2.3 Developing Organizational Objectives and Formulating Strategies – Principles of Marketing.pdf

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1/7/22, 1:19 PM2.3 Developing Organizational Objectives and Formulating Strategies – Principles of Marketing1/72.3 Developing OrganizationalObjectives and Formulating StrategiesLearning Objectives1. Explain how companies develop the objectives driving their strategies.2. Describe the different types of product strategies and market entry strategies that com‐panies pursue.
1/7/22, 1:19 PM2.3 Developing Organizational Objectives and Formulating Strategies – Principles of Marketing2/7Developing ObjectivesObjectivesare what organizations want to accomplish—the end results they want to achieve—ina given time frame. In addition to being accomplished within a certain time frame, objectivesshould be realistic (achievable) and be measurable, if possible. “To increase sales by 2 percent bythe end of the year” is an example of an objective an organization might develop. You have prob‐ably set objectives for yourself that you want to achieve in a given time frame. For example, yourobjectives might be to maintain a certain grade point average and get work experience or an in‐ternship before you graduate.Objectives help guide and motivate a company’s employees and give its managers referencepoints for evaluating the firm’s marketing actions. Although many organizations publish theirmission statements, most for-profit companies do not publish their objectives. Accomplishmentsat each level of the organization have helped PepsiCo meet its corporate objectives over thecourse of the past few years. PepsiCo’s business units (divisions) have increased the number oftheir facilities to grow their brands and enter new markets. PepsiCo’s beverage and snack unitshave gained market share by developing healthier products and products that are more convenientto use.A firm’s marketing objectives should be consistent with the company’s objectives at other levels,such as the corporate level and business level. An example of a marketing objective for PepsiComight be “to increase by 4 percent the market share of Gatorade by the end of the year.” The wayfirms analyze their different divisions or businesses will be discussed later in the chapter.Formulating StrategiesStrategiesare the means to the ends, the game plan, or what a firm is going to do to achieve itsobjectives. Successful strategies help organizations establish and maintain a competitive advan‐tage that competitors cannot imitate easily.Tacticsinclude specific actions, such as coupons, tele‐vision commercials, banner ads, and so on, taken to execute the strategy. PepsiCo attempts to sus‐tain its competitive advantage by constantly developing new products and innovations, including“mega brands,” which include nineteen individual brands that generate over $1 billion in saleseach. The tactics may consist of specific actions (commercials during the Super Bowl; coupons;buy one, get one free, etc.) to advertise each brand.

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