Kinds of Organizations
Organizations
Legal entities and consists of people who share a common mission
Develop offerings that create value:
1. For-profit organizations (business firm)
oProfit – Money left after expenses
2. Non-profit organizations
oProfit is not an organizational goal
3. Government agencies
oFederal, state, county or city unit
Industry is a group of companies with similar offerings
Making Responsible Decisions
Social entrepreneurship to address social needs and issues
Today’s Organizations – Strategy and Organizational Structure
Strategy
Organization’s long-term course of action designed to deliver a unique
customer experience while achieving its goals
Businesses are limited on time, resources, people, money
Cannot be “All things to all people”
Structure of today’s organizations:
Corporate level of top management includes Chief Marketing Officer
(CMO)
Strategic Business Unit (SBU) level
Functional level
oThe board of directors oversees the three levels or strategy in
organizations
Organizational Structure
1. Functional level: Group of specialists create value
2. Department: Functions such as finance and marketing
3. Cross-functional teams: Different departments contribute to a
performance goal
Strategy in Visionary Organizations
Organizational Foundation (Why)
Why does this organization exist?
What is the organizational purpose?
Core values:
To inspire stakeholders, including employees, suppliers, etc.
Mission or vision:
Mission statement should be clear, concise, meaningful
Organizational culture:
The set of values, ideas, attitudes, and norms of behavior that is
learned and shared among the members of an organization
Organizational Direction (What)
Business:
What do we do?
What business are we really in?
oMarketing Myopia (pay phones, railroads) Forbes describes
Uber as a “frictionless middleman”
Business model includes the strategies an organization develops to
provide value to customers
Business models change over time
Goals or objectives:
Profit, sales (dollars or units), market share, quality, customer
satisfaction, employee welfare, social responsibility, efficiency
(nonprofit organizations)
Organizational Strategies (How)
Strategies can vary by level
Corporate (increase profit margin by 5%)
SBU (Sales – Increase leads and sales of Prod X by 10%)
Functional (Salesforce – Increase calls and customer visits to
100/week)
And, strategies can vary by product (or offering):
Product, services, and ideas
Marketing Plan
The road map for the marketing actions
Applying Marketing Metrics
Dollar Sales and Dollar Market Share
Dollar Sales ($) = Average Price X Quantity Sold
Dollar Market Share (%) = Company’s Sales ($) / Total Industry Sales
($)
Actions:
Compare results with goals
Compare with previous years
Leads to marketing actions
Setting Strategic Directions
Identify the organization’s competencies
Competitive advantage relative to competitors: What do we do best?
oHow it benefits customers. How does Ben & Jerry’s customer
differ from Chobani?
oHow it compares to competitors. Not just local, but global
Where do we want to go
Business Portfolio Analysis
Used to quantify performance measures and growth targets
1. Question marks: Low share of high-growth market
2. Stars: High share of high-growth markets
3. Cash cows: Generates large amounts of cash
4. Dogs: Low share of slow-growth markets
Diversification Analysis
Helps a firm search for growth opportunities
1. Market penetration: Increase sales of current product in current
markets
2. Market development: Sell current products to new markets
3. Product development: Sell new products to current markets
4. Diversification: Develop new products to sell in new markets
The Strategic Marketing Process
Strategic Marketing Process
The allocation of an organization’s marketing mix resources to reach
its target markets and achieve a competitive advantage
Guiding principles and assumptions
1. Customers are different
2. Customers change
3. Competitors change and react
4. Organizational resources are limited
Planning Phase of the Strategic Marketing Process
1. Conduct a Situation (SWOT) Analysis
2. Develop a market-product focus, customer value proposition and goals
3. Design the marketing program
Step 1: Conduct a SWOT Analysis
Strengths – Build on a strength
Weaknesses – Correct a weakness
Opportunities – Exploit an opportunity
Threats – Avoid a disaster-laden threat
Step 2: Develop a market-product focus, customer value proposition, and
goals
Market segmentation
Aggregating buyers into groups/segments who have a common need
and will respond similarly to a marketing action
Customer value proposition
Cluster of benefits the organization promises customers to satisfy
their needs
oHow do we solve YOUR problems?
oSpecific benefits
oWhy us vs. our competitors?
Points of difference
What makes us superior to competitive alternatives?
Step 3: Design a marketing program
Product strategy
Price strategy
Promotion strategy
Place (distribution) strategy
