Chapter 2 Developing Successful Marketing and Organizational Strategies I Strategic Planning if you don t know where you are going you will wind up somewhere else yogi II Corporate Strategy Corporate strategy is used by ALL firms whether profit or non profit manufacturer or service entrepreneurship or a global corporation III Marketing Strategy a Selecting and analyzing a target market and b Creating and maintaining an appropriate marketing mix to c Deliver a unique customer experience while d While Achieving organizational goals e Profit vs nonprofit organizations and strategy IV Three levels of Strategy in Organizations figure 2 1 page 29 a The C level corporate level strategy b The SBU level Business unit level strategy c The Functional or Departmental level see text page 27 Figure 2 1 The board of directors oversees the three levels of strategy in organizations corporate business unit and functional V Organizational Structure a Corporate i The C level ii Top management sets and directs the overall strategy for the firm 1 How does this work for our entrepreneurs a Tim Apel AAA homes b Rob Felber Felber and Felber c Gary Trinetti Garick 2 Which of our guest speakers are at the c level a Dan Muller Timken b Strategic Business Units SBU s i A division product line or profit center ii Selling a distinct set of products services to a specific target market against well defined competitors iii Operate in markets that have different sizes growth rates opportunities threats competitions and profit potential iv SO planners must be knowledgeable about these in doing planning in allocating resources and in performing evaluations Don Kosec Time warner business services VI Functional Department Level Levels of Strategic VII Market Planning VIII Mission Statement a The mission statement should be a clear and succinct representation of the enterprise s purpose for existence It should incorporate criteria addressing concepts such as the moral ethical position of the enterprise public image the target market products services the geographic domain and expectations of growth and profitability b The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision c Example Mission Vision at Timken Dan Muller i WAS the World wide Leader in Bearings and Steel focus is on product and not what the customers want ii BUT that put them in a strategic box iii NEW Improving Customer Performance sets sights on customers 1 Allows out of the box thinking iv For customers who are willing to pay for the value we create v REMEMBER At a profit d Time Warner Example IX Goals or Objectives Be S M A R T Specific Measurable i ii iii Attainable iv Relevant v 25 per year Time based 1 Time Warner Business Services Goal is to keep business growing X Types of Goals a Profit b Sales Targets In Dollars In Unit Sales i ii c Market Share our percent of the market d Quality i High Acceptable e Customer Satisfaction f Efficiency g Employee Welfare h Social Responsibility i Example Portage County Health Services 1 By next year 90 of pregnant women will receive prenatal care in the first trimester XI Setting Strategic Directions a Understanding where we are now Three and C s i Our COMPETENCIES 1 Competitive advantage ii Our CUSTOMERS iii Our COMPETITORS b Where do we want to go i Grow ii Sustain iii Divest iv Invest Market Growth Rate Use Portfolio Analysis to help figure it out XII Product Portfolio Models The Boston Consulting Group Market Dominance a Cash Cows i Dominant in Low Growth Market 1 Low Growth Sales 2 Strong Profits 3 Generate a large cash flow 4 Do NOT require cash resources to be reinvested 5 Profits flow to appropriate problem children problem children b Dogs i Low Market Share in Low Growth Market 1 Low Growth sales 2 Weak profits 3 Typically generate a little cash flow or have a weak future 4 Not a good candidate for cash resources to be reinvested c Problem Children i Low Market Share in High Growth Market 1 High growth sales 2 Weak profits 3 Typically require additional cash to become dominant d Star i Dominant in High Growth Market 1 High growth market 2 Profitable but requires attention 3 Requires cash and resources to stay dominant 4 Will be a cash cow in the future Example The BCG MODEL and Coca Cola XIII Product Portfolio Models The Directional Policy Matrix Market Attractiveness HIGH Medium low Competitive Position STRONG Maintain Leadership Challenge the Leader Cash Generator Medium Challenge the Leader Manage for Earnings Harvest weak Overcome Niche or Quit Harvest Divest XIV Tracking Strategic Directions with Marketing Dashboards a What are they Visual display on single computer of essential info Example Jim Wise Marketing Dashboards at Don Joseph Toyota a We can actually get too much info b But we get the good info 24 7 c How many customers walk in d Where in purchase process e Did they buy f Did we get paid g Dashboards make it easy b iDashboards Driving Business Decisions http www idashboards com Example Using Dashboards at Don Joseph Toyota for Media Effectiveness Measure media effectiveness c Using data to effective actions XV The Strategic Marketing Process a Situation Analysis with SWOT i Internal Factors for organization 1 Strengths 2 Weaknesses ii External Factors 1 Opportunities 2 Threats Example Fred Hunt on the Importance of SWOT Sherman Williams a Few techniques fro the MBA are used more than the SWOT analysis b When you talk strategy you go back to SWOT to ask the deep questions c From the analysis you can develop appropriate strategies b ACTIONS based on SWOT want to convert weaknesses into strengths Convert threat into opportunity Match strength and oppertunity Location of Factor Internal External Type of Factor FAVORABLE UNFAVORABLE Strength Weakness Opportunity Threat c Market Product Focus and Goal Setting i Market Segmentation 1 IDENTIFY groups of buyers who a have common needs and b will respond differently to a marketing effort ii Target Marketing plan to serve them 1 SELECTION of one or more segments and developing a marketing iii Jumbo Shrimp Marketing Example the video Get bigger by acting smaller bigger isn t better Marketing Rules for How to get BIG by acting smaller 1 Be the Best at what you do not the biggest 2 LOVE your business 3 Passion attracts passion 4 Treat employees like family 5 Redefine sucess View http www youtube com watch v UApCcRqu Xo d The Marketing Program the 4 P s i Product Strategy ii Price