Formulating and Implementing Marketing Strategy—

An Overview of the Process

a. A decision-making focus: planning and executing a
marketing strategy involves many interrelated decisions
b. Analysis comes first – The four “Cs”.
Analysis necessary to provide foundation for a good strategic
marketing plan should focus on four elements of the overall
environment:
1. The company’s internal resources, capabilities, and
strategies
2. The environment context (broad, social, economic,
technology trends) in which the firm will compete
3. The relative strengths and weaknesses of competitors
and trends in the competitive environment
4. The needs, wants, and characteristics of current and
potential customers
c. Integrating marketing strategy with the firm’s other strategies
and resources. There should be a good fit – or internal
consistency – among the elements of all three levels of
strategy
d. Market opportunity analysis
1. Focuses on the four “Cs”
2. Understanding market opportunities by:
➢ Conducting an examination of the external
environment, including markets served and the
industry of which the firm is a part.
➢ Examine the management team that will be
charged with implementing the developed strategy
to determine if they have what it takes to get the
job done.
3. Measuring market opportunities by Preparing an
evidence-based forecast of the sales that can be
achieved over the short and intermediate term.
4. Market segmentation, targeting, and positioning
decisions:
➢ The manager must divide customers into market
segments – subsets of people with similar needs,
circumstances, and characteristics that lead them to
respond in a similar way to a product or service or
to a strategic marketing program
➢ The manager must select a target segment – on
which segments to focus a strategic marketing
program
 ➢ The manager must decide how to position the
product or service offering and its brand within a
target segment – design the product and marketing
program to emphasize attributes and benefits that
appeal to customers in the target segment.
e. Formulating marketing strategies for specific situations
➢ The strategic marketing program for a product should
reflect market demand and the competitive situation
within the target market
➢ Different strategies are more appropriate and
successful for different market conditions and different
life cycle stages
f. Implementation and control of the marketing strategy
➢ A final determinant of a strategy’s success is the firm’s
ability to implement it effectively. Depending on
whether the strategy is consistent with the resources,
the organizational structure, the coordination and
control systems, and the skills and experience of
company personnel.
➢ The final tasks in the marketing management process
are determining whether the strategic marketing
program is meeting objectives and adjusting the
program when performance is disappointing.
G. The marketing plan – A blueprint for action
1. Marketing plan: a written document detailing the current
situation with respect to customers, competitors, and the
external environment and providing guidelines for
objectives, marketing actions, and resource allocations
over the planning period for either an existing or a proposed
product or service.
2. Provides a concrete history of a product’s strategies and
performance over time, which aids institutional memory and
helps educate new managers
3. The discipline involved in producing a marketing plan
helps ensure that the proposed objectives, strategy, and
marketing actions are based on rigorous analysis of the 4Cs
and sound reasoning
4. Vary in timing, content, and organization across
companies
5. There are Three major parts:
A. The marketing manager details his or her assessment
of the current situation
B. Details of the strategy for the coming period
C. Details the financial and resource implications of the
strategy and the controls to be employed to monitor
the plan’s implementation and progress over the
period.
Corporate Scope—Defining the Firm’s Mission and
objectives
 To provide a useful sense of direction, a corporate mission
statement should clearly define the organization’s strategic
scope. It should answer the following questions:
➢ What is our business?
➢ Who are our customers?
➢ What kinds of value can we provide to these customers?
➢ What should our business be in the future?

Ex: PepsiCo mission: “marketing superior quality food and

beverage products for households and consumers dinning
out”

This mission guided the PepsiCo to the acquisition of: Frito

lay, Taco-bell and pizza hut
Market influences on the corporate mission
i. The mission should fit both the organization’s
internal characteristics and the opportunities and
threats in its external environment
ii.It should be compatible with its established
values, resources and distinctive competencies
iii.It should focus the firm’s efforts on markets
where those resources and competencies will
generate value for customers, an advantage over
competitors, and synergy across products.
 Criteria for defining the corporate mission
i. Many firms specify the domain in physical terms, focusing on
products or services or technology used. The problem is that
such statements Can lead to slow reactions to technological or
customer-demand changes
ii. Other firms define mission as what customer needs are to be
satisfied and the functions the firm must perform to satisfy
them, but the problem is that such statements:
1. Can be too broad to provide clear guidance
2. Fails to take into account firm’s specific competencies
iii.Most useful mission statements are specific as to the customer
groups and the products or technologies on which to
concentrate
 Social values and ethical principles
i. An increasing number of organizations are developing
mission statements that also attempt to define the social and
ethical boundaries of their strategic domain.
ii. Some firms are pursuing social programs they believe to be
intertwined with their economic objectives, while others
simply manage their businesses according to sustainability
– meeting humanity’s needs without harming future
generations.
iii. So crafting mission statements that specify explicit social
values, goals, and programs is becoming a more important
part of corporate strategic planning
Ethics is concerned with the development of moral
standards by which actions and situations can be
judged. It focuses on actions that may result in actual
or potential harm of some kind (economic, mental,
physical) to an individual, group or organization. In
this domain we can see that:
1. Actions may be legal but not ethical ( ex:
extreme advertising claims such as “ our product
is far superior to brand X)
2. Ethics is more proactive than the law in that it
attempts to anticipate and avoid social problems.
 Why are ethics important? The marketing
implications of ethical standards
i. The practical reason for the firm to impose ethical
standards to guide employees is that unethical
practices can:
➢ damage the trust between a firm and its suppliers
or customers which can
➢ disrupt the development of long term
relationships
➢ Result in the likely loss of sales and profits over
time
ii. Unfortunately not all customers or suppliers adhere
to the same ethical standards as a result marketers
sometimes feel obliged to engage in actions that are
inconsistent with what they believe to be right. Such
inconsistencies in ethical standards across
organizations, markets, or countries can lead to :
➢ job stress
➢ inconsistent behavior among personnel, which in
turn can risk damaging long-term relationships
with suppliers and customers.
iii. A company can reduce such problems by clarifying
formal social policies and ethical standards in the
mission statement as well as communicating and
enforcing those standards.
➢ For example Fluor ( a multinational construction
firm has a strict ethical policy against paying any
bribes to win new projects.
➢ The firm puts all of its employees through online
anticorruption training.
➢ Each objective contains the following four
components in order to be specific and measurable
so it can be useful as decision criteria and evaluative
benchmarks:
i. A performance dimension or attribute sought
ii.A measure or index for evaluating progress
iii.A target or hurdle level to be achieved
iv.A time frame within which the target is to be
accomplished
➢ It is useful to follow the SMART acronym when
specifying objectives at all levels: Specific,
Measurable, Attainable, Relevant, and Time-bound
 Enhancing shareholder value: The ultimate objective
i. To do so management must balance the interests of
various corporate constituencies, including:
➢ employees ( competitive wages)
➢ Customers ( high quality at a competitive price)
➢ Suppliers and debt holders ( cash)
➢ Stockholders (cash dividends)
ii. Firms must make every effort to enhance ability to
generate cash from the operation of its businesses
and obtain any additional funds needed from debt or
equity financing
iii. Management’s objective should be to pursue capital
investments , acquisitions, and business strategies that
produce sufficient future cash flows to return positive
value to shareholders.
iv. Firms set explicit objective targeted at increasing
shareholder value:
➢ These objectives are often stated in terms of a
target return on shareholder equity, increase in
stock price, or earnings per share
➢ Recently it has been expressed in terms of
economic value added or market value added
(MVA= debt +market value of stock – capital
invested), which shows how much wealth the
company has created.
iii. Such broad shareholder-value objects don’t always
provide guidance for a firm’s lower-level managers
or benchmarks for evaluating performance , for one
thing standard accounting measures , such as
earnings per share or return on investment are not
always reliably linked to the true value of a
company’s stock.
The marketing implications of corporate objectives
Trying to achieve many objectives at once leads to
conflicts and trade-offs. Managers can deal with
conflicting goals in a variety of ways:
➢ Prioritizing them
➢ State one of the conflicting goals as a constraint
or difficulty. A firm attempts to maximize
growth subject to meeting some minimum ROI
hurdle
➢ Break them down into sub objectives and then
assign different sub objectives to different
business units or products.
► As firms emphasize developing and maintaining
long-term customer relationships, customer-focused
objectives such as satisfaction, retention and loyalty
are being given greater importance.
► Such market-oriented objectives are more likely to
be consistently pursued across business units and
product offerings.
► There are several reasons for this:
1. Maximizing satisfaction and loyalty help in the
accomplishment of financial objectives.
2. Loyal customers of one product can be leveraged
to provide synergies for other company products
or services.