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1.1 ETHICAL DIMENSION 2
Ethical Perspective
1. Senior Management: How should senior management incorporate ethical standards at all
stages of the marketing planning process?
2. Marketing Managers: A company’s brands can be quickly impacted by negative publicity
surrounding ethical scandals. How might they be impacted and what might a marketing
manager do to reestablish a brand damaged in this way?
3. The Public: Company image and trust can be regained by a CEO’s quick public
acknowledgment of an ethics problem accompanied by plans for changes in practice. What
could HP’s CEO have done better?
1.2 KEY TERMS
benefits The advantageous outcome from the advantage found in a product feature.
utility The want-satisfying power of a good or service. There are four types of utility: form
utility, time utility, place utility, and ownership utility.
value proposition The whole bundle of benefits a company promises to deliver to the customer,
not just the benefits of the product itself.
customer satisfaction The level of liking an individual harbors for an offering.
customer loyalty A customer’s commitment to a company and its products and brands for the
long run.
customer retention Low propensity among a firm’s customer base to consider switching to other
providers.
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value chain The synthesis of activities within a firm involved in designing, producing,
marketing, delivering, and supporting its products or services.
value-creating activities Activities within a firm’s value chain that act to increase the value of
its products and services for its customers. These can take the form of either primary activities
or support activities.
marketing planning The ongoing process of developing and implementing market-driven
strategies for an organization.
marketing plan The resulting document that records the marketing planning process in a useful
framework.
market-driven strategic planning The process at the corporate or strategic business unit (SBU)
level of a firm that acts to marshal the various resource and functional areas toward a central
purpose around the customer.
corporate-level strategic plan An umbrella plan for the overall direction of the corporation
developed above the strategic business unit (SBU) level.
SBU-level strategic plan Planning that occurs within each of the firm’s strategic business units
(SBUs) designed to meet individual performance requirements and contribute satisfactorily to
the overall corporate plan.
portfolio analysis A tool used in strategic planning for multibusiness corporations that views
SBUs, and sometimes even product lines, as a series of investments from which it expects
maximization of returns.
Boston Consulting Group (BCG) Growth-Share Matrix A popular approach for in-firm
portfolio analysis that categorizes business units’ level of contribution to the overall firm based
on two factors: market growth rate and competitive position.
GE business screen A popular approach for in-firm portfolio analysis that categorizes business
units’ level of contribution to the overall firm based on two factors: business position and market
attractiveness.
functional-level plans Plans for each business function that makes up one of the firm’s strategic
business units (SBUs). These include core business functions within each SBU such as
operations, marketing, finance, as well as other pertinent operational areas.
mission statement The verbal articulation of an organization’s purpose, or reason for existence.
strategic vision Often included within a firm’s mission statement, it is a discussion of what the
company would like to become in the future.
goals General statements of what the firm wishes to accomplish in support of the mission and
vision.
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objectives Specific, measurable, and potentially attainable milestones necessary for a firm to
achieve its goals.
strategy A comprehensive plan stating how the organization will achieve its mission and
objectives.
generic strategy An overall directional strategy at the business level.
competitive strategy An organization-wide strategy designed to increase a firm’s performance
within the marketplace in terms of its competitors.
core competencies The activities a firm can do exceedingly well.
distinctive competencies A firm’s core competencies that are superior to those of their
competitors.
sustainable competitive advantage The resulting advantage a firm has when it invests in
distinctive competencies.
strategic type Firms of a particular strategic type have a common strategic orientation and a
similar combination of structure, culture, and processes consistent with that strategy. Four
strategic types are prospectors, analyzers, defenders, and reactors—depending on a firm’s
approach to the competitive marketplace.
first-mover advantages When a firm introduces a new market offering, thus defining the scope
of the competitive marketplace.
situation analysis An analysis of the macro and micro-level environment within which a firm’s
marketing plan is being developed.
SWOT analysis A convenient framework used to summarize key findings from a firm’s
situational analysis into a matrix of strengths, weaknesses, opportunities, and threats.
market penetration strategies Strategies designed to involve investing against existing
customers to gain additional usage of existing products.
product development strategies Strategies designed to recognize the opportunity to invest in
new products that will increase usage from the current customer base.
market development strategies Strategies designed to allow for expansion of the firm’s product
line into heretofore untapped markets, often internationally.
diversification strategies Strategies designed to seize on opportunities to serve new markets
with new products.
marketing control The process of measuring marketing results and adjusting the firm’s
marketing plan as needed.
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1.3 APPLICATION QUESTIONS
1 What is a value proposition? For each of these brands, articulate your perception of their key
value proposition:
4. Consider the concept of the value chain. Identify a firm that you believe does an especially
good job of investing in elements in the value chain in order to gain higher profit margins
versus competition. Which two or three elements in the value chain does that firm handle
especially well? For each of those elements, what do they do that is better than their
competition?
5. Why is it so important for marketing managers, when engaged in marketing planning, to
successfully deal with both Marketing (Big M) and marketing (little m) elements? What
would be the likely negative outcome if a marketing plan paid a lot of attention to strategies
and little attention to tactics? What would be the likely negative outcome of the reverse?
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6. Consider firms in any area of the retail business. Using Miles and Snow’s Strategy Types,
identify the following: (1) a firm that you believe is a prospector; (2) a firm that you believe
is an analyzer; (3) a firm that you believe is a defender; and (4) a firm that you believe is a
reactor. What characteristics of each led you to conclude they belong in their respective
strategy type?
7. Historically, the theme park industry in Orlando is heavily impacted by a large number of
macro-level external environmental factors. From each of the five major categories of
macro-level external factors, identify a specific example of how some element within that
category might impact a theme park’s marketing planning for the next couple of years. Be
sure to explain why you believe each of your examples will be important for marketing
managers to consider as they develop their marketing plans.
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MANAGEMENT DECISION CASE: Hewlett-Packard and the Case
Questions for Consideration
1. As HP continues to make changes to its overall strategy, what other aspects of the situation
analysis beyond those element mentioned above should Meg Whitman and other leaders pay
special attention to?
2. What strengths does HP have that they can use to take advantage of various opportunities or
minimize threats in the external environment?
3. Given what you know about HP and its situation, what product-market strategy or strategies
would you recommend the company adopt to improve its performance and return on
investment?
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1.4 SUGGESTED VIDEO
BP: Transforming its Strategy “Beyond Petroleum” (7:52 minutes)
Description: Senior Vice President of BP Global Brand and Marketing & Innovation speaks on
one of their Brand Values “going green” and having a lower impact on the environment by
designing an innovative gas station and apply to their other 25,000 sites.
1. Are people more likely to purchase gas from BP because of its commitment to the
environment?
2. In light of the recent crisis in the Gulf of Mexico, how does BP convince the public that they
are sincere about caring about the environment?
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