LYCEUM-NORTHWESTERN UNIVERSITY

Urdaneta City Campus

INSTITUTE OF GRADUATE AND PROFESSIONAL STUDIES

MASTER IN BUSINESS ADMINISTRATION

MARKETING MANAGEMENT
(BA 206)

Submitted by: Eunice A. Cisnero

PROFESSOR: JOY C. GAMBOA, Ph.D.

CORPORATE AND DIVISION STRATEGIC PLANNING

Corporate or Company headquarters establish the framework by preparing statements of mission,

policy, strategy, and goals, within which the divisions and business units prepare their plans.

Some corporations give their business units a lot of freedom to set their own sales and profit goals

and strategies. Others set goals for their business units but let them develop their own strategies.

Still others set the goals and participate in developing individual business unit strategies.

All corporate headquarters undertake four planning activities:

1. Defining the corporate mission.

2. Establishing strategic business units.

3. Assigning resources to each SBU.

4. Assessing growth opportunities.

Defining the Corporate Mission:

An organization exists to accomplish something to make cars, lend money, and provide a night

lodging, and so on. Its specific mission or purpose is usually clear when the business starts. Over

time the mission may change, to take advantage of new opportunities or respond to new market

conditions. Amazon.com changed its mission from being the world largest online bookstore to

aspiring to become the world largest online store. eBay changed its mission from running online

auctions for collectors to running online auctions covering all kinds of goods.

To define its mission, a company should address Peter Drucker classic questions. What is our

business? Who is the customer? What is of value to the customer? What will our business be?

These simple-sounding questions are among the most difficult a company will ever have to

answer. Successful companies continuously raise these questions and answer them thoughtfully
and thoroughly. A company must redefine its mission if that mission has lost credibility or no

longer defines as optimal course for growth.

Organizations develop mission statements to share with managers, employees, and (in many

cases) customers. A clear, thoughtful mission statement provides employees with a shared sense

of purpose, direction, and opportunity. The statement guides geographically dispersed employees

to work independently and yet collectively toward realizing the organizations goals.

Mission statements are at their best when they reflect a vision, an almost impossible dream? that

provides a direction a direction for the company for the next 10 to 20 years. Sonys former

president, Akio Morita, wanted everyone to have access to personal portable sound so his

company created the Walkman and Portable CD player. Fred Smith wanted to deliver mail

anywhere in the United States before 10:30 A.M the next day, so he created FedEx.

Good mission statements have three major characteristics. First, they focus on a limited number

of goals. The statements, We want to produce the highest-quality products, offer the most service,

achieve the widest distribution, and sell at the lowest prices claims too much. Second, mission

statements stress the company’s major policies and values. They narrow the range of individual

discretion so that employees act consistently on important issues. Third, they, define the major

competitive spheres within which the company will operate.

Industry

Some companies will operate in only one industry; some only in a set of related industries; some

only in Industrial goods; consumer goods, or services; and some in any industry. For example,
DuPont prefers to operate in the industrial market, whereas Dow is willing to operate in the

Industrial and consumer markets. 3M will get into almost any industry where it can make money.

Products and Applications:

The range of products and applications a company will supply. St. Jude Medical aims to serve

physicians worldwide with high-quality products for cardiovascular care?

Competence

Competence is the range of technological and other core competencies that a company will

master. Japans NEC has built its core competencies in computing, communications, and

components to support production of laptop computers, television receivers, and hand held

telephones.

Market segment

The type of market or customers a company will serve. For example, Porsche makes only

expensive cars. Gerber serves primarily the baby market.

Vertical

The number of channel levels from raw material to final product and distribution in which a

company will participate. At one extreme are companies with a large vertical scope; at one time

Ford owned its own rubber plantations, sheep farms, glass manufacturing plants, and steel

foundries. At the other extreme are hollow corporations or pure marketing companies? consisting

of a person with a phone, fax, computer, and desk who contracts out for every service, including

design, manufacture, marketing and physical distribution.

Geographical

The range of regions or countries in which a company will operate is its geographical range.. At

one extreme are companies that operate in a specific city or state. At the other are multinationals

such as Unilever and Caterpillar, which operate in almost every country in the world.

Defining the Business

Companies often define their businesses in terms of products. They are in the auto business or the

clothing business. Market definitions of a business are superior to product definitions. A business

must be viewed as a customer-satisfying process, not a goods-producing process. Products are

transient; basic needs and customer groups endure forever. Transportation is a need: the horse and

carriage, the automobile, the railroad, the airline, and the truck are products that meet the need.

Companies must redefine their business in terms of needs, not products. Pitney-Bowes Inc., an

old-line manufacturer of postage meters, is in the process of doing just that. With old-fashioned

paper mail under siege, Pitney Bowes, a U.S. company, can no longer afford to be defined by its

main product,, even though it currently holds 80% of the domestic market and 62% of the global

market. The company is redefining itself as a leading service provider in the much larger mail and

document management industry. With its wealth of engineers, cryptographers, and even

workplace anthropologists, as well as 2,300 patents and several labs, Pitney-Bowes is well

positioned to help companies organize their communications. In a new series of ads in business

publications such as Fortune, Pitney Bowes is spreading the word about its new mission. For

instance, one ad boasts that “we can generate remarkable changes across your entire business,

including a sizeable increase in profits.

A business can be defined in terms of three dimensions: customer groups, customer needs, and

technology. Consider a small company that defines its business as designing incandescent
lighting systems for television studios. Its customers group is television studios; the customer

need is lighting; and the technology is incandescent lighting. The company might want to expand.

It could make lighting for other customer groups, such as homes, factories, and offices; or it could

supply other services needed by television studios, such as heating, ventilation, or air

conditioning. It could design other lighting technologies for television studios, such as infrared or

ultraviolet lighting.

Large companies normally manage quite different businesses, each requiring its own strategy.

General Electric classified its businesses into 49 strategic business units (SBU). An SBU has

three characteristics:

1. It is a single business or collection of related businesses that can be planned separately from

the rest of the company.

2. It has its own set of competitors.

3. It has a manager who is responsible for strategic planning and profit performance and who

controls most of the factors affecting profit.

The purpose of identifying the company’s strategic business units is to develop separate strategies

and assign appropriate funding. Senior management knows that its portfolio of businesses usually

includes a number of yesterdays has-been as well as tomorrows breadwinners. Yet it cannot rely

on impressions; it needs analytical tools to classify its businesses by profit potential.

THE NATURE AND CONTENTS OF MARKETING PLAN

Marketing managers follow a marketing process to carry out their responsibilities effectively.

Working within the plans set up by the top management product managers come up with a

marketing plan for individual products, lines, brands, channels, or customer groups. Each product

level (product line, brand) must develop a marketing plan for achieving its goals.

A marketing plan is a written document that summarizes what the marketer has learned about the

marketplace and indicates how the firms plan to reach its marketing objectives. It contains tactical

guidelines for the marketing programs and financial allocations over the planning period. It is one

of the most important outputs of the marketing process.

Marketing plans are becoming more customer- and competitor-oriented and better reasoned and

more realistic than in the past. The plans draw more inputs from all the functions and are team-

developed. Marketing executives increasingly see themselves as professional managers first, and

specialists second. Planning is becoming a continuous process to respond to rapidly changing

market conditions.

At the same time, marketing planning procedures and content vary considerably among

companies. The plan is variously called a business plan a marketing plan and sometimes a battle

plan. Most marketing plans cover one year. The plans vary in length from under 5 to over 50

pages. Some companies take their plans very seriously, whereas others see them only a rough

guide to action. Eisenhower once observed: In preparing for the battle I have always found that

plans are useless but planning is indispensable.� The most frequently cited shortcomings of

current marketing plans, according to marketing executives, are lack of realism, insufficient

competitive analysis, and a short-run focus.

Contents of the Marketing Plan:

The marketing plan should open with a brief summary of the main goals and recommendations.

The executive summary permits senior management to grasp the plans major thrust. A table of

contents that outlines the rest of the plan and all the supporting rationale and operational detail

should follow the executive summary.

Situation analysis:

This section presents relevant background data on sales, costs, the market, competitors, and the

various forces in the macro environment. How is the market defined, how big is it, and how fast

is it growing? What are the relevant trends affecting the market? What is the product offering and

what are the critical issues facing the company? Pertinent historical information can be included

to provide context. All this information is used to carry out a SWOT analysis.

Marketing strategy:

Here the product manager defines the mission and marketing and financial objectives. The

manager also defines those groups and needs that the market offerings are intended to satisfy. The

manager thus establishes the product line competitive positioning, which will inform the game

plan to accomplish the plan objectives. All this is done with inputs from other organizational

areas, such as purchasing, manufacturing, sales, finance, and human resources, to ensure that the

company can provide proper support for effective implementation. The marketing strategy should

be specific about the branding strategy and customer strategy that will be employed.

Financial Projections:
Financial projections include a sales forecast, an expense forecast, and a break-even analysis. On

the revenue side, the projections show the forecasted sales volume by month and product

category. On the expense side, the projections show the expected costs of marketing, broken

down into finer categories. The break-even analysis shows how many units must be sold monthly

to offset the monthly fixed costs and average per-unit variable costs.

Implementation Controls:

The last section of the marketing plan outlines the controls for monitoring and adjusting

implementation of the plan. Typically, the goals and budget are spelled out for each month or

quarter so management can review each period results and take corrective action as needed. A

number of different internal and external measures must be taken to assess progress and suggest

possible modifications. Some organizations include contingency plans outlining the steps

management would take in response to specific environmental developments, such as price wars

or strikes

In this article we have discussed in detail how the marketing managers go about planning their

marketing strategies to overcome competition, increase market share and attract more customers

for their products. In practice all the players in the field adopt their market planning techniques

resulting in stiff competition and the faster innovations by any of the firms the more shall be the

market share.

The Role of the research

It is not at all unusual for marketing managers to neglect to tell the researcher the precise purpose

of the research. They often do not appreciate the need to do so. Instead, they simply state what

they think they need to know. This is not quite the same thing. To appreciate the difference

consider the case of the marketing research agency which was contacted by the International
Coffee Organisation (ICO) and asked to carry out a survey of young people in the age group 15-

24. They wanted information on the coffee drinking habits of these young people: how much

coffee they drank, at what times of day, with meals or between meals, instant or ground coffee,

which other beverages they preferred and so on. In response, the research organisation developed

a set of wide-ranging proposals which included taking a large random sample of young people.

In fact much of the information was interesting rather than important. Important information is

that information which directly assists in making decisions and the ICO had not told the research

company the purpose of the research. The initial reason for the study had been a suspicion, on the

part of the ICO, that an increasing percentage of young people were consuming beverages other

than coffee, particularly soft drinks, and simply never developed the coffee drinking habit. Had

this been explained to the research company then it is likely that their proposals would have been

radically different. To begin with, the sample would have been composed of 15-24 year old non-

coffee drinkers rather than a random sample of all 15-24 year olds. Second, the focus would have

been non-coffee drinking habits rather than coffee drinking habits.

Unless the purpose of the research is stated in unambiguous terms it is difficult for the marketing

researcher to translate the decision-maker's problem into a research problem and study design.