BUAD 307
Marketing
Fundamentals

 

 

 

MIDTERM REVIEW

Strategy--Purpose

PowerPoint Narration

Plans are needed to clarify what kinds of strategic objectives an organization would like to achieve and how this is to be done. Such plans must consider the amount of resources available. One critical resource is capital. Microsoft keeps a great deal of cash on hand to be able to “jump” on opportunities that come about. Small startup software firms, on the other hand, may have limited cash on hand. This means that they may have to forego what would have been a good investment because they do not have the cash to invest and cannot find a way to raise the capital. Other resources that affect what a firm may be able to achieve include factors such as:

  • Trademarks/brand names: It would be very difficult to compete against Coke and Pepsi in the cola market.
  • Patents: It would be difficult to compete against Intel and AMD in the microprocessor market since both these firms have a number of patents that it is difficult to get around.
  • People: Even with all of Microsoft’s money available, it could not immediately hire the people needed to manufacture computer chips.
  • Distribution: Stores have space for only a fraction of the products they are offered, so they must turn many away. A firm that does not have an established relationship with stores will be at a disadvantage in trying to introduce a new product.


Plans are subject to the choices and policies that the organization has made. Some firms have goals of social responsibility, for example. Some firms are willing to take a greater risk, which may result in a very large payoff but also involve the risk of a large loss, than others.
Strategic marketing is best seen as an ongoing and never-ending process. Typically:

  • The organization will identify the objectives it wishes to achieve. This could involve profitability directly, but often profitability is a long term goal that may require some intermediate steps. The firm may seek to increase market share, achieve distribution in more outlets, have sales grow by a certain percentage, or have consumers evaluate the product more favorably. Some organizations have objectives that are not focused on monetary profit—e.g., promoting literacy or preventing breast cancer.
  • An analysis is made, taking into consideration issues such as organizational resources, competitors, the competitors’ strengths, different types of customers, changes in the market, or the impact of new technology.
  • Based on this analysis, a plan is made based on tradeoffs between the advantages and disadvantages of different options available.
  • This strategy is then carried out. The firm may design new products, revamp its advertising strategy, invest in getting more stores to carry the product, or decide to focus on a new customer segment.
  • After implementation, the results or outcome are evaluated. If results are not as desired, a change may have to be made to the strategy. Even if results are satisfactory, the firm still needs to monitor the environment for changes.

 

Main Midterm Review Page