IM_Chapter2

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Jan 9, 2024

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Chapter 2 Chapter 2.1 - Company-Wide Strategic Planning: Defining Marketing’s Role ● Strategic Planning and Marketing: Strategic planning is the process of aligning a company's goals and capabilities with evolving marketing opportunities. It serves as the foundation for all other planning activities within the organization. ● Types of Plans: Companies typically create annual plans, long-range plans, and strategic plans. While annual and long-range plans focus on maintaining current businesses, the strategic plan is designed to adapt the company to capitalize on changing market dynamics. ● Corporate Level Planning: At the corporate level, the strategic planning process begins with defining the company's mission, which should be market-oriented and centered on satisfying customer needs. This mission guides the entire organization. ● Mission Statements: Mission statements clarify what the organization aims to achieve in the broader environment. Effective mission statements should be specific, motivating, and focused on creating value for customers rather than just increasing sales or profits. ● Examples of Market-Oriented Missions: Examples from companies like Pinterest, Nike, and Sephora illustrate the importance of framing missions around fulfilling customer needs and aspirations rather than product-centric or technology-centric approaches. ● Setting Objectives and Goals: Companies must translate their broad mission into detailed objectives for each level of management, including business and marketing objectives. These objectives guide decision-making and strategy development. ● Hierarchy of Objectives: The hierarchy of objectives leads from the broad mission down to specific marketing objectives. For instance, CVS Health's mission to improve health care leads to business objectives, which, in turn, translate into marketing objectives such as increasing customer engagement and market share. ● Marketing Strategies: Marketing strategies are developed to support marketing objectives. In the case of CVS Health, strategies include reshaping product lines, discontinuing tobacco sales, expanding healthcare services like MinuteClinic, and tailoring advice to customers managing health conditions. ● Detailed Marketing Plans: Each marketing strategy requires detailed planning, including advertising and promotional efforts, to achieve specific short-term objectives. This process ensures that the company's broad mission is translated into actionable marketing plans. Chapter 2.2 - Designing the Business Portfolio Business Portfolio Planning: ● Management uses the company's mission statement and objectives as a guide to plan its business portfolio, which includes a collection of businesses and products.

● The best business portfolio aligns the company's strengths and weaknesses with opportunities in the environment. ● Companies often have complex portfolios with multiple brands and businesses, as exemplified by Mars Inc., known for both confectionery and pet care. ● Effective portfolio management is crucial for success and profitability, guided by the company's mission and core principles. Analyzing the Current Business Portfolio: ● Strategic business units (SBUs) are identified within the company, such as divisions, product lines, or individual products or brands. ● The attractiveness and strength of each SBU are evaluated to determine resource allocation. ● Portfolio analysis methods, like the BCG growth-share matrix, classify SBUs into categories like Stars, Cash Cows, Question Marks, and Dogs. ● Strategies are developed for each SBU based on its position in the matrix, determining whether to invest, maintain, harvest, or divest. Developing Strategies for Growth and Downsizing: ● Marketing plays a crucial role in achieving profitable growth by identifying and evaluating market opportunities. ● The product/market expansion grid helps identify growth possibilities, including market penetration, market development, product development, and diversification. ● Starbucks is cited as an example of successful growth through market penetration, market development, product development, and diversification. ● Companies must also develop strategies for downsizing when products or markets become unprofitable or no longer fit the overall strategy. ● Pruning, harvesting, or divesting unprofitable brands or businesses is necessary for focusing resources on stronger ones. Overall, marketing plays a pivotal role in shaping a company's business portfolio, ensuring growth, and adapting to changing market dynamics. Portfolio management involves a delicate balance of investment, maintenance, and divestment to optimize long-term profitability. Chapter 2.3 - Planning Marketing: Partnering to Build Customer Relationships ● Strategic Planning and Marketing: A company's strategic plan sets the direction for its various business units, outlining objectives and goals. Marketing plays a pivotal role

in strategic planning by advocating the marketing concept, which emphasizes creating customer value and building profitable customer relationships. ● Internal Collaboration: Marketing is not an isolated function; it collaborates with other departments, such as research and development, production, logistics, distribution, and after-sales, to deliver customer value efficiently and consistently. Each department's role is crucial in creating a strong internal value chain. ● Value Chain Strength: A company's value chain is only as strong as its weakest link, necessitating close communication and coordination among departments. Departments must align their efforts to ensure customer satisfaction and loyalty. For instance, accurate information from marketing helps R&D meet customer needs, ensuring production can deliver on promises. ● Interdepartmental Conflicts: While marketing strives to enhance customer value and satisfaction, its actions may inadvertently disrupt other departments' operations, such as increasing costs, inventory, or budget challenges. Managing these conflicts is essential to creating a smoothly functioning value chain. ● Company-Wide Commitment: Engaging customers requires a whole-company commitment. All employees, regardless of their roles, should understand marketing and their contributions to customer value. Marketing sets the tone but requires the cooperation of all departments to deliver a consistent customer experience. ● External Collaboration: Beyond internal collaboration, companies must partner with suppliers, distributors, and customers to optimize the customer value delivery network. The example of Subway demonstrates how an effective value delivery system depends on collaboration with franchisees, suppliers, and others to fulfill the brand promise. ● Competing Value Delivery Networks: Competition in today's market doesn't solely involve individual companies but extends to entire value delivery networks. A company's success depends on the quality of its network compared to competitors. For example, Ford's success isn't solely about making great cars but also about providing a superior customer experience through its dealer network. In summary, marketing's role goes beyond traditional marketing activities. It involves collaborating with other departments internally and with partners externally to create, deliver, and optimize customer value across the entire value chain and network. This holistic approach is essential in the modern business landscape. Class Discussion CORE FRAMEWORK ● Strategic Planning - Mission Statement ● BCG Growth-Share Matrix ● The Product/Market Expansion Grid What's the difference between Product and Market-Oriented business definitions? Why is it

important? ● Product-Oriented Definition: Focuses on what the company makes or sells (e.g., "We make and sell furniture"). ● Market-Oriented Definition: Focuses on satisfying customer needs and aspirations (e.g., "We provide a platform for sharing things people love"). ● Importance: Market-oriented definitions are crucial because they center the company's efforts around customer satisfaction and adapting to changing customer preferences, leading to long-term success. Why are we talking about company-wide strategic planning in a marketing text? ● Company-wide strategic planning is discussed in a marketing text because marketing plays a central role in shaping a company's strategy, focusing on creating customer value and building profitable relationships. It highlights how marketing aligns with the overall corporate strategy. What does strategic planning have to do with marketing? ● Strategic planning guides marketing by setting objectives, defining missions, and identifying market opportunities. Marketing then translates these into actionable strategies and plans to achieve the company's goals. Case Questions: What are Rolex’s strategy and mission? What role does marketing play in helping Rolex to accomplish its strategy and mission? ● Rolex's strategy involves producing high-quality luxury watches known for precision and craftsmanship. Its mission is to create enduring, timeless pieces that exemplify luxury and status. ● Marketing at Rolex involves maintaining and enhancing the brand's exclusivity and desirability. It focuses on creating brand awareness, maintaining a premium image, and expanding into new markets while preserving the brand's heritage. What roles do other Rolex departments play, and how can the company’s marketers partner with these departments to maximize overall engagement and customer value? ● Other departments at Rolex, such as manufacturing, quality control, and research and development, ensure the production of high-quality watches. ● Marketers can partner with these departments to communicate the brand's commitment to quality and innovation, enhancing customer trust and satisfaction. What roles do Rolex’s suppliers play? ● Suppliers provide the materials and components necessary for Rolex's watchmaking. ● Rolex's marketers can work with suppliers to ensure the quality and availability of materials, ensuring that the final product lives up to the brand's reputation for excellence. Relationships with Brands ● We don’t necessarily engage with the brand but we still can have a relationship with them and understand their goals through emotional connections

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