is desig ned t o help st udent s achieve t he r ig ht balance by examining their per sonal str ateg ic plans and zeroing in on bot h wide- r ang e and detailed issues ( while r eceiv ing som e unexpect ed g uidance f r om t heir peer s about t heir car eers). Relationship t o T ext : St r ateg ic Planning Est im ated Class T ime: About 15 m inut es Pr eparat ion/ Mater ials: Each st udent will need paper and a pencil or pen Exercise: Ask st udent s t o wr it e down a brief st r at eg ic m ission st at ement f or t heir career s, look ing at t he f ive - year hor izon. From a prof essional st andpoint , what do t hey aspir e t o be ? Collect t he paper s, shuf f le t hem , and r edistr ibut e t hem t o t he class. Ask each st udent t o wr it e a f ive - point st r at eg ic plan f or t he pers on whose paper he or she r eceived. Each point in t he plan should be no m ore t han a sent ence or t wo. Remind t he class t o be sure t hat all of t heir points are specif ic and m easurable, and m ost im port ant ly, will bring t he st udent closer t o t he


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 49 49 eting S tr k eti ng ateg ies

overall st r at eg ic g oal. Af t er about t en m inut es, call on a handf ul of st udent s and ask t hem t o shar e t he ir classmat e ’s g oal and t he f ive - st ep plan t hat t hey cr eat ed. Q uest ions f or Ref lect ion: W as it easy or har d t o wr it e t he plan? W hy? W here did t hey have pr oblems? How could a st r at eg ic plan help develop your career ? W hy? How does develop ing a per sonal st r at eg ic plan compare t o developing a business str ateg ic plan?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 50 50 eting S tr k eti ng ateg ies

Form ulat i ng a M arket i ng Str at egy Purpose: T o help st udents explore str ateg ic solutions f or a cont emp or ary m ark et ing issue Backgr ound: Not sur prising ly, f ast -f ood r est aur ant s ar e f eeling under sieg e. Recent st udies ar e hig hlig ht ing healt h hazards acr oss t he U.S. and cit ing r am pant obesit y, child obesit y, the dang ers of tr ans f at s, and m or e . As low- carb d iets becam e popular , r et ail sales of f r ench f r ies —a st aple of f ast -f ood r estaur ant s—plumm eted, dr opping 2.9% in 2001, 3.3% in 2002, and 10% in 2003 ( www. wh ybiotech. com) . From a PR per spect ive, the document ary Super Size Me f anned t he f lam es. T his exercise is desig ned t o help st udents explore pot ent ial solutions — and et hical im plications—f or this st rateg ic challeng e f r om t he f ast -f ood indust r y perspect ive. Relationship t o T ext : For m ulating, I m plem ent ing, and Monit oring a Mark et ing Str ateg y Est im ated Class T ime: About 20 t o 25 m inut es Pr eparat ion/ Mater ials: You m ay want t o copy t he backg r ound and t he case situat ion f or each st udent . Exercise: Divide your class int o small g r oups and shar e wit h t hem t he f ollowing case. Sit uat ion : You and your t eamm at es ar e par tner s in t he owner ship of a m edium - sized f ast -f ood chain in t he Mid west. You own 41 out lets, m ost of t hem in sm all t owns. T he m ainst ay of your m enu is ham burg er s and f r ench f r ies, alt houg h you also of f er a couple of sandwiches, chips, sof t serve ice cr eam , and sodas. Your m ost im por tant cust om ers are m en ag ed 18 - 34 (t hey account f or about 20 per cent of your custom ers and about 5 5 per cent of your sales), but since r est aur ant opt ions are lim it ed in m ost of t he t owns wher e you operat e, you serve custom er s across a wide dem og r aphic r ang e. Sales in t he past t wo year s have been dropping at an acceler ating r ate . You have t o m eet wit h your par t ner s t o discuss pot ent ial solutions. G ive your class about 10 m inut es t o br ainstor m opt ions. Encourag e t hem t o consider all t he possibilit ies including doing not hing ( “T his will all blo w over ….” ). T hen, dir ect each g r oup t o choose t heir best opt ion, and t o ident if y t he potent ial r isk s and benef it s (e.g. , if t hey m ade chang es t o att r act new custom er s, will t hey alienate t he ir cur r ent custom ers?) . Reconvene as a class, and ask each g r oup t o r epor t brief ly to t heir peers. W hich solution does t he class lik e best ? W hy? Q uest ions f or Ref lect ion: W hat addit ional inf orm ation do you need t o f or m ulate t he best solution? W hat are t h e ethical implications of each choice?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 51 51 eting S tr k eti ng ateg ies

Should your per sonal per spect ive play a r ole in your st r at eg ic decision m ak ing ? W hy or why not ? ( You m ay want t o pr ef ace t his q uest ion by ask ing how m any of your st udent s eat f ast f ood m ore t han once a week . )

Promoti on St rat egy and Pri ci ng St rat egy Purpose: T o explore t he r elationship bet ween t he pr omot ional and pr icing st r at eg ies


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 52 52 eting S tr k eti ng ateg ies

Backgr ound: Clear ly, all element s of the m ark eting m ix are interr elated , so t his exercise is desig ned t o hig hlig ht t he link s bet ween pr om otion and pr icing Relationship t o T ext : Pr omot ion Str ateg y and Pr icing St r at eg y Est im ated Class T ime: About 15 m inut es Pr eparat ion/ Mater ials: Each st udent needs t o have unlined paper and a pencil or pen Exercise*: Br eak your class into small g r oups . Ask each group t o choose a g ood or a service t hat t hey all k now and lik e, and t o cr eate t wo ads f or t hat product: one t hat f ocuses on price, t he ot her on t he f eat ur es and benef it s of the product itself . (T hey can do pr int, r adio, T V , or I nter net ads, as long as bot h ads are desig ned f or t he sam e m edia.) Let t hem k now upf r ont t hat t hey’ll need t o pr esent t heir ads t o t he class. W hen t he t eam s present t heir ads, conduct a q uick vote t o see which ad t he class lik ed bett er f or each pr oduct . Keep a t ally on t h e board showing each of t he product s and t he winning t ype of ad. Result s will vary sig nif icant ly based on t he pr oduct categ ories ( and, of cour se, t he cr eat ivit y of the st udent s). Follow- up discussion can be inter est ing, surpr ising, and f un. W hat t ype of ad s work ed best , and why? Ho w did t he product categ or y and pr ice af f ect t he prom ot ional str ateg y? Does t he broader m arket ref lect t he f indings of t he class? W hy or why not ? Q uest ions f or Ref lect ion: W hat f act ors should a com pany consider when develop ing t he ir pr icing str at eg ies? W hat about t heir prom ot ional st r at eg ies? W hy? *T his exercise was adapted f r om t he t ext.

The M arketi ng Envi ronment Purpose: T o hig hlig ht t he im port ance of t he m ark et ing envir onm ent Backgr ound: T his q uick, discussion- based exerc ise is desig ned t o help st udent s bett er under st and t he im pact of t he ext ernal envir onment on m ark eting decisions Relationship t o T ext : T he Mark eting Envir onm ent


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 53 53 eting S tr k eti ng ateg ies

Est im ated Class T ime: About 10 m inut es Mater ials/ Pr eparat ion: None needed Exercise:


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 54 54 eting S tr k eti ng ateg ies

Choose a br anded pr oduct t hat your st udent s seem t o all k now and enj oy. Hig her - end product s, such as an Apple iPod or a Burt on snowboard seem t o work especially wel l f or t his exercise. G uide your st udents in a discussion of how each element of t he ext ernal env ir onm ent — compet it ive, polit ical- legal, econom ic, t echnolog ical, and social - cult ural—could inf luence t he success of t heir product over t he next f ive year s. Encourag e t hem t o consider f actor s beyond t he obvious ( e.g ., t he em erg ing developm ent of year -round s now- m ak ers, or vi r t ual r ealit y snowboarding g ames). As you develop your list , you m ay want t o also r emind t hem t hat a m ark et er cannot cont r ol the ext ernal envir onm ent, but he or she m ust r espond t o it ef f ect ively. Q uest ions f or Ref lect ion: W hich element of t he m ark eting envir onm ent is most im port ant ? W hy? W ould t he answer be dif f erent f or dif f erent pr oduct cat eg ories? W hich element s have t he m ost im pact on a m arketer ’s day-to- day decision - m ak ing ? W hich element s are lik ely t o g ener ate surpr ises? ( You m ay wa nt t o point out how m any companies were surpr ised by t he bur st ing of t he “ dot - com ” bubble in t he 1990s.) W hat are ef f ective ways t o m onit or t he m ark et ing envir onm ent on an ong oing basis?

BCG M at ri x Purpose: T o help st udents g ain a fuller under st anding of t he BCG m at r ix as a planning t ool Backgr ound: W hile t he concept of t he BCG m atr ix is st r aig htf orward, m any st udent s have tr ouble under st anding how it applies t o act ual sit uat ions as an investm ent t ool. This exercise is desig ned t o f oster a deeper unders t anding t hr oug h a hands - on case st udy approach. Relationship t o T ext : BCG Matr ix Est im ated Class T ime: About 25 m inut es Mater ials/ Pr eparat ion: None needed Exercise: Announce t o your class that t hey wi ll do a case study on t he t alent ag ency business ( which m ost of t hem f ind m or e g lamorous and excit ing t han it reall y is) . Beg in by br ainstorm ing a list of m ovie st ars, celebr it ies, and entert ainer s. E ncour ag e t he class t o include a wide variet y, f r om cur r ent box off ice dr aws, t o over - t he- hill t alent s, t o em erging st ars. T hen, divide yo ur st udent s into sm all g roups and t ell t hem t hat each group r epr esent s a sm all t alent ag ency. T heir list includes t he


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 55 55 eting S tr k eti ng ateg ies

st ars t hat you list ed on t he board. G ive t hem each a hypot het ical $10 m illio n t o invest in m ark et ing t he per sonalit ies in t heir st able of st ars, and dir ect t hem t o use t he BCG Matr ix t o m ak e t heir investm ent choices. Ask each g r oup t o present t heir allocat ion and r ationale in t er ms of t he m atr ix. You will probabl y f ind t hat t hey were t em pted t o invest big dolla r s in t heir “ cash cows, � wh ich m ak es f or an interesting discussion. Q uest ions f or Ref lect ion: W hat are t he str eng t hs and weak nesses of t he BCG Matr ix as a st r at eg ic planning t ool? W hat k ind of inf or m at ion do you need in or der t o use t his t ool m ost ef f ect i vely?


Chapt er 2 Str ate gic Pl ann in g in Con tem por ar y Mar Part 1 Des ig nin g C us tom er -O r iented Mar k 56 56 eting S tr k eti ng ateg ies

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Contemporary Marketing 2013 Update 15th Edition Boone Test Bank  

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Contemporary Marketing 2013 Update 15th Edition Boone Test Bank  

Download: http://testbanklive.com/download/contemporary-marketing-2013-update-15th-edition-boone-test-bank/ Contemporary Marketing 2013 Upda...

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