Objective 5

List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

Managing the Marketing Effort 77-81

Like London 2012, outstanding marketing organizations employ strongly customer-driven marketing strategies and programs that create customer value and relationships. These marketing strategies and programs, however, are guided by broader strategic plans, which must also be customer focused. Thus, to understand the role of marketing, we must first understand the organization's overall strategic planning process.

Author I Companywide strategic

Comment | planning guides marketing strategy and planning. Like marketing strategy, the company's broad strategy v must also be customer focused, v___-

Strategic planning

The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities.

Companywide Strategic Planning: Defining Marketing's Role (PP62-70)

Each company must find the game plan for long-run survival and growth that makes the most sense given its specific situation, opportunities, objectives, and resources. This is the focus of Strategic planning—the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities.

Strategic planning sets the stage for the rest of the planning in the firm. Companies usually prepare annual plans, long-range plans, and strategic plans. The annual and longrange plans deal with the company's current businesses and how to keep them going. In contrast, the strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment.

At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission (see Figure 2.1). This mission is then turned into detailed supporting objectives that guide the whole company. Next, headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one. In turn, each business and product develops detailed marketing and other departmental plans that support the companywide plan. Thus, marketing planning occurs at the business-unit, product, and market levels. It supports company strategic planning with more detailed plans for specific marketing opportunities.

Mission statement

A statement of the organization's purpose—what it wants to accomplish in the larger environment.

Cold Stone Creamery's mission is "to make people happy around the world by selling the highest quality, most creative experience with passion, excellence, and innovation."

Defining a Market-Oriented Mission

An organization exists to accomplish something, and this purpose should be clearly stated. Forging a sound mission begins with the following questions: What is our business? Who is the customer? What do consumers value? What should our business be? These simple-sounding questions are among the most difficult the company will ever have to answer. Successful companies continuously raise these questions and answer them carefully and completely.

Many organizations develop formal mission statements that answer these questions. A mission Statement is a statement of the organization's purpose—what it wants to accomplish in the larger environment. A clear mission statement acts as an "invisible hand" that guides people in the organization. Studies have shown that firms with well-crafted mission statements have better organizational and financial performance.2

Some companies define their missions myopically in product or technology terms ("We make and sell furniture" or "We are a chemical-processing firm"). But mission statements should be market oriented and defined in terms of satisfying basic customer needs. Products and technologies eventually become outdated, but basic market needs may last forever. A Cold Stone Creamery's mission isn't simply to sell ice cream. Its mission is to "make people happy around the world by selling the highest quality, most creative ice cream experience with passion, excellence, and innovation." Likewise, eBay's mission isn't simply to hold online auctions and trading. It aims "to provide a global trading platform where practically anyone can trade practically anything"—with eBay, "Shop victoriously!" It wants to be a unique Web community in which people can safely shop around, have fun, and get to know each other, for example, by chatting at the eBay Café. • Table 2.1 provides several other examples of product-oriented versus market-oriented business definitions.3

Mission statements should be meaningful and specific yet motivating. They should emphasize the company's strengths in the marketplace. Too often, mission statements are written for public relations purposes and lack specific, workable guidelines. Says former General Electric (GE) CEO, Jack Welch:4

Few leaders actually get the point of forging a mission with real grit and meaning. [Mission statements] have largely devolved into fat-headed jargon. Almost no one can figure out what they mean. [So companies] sort of ignore them or gussy up a vague package deal along the lines of: "our mission is to be the best fill-in-the-blank company in our industry." [Instead, Welch advises, CEOs should] make a choice about how your company will win. Don't mince words! Remember Nike's old mission, "Crush Reebok"? That's directionally correct. And Google's mission statement isn't something namby-pamby like "To be the world's best search engine." It's "To organize the world's information and make it universally accessible and useful." That's simultaneously inspirational, achievable, and completely graspable.

• table 2.1 Market-Oriented Business Definitions

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