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Unformatted text preview: CHAPTER 2 The Nature of Strategic Planning 22/04/2008 09:37:00 o Strategic planning: is the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities. o The goal of strategic planning is longrun profitability and growth. o A strategic error can threaten a firm's survival. But on the other hand, a god strategic plan can help protect and grow the firm's resources. o Strategic marketing management addresses 2 questions: What is the organization's main activity at a particular time? How will it reach its goals? What Is A Marketing Plan? o Marketing planning involves designing activities relating to marketing objectives and the changing marketing environment. Marketing planning is the basis for all marketing strategies and decisions. Issues such as product lines, distribution channels, marketing communication, and pricing are all delineated in the marketing plan. o Planning: is the process of anticipating future events and determining strategies to achieve organizational objectives in the future. Why Write A Marketing Plan? o The marketing plan: is a written document that acts as a guidebook or marketing activities for the marketing manager. o The written marketing plan provides clearly stated activities that help employees and managers understand and work toward common goals. o Once the marketing plan is written, it serves as a reference point for the success of future activities. Marketing Plan Elements o What is typically in a marketing plan is defining the business mission and objectives, performing a situation analysis, delineating a target market, and establishing components of the marketing mix. o Other elements that may be included in a plan are budgets, implementation timetables, required marketing research efforts, or elements of advanced strategic planning. Writing The Marketing Plan o The marketing plan is only as good as the information it contains and the effort creativity, and thought that went into its creation. Keep in mind that creating a complete marketing plan is not a simple or quick effort. Defines The Business Mission o Mission statement: a statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions. This answers the big question: What business are we in? The firm's mission statement establishes boundaries for all subsequent decisions, objectives and strategies. o Marketing myopia: defining a business in terms of goods and services rather than in terms of the benefits that customers seek. o Strategic Business Unit (SBU): a subgroup of a single business or collection of related businesses within the larger organization. A properly defined SBU should have a distinct mission and specific target market, control over its resources, its own competitors and plans independent of the other SBUs in the organization. Large Firms such as Kraft Foods may have marketing plans for each of its SBUs, which include breakfast foods, desserts, pet foods, and beverages. CHAPTER 3 Corporate Social Responsibility 22/04/2008 09:37:00 o Corporate Social Responsibility: is a business's concerns for society welfare. This concern is demonstrated by managers who consider both the longrange best interest of the company and the company's relationship to the society within which it operates. o Sustainability: the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time. Business should focus on making a profit and leave social and environmental problems to nonprofit organizations and government. o Total corporate social responsibility has four components: economic, legal, ethical, and philanthropic. o Pyramid of Corporate Social Responsibility: a model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supporters the entire structure. Ethical Behavior o Ethics: the moral principles or values that generally govern the conduct of an individual or a group. (The standard of behavior by which conduct is judged.) Often, judgment is needed to determine if an unethical act is legal or illegal. o Morals: the rules people develop as a result of cultural values and norms. Morality and Business Ethics o Ethical Development has 3 levels Preconventional morality: the most basic level, is childlike. It is calculating, self0centered, and even selfish, based on what will be immediately punished or rewarded. Conventional Morality: moves from an egocentric viewpoint toward the expectations of society. Loyalty and obedience to the organization (or society) become paramount. A marketing decision marker would be concerned only with whether the proposed action is legal and how it will be viewed by others. Postconventional Morality: represents the morality of the mature adult. At this level, people are less concerned about how others might see them and more concerned about how they see and judge themselves over the long run. A marketing decision marker who has attained a postconventional level of morality might ask. "even though it is legal and will increase company profits, is it right in the long run?" o Ethical Decision Making Extent of ethical problems within the organization: marketing professionals who perceive fewer ethical problems in their organizations tend to disapprove more strongly of "unethical" or questionable practices than those who perceive more ethical problems. Apparently, the healthier the ethical environment, the more likely that marketers will tae a strong stand against questionable practices. Topmanagement actions on ethics: Top managers can influences the behavior of marketing professionals by encouraging ethical behavior and discouraging unethical behavior. Potential Magnitude of the Consequences: The greater the harm done to the victims, the more likely that marketing professionals will recognize a problem as unethical. Social Consensus: The greater the degree of agreement among managerial peers that an action is harmful, the more likely that marketers will recognize a problem as unethical. Probability of a harmful outcome: The greater the likelihood that an action will result in a harmful outcome, the more likely the marketers will recognize a problem as unethical. Length of time between the decision and the onset of consequences: The shorter the length of time between the action and the onset of negative consequences, the more likely that marketer will perceive a problem as unethical. Number of people to be affected: The greater the number of persons affected by a negative outcome, the more likely that marketers will recognize a problem as unethical. o Ethical Guidelines Code of Ethics: a guideline to help marketing managers and other employees make better decisions. Advantages for Ethic Guidelines The guidelines help employees identify what their firm recognizes as acceptable business practices. A code of ethics can be an effective internal control on behavior which is more desirable than external controls like government regulation. A written code helps employees avoid confusion when determining whether their decisions are ethical. The process of formulating the code of ethics facilitates discussion among employees about what is right and what is wrong and ultimately leads to better decisions. CHAPTER 4
Rewards of Global Marketing 22/04/2008 09:37:00 o Global Marketing: marketing that targets markets throughout the world. o Global Vision: recognizing and reacting to international marketing opportunities, using effective global marketing strategies, and being aware of threats from foreign competitors in all markets. Product development costs are rising, the life of products are getting shorter, and new technology is spreading around the world faster than ever. But marketing winners relish the pace of change instead of fearing it. Importance of Global Marketing to the United States o Benefits of Globalization Globalization expands economic freedom, spurs competition, and raises the productivity and living standards of people in countries that open temselves to the global marketplace. Multinational Firms o Multinational Corporation: a company that is heavily engaged in international trade beyond exporting and importing Multinational corporations move resources, goods, services, and skills across national boundaries without regard to the country in which the headquarters is located. 1st Stage: companies operate in one country and sell into others. 2nd Stage: multinationals set up foreign subsidiaries to handle sales in one country. 3rd Stage: they operate an entire line of business in another country. 4th Stage: has evolved primarily due to the Internet and involves mostly hightech companies. A multinational company may have several worldwide headquarters, depending on where certain markets or technologies are. o CapitalIntensive: using more capital than labor in the production process. o Global Marketing Standardization Global Marketing Standardization: production of uniform products that can be sold the same way all over the world. External Environment Facing Global Marketers Environmental Factors include culture, economic and technological development, political structure and actions, demographic makeup, and natural resources. o Culture Each country has its own customs and traditions that determine business practices and influence negotiations with foreign customers. o Economic and Technological Development Larger income mean greater purchasing power and demand not only for consumer goods and services but also for the machinery and workers required to produce consumer goods. o Political Structure and Actions Legal Considerations: Tariff: a tax levied on the goods entering a country. Quota: a limit on the amount of a specific product that can enter a country. Companies request quotas as a means of protection from foreign competition. Boycott: the exclusion of all products from certain countries or companies. Governments use boycotts to exclude companies from countries with which they have a political dispute. Exchange control: a law compelling a company earning foreign exchange from its exports to sell it to a control agency, usually a central bank. A company wishing to buy goods abroad must first obtain foreign currency exchange from the control agency. For instance, AVON Products drastically cut back new production lines and products in the Philippines because exchange controls prevented to company from converting pesos to dollars to ship back to the home office. The pesos had to be used in the Philippines. Market grouping (also known as, a common trade alliance): occurs when several countries agree to work together to form a common trade area that enhances trade opportunities. Trade agreement: an agreement to stimulate international trade. Not all government efforts are meant to stifle imports or investment by foreign corporations. The Uruguay Round of trade negotiations is an example of an effort to encourage trade. The largest Latin American trade agreement is Mercosur, which includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, and Uruguay. Uruguay Round And Doha Round The Uruguay Round: is an agreement that has dramatically lowered trade barriers worldwide. Several Major Changes in World Trading Practices: Entertainment, Pharmaceuticals, Integrated Circuits, and Software: The rules protect patents, copyrights, and trademarks for 20 years. Computer programs receive 50 years' protection and semiconductor chips receive 10 years'. But many developing nations were given a decade to phase in patent protection for drugs. Financial, legal, and accounting services: Services came under international trading rules for the first time, creating a vast opportunity for these competitive U.S. industries. Now it is easier for managers and key personnel to be admitted to a country. Agriculture: Europe is gradually reducing farm subsides, opening new opportunities for such U.S. farm exports as wheat and corn. Textiles and Apparel: Strict quotas limiting imports from developing countries are being phased out, causing further job loses in the U.S. clothing trade. But retailers and consumers are the big winners, because past quotas have added $15 billion a year to clothing prices. A New Trade Organization: The World Trade Organization (WTO) replaced the old General Agreement on Tariffs and Trade (GATT), which was created in 1948. North American Free Trade Agreement (NAFTA): created the world's largest free trade zone. Canada, Mexico, and United States. Central American Free Trade Agreement (CAFTA): Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. Natural Resources Petroleum resources have created huge amounts of wealth for oilproducing countries. Warm climate and lack of water mean that many of Africa's countries will remain importers of foodstuffs. CHAPTER 17
The Importance of Price 22/04/2008 09:37:00 What is Price? o Price is that which is given up in an exchange to acquire a good or service. The Importance of Price to Marketing Managers o Revenue: is the price charged to customers multiplied by the number of units sold. o Revenue is what pays for every activity of the company: production, finance, sales, distribution, and so on. o Profit: revenue minus expenses. Price x Units = Revenue Pricing Objectives ProfitOriented Pricing Objectives o Profit Maximization: means setting prices so that total revenue is as large as possible relative to total costs. Profit maximization does not always signify unreasonably high prices Return on Investment (ROI): net profit after taxes divided by total assets. 22/04/2008 09:37:00 ...
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This note was uploaded on 04/22/2008 for the course MRKT 101 taught by Professor Vishalkashyap during the Fall '07 term at Xavier.
- Fall '07