Defining the Business Mission 2

• Answers the question,

“What business are we in?”

• Focuses on the market(s)

rather than the good or service

• Strategic Business Units (SBUs) may

also have a mission statement
AMA’s Mission Statement 3
Strategic Business Units (SBUs) 4

Characteristics:
[SBU HAS…]
• A distinct mission and specific target market
• Control over its resources
• Its own competitors
• Plans independent of other SBUs
REVIEW LEARNING OUTCOME
Business Mission Statement 5

Q: What business are we in?

A: Business mission statement

marketing myopia
no direction
Too narrow focus marketing
on marketsmyopia
Too broad servednoand
direction
benefits
Just right focusseek
customers on markets
served and benefits
customers seek
Marketing Objective 6

Marketing A statement of what is to be

Objective accomplished through
marketing activities.
Marketing Objectives 7

 Realistic
“Our objective is to
 Measurable achieve 10 percent dollar
market share in the cat
 Time specific food market within 12
months of product
 Consistent with introduction.”
and indicate the
organization’s
priorities
REVIEW LEARNING OUTCOME
Criteria for Good Marketing Objectives 8
Realistic, measurable, and time-specific objectives
consistent with the firm’s objectives:

1. Communicate marketing management philosophy

2. Provide management direction

3. Motivate employees

4. Force executives to think clearly

5. Allow for better evaluation of results

SWOT Analysis 9

SWOT Identifying
SWOTAnalysis
Analysis
internal strengths (S)
and weaknesses (W)
and also examining
external opportunities (O)
and threats (T)
 SWOT Analysis 10

S
Internal
Things
Thingsthe
thecompany
companydoes
doeswell.
well.

W Things
Thingsthe
thecompany
companydoes
doesnot
notdo
dowell.
well.

O
External
Conditions
Conditionsin
favor
inthe
theexternal
favorstrengths.
strengths.
externalenvironment
environment that
that

T
Conditions
Conditionsin inthe
theexternal
externalenvironment
environment that
that
do
donot
notrelate
relateto toexisting
existingstrengths
strengthsororfavor
favor
areas of
ofcurrent
areas©South-Western weakness.
currentCollege
weakness.
Publishing
Environmental Scanning 11

Environmental
Environmental The collection and interpretation
Scanning
Scanning of information about forces,
events, and relationships in the
external environment that may
affect the future of the
organization or the implementation

of the marketing plan.

REVIEW LEARNING OUTCOME
Components of a Situation Analysis 12
Strengths

 production costs

ENVIRONMENT
INTERNAL

 marketing skills
 financial resources
 image
 technology

Weaknesses
REVIEW LEARNING OUTCOME
Components of a Situation Analysis 13

Opportunities

 social

ENVIRONMENT
EXTERNAL

 demographic
 economic
 technological
 political / legal
 competitive

Threats
Competitive Advantage 14

Competitive
Competitive The set of unique features of a
Advantage
Advantage company and its products that
are perceived by the target
market as significant and
superior to the competition.
Competitive Advantage 15

Cost
Cost

Types
Typesof
ofCompetitive
Competitive Product/Service
Product/Service
Advantage
Advantage Differentiation
Differentiation

Niche
Niche Strategies
Strategies
Cost Competitive Advantage 16

Cost
Cost
Competitive
Competitive Being the low-cost competitor
Advantage
Advantage in an industry while
maintaining satisfactory profit
margins.
Cost Competitive Advantage 17

 Obtain inexpensive raw materials

 Create efficient plant operations
 Design products for ease of
manufacture
 Control overhead costs
 Avoid marginal customers
Sources of Cost Reduction 18

Experience
Experience Curves
Curves Product
Product Design
Design

Efficient
Efficient Labor
Labor Reengineering
Reengineering

No-frills
No-frills Products
Products Production
Production Innovations
Innovations

New
New Service
Service
Government
Government Subsidies
Subsidies Delivery
Delivery Methods
Methods
Product/Service Differentiation 19

Product
Product// Service
Service
Differentiation
Differentiation The provision of something
Competitive
Competitive that is unique and valuable
Advantage
Advantage to buyers beyond simply
offering a lower price than
the competition’s.
Examples of 20

Product/Service Differentiation

 Brand names
 Strong dealer network
 Product reliability
 Image
 Service
Niche Competitive Advantage 21

Niche
Niche The advantage achieved when
Competitive
Competitive a firm seeks to target and
Advantage
Advantage effectively serve a small
segment of the market.
Niche Competitive Advantage 22

• Used by small companies with

limited resources

• May be used in a limited geographic market

• Product line may be focused on a

specific product category
Sources of Sustainable 23

Competitive Advantage

Patents
Patents
Copyrights
Copyrights
Locations
Locations
Equipment
Equipment
Technology
Technology
Skills
Skills and
and Assets
Assets
of
of an
an Customer
Customer Service
Service
Organization
Organization
Promotion
Promotion
REVIEW LEARNING OUTCOME
Sources of Competitive Advantage 24

Advantage
CompetitiveAdvantage
Competitive
Sourcesof
Sources of

Product/Service
Product/Service
Cost
Cost Niche
Niche
Differentiation
Differentiation
$$ Strategies
Strategies
AAvs.
vs.BBvs.
vs.CC