Page 66 - Foundations of Marketing

Planning, Implementing, and Evaluating Marketing Strategies | Chapter 2 33

“problem children,” have a small share of a growing market and require a large amount of
cash to build market share. Mercedes bicycles, for example, are a question mark relative to
Mercedes’ automobile products.
The long-term health of an organization depends on having a range of products, some that core competencies Things a
company does extremely well,
generate cash (and generate acceptable profits) and others that use cash to support growth. The
which sometimes give it an
major indicators of a firm’s overall health are: the size and vulnerability of the cash cows, the
advantage over its competition
prospects for the stars, and the number of question marks and dogs. Particular attention should
market opportunity A combi-
be paid to products that require large cash flows, as most firms cannot afford to sponsor many
nation of circumstances and
such products. If resources are spread too thin, the company will be unable to finance promis-
timing that permits an organiza-
ing new product entries or acquisitions.
tion to take action to reach a
particular target market
Assessing Organizational Resources strategic windows Temporary
periods of optimal fit between
and Opportunities the key requirements of a mar-
ket and the particular capabili-
The strategic planning process begins with an analysis of the marketing environment, includ-
ties of a company competing in
ing the industry in which the company operates or intends to sell its products. As we will see that market
in Chapter 3 , the external marketing environment, which includes economic, competitive,
competitive advantage The
political, legal and regulatory, sociocultural, and technological forces, can threaten an organi- result of a company matching a
zation and influence its overall goals. These forces affect the amount and type of resources the core competency to opportuni-
company can acquire, but can also create favorable opportunities that can help an organization ties it has discovered in the
achieve its goals and marketing objectives. marketplace
Any strategic planning effort must take into account the orga-
nization’s available financial and human resources and capabilities
and how these resources are likely to change over time, as changes
may affect the organization’s ability to achieve its mission and goals.
Adequate resources can help a firm generate customer satisfaction
and loyalty, goodwill, and a positive reputation, all of which impact
marketing through creating well-known brands and strong financial
performance. Coca-Cola, Apple, and Google all benefit from high
brand recognition and goodwill. Such strengths also include core
competencies , things a company does extremely well—sometimes
so well that they give the company an advantage over competition.
Analysis of the marketing environment also includes identify-
ing opportunities in the marketplace, which requires a solid under-
standing of the company’s industry. When the right combination of
circumstances and timing permits an organization to take action to
reach a particular target market, a market opportunity exists. For
example, Amazon recently identified a market opportunity to enter
into small business banking. As more small businesses are engaging
in online retailing, Amazon has begun to offer banking opportuni-
ties to businesses that sell their goods through the Amazon website.
Amazon believes that it can lend financing to small companies more
9
quickly and easily than a bank or commercial lender. Such oppor-
tunities are often called strategic windows , temporary periods of
optimal fit between the key requirements of a market and the partic-
10
ular capabilities of a company competing in that market. When a
company matches a core competency to opportunities it has discov-
ered in the marketplace, it is said to have a competitive advantage . Courtesy of Dyson, Inc.
Some companies possess manufacturing, technical, or marketing
skills that they can tie to market opportunities to create a competi-
tive advantage. Note in the Dyson vacuum advertisement that the Competitive Advantage
company focuses on promoting the product’s advantages over com- Dyson has gained a competitive advantage through a
peting brands. The advertisement indicates that the vacuum does not combination of product features relative to those of
lose suction from any angle, something other vacuum brands cannot competing brands.

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