Marketing Management And Strategic Planning Most people think of a marketing manager as someone who finds enough customers for the company's current output. But this view is too limited. Marketing managers can be concerned not only with finding and increasing demand but also with changing or even reducing it.
We define marketing management as the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.
There are five alternative concepts under which organizations conduct their marketing activities: the production, product, selling, marketing, and societal marketing concepts.
The production concept holds that consumers will favor products that are available and highly affordable and that management should therefore focus on improving production and distribution efficiency. This concept is one of the oldest philosophies guiding sellers.
The production concept is a useful philosophy in two types of situations. The first occurs when the demand for a product exceeds the supply. Here, management should look for ways to increase production. The second situation occurs when the product's cost is too high and improved productivity is needed to bring it down.
Another major concept guiding sellers, the product concept, holds that consumers will favor products that offer the most quality, performance, and features, and that an organization should thus devote energy to making continuous product improvements.
Many organizations follow the selling concept, which holds that consumers will not buy enough of the organization's products unless it undertakes a large selling and promotion effort. The concept is typically practiced with unsought (неразыскиваемый) goods—those that buyers do not normally think of buying (say, encyclopedias and funeral plots). These industries must be good at tracking down prospects and selling them on product benefits. The selling concept is also practiced in the nonprofit area.
The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. Surprisingly, this concept is a relatively recent business philosophy. It emerged only during the 1950-s.
The marketing concept views the consumer as the focal point of all marketing activities. Organizations that practice the marketing concept study the consumer to determine consumer's needs and wants and then organize and integrate all activities within the firm toward helping the consumer fulfill these needs and wants while simultaneously achieving organizational goals. There are three pillars to the marketing concept) (1) consumer orientation, (2) integrated or total company effort, and (3) achievement of organization goals.
The consumer orientation dimension of the marketing concept argues that a firm can be more successful if it determines what the consumer needs and wants before it decides what product to produce and/or sell.
To successfully practice the principle of consumer orientation firms need to regularly conduct marketing research. Marketing research is the systematic collection, recording, and analyzing of data that deal with the marketing of goods and services. The tools of marketing research allow the firm to assess consumers' needs-wants.
Regardless of how much marketing research is conducted, no organization can be certain of consumers' wants and needs. This is especially true with new product development or anticipatory manufacturing. Consequently, the role of good executive judgment in marketing decision-making cannot be ignored. Since marketing is not a precise science, good subjective judgment resulting from years of «hands on» experience is also a key to successfully implementing the marketing concept.
A second pillar of the marketing concept is the principle of integrated effort, in which departments within the organization work together toward the common goal of satisfying the customer. Integrated effort is a systems point of view, in which all departments recognize they are interdependent parts of an organization. Because they are interdependent, they must cooperate to enable the firm to achieve its objectives. Cooperation is often difficult because one department's goals may conflict with those of another department and with the organization's overall objectives.
Several types of conflicts can develop between departments within an organization. One type is the inherent (свойственный) conflict between low unit production costs and high consumer satisfaction.
Organizational goals. The final pillar of the marketing concept states that the organization should engage in exchanges based on their potential for helping the organization achieve its goals. Organizations do not participate without expecting something in return, and what they receive should help them achieve their objectives.
The societal (социальный) marketing concept holds that the organization should determine the needs, wants, and interests of target markets. It should then deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer's and the society's well-being. The societal marketing concept is the newest of the five marketing management philosophies.
The societal marketing concept questions whether the pure marketing concept is adequate in an age of environmental problems, resource shortages, rapid population growth, worldwide inflation, and neglected social services. It asks if the firm that senses, serves, and satisfies individual wants is always doing what is best for consumers and society in the long run. According to the societal marketing concept, the pure marketing concept overlooks possible conflicts between short-run consumer wants and long-run consumer welfare.
The societal marketing concept calls upon marketers to balance three considerations in setting their marketing policies: company profits, consumer wants, and society's interests. Originally, most companies based their marketing decisions largely on short-run company profit.
STRATEGIC PLANNING
Strategic planning is deciding today what to do in the future. It sets the stage for the rest of the planning in the firm and consists of analysis and strategy. Strategic planning can be defined as the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities. It relies on developing a clear company mission, supporting objectives, a sound business portfolio, and coordinated functional strategies.
At the corporate level, the company first analyses its present position and defines its overall purpose and mission. This mission is then turned into detailed supporting objectives that guide the whole company. Next, headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one . Each business and product unit must in turn develop detailed marketing and other departmental plans that support the company-wide plan. Marketing planning occurs at the business-unit, product, and market levels. It supports company strategic planning with more detailed planning for specific marketing op-portunities.
The first step in the strategic marketing management process is analysis. It consists of identifying the firms Strengths and Weaknesses as well as Opportunities and Threats (SWOT). A SWOT analysis consists of studying a firm's performance trends, resources, and capabilities to assess a firm's strengths and weaknesses, explicitly stating a firm's mission and objectives, and scanning the external environment to identify opportunities and threats facing the organization.
A firm's strengths and weaknesses can be identified and analyzed by studying performance trends, resources, and capabilities. Past performance typically is measured in financial terms, such as sales and profits. Current resources and capabilities also help to determine a firm's strengths and weaknesses. Resources and capabilities refer to various things; special talents (i.e., the company has one of the most creative advertising departments In the country), areas of expertise (i.e., the company is a beer producer and is the industry leader in developing new brewery technologies), unique assets (i.e. the company holds 12 patents on new products or has $ 50 million in available cash), or any other advantage that can be drawn on for support (i.e. a pharmaceutical company may have excellent working relationships with retail druggists).
Opportunities and threats can be identified by stating the organization's mission and objectives and engaging in the process of environmental scanning.
The marketer wants to identify market opportunities that exist because there is an unmet (невыполненный) or unsatisfied need or want in the marketplace and for which the firm has an interest in and capability to satisfy. At the same time the marketer should try to convert threats into opportunities.
Defining the Company Mission
Many organizations develop formal mission statements that answer different questions. A mission statement is a statement of the organization’s purposes — what it wants to accomplish in the larger environment.
Companies traditionally defined their business in product terms (We manufacture furniture) or in technological term (We are a chemical-processing firm). But market definitions of 1 business are better than product or technological definitions. A market-oriented mission statement defines the business in terms of satisfying basic customer needs.
Management should avoid making its mission too narrow or too broad. Mission statements should be specific and realistic. Many mission statements are written for public relations purposes and lack specific, workable guidelines.
Setting Company Objectives and Goals
The company's mission needs to be turned into detailed supporting objectives for each level of management. Each manager should have objectives and be responsible for reaching them.
Marketing strategies must be developed to support these marketing objectives. To increase its national market share, the company may increase its product's availability and promotion. To enter new foreign markets, the company may cut prices and target large farms abroad. These are its broad marketing strategies.
Designing the Business Portfolio
Guided by the company's mission statement and objectives, management must now plan its business portfolio. A company's business portfolio is the collection of businesses and products that make up the company. The best business portfolio is the one that best fits the company's strengths and weaknesses to opportunities in the environment. The company must (1) analyze its current business portfolio and decide which businesses should receive more, less, or no investment, and (2) develop growth strategies for adding new products or businesses to the portfolio.
Analyzing the Current Business Portfolio
The major tool in strategic planning is business portfolio analysis, whereby (посредством чего) management evaluates the businesses making up the company. The company will want to put strong resources into its more profitable businesses and phase down or drop its weaker businesses.
Management's first step is to identify the key businesses making up the company. These can be called its strategic business units. A strategic business unit (SBU) is a unit of the company that has a separate mission and objectives and can be planned independently from other company businesses. An SBU can be a company division, a product line within a division, or sometimes a single product or brand.
The purpose of strategic planning is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment.
One of four strategies can be pursued for each SBU. The company can invest more in the business unit in order to build its share. Or it can invest just enough to hold the SBU's share at the current level. Or it can harvest the SBU, increasing its short-term cash flow by investing little or nothing in it regardless of the long-term effect. Finally, the company can divest the SBU by selling it or phasing it out and using the resources elsewhere.
Such analysis is no cure-all for finding the best strategy. But it can help management to understand the company's overall situation, to see how each business or product contributes, to assign resources to its businesses, and to orient the company for future success.
