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1
ONE
Market-Oriented
Perspectives
Underlie Successful
Corporate,
Business, and
Marketing Strategies
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
What is a strategy?
A strategy is a fundamental
pattern of present and
planned objectives, resource
deployments, and interactions
of an organization with
markets, competitors, and
other environmental factors
1-2
Components of Strategy
o Scope
o Goals and objectives
o Resource deployments
o Identification of sustainable competitive
advantage
o Synergy
1-3
The Hierarchy of Strategies
o Three major levels of strategy
are:
o Corporate strategy
o Business-level strategy
o Marketing strategy
1-4
Market-Oriented Management
o Follows a business philosophy
commonly called marketing
concept
o Consistent focus by personnel in all
departments and at all levels
o Adopts a variety of organizational
procedures and structures:
o To improve the responsiveness of
decision making
1-5
Exhibit 1.4
Guidelines for Market-Oriented Management
o Create customer focus throughout the
business
o Listen to the customer
o Define and nurture your distinctive
competence
o Define marketing as market intelligence
o Target customers precisely
o Manage for profitability, not sales volume
o Make customer value the guiding star
o Let the customer define quality
1-6
Exhibit 1.4
Guidelines for Market-Oriented Management (continued)
o Measure and manage customer
expectations
o Build customer relationships and loyalty
o Define the business as a service
business
o Commit to continuous improvement and
innovation
o Manage culture along with strategy and
structure
o Grow with partners and alliances
o Destroy marketing bureaucracy
1-7
Factors that Mediate Marketing’s Strategic Role
o Competitive factors affect a firm’s
market orientation
o Influence of different
development stages across
industries and global markets
o Strategic inertia
1-8
Exhibit 1.6
Differences between Production-Oriented and Market-Oriented
Organizations
Business Activity
or Function
Production
Orientation
Marketing
Orientation
Product offering
Company sells what
it can make
Company makes
what it can sell
Product line
Narrow
Broad
Pricing
Based on production
and
distribution costs
Based on perceived
benefits
provided
Focus on product
improvement and
cost cutting in
the production
process
Focus on
identifying new
opportunities and
applying new
technology to
satisfy
customer needs
Research
1-9
Exhibit 1.6
Differences between Production-Oriented and Market-Oriented
Organizations (continued)
Business
Activity or
Function
Production
Orientation
Marketing
Orientation
Packaging
Protection for the
product;
minimize costs
Designed for
customer
convenience; a
promotional tool
Credit
A necessary evil;
minimize bad debt
losses
A customer service; a
tool to attract
customers
Promotion
Emphasis on
product features,
quality, and price
Emphasis on product
benefits and
ability to satisfy
customers’ needs or
solve problems
1-10
Recent Developments Affecting the Strategic Role of
Marketing
o Globalization
o Increased importance of service
o Information technology
o Relationships across functions
and firms
1-11
Exhibit 1.8
Categories of E-Commerce
Business
Consumer
Business
Consumer
Business-to-Business (B2B)
Business-to-Consumer (B2C)
Examples:
• Purchasing sites of Ford, Oracle,
Cisco
• Supply chain networks linking
producers and distribution channel
members, such as 3M
and Wal-Mart
Examples:
• E-tailers, such as E*Trade, Amazon, iTunes
• Producers’ direct sales sites, such as Dell, Ryanair,
Safital Hotels
• Web sites of traditional retailers, such as
Sears, Lands’ End, Marks & Spencer
Consumer-to-Business (C2B)
Consumer-to-Consumer (C2C)
Examples:
• Sites that enable consumers to bid on
unsoldairline tickets and other goods
and services,
such as Priceline
Examples:
• Auction sites, such as eBay, QXL
• Blogs praising /criticizing companies or
brands
Source: Adapted from “A Survey of E-Commerce: Shopping Around the Web, The Economist, February 26, 2000, p. 11.
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Formulating and Implementing Marketing
Strategy Process
o Decision-Making Focus
o Analysis of the four “Cs”
o Integrating marketing strategy with the
firm's other strategies and resources
o Market opportunity analysis
o Understanding Market Opportunities
o Measuring Market Opportunities
o Market Segmentation, Targeting, and
Positioning Decisions
1-13
Formulating and Implementing Marketing Strategy
Process (Continued)
o Formulating strategies for specific
market situations
o Implementation and control of the
marketing strategy
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The Marketing Plan—A Blueprint for Action
o A marketing plan is a written
document detailing the current
situation with respect to
customers, competitors, and the
external environment
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Exhibit 1.10
Contents of a Marketing Plan
o
o
o
o
o
o
o
o
o
o
Executive summary
Current situation and trends
Performance review
Key issues
Objectives
Marketing strategy
Action plans
Projected profit-and-loss statement
Controls
Contingency plans
1-16