Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

4. Evaluating Opportunities
   in the Changing Marketing
   Environment

Text © The McGraw−Hill

Companies, 2002

Evaluating Opportunities in the Changing Marketing Environment 97

Some top managements want a large market share because they feel this ensures

greater profitability. But many large firms with big market shares, like Eastern Air-

lines, have gone bankrupt. These firms sought large market shares—but earned little

profit. Increasingly, managers are shifting their objectives toward profitablesales

growth rather than just larger market share—as they realize that the two don’t nec-

essarily go together.^6

You can see why the marketing manager should be involved in setting company

objectives. Company objectives guide managers as they search for and evaluate

opportunities—and later plan marketing strategies. Particular marketingobjectives

should be set within the framework of larger company objectives. As shown in

Exhibit 4-1, firms need a hierarchy of objectives—moving from company objectives

to marketing department objectives. For each marketing strategy, firms also need

objectives for each of the four Ps—as well as more detailed objectives. For exam-

ple, in the Promotion area, we need objectives for advertising, sales promotion, and

personal selling.

Toyota provides a good example. One of its company objectives is to achieve

high customer satisfaction. So, the R&D people design vehicles to meet specific

reliability objectives. Similarly, the production people work to cut manufacturing

defects. The marketing department, in turn, sets specific customer satisfaction

objectives for every product. That leads to specific promotion objectives to ensure

that the sales and advertising people don’t promise more than the company can

deliver. Dealers’ service people, in turn, work to fix any problem the first time it’s

reported.

Both company objectives and marketing objectives should be realistic and

achievable. Overly ambitious objectives are useless if the firm lacks the resources to

achieve them.

Company

objectives

R&D

objectives

Marketing

objectives

Finance

objectives

Production

objectives

Product

objectives

Place

objectives

Promotion

objectives

Price

objectives

Sales

promotion

objectives

Mass selling

objectives

Personal

selling

objectives

Human

resource

objectives

Exhibit 4-1 A Hierarchy of Objectives

Company objectives

should lead to

marketing objectives

Company Resources May Limit Search for Opportunities

Every firm has some resources—hopefully some unique ones—that set it apart.

Breakthrough opportunities—or at least some competitive advantage—come from

making use of these strengths while avoiding direct competition with firms having

similar strengths.