LO1  Describe the kinds of organizations that exist and the three organizational levels of strategy.

An organization is a legal entity of people who share a common mission. There are two kinds. One is a business firm that is a privately owned organization that serves its customers in order to earn a profit so that it can survive. The other is a nonprofit organization that is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Most large business firms and nonprofit organizations are divided into three levels of strategy: (a) the corporate level, where top management directs overall strategy for the entire organization; (b) the strategic business unit level, where managers set a more specific strategic direction for their businesses to set value- creating opportunities; and (c) the functional level, where groups of specialists actually create value for the organization.

LO2  Describe how core values, mission, organizational culture, business, and goals are important to organizations.

Organizations exist to accomplish something for someone. To give organizations direction and focus, they continuously assess their core values, mission, organizational culture, business, and goals. Today's organizations specify their foundation, set a direction, and formulate strategies—'why,' 'what,' and 'how' factors, respectively. Core values are the organization's fundamental, passionate, and enduring principles that guide its conduct over time—what Enron forgot when it lost sight of its responsibilities to its stakeholders. The organization's mission is a statement of its function in society, often identifying its customers, markets, products, and technologies. Organizational culture is a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. To answer the question, 'What business are we in?' an organization defines its "business"—the clear, broad, underlying industry category or market sector of its offering. Finally, the organization's goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time.

LO3  Explain how organizations set strategic directions by assessing where they are now and seek to be in the future.

Managers of an organization ask two key questions to set a strategic direction. The first question, Where are we now? requires an organization to (a) reevaluate its competencies to ensure that its special capabilities still provide a competitive advantage; (b) assess its present and prospective customers to ensure they have a satisfying customer experience—the central goal of marketing today; and (c) analyze its current and potential competitors from a global perspective to determine whether it needs to redefine its business. The second question, Where do we want to go? requires an organization to set a specific direction and allocate resources to move it in that direction. Business portfolio, hedgehog, and blue ocean analyses help do this.

LO4  Describe the strategic marketing process and its three key phases: planning, implementation, and evaluation.

An organization uses the strategic marketing process to allocate its marketing mix resources to reach its target markets. This process consists of three phases, which are usually formalized in a marketing plan. The planning phase consists of (a) a situation (SWOT) analysis of the organization's strengths, weaknesses, opportunities, and threats; (b) a market-product focus through market segmentation, points of difference analysis, and goal setting; and (c) a marketing program that specifies the budget and activities (marketing strategies and tactics) for each marketing mix element. The implementation phase carries out the marketing plan that emerges from the planning phase. It has four key elements: obtaining resources, designing the marketing organization, developing schedules, and executing the marketing program. The evaluation phase compares the results from the implemented marketing program with the marketing plan's goals to identify the "planning gaps" and take actions to exploit positive deviations or correct negative ones.

LO5  Explain how the marketing mix elements are blended into a cohesive marketing program.

A marketing manager uses information obtained during the SWOT analysis, market-product focus, and goal-setting steps in the planning process to develop marketing strategies and marketing tactics for each marketing mix element for a given product, which are then implemented, as specified in the marketing plan, as a marketing program.