Chapter 2

Summary

The marketing management process has key ingredients that are insightful, creative strategies and plans that guide marketing activities.  There must be strategies for a range of products and services within the organization and a value delivery process which includes choosing, providing and communicating superior value.  Successful companies develop strong core values, strategic business processes and mission statements.  The mission statement and core values should define the reason for the company’s existence and be guides for establishing strategic business units, assigning resources, assessing growth opportunities and measuring performance. Companies develop marketing plans for every product they offer and use performance measurement tools including marketing metrics, marketing dashboards and various analyses.

A.      Marketing and Customer Value

1.      In order for companies to exceed today they must know how to thoughtfully and creatively devise marketing plans that deliver superior customer value.

2.      Yahoo! is a great example of a company that delivers customer value through product diversification and continuously seeks growth through new markets.  

3.      Marketers can no longer follow the traditional view of making a product, then selling it to the consumer.  Economies that are made up of many types of people with many various tastes, needs, wants and viewpoints demand a smarter approach by marketers.  The value delivery process has three phases using the formula “segmentation, targeting, positioning”.  The value chain proposed by Harvard’s Michael Porter, is a tool for identifying ways to create more customer value using five primary and four support activities within a company and examining their value and cost. The primary activities are 1) inbound logistics; 2) operations; 3) outbound logistics; 4) marketing; and 5) service.  Support activities are 1) procurement; 2) technology development; 3) human resource management and 4) firm infrastructure. Companies should also examine their own core competencies and focus on developing and improving them.  George Day sees organizations excelling in market sensing, customer linking and channel bonding.  A holistic marketing approach addresses three key management questions concerning value exploration, value creation and value delivery.

B.      Corporate and Division Strategic Planning

1.      All corporate headquarters should undertake four planning activities – defining the corporate mission, establishing strategic business units, assigning resources to each unit and assessing growth opportunities.           

2.      Amazon changed its mission from being the world’s largest online bookstore to being the largest online store.

3.      Companies should define why they exist by creating a mission statement.  It states their purpose and gives a shared sense of purpose, direction, and opportunity.  Companies also establish strategic business units and each a different business unit has its own strategy.  A strategic business unit (SBU) has three characteristics: 1) a single business or collection of related businesses, 2) its own set of competitors, 3) a manager responsible for strategic planning and profit performance.  Companies also will assign resources to each SBU and assess growth opportunities.  Companies also have a corporate culture, which is the shared experiences, stories, beliefs, and norms that characterize an organization.  The mission statement of the organization I work for, the Chickasaw Nation is, “To enhance the overall quality of life of the Chickasaw People.”  It is the reason we exist and almost every employee can quote it word for word.  It is so important to the identity of our organization that it is not only memorized, but is a deeply ingrained part of the culture of the organization.

C.      Business Unit Strategic Planning

1.      The business unit strategic planning process consists of the business mission for that particular unit within the broader corporate mission. 

2.      An example of a company that has different business units is Newell Rubbermaid.  They have a variety of business units with brands including Sharpie, Lenox, and Graco - all providing products and services from very different units.

3.      Each unit should conduct a SWOT analysis to monitor the external (threat and opportunity) and internal (strength and weaknesses) marketing environment.  They should always be aware of marketing opportunities and buyer needs and interests that the company has a high probability of satisfying.  After the SWOT analysis, the company should formulate specific goals and objectives to accomplish within a specific time frame and then a strategy for achieving them.  The strategy, or game plan, consists of marketing strategy, a compatible technology strategy and a sourcing strategy. Even the best strategic planning can be useless without great implementation.   A company has to be willing to invest in time and money to accomplish the goals and objectives.  Marketers have to accomplish the goals they set.  Some companies find it difficult to reach their goals on their own and form alliances or partnerships with other companies.  This is called partner relationship management. There are seven elements, all beginning with the letter S, in successful business practices.  They are: strategy, structure, systems, style, skills, staff and shared values. Companies should also re-examine their strategic fit with the environment because they change.  Adjustments may need to be made in order for a company to stay healthy.

D.     The Marketing Plan and Marketing Performance

1.      A marketing plan summarizes what the marketer has learned about the marketplace and indicates how the company plans to reach its marketing objectives.  It contains guidelines and financial allocations for the planning period.

2.      An example of this is the organization, 3M, which is known for its Post It notes, but also produces medical and manufacturing products.   3M tracks the proportion of sales resulting from its recent innovations.

3.      Marketing plans usually contain an executive summary, situation analysis, marketing strategy, financial projections and implementation controls.  Many companies start well in advance of the marketing period to allow time for planning and research, review and coordination between departments.  Companies must also measure performance of the action programs; marketing metrics, marketing dashboards and analysis are useful tools to assess performance in both the short-term and changes in brand equity.  Marketing metrics help organizations quantify, compare, and interpret their marketing performance.  Dashboards are a summary of relevant internal and external measures that visually display real time indicators of performance.  Marketing analysis can include sales analysis, market share analysis, marketing expense to share analysis and financial analysis.