Marketing Management PDF - Part 1: Fundamentals

PART 1 | FUNDAMENTALS OF MARKETING MANAGEMENT tools many companies already use, such as Google Drive and other popular business a­ pplications,...

PART 1 | FUNDAMENTALS OF MARKETING MANAGEMENT tools many companies already use, such as Google Drive and other popular business a­ pplications, making it easy to centralize communications and the work flow. Another important benefit of Slack is its ability to bring work-related social media into the workplace, making work life more like digi- tal life. In this context, Slate magazine described Slack’s app as “cool office culture, available for instant download.” Despite the lack of a formal sales force—the vast majority of its new customers are ­referrals who hear about it from friends, co-workers, and social media—in less than four years, Slack amassed more than 10 million daily active users in 150 countries and reached a valuation of $7 billion.1 This chapter begins by examining some of the strategic marketing implications involved in creating customer value. We’ll look at several perspectives on planning and describe how to draw up a formal marketing plan. Corporate and Business Unit Planning and Management To ensure that they execute the right activities, marketers must prioritize strategic planning in three key areas: managing the company’s businesses as an investment portfolio, assessing the market’s growth rate and the company’s position in that market, and developing a viable business model. The company must develop a game plan for achieving the long-run objectives of each business unit. Generally speaking, marketing planning and management can occur on three different levels: cor- porate, business unit, and specific market offering. Corporate headquarters is responsible for designing a corporate strategic plan to guide the whole enterprise. It makes decisions on the amount of resources to allocate to each business unit, as well as on which businesses to start or eliminate. Each business unit develops a plan to carry that business unit into a profitable future. Finally, each market offering involves a marketing plan for achieving its objectives (Figure 2.1). This section addresses the key issues involved in analyzing, planning, and managing a company or distinct business units. The remainder of the chapter examines the process of analyzing, planning, and managing a company’s offerings. Companies undertake four planning activities: defining the corporate mission, building the cor- porate culture, establishing strategic business units, and assigning resources to each strategic business Copyright © 2021. Pearson Education, Limited. All rights reserved. unit. We’ll briefly look at each process. DEFINING THE CORPORATE MISSION An organization exists to accomplish something: make cars, lend money, provide a night’s lodg- ing. Over time, the mission may change to respond to new opportunities or market conditions. Amazon.com changed its mission from being the world’s largest online bookstore to aspiring to be Learning Objectives After studying this chapter you should be able to: 2.1 Identify the key tasks required for company and 2.4 Describe the key components of an actionable business unit planning. marketing plan. 2.2 Describe the process of developing a market 2.5 Explain how and when to modify the marketing offering. plan. 2.3 Explain the process of marketing planning. Kotler, P, & Keller, K 2021, Marketing Management, Global Edition -- (Perpetual Access), Pearson Education, Limited, Harlow. Available from: ProQuest Ebook Central. [8 December 2024]. Created from lancaster on 2024-12-08 23:21:19. 55 M02_KOTL4813_16_GE_C02.indd 55 07/09/2021 18:45  56 PART 1 | FUNDAMENTALS OF MARKETING MANAGEMENT FIGURE 2.1 Corporate Business unit Offering The Strategic planning planning planning Planning Processes the world’s largest online store; eBay changed from running online auctions for collectors to run- ning online auctions that offer all kinds of goods; and Dunkin’ Donuts switched its emphasis from doughnuts to coffee. A mission is a clear, concise, and enduring statement of the reasons for an organization’s exis- tence. Often referred to as its core purpose, a company’s mission is a long-term goal that provides com- pany employees and management with a shared sense of purpose, direction, and opportunity.2 To define its mission, a company should address Peter Drucker’s classic questions:3 What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be? These simple-sounding questions are among the most difficult a company will ever face. Successful companies continuously ask and answer them. A clear, thoughtful mission statement, developed collaboratively with managers, employees, and often customers, provides a shared sense of purpose, direction, and opportunity. At its best, it reflects a vision, an almost “impossible dream,” that provides direction for the next 10 to 20 years. Sony’s former president, Akio Morita, wanted everyone to have access to “personal portable sound,” so his company created the Walkman and the portable CD player. Fred Smith wanted to deliver mail anywhere in the United States before 10:30 am the next day, so he created FedEx. Consider the following mission statements: Google’s mission is to organize the world’s information and make it universally accessible and useful.4 At IKEA our vision is to create a better everyday life for the many people. Our business idea sup- ports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.5 Facebook’s mission is to give people the power to build community and bring the world closer together.6 Tesla’s mission is to accelerate the world’s transition to sustainable energy.7 To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (Starbucks).8 Our mission is to empower every person and every organization on the planet to achieve more (Microsoft).9 Good mission statements have five major characteristics. They focus on a limited number of specific goals. Mission statements containing a laundry Copyright © 2021. Pearson Education, Limited. All rights reserved. list of unrelated activities tend to be less effective than focused mission statements that clearly articulate their ultimate goals. They stress the company’s major policies and values. Narrowing the range of individual discretion lets employees act consistently on important issues. They define the major markets that the company aims to serve. Because the choice of tar- get market defines a company’s strategy and tactics, it should be defined by and follow from the company’s mission statement. They take a long-term view. The corporate mission defines the ultimate strategic goal of the company; it should be changed only when it ceases to be relevant. They are as short, memorable, and meaningful as possible. Three- to four-word corporate mantras are typically more effective than long-winded mission statements. BUILDING THE CORPORATE CULTURE Strategic planning happens within the context of the organization. A company’s organization consists of its structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly changing business environment. Whereas managers can change structures and policies (though with difficulty), the company’s culture is very hard to change. Yet creating a viable corporate culture is often the key to market success, as the experience of Southwest Airlines shows. Kotler, P, & Keller, K 2021, Marketing Management, Global Edition -- (Perpetual Access), Pearson Education, Limited, Harlow. Available from: ProQuest Ebook Central. [8 December 2024]. Created from lancaster on 2024-12-08 23:21:19. M02_KOTL4813_16_GE_C02.indd 56 07/09/2021 18:45  CHAPTER 2 | Marketing Planning and Management 57