Chap 8 developing marketing objectives and goals

Chapter Developing Marketing Objectives and Goals A Intoduction Defining Objectives and Goals: Chapter Organization (TM 8-1) Problems with Defining Objectives (TM 8-2) B Corporate Strategic Direction Meansing of Corporate Strategic Direction (TM 8-3) Usefulness of Corporate Strategic Direction (TM 8-4) Corporate Strategic Direction: An Example (TM 8-5) Changing an Established Direction (TM 8-6) C SBU Mission Defining Business Mission – Traditional Viewpoint (TM 8-7) Defining Business Mission – A New Approach (TM 8-8) Defining Business Mission – Narrow Scope (TM 8-9) Defining Business Mission – Broader Scope (TM 8-10) D SBU Objectives and Goals Defining Objectives (TM 8-11) Illustration of an SBU’s Objectives (TM 8-12) E Product/Market Objectives Bases of Product/Market Objectives (TM 8-13) Sources for Generating Objectives (TM 8-14) Validity Test for Objectives (TM 8-15) 255 256 CHAPTER 8: Developing Market Objectives and Goals 8-1 DEFINING OBJECTIVES AND GOALS: CHAPTER ORGANIZATION • Corporate strategic direction • SBU mission • SBU objectives and goals • Product/market objectives CHAPTER 8: Developing Market Objectives and Goals 257 8-2 PROBLEMS WITH DEFINING OBJECTIVES • Lack of credibility, motivation, and/or practicality • Poor information inputs • Defining objectives without considering different options • Lack of consensus regarding corporate values • Disappointing committee effort to define objectives • Sterility (lack of uniqueness and competitive advantage) 258 CHAPTER 8: Developing Market Objectives and Goals 8-3 MEANING OF CORPORATE STRATEGIC DIRECTION Broad statements that represent a company’s position on various matters and serve as an input in defining objectives and formulating strategy at lower echelons in the organization CHAPTER 8: Developing Market Objectives and Goals 259 8-4 USEFULNESS OF CORPORATE STRATEGIC DIRECTION • Identifies what “fits” and what needs the company is well suited to meet • Analyzes potential synergies • Undertakes risks that simply cannot be justified on a project basis For example, willingness to pay for what might appear, on a purely financial basis, to be a premium for acquisition • Provides the ability to act fast The presence of strategic direction not only helps companies adequately and quickly scan opportunities in the environment, but helps companies capitalize on them without waiting • Focuses the search for opportunities and options more clearly 260 CHAPTER 8: Developing Market Objectives and Goals 8-5 CORPORATE STRATEGIC DIRECTION: AN EXAMPLE Hewlett-Packard Corporation Profit — Achieve sufficient profit Customers — Provide products of greatest value Field of interest — Enter new fields judiciously Growth — Should be related to satisfaction of real customer needs People — Help our people share in company’s success Management — Foster initiative and creativity Citizenship — Honor our obligations to society CHAPTER 8: Developing Market Objectives and Goals 261 8-6 CHANGING AN ESTABLISHED DIRECTION • Need for change • Awareness • Broad support • Pockets of commitment • Clear focus • Definite commitment • New strategic direction 262 CHAPTER 8: Developing Market Objectives and Goals 8-7 DEFINING BUSINESS MISSION— TRADITIONAL VIEWPOINT Traditionally, the mission of a business corporation was framed around its product line and expressed in mottoes such as “our business is textiles,” “we manufacture cameras,” and so on CHAPTER 8: Developing Market Objectives and Goals 263 8-8 DEFINING BUSINESS MISSION— A NEW APPROACH Business is defined in terms of three measures: • Scope (breadth of a business) • Differentiation of the business unit offerings, one from another, across segments • Differentiation of the business unit offerings from those of competitors The above three measures are viewed in four dimensions: • Customer group served • Customer functions served • Technologies utilized • Level of production/distribution 264 CHAPTER 8: Developing Market Objectives and Goals 8-9 DEFINING BUSINESS MISSION— NARROW SCOPE (Thermometer) CHAPTER 8: Developing Market Objectives and Goals 265 8-10 DEFINING BUSINESS MISSION— BROADER SCOPE (Thermometer) 266 CHAPTER 8: Developing Market Objectives and Goals 8-11 DEFINING OBJECTIVES • Activities (manufacturing a specific product, selling in a particular market) • Financial indicators (targeted ROI) • Desired positions (market share, quality leadership) CHAPTER 8: Developing Market Objectives and Goals 267 8-12 ILLUSTRATION OF AN SBU'S OBJECTIVES I SBU Cooking Appliances II Mission To market to individual homes cooking appliances that perform such functions as baking, broiling, and roasting, using electric fuel technology III Objectives (general statements in the following areas): A B C Measurement Profitability Cash flow Growth/Survival Market standing Productivity Innovation Constraint Capitalize on our research in certain technologies Avoid style businesses with seasonal obsolescence Avoid antitrust problems Assume responsibility to public IV Goals Specific targets and time frame for achievement of each objective listed above 268 CHAPTER 8: Developing Market Objectives and Goals 8-13 BASES OF PRODUCT/MARKET OBJECTIVES • Profitability • Market share • Growth • Other — Technological leadership — Social contribution — Strengthening of national security — International economic development CHAPTER 8: Developing Market Objectives and Goals 269 8-14 SOURCES FOR GENERATING OBJECTIVES • Focus on material resources (e.g., oil, minerals, forest) • Concern with fabricated objects (e.g., paper, nylon) • Major interest in events and activities, handling emergencies (Emery Air Freight) • Emphasis on the kind of person whose needs are to be met: “babies are our business” (Gerber) • Catering to specific parts of the body, i.e., eyes (Maybelline), teeth (Dr West), feet (Florsheim), skin (Noxzema), hair (Clairol), beard (Gillette), and legs (Hanes) • Examination of wants and needs and seeking to adapt to them, i.e., generic use to be satisfied (nutrition, comfort, energy, selfexpression, development, conformity, etc.) 270 CHAPTER 8: Developing Market Objectives and Goals 8-15 VALIDITY TEST FOR OBJECTIVES • Is it, generally speaking, a guide to action? • Is it explicit enough to suggest certain types of action? • Is it suggestive of tools to measure and control effectiveness? • Is it ambitious enough to be challenging? • Does it suggest cognizance of external and internal constraints? • Can it be related to both the broader and the more specific objectives at higher and lower levels in the organization? [...]...CHAPTER 8: Developing Market Objectives and Goals 265 8- 10 DEFINING BUSINESS MISSION— BROADER SCOPE (Thermometer) 266 CHAPTER 8: Developing Market Objectives and Goals 8- 11 DEFINING OBJECTIVES • Activities (manufacturing a specific product, selling in a particular market) • Financial indicators (targeted ROI) • Desired positions (market share, quality leadership) CHAPTER 8: Developing Market Objectives. .. IV Goals Specific targets and time frame for achievement of each objective listed above 2 68 CHAPTER 8: Developing Market Objectives and Goals 8- 13 BASES OF PRODUCT/MARKET OBJECTIVES • Profitability • Market share • Growth • Other — Technological leadership — Social contribution — Strengthening of national security — International economic development CHAPTER 8: Developing Market Objectives and Goals. .. feet (Florsheim), skin (Noxzema), hair (Clairol), beard (Gillette), and legs (Hanes) • Examination of wants and needs and seeking to adapt to them, i.e., generic use to be satisfied (nutrition, comfort, energy, selfexpression, development, conformity, etc.) 270 CHAPTER 8: Developing Market Objectives and Goals 8- 15 VALIDITY TEST FOR OBJECTIVES • Is it, generally speaking, a guide to action? • Is it... Market Objectives and Goals 267 8- 12 ILLUSTRATION OF AN SBU'S OBJECTIVES I SBU Cooking Appliances II Mission To market to individual homes cooking appliances that perform such functions as baking, broiling, and roasting, using electric fuel technology III Objectives (general statements in the following areas): A B C Measurement 1 Profitability 2 Cash flow Growth/Survival 1 Market standing 2 Productivity... explicit enough to suggest certain types of action? • Is it suggestive of tools to measure and control effectiveness? • Is it ambitious enough to be challenging? • Does it suggest cognizance of external and internal constraints? • Can it be related to both the broader and the more specific objectives at higher and lower levels in the organization? ... national security — International economic development CHAPTER 8: Developing Market Objectives and Goals 269 8- 14 SOURCES FOR GENERATING OBJECTIVES • Focus on material resources (e.g., oil, minerals, forest) • Concern with fabricated objects (e.g., paper, nylon) • Major interest in events and activities, handling emergencies (Emery Air Freight) • Emphasis on the kind of person whose needs are to be met: “babies ...256 CHAPTER 8: Developing Market Objectives and Goals 8- 1 DEFINING OBJECTIVES AND GOALS: CHAPTER ORGANIZATION • Corporate strategic direction • SBU mission • SBU objectives and goals • Product/market... production/distribution 264 CHAPTER 8: Developing Market Objectives and Goals 8- 9 DEFINING BUSINESS MISSION— NARROW SCOPE (Thermometer) CHAPTER 8: Developing Market Objectives and Goals 265 8- 10 DEFINING BUSINESS... to public IV Goals Specific targets and time frame for achievement of each objective listed above 2 68 CHAPTER 8: Developing Market Objectives and Goals 8- 13 BASES OF PRODUCT/MARKET OBJECTIVES