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Chapter 2: A Philosophical and Historical View

by: Alora Lornklang

Chapter 2: A Philosophical and Historical View MKTG 3650

Marketplace > University of North Texas > Marketing > MKTG 3650 > Chapter 2 A Philosophical and Historical View
Alora Lornklang
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These notes will cover Chapter 2 from the textbook, "Marketing From Scratch".
Foundations of Marketing
David Strutton
Class Notes
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This 7 page Class Notes was uploaded by Alora Lornklang on Wednesday February 17, 2016. The Class Notes belongs to MKTG 3650 at University of North Texas taught by David Strutton in Spring 2016. Since its upload, it has received 44 views. For similar materials see Foundations of Marketing in Marketing at University of North Texas.

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Date Created: 02/17/16
MKTG 3650 Foundations of Marketing Practice Chapter 2: Marketing Strategies: A Philosophical And Historical View  Strategies should outline where the marketing Firm is going, how it will get there, and what will be accomplished after arrival.  The Two Levels of Business Strategy  The general strategic intention of top­level, overarching organizationally­wide  plans is to: o Meet and beat competitive threats, and  o Ensure the long­term survival and eventual growth of the Firm.   At the second functional or strategic marketing planning level, tactical  decisions are made about:  o Which products to produce or update (change in some manner), and  o How to promote price, and distribute these products effectively.   Firms must simultaneously determine the:  o Market (i.e. target segments) they will enter and in which they will  compete o Types of customer wants, needs, and ultimately problems they will satisfy  or solve o Competitors against which they will compete.   When Firms decide which market segments they will target and serve, those  Firms are also deciding who their competitors will be.   A product can be defined as anything developed or delivered by a Firm that o Potentially offers value to some customer or customer group and  o Can be offered to those customers as part of an exchange relationship.   Products could include tangible products, intangible services, an idea, person, or  place or anything else that might offer value to anyone.  Ten Universal Strategic Laws  Strategic planning process requires that senior leadership carefully examine and  analyze where their Firms have been (the past), where their Firms are now in  terms of their current Strengths and Weaknesses (the Present), and where their  Firms logically should go given the Opportunities and Threats that they soon may  face (Future).   Strategic Law 1: Remain Grounded in Logic  o Strategists, operating in any decision making setting, should always  pursue logical marketing solutions.  o Know when to stop, when to declare victory, with the strategic intention of introducing some other product that offers alternative value to new or  existing marketing segments.   Strategic Law 2: Always Account for Technology.  o Technology remains the incredibly fertile mother of myriad changes,  opportunities and threats, and growing/shrinking strengths/weaknesses for  myriad Firms.   Strategic Law 3: Accept but Accommodate Certain Uncontrollable(s) o Strategists should allocate more time to thinking and doing something  about factors they can control.  o Marketers cannot control the pre­existing beliefs and attitudes of  customers.  o Still must attempt to account and make accommodations for  uncontrollable factors.   Strategic Law 4: Gold Rules.  o When developing strategies plans, marketers should usually dance close to revenue and/or cost lines.  o Goals and tasks should prioritize goals and tasks based on their anticipated contributions to revenue (growth), costs (savings), and, ultimately, profits  (enjoy them).   Strategic Law 5: Manage Two Types of Risk o When planning, marketers should consider two types of risk.   “Sinking the boat.”   Risk of ruining a Firm by making a bad strategic bet  “Missing the boat”  Entails the risk of permitting a great strategic opportunity  to cruise by because strategists missed, ignored, or were  unwilling to shoulder the risk necessary to pursue it.  o If you or your Firm does not embrace the possibility of great failure you  and it are far less likely to ever experience great success.   Strategic Law 6: Distinguish between Uncertainty and Risk.  o Risk  Describes a situation where planners have a sense of the range and  likelihood of possible outcomes.  o Uncertainty  Describes a situation where not only is it unclear what might  happen, it is also unclear how likely all the various outcomes are.   Strategic Law 7: Accept that Some Problems are Wicked o Wicked strategic problems include challenges so persistent, pervasive, or  slippery that strategies often deem them insoluble.  o Examples of wicked strategic problems include:   Balancing long­term goals with short­term demands (pressures)  Balancing the pursuit of profits with the desire to be socially  responsible.   Finding completely unclaimed new market space.   Determining how best to multiply success and creativity by  leveraging diversity of opinion and expertise through cross­ functional collaboration.   Protecting profit margins and sustaining market shares within  increasingly commoditized business sectors.   Balancing the need for higher manufacturing quality with the  desire for lower production costs.   Strategic Law 8: Often No One Best Solution Exists o When attempting to strategically solve truly wicked problems, the  solutions agreed upon are rarely right or completely wrong.  o “Contentious strategic problems are best solved not by imposing a single  point of view at the expense of others, but by striving for a higher order  solution that integrates the diverse perspectives of all relevant  constituencies.”  Strategic Law 9: Watch Those Assumptions.  o In business or in life, often it is not what we don’t know that hurts us.  Instead it is what we assumed we knew for certain.   Strategic Law 10: Relationships are Huge.  o Everything that Firms or individuals might do strategically in order to  achieve or sustain marketing success relates directly or indirectly to  relationships and exchange.  o Firms always owe strategic commitments to create and deliver something  of value to customer that they perceive is worth paying for; that’s  exchange, the basis for marketer­customer relationship.  Business Strategy: What History Teaches Us  “Failing to plan is like planning to fail.”­ John Wooden o Implies that if you want to ensure the failure of your Firm or yourself,  don’t plan.   “Plans are nothing, but planning is everything.” General and US President Dwight D. Eisenhower o Implies that plans rarely, if ever, work out the way they are supposed to on paper.   “A good plan, violently executed today, is better than a perfect plan next week” –  General George Patton.  o Firms should “never let the (pursuit of the) perfect be the enemy of the  good.”  o Firms must be opportunistic when opportunities arise  Firms should consider scanning their environment first. The purpose of this  scanning is to identify opportunities promising large payoffs at low costs. Only  then should Firms establish their goals.   Dr. Martin Luther King positioned himself as the face of non­violent civil rights  brand and elevated awareness of such inequalities throughout the nation.  o Non­violent protest was the core competency that drove the ultimate  success of Dr. King’s movement.   Technology is deeply embedded in the “spirit of our times,” our zeitgeist.  o Technology influences how Firms communicate with Firms, how Firms  communicate with customers, and how customers communicate with  Firms.  o Technology is the primary reason why in the future the big Firms will not  automatically eat the little Firms.   “When absolute superiority is not attainable produce a relative one at the decisive  point by making skillful use of the resources you have.” – General Carl von  Clausewitz.   This provides three key points of counsel to any organization engaged in  planning:  o Firms should attack competitors at their weakest points.  o Firms should concentrate on doing what they do best.  o Firms should exploit these differences in ways that permit them to deliver  differentiating value in the marketplace.   “If you don’t know where you are going, any road will get you there.” – A  o Firms should view strategies as maps to desirable destinations.  o Firms must identify intentional destinations. This is where missions, and  goals and objectives, come into play, along with metrics—or  measurements—that permit planners to measure progress in route to those  desirable destinations.   “The man who chases two rabbit’s catches neither.” – Chinese Proverb o Firms should focus ruthlessly on performing the one, two, or possibly  three things that they must do well in order to succeed.   “Chances favor the prepared mind.” –Louis Pasteur o “Dig wells before you are thirsty.” – Chinese Proverb  o “Luck is where opportunity and preparation meet.” – Roman philosopher  Seneca.  o All suggest that Firms should get ready, in order to be ready when  opportunities or threats arise.   “We don’t have a strategy, yet.” – Obama  o Firms of all sizes, scales, and scopes should have a plan. And when you  don’t have a plan, don’t make public pronouncements.  “If you don’t have (or cannot create) a competitive advantage, don’t compete.” – Jack Welch, former CEO of General Electric (GE) o Strategic Business Units (SBUs): A SBU is the smallest unit inside any  Firm for which independent strategic planning can be done. An SBU could be an entire Firm, a division inside a Firm, or product category family  within the Firm. o Virtually any product, no matter how similar it is to competitive offerings,  can be differentiated when marketers are sufficiently creative.  Why Strategy Is Useful  The act of developing a business or marketing strategy is inevitably useful. This is because the effort:  o Encourages systematic and forward­looking thinking within a Firm.  o Forces planners to create, clarify, and prioritize goals and objectives.  o Leads to more efficient coordination of efforts within a Firm.  o Leads to more efficient allocation of resources inside Firms.   Resources: Any physical, organizational, human, temporal (time)  or financial asset that enables the Firm to generate and execute  strategies that improve its efficiency and effectiveness.   Resources = time, talent, treasures (again, the “3­Ts”). o Provides clear performance metrics for Firms.   In turn, the presence of these metrics facilitates managerial control  and establishing accountability; that is, who is responsible for  what? o Helps Firms identify, understand, and respond more quickly to  environmental changes and suddenly or gradually emergent opportunities  and threats.  o Forces more careful consideration of the entire environment in which a  Firm operates, as well as deliberation about customers and competitors  who also exist as key dimensions of any Firm’s environment.  o Increases the likelihood that the Firm is working­on­the­right­things and  doing­those­right­things­right. o Uncovers new ideas and areas for growth and improvement.  o Provides a safe harbor in which decision­makers can engage in possibility­ thinking; i.e., considering and evaluating heretofore outside­the­box  approaches.  Relevant Thoughts on Goal and Goal-Setting  Peter Drucker suggested leaders establish the Firm’s overall goals, and then, in  discussion with each worker, establish and agree upon a subset of goals or  objectives that align what those workers were supposed to do with the Firm’s  overall goals.   SMART o Specific (precision and clarity matters) o Measurable (b/c what gets measured is what gets done) o Actionable (Steps can be identified to achieve the objectives) o Realistic (the goals may stretch the Firm’s collective abilities and  resources, but are still reasonably attainable) o Time­sensitive (a time­line for completion of the objectives is always  present) Relevant Thought on Decision Making Itself  There are four steps in any decision: o 1. Strategists must perceive the relevant situation. If the situation is  relevant it will offer either opportunity or a threat.  o 2. Strategists should think up and prioritize all possible courses of action  in response to the opportunity or threat that is embedded in the decision.  o 3. Strategists should calculate which action is in the best interests of the  Firm.  o 4. Strategists should decide which action to pursue.  Accounting for Porter’s “Five Strategic Forces”  The five forces are:  o The competitors or rivals that the Firm currently faces o The threat of new competitors o The threat of substitutes for the Firm’s current products o The bargaining power of suppliers o The bargaining power of customers  Insofar as every successful Firm possesses and is able to exploit some element of  uniqueness, the overarching goal of that Firm’s strategy is to find or develop that  uniqueness or what educated marketers commonly think of as differentiation.   Firms can achieve uniqueness by:  o Earning low cost advantage in the minds of the segments they target o Differentiating greater customer intimacy within the segments they target,  or  o Dominating a niche or market segment by establishing technological  advantage   Focus remains critical to Firms or people as either is developing and executing  strategies. 


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