Lec 04- Developing Successful Marketing and Organizational Strategies
Summary
TLDRThis video script introduces marketing essentials, covering organizational types, strategy levels, and core values. It explains the roles of for-profit, non-profit, and industry organizations, and delves into strategic planning, including setting direction, using marketing analytics like dashboards and metrics for performance tracking, and assessing current and future business positions with tools like the BCG Matrix and Ansoff Matrix. The module aims to guide organizations in making informed strategic decisions for growth and success.
Takeaways
- 🏢 Organizations are legal entities with a common mission, creating value for both the organization and its customers through offerings such as products, services, or ideas.
- 💼 There are three types of organizations: for-profit businesses, non-profit organizations including government agencies and social entrepreneurships, and industries which are groups of organizations with similar offerings.
- 📈 For-profit businesses aim to earn a profit as a reward for the risks they take, while non-profit organizations focus on goals other than profit, such as operational efficiency or customer satisfaction.
- 🌐 Social entrepreneurs use business concepts to address social needs and are often structured as non-profit organizations, exemplified by initiatives like Teach for India.
- 🔍 Understanding the industry in which an organization competes is crucial for formulating effective marketing strategies and identifying competitors within that industry.
- 📊 Large organizations typically have three levels of strategy: corporate level, strategic business unit (SBU) level, and functional level, each with its own specific strategic direction and role in creating value.
- 🛣 Strategy is a long-term course of action that helps an organization achieve its goals by focusing efforts and delivering a unique customer experience.
- 📝 Core values, mission, organizational culture, and business goals are fundamental to an organization's foundation and guide its strategic direction.
- 📋 Marketing dashboards and metrics are essential tools for tracking strategic performance, allowing managers to quickly identify deviations from plans and take corrective actions.
- 📈 The BCG Matrix and diversification analysis are techniques used to assess an organization's current situation and identify growth opportunities, categorizing SBUs based on market growth rate and relative market share.
- 🎯 Setting strategic direction involves answering key questions about an organization's current position and desired future state, considering competencies, customers, and competitors.
Q & A
What are the three kinds of organizations discussed in the script?
-The three kinds of organizations discussed are for-profit organizations, non-profit organizations, and industries. For-profit organizations are private businesses aimed at earning profits. Non-profit organizations include government agencies and social entrepreneurships that do not aim for profit as their primary goal. Industries are groups of organizations that develop similar offerings.
What is the difference between a for-profit organization and a non-profit organization?
-A for-profit organization is a privately owned entity that operates to earn profits, with profit being the reward for the risks taken in business operations. In contrast, non-profit organizations serve their customers or clients without profit as their organizational goal; their goals may focus on operational efficiency, customer satisfaction, or addressing social needs.
What are the three levels of strategy in an organization?
-The three levels of strategy in an organization are the corporate level, the strategic business unit (SBU) level, and the functional level. The corporate level involves top managers directing the overall strategy for the entire organization. The SBU level involves managers setting more specific strategic directions for their business units. The functional level involves specialist groups creating value for the organization.
What is a marketing dashboard and why is it used?
-A marketing dashboard is a visual computer display of essential marketing information related to achieving a marketing objective. It is used to track strategic performance, allowing managers to quickly spot deviations from plans and take corrective actions.
What is an industry and how does it relate to an organization's marketing strategy?
-An industry consists of organizations that develop similar offerings, such as the computer, automobile, or clothing industries. Understanding the industry within which an organization competes is crucial for developing a clear marketing strategy, as it helps to identify the competitive landscape and target market.
What are core values and how do they guide an organization?
-Core values are the fundamental, passionate, and enduring principles that guide an organization's actions and decisions. They serve as the foundation for an organization's culture and operations, ensuring consistency in behavior and ethical standards.
What is the role of marketing in setting an organization's strategic direction?
-Marketing plays a crucial role in setting an organization's strategic direction by helping to define the long-term course of action that delivers a unique customer experience while achieving the organization's goals. It aids in focusing and directing the organization's efforts.
What is the definition of strategy according to Philip Kotler?
-According to Philip Kotler, strategy is a game plan to achieve an organization's goals. It outlines the steps and actions needed to reach the desired objectives.
What are the different types of goals that a business firm can pursue?
-A business firm can pursue various types of goals, including profit, sales, market share, quality, customer satisfaction, employee welfare, and social responsibility. These goals can guide the firm's operations and strategic decisions.
What is the BCG Matrix and how does it help in business portfolio analysis?
-The BCG Matrix, developed by the Boston Consulting Group, is a tool used for business portfolio analysis. It helps managers quantify the performance measures and growth targets of their strategic business units by plotting them on a matrix with market growth rate on the vertical axis and relative market share on the horizontal axis. The matrix divides the SBUs into four categories: Question Marks, Stars, Cash Cows, and Dogs, indicating their potential for growth and cash generation.
What is diversification analysis and how does it assist in identifying growth opportunities?
-Diversification analysis is a technique that helps a firm identify growth opportunities by examining the potential of current and new markets as well as current and new products. It is often visualized using the Ansoff Matrix, which presents four options: market penetration, market development, product development, and diversification, allowing companies to assess their strategic direction for growth.
Outlines
🏢 Organizational Types and Strategy Levels
This paragraph introduces the concept of different types of organizations, including for-profit businesses, non-profit organizations, and industries. It explains that organizations are legal entities with a shared mission, offering products, services, or ideas to create value for both the organization and its customers. The paragraph also discusses the three levels of strategy within large organizations: corporate level, strategic business unit (SBU) level, and functional level, each with its specific role in directing the overall strategy.
📈 Understanding Organizational Strategy
The second paragraph delves into the structure of today's organizations, emphasizing the complexity of large entities and the interlinking strategies across different levels. It defines strategy as a long-term course of action aimed at achieving goals and delivering a unique customer experience. The importance of being forward-looking and formulating strategies at the corporate, SBU, and functional levels is highlighted. The paragraph also outlines the steps visionary organizations take to establish a foundation, set direction, and create strategies for successful product development and marketing.
🛠️ Organizational Foundations and Direction
This paragraph focuses on the foundational elements of an organization, including core values, mission, vision, and organizational culture. It discusses the importance of defining an organization's direction by understanding the underlying industry or market sector and the types of goals an organization may pursue, such as profit, sales, market share, and customer satisfaction. The paragraph also touches on the variations in strategy by different levels within an organization and the use of marketing analytics tools like marketing dashboards and metrics to track performance.
📊 Marketing Analytics and Strategic Performance
The fourth paragraph introduces marketing analytics as a tool for tracking strategic performance. It describes the use of marketing dashboards to provide a visual display of essential marketing information and marketing metrics to measure the effectiveness of marketing activities. Data visualization is presented as a means for managers to quickly identify deviations from plans and take corrective actions. The paragraph also provides an example of a marketing dashboard, illustrating how it can display website traffic sources and sales performance by SBU.
🚀 Setting Strategic Directions
This paragraph discusses the process of setting strategic directions for an organization, which involves answering two key questions: 'Where are we now?' and 'Where do we want to go?' It emphasizes the importance of understanding the current situation and future aspirations. The paragraph introduces the concept of competencies, which are the special capabilities that provide a competitive advantage and customer value. It also outlines growth strategies, including business portfolio analysis and diversification analysis, as tools to aid in decision-making for future direction.
🌐 Business Portfolio and Diversification Analysis
The final paragraph concludes the module by discussing business portfolio analysis and diversification analysis in detail. It explains how the BCG Matrix classifies SBUs based on market growth rate and relative market share, resulting in categories like question marks, stars, cash cows, and dogs. Diversification analysis is presented as a technique for identifying growth opportunities across current and new markets and products. The paragraph also includes the Ansoff Matrix, which outlines four strategies: market penetration, market development, product development, and diversification. The module wraps up with acknowledgments and a thank you note.
Mindmap
Keywords
💡Organization
💡For-Profit Organization
💡Non-Profit Organization
💡Social Entrepreneur
💡Industry
💡Marketing Strategy
💡Core Values
💡Mission Statement
💡Marketing Dashboard
💡Marketing Metrics
💡Competencies
💡BCG Matrix
💡Diversification Analysis
Highlights
Introduction to Marketing Essentials covers three kinds of organizations and their strategic levels.
Core values, mission, organizational culture, business goals, and marketing dashboards are essential components of organizational strategy.
For-profit organizations aim to earn profits, while non-profit organizations focus on operational efficiency and customer satisfaction.
Social entrepreneurs address social needs using business concepts, often structured as non-profit organizations.
Industries are formed by organizations that develop similar offerings, which is crucial for understanding marketing strategies.
Organizational structure typically includes corporate, strategic business unit (SBU), and functional levels, each with distinct strategic roles.
Strategy formulation involves setting a direction and developing a game plan to achieve business goals.
Visionary organizations must anticipate future events and respond effectively, establishing a foundation, and setting a clear direction.
Organizational foundations include core values, mission, and culture, which guide an organization's actions and decisions.
Organizational direction involves understanding the underlying industry or market sector and defining business goals and objectives.
Business firms can pursue various goals such as profits, sales, market share, quality, customer satisfaction, and social responsibility.
Strategic performance can be tracked using marketing analytics tools like marketing dashboards and metrics.
Data visualization helps managers quickly spot deviations from plans and take corrective actions in marketing strategies.
Setting strategic directions requires answering where the organization is currently and where it aims to go.
Competencies, including core competencies and special capabilities, are essential for an organization's competitive advantage.
Business portfolio analysis and diversification analysis are techniques to identify growth strategies and future direction.
The BCG Matrix and Ansoff Matrix are tools for analyzing an organization's strategic position and growth opportunities.
The module concludes with an understanding of different organizational types, the importance of strategy, and the use of marketing analytics for strategic direction setting.
Transcripts
foreign
[Music]
introduction to marketing Essentials and
let us look at what are the things that
will be covered in this module so this
module starts with describing the three
kinds of organization and the three
levels of strategy in them
then it describes what are core values
Mission organization culture business
and goals
then we will explain why managers use
marketing dashboards and marketing
metrics and then in the last we will
discuss how an organization assesses
where it is now and where it seeks to be
to start with in studying today's
Visionary organizations it is important
to recognize these three things the
first is
the kind of organizations that exist
today the second is
what strategy is and the third is
how this strategy relates to the three
levels of structure found in many large
organizations now let us try to answer
this question what is an organization
an organization is a legal entity that
consists of people who share a common
Mission they develop offerings
offerings means products services or
ideas that create value for both the
organization and its customers
by satisfying their needs and wants
what are the different types of
organization different kinds of
organization
so first type of organization first kind
of organization is for-profit
organization normal business firms
and the second kind of organizations are
non-profit organizations
that will include government agencies
and social entrepreneurship
and then there is another thing that is
called as Industries
let us look at each one of them so what
is the business form
a business firm is a private privately
owned organization that serves its
customers to earn a profit so that it
can survive profit is the reward to a
business firm for the risk that it takes
to undertake its marketing office
offering
it is the money left after the business
firms total expenses are subtracted from
its total revenues
what are non-profit organizations
they are non-government organizations
they serve
their customers but do not have profit
as an organization goal while business
firm has profit as a organization goal
non-profit organization although they
may be doing the same thing but they do
not have
profit as an organizational goal
its goal may be operational efficiency
or satisfaction of the customers or
client satisfaction social entrepreneurs
like teach for India seek to solve the
Practical needs of society and are
usually structured as non-profit
organizations
how to go about making responsible
decisions
these new types of organizations they
help entrepreneurs Focus
on the passion and purpose so what are
social entrepreneurs
they address important social needs and
issues use business Concepts to change
the world for good for example
next gen West helps Generation Z
navigate navigate financial aid and
student loans
another example of a social entrepreneur
is teach for India now let us understand
what is an industry
organizations that develop similar
offerings
create an industry and recall that
offerings are all those products
services and ideas so organizations that
develop similar offerings they create an
industry such as computer industry or
automobile industry or shoe industry or
clothing industry
much of an organizations marketing
strategy is having a clear understanding
of the industry within which it competes
so this when we talk of competition we
are generally talking of within industry
competition so your marketing strategy
before you go about making a marketing
strategy you should be clear about
the industry in which the this company
your company competes now what is the
structure of today's organization
keep in mind that large organizations
are extremely complex
this usually consist of three
organizational levels whose strategies
are linked to marketing the first level
is the corporate level
the second level is
strategic business unit or sbu level
and the third level is
the functional level
in this functional level you you can
have two different types for one is the
department the second is cross
functional teams
so what is this corporate level at the
corporate level top managers Direct
overall strategy for the entire
organization
so at this level the top management
the top managers they Direct
the overall strategy for whole of this
organization
then what happens at the Strategic
business unit or sbu level
the managers at sbu level set a more
specific strategic Direction
for their businesses to exploit value
creating opportunities
and how this strategy looks like at the
third level that is the functional level
the groups of a specialist actually
create value for the organization
so they at the top level they Direct
now at the SVU level the strategies
become more
they have more specific strategic
Direction and at the functional level
they create value for the organization
so this is what it looks like at the top
is the board of directors
then comes the corporate level
sbu level and then the functional level
at functional level you have all these
departments the information system
Department the finance department r d
Department marketing operations and
human resource department
so strategy you see that strategy is
Flowing from
from the board of directors to the
corporate level to the sbu level and
then to the functional level that is at
that department level and this is where
these departments they create value
now after having understood the three
levels of organization now let us look
at what is strategy
an organization has limited human
Financial technological and other
resources
available to produce and markets is
offering it cannot be all thing to all
people therefore every organization must
develop strategies to help focus and
direct its efforts to accomplish its
goals
all organizations set a strategic
Direction
marketing helps to both set this
direction and move the organization
there so this is how marketing helps the
organization
by setting the direction and taking the
organization
there
and organizations long-term course of
action
that delivers a unique customer
experience while achieving its goals so
that is one concept one definition of
strategy another is goals indicate what
a business unit wants to achieve
strategy is a game plan to get there
that is by Philip kotler
so how this strategy happens in
Visionary organizations
to be successful
today's organizations must be forward
looking they must both anticipate future
events
and respond quickly and effectively
so a visery organization must
specify its foundation why does it exist
that is the first thing second
it should set a direction what will it
do
and third
formulate strategies how will it do that
so the first thing that visually
organization must do is to decide why do
they exist
then they will decide what will it do
and then how will it do it
Visionary organizations use key elements
too
first establish a foundation
and second set a Direction
using
the third one that is strategies that
enable them to develop and Market their
products successfully
so
let us start from here I am writing one
overhead over this organizational
Foundation that is why
why do we exist core values
vision and Mission and the organization
culture
the second is the organizational
Direction what what businesses what
goals and objectives both long term and
short term
and the third is organizational strategy
is how
at various levels that is the corporate
sbu and functional level
and buy a product that is
good services and idea
so now let us look at the organizational
foundations why does it exist so there
are three elements of organizational
foundations which are the first is the
core values
the fundamental passionate and enduring
principles that guide an organization
are the core values
second is the mission a statement or
vision of an organization's function in
society and the third is
organizational culture the set of values
ideas attitudes and behavioral Norms
that are learned and shared among the
members of an organization
next thing that we need to understand is
what is organizational Direction what
will it do
businesses the underlying industry or
Market sector often organizations
offering what do we do what businesses
are we really in so these are the some
of the questions that organizations have
to continuously ask and answer what do
we do
what businesses are we really in
so the questions may seem to be similar
on the face of them but then the answers
can be very thought provoking and it may
take it may take lots of time for the
organization to answer these questions
and thereby clarify their organizational
Direction goals and objectives
targets of performance to be achieved
Often by a specific time
business firms can pursue several
different types of goals
now these are the various types of gold
that any business home can pursue
they can pursue profits sales market
share quality customer satisfaction
employee welfare social responsibility
they are just to name a few
so this is not exhaustive list
some organization May seek to be
technology leader
ah variation by level there can be
variations in the strategy by various
levels the corporate sbu and functional
and there can also be Variations by
product or offering that is product
service or idea how to go about tracking
strategic performance with marketing
Analytics
one such tool is marketing dashboard
this visual computer display of
essential marketing information related
to achieving a marketing objective
second is marketing metrics a measure of
the value or trend of a marketing
activity or result and the third is data
visualization it presents information
about an organization's marketing Matrix
graphically so marketers can quickly
spot deviation from the plans and take
Collective action so the idea of data
visualization is that it becomes easier
for the managers to track
major differences they can spot
deviation from the plans and then
they can timely take corrective actions
and effective marketing dashboard health
manager assess a business situation at a
glance so now this figure shows
the it comes from
Dundas data visualization incorporation
now you see that this is on the left we
have this marketing dashboard as of the
December 2015. so it says about website
traffic sources
and there is this month and last month
now this this circle
this circle it shows
from where the traffic is coming so
there is Google LinkedIn YouTube and
Twitter Facebook and direct traffic
these are the various percentages
then there are various search engines so
there are these are referral sides then
there are some search engines and then
direct traffic now on the right they are
giving this sales performance by sbu
so what is the sales performance of
Hardware sbu what is the sales
performance of electronics sbu
and what is the sales that comes from
software and peripherals and then you
have this grand total now what does this
red means
so
this is for revenues versus targets so
when when they are showing red
in front of Hardware it means that the
revenues
actual revenues they are not meeting the
targets
then this is the third display that is
website visit by the state it tells from
which state websites are their website
are being visited by
so they can understand from which state
people are viewing their website more
and
from which site they are coming to their
site is it through the Facebook Twitter
or through Google or Bing or they come
to their website directly
so this again gives a detailed view
about this data marketing dashboard that
is the website traffic sources
from Facebook it comes 15 percent of it
comes from Twitter the 13 and from
YouTube it is 10 percent from Search
Engine 34 and from being it is three and
from direct traffic it is 16 percent so
approximately it it totals up to 100 so
now you see that in search engine you
see 30 34 percent comes from Google
while only three percent comes from Bing
and
from referral sites Facebook contributes
most to the visit while LinkedIn and
others it has a small share in that
another thing that it it showed was the
sales performance by
the sbu so now on this here you are you
can look at this 13 month trend
it is normal it is it is a straight line
here it goes up and come down
for hardware for electronics it is more
erratic software it is coming down
peripherals again it goes up comes down
and the grand total so this is how this
this revenues and targets they match up
then this third slide it shows marketing
dashboard that is monthly website visit
by the state
so the these white States they where the
the color is white there no visitors are
coming from those States
from Blue
ten thousand from light blue ten
thousand people are visiting and from
black twenty thousand visitors are
visiting their website so now it it
becomes easier for the company to to
Target the states
and it also becomes easier for the
company to look at which sbus are
performing good and which are not
performing good so now this becomes
easier for the managers to just have a
glance and understand what is happening
the then we come to setting strategic
directions
to set a strategic Direction an
organization needs to answer two
difficult question
one is where are we now
and the second is
where do we want to go sorry this is
second
so
when we have to to set a strategic
Direction these are the two difficult
questions that need to be answered where
are we now and from here where do we
want to go so it involves that you
should be first clear that where you are
standing
once that becomes clear
another difficult question is where do
you want to go from here
now if you
get the answer to the first question
wrong then obviously the answer to the
second question will go wrong the first
thing that you do that you need to do is
to answer the first question very
clearly and then the second question
then becomes slightly more easier to
answer
now this involves identifying
competencies that is the competitive
Advantage the competitors and the
customers so in order to answer these
two questions where are we now and where
do we want to go
we have to
identify our competencies that is our
competitive advantage
our customers and our competitors
so what are competencies
competencies are what do we do best and
organizations core competencies are its
special capabilities
the skills Technologies and resources
that distinguish it from other
organizations and provide customer value
and organizations core competencies are
its special capabilities special
capabilities special capabilities may
include the skills
the technologies that they have and
other resources
now these three put together should also
be able to distinguish it from other
organizations
one
from other organizations this is the one
thing that it does and second is it also
should provide customer value so both of
them should be looked after
simultaneously
exploiting these competencies
can lead to success
competencies should be distinct enough
to provide competitive advantage
so one characteristics of
competency is that there should be
distinctive enough or unique strength
relative to competitors that provide
Superior returns often based on quality
time cost or innovation so these
competencies should be distinctive
enough to provide competitive Advantage
how a unique strength that is related to
the competitors and that provides
Superior returns
how they should provide Superior returns
based on quality time cost or innovation
now customers identify
who do we want to serve so who are
customers therefore the answer needs to
be the question needs to be answered is
who do we serve a strategy must provide
genuine value to customers to ensure
that they have a satisfying experience
and who are the competitors
in today Global Marketplace the
distinction be among competitors are
increasingly blurred
firms compete on different channels and
due to advances in internet technology
the competition is increasing another
thing that you need to understand is
where do we want to go
till now we were looking at where are we
we are where are we standing now we are
looking at where do we want to go so
there are these growth strategies so
these two techniques
Aid managers with their decision first
is the business portfolio analysis and
second is diversification analysis these
two analysis
tells a tells us where do we want to go
so what is this business portfolio
analysis it is a technique that manages
use two quantify performance measures
and growth targets of their firms
strategic business unit
the BCG
that is Western Consulting Group
business portfolio analysis requires an
organization to locate the position of
each of its sbu on a growth share Matrix
so a growth share Matrix is made and
each sbu is located on that Matrix
on the vertical axis is the market
growth rate and on the horizontal axis
it is the relative market share keep in
mind we are talking of relative market
share and not just the market share that
BCG Matrix has given specific names and
descriptions to the four resulting
quadrants
these are based on the amount of cash
they generate for or required from the
organization
so these are the four quadrant
first is the question mark that is low
share
of a high growth Market
stars that is high share of a high
growth Market
the third is Cash cows that generate
large amount of cash and dogs low share
of a slow growth markets
this is what this BCG looks like now you
see on this x axis we have this relative
markets here
relative market share means share
related related to the largest
competitor
so we are worried about the largest
competitor and not all the competitors
on this axis we have this market growth
rate that is percent per year this
market growth rate it can go from minus
42 plus 40 or minus 10 to 2 plus 10 Etc
etcetera and on x axis that is relative
market share it is 10x 1X and 0.1 x x is
the share of the largest competitor so
you can be 10 times the share of the
largest competitor or one time or point
one times now if you look at this
quadrant which which is mentioned as one
here so these are
High Mark in the in this quadrant the
market growth rate is high
while the relative market market share
is low
so that is why they are called as
question marks here in cash cows you are
much bigger than the competitors
here in this you are much bigger than
your ah nearest largest competitor but
the growth rate is not there so that is
why they are called as cash cows you can
take lots of money from from this place
while in stars both of them are high
your your market share related to the
competitor is also very high and the
market growth rate is also very high
another
analysis that needs to be done is
diversification analysis
diversification analysis is a technique
that helps a firm
search for growth opportunities from
among current and new markets as well as
from amongst current and new products
now these are the four options that a
company can have the first is Market
penetration
that is increased sales of current
products in current markets
the second is Market development cell
current products to New Markets
third is product development cell new
products to current markets and the
fourth is
diversification develop new products to
sell in New Markets now this is what
this Matrix looks like this is we are
talking of diversification analysis
and this Matrix is called as and soft
Matrix
on one axis you have products
current and new on another axis you have
markets current and new so when the
product is current and the markets are
current it is Market penetration when
the products are new the markets are
current then it is
3.
when the markets are new and the current
and the product is current it is to when
both of them are new then it becomes
diversification so this fourth is
diversification
to conclude
we started this module by introducing
different kinds of organizations
and understanding the concept of
strategy
then we went on to discuss about the
importance of core values Mission
organizational culture business and
goals of an organization
further we have studied the importance
of marketing Analytics
by way of understanding what are
marketing dashboards and marketing
metrics and finally we focused on
setting
strategic directions for the
organization
which included assessing the current
situation and deciding on the future
course of Direction
these are the three books from which
from where the material for this this
module were take was taken thank you
[Music]
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