Hoofdstuk 10
Strategic decisions concern the overall direction of the organisation. Strategy is
about where we want to be; decisions on tactics are about how we are going to
get there. Strategic decisions tend to be difficult to reverse; they usually involve
a rejection of other strategic options; and they generally therefore involve a
major personal commitment on the part of the decision maker. Tactical decisions
are relatively easy to change, involve less commitment, and can often run
alongside other options. Strategy is influenced by organisational objectives and
resources, competitor activities, the structure of the market itself and the firm’s
willingness to make changes and take risks. In marketing, strategic planning
revolves around issues such as launching new products, changing brand names,
deciding which segments to target and designing new promotional campaigns.
The marketing audit is a review of the firm’s current objectives, strategies,
organisation, performance and activities, and its primary purpose is to pick out
the firm’s strengths and weaknesses so that managers can improve on them in
future. It evaluates how effectively the organisation is performing its marketing
tasks within the context of the seven Ps – products, price, place, promotion,
people, processes and physical evidence.
Corporate objectives often involve trade-offs, since all firms have limited
resources and can concentrate on only one area at a time. In some cases the
tradeoffs involve diametrically opposed objectives. Weinberg3 proposes a set of
eight trade-offs in setting objectives, as follows:
1 Short-term profit v long-term growth.
2 Profit margin v market positioning.
3 Direct sales effort v market development.
4 Penetrating existing markets v developing new ones.
5P rofit v non-profit goals.
6 Growth v stability.
7Change v stability.
8 Low-risk v high-risk environments
As a general rule, most firms want to grow. Growth increases the firm’s security in
the market, it increases the power and influence of managers (not to mention
their salaries), and it reduces costs.
There are three generic strategies:
• cost leadership,which is about keeping costs low enough to be able to maintain
high profits even when competition is strong;
• differentiation,which means distinguishing the firm and its products from all
competitors; and
• focus,which is about concentrating on specific segments of the market.
Marketers usually need to concentrate most of their attention on the second two
strategies, and in particular on differentiation. Competitive tactics will depend
largely on the company’s current product portfolio, and on the activities of
competitors.
In general there are five broad ways to organise marketing tasks, as shown in
Table 10.5. An extension of the matrix organisation structure is the organismic
structure. Unlike the traditional mechanistic or bureaucratic pyramid, there is no
clear ‘boss’. Each individual contributes expertise (and effort) towards achieving
the corporate objectives. The leader for each task is determined by the project
being tackled at the time. This type of structure is typical of small consultancy
firms who may be dealing with a wide range of disparate tasks, but can be found
in larger organisations or departments of larger organisations. The main
advantage of the organismic structure is that it is extremely flexible, which
makes it a more appropriate structure for dealing with changing environments.
On the other hand, there is some evidence that organismic structures may not be
Strategic decisions concern the overall direction of the organisation. Strategy is
about where we want to be; decisions on tactics are about how we are going to
get there. Strategic decisions tend to be difficult to reverse; they usually involve
a rejection of other strategic options; and they generally therefore involve a
major personal commitment on the part of the decision maker. Tactical decisions
are relatively easy to change, involve less commitment, and can often run
alongside other options. Strategy is influenced by organisational objectives and
resources, competitor activities, the structure of the market itself and the firm’s
willingness to make changes and take risks. In marketing, strategic planning
revolves around issues such as launching new products, changing brand names,
deciding which segments to target and designing new promotional campaigns.
The marketing audit is a review of the firm’s current objectives, strategies,
organisation, performance and activities, and its primary purpose is to pick out
the firm’s strengths and weaknesses so that managers can improve on them in
future. It evaluates how effectively the organisation is performing its marketing
tasks within the context of the seven Ps – products, price, place, promotion,
people, processes and physical evidence.
Corporate objectives often involve trade-offs, since all firms have limited
resources and can concentrate on only one area at a time. In some cases the
tradeoffs involve diametrically opposed objectives. Weinberg3 proposes a set of
eight trade-offs in setting objectives, as follows:
1 Short-term profit v long-term growth.
2 Profit margin v market positioning.
3 Direct sales effort v market development.
4 Penetrating existing markets v developing new ones.
5P rofit v non-profit goals.
6 Growth v stability.
7Change v stability.
8 Low-risk v high-risk environments
As a general rule, most firms want to grow. Growth increases the firm’s security in
the market, it increases the power and influence of managers (not to mention
their salaries), and it reduces costs.
There are three generic strategies:
• cost leadership,which is about keeping costs low enough to be able to maintain
high profits even when competition is strong;
• differentiation,which means distinguishing the firm and its products from all
competitors; and
• focus,which is about concentrating on specific segments of the market.
Marketers usually need to concentrate most of their attention on the second two
strategies, and in particular on differentiation. Competitive tactics will depend
largely on the company’s current product portfolio, and on the activities of
competitors.
In general there are five broad ways to organise marketing tasks, as shown in
Table 10.5. An extension of the matrix organisation structure is the organismic
structure. Unlike the traditional mechanistic or bureaucratic pyramid, there is no
clear ‘boss’. Each individual contributes expertise (and effort) towards achieving
the corporate objectives. The leader for each task is determined by the project
being tackled at the time. This type of structure is typical of small consultancy
firms who may be dealing with a wide range of disparate tasks, but can be found
in larger organisations or departments of larger organisations. The main
advantage of the organismic structure is that it is extremely flexible, which
makes it a more appropriate structure for dealing with changing environments.
On the other hand, there is some evidence that organismic structures may not be
