In business, a strategic business unit is a profit center which focuses on product offering and market segment. Strategic business units typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.
A strategic business unit may be a business unit within a larger corporation, or it may be a business into itself or a branch. Corporations may be composed of multiple strategic business units, each of which is responsible for it’s own profitability. General Electric is an example of a company with this sort of business organization. Strategic business units are able to affect most factors which influence their performance. Managed as separate businesses, they are responsible to a parent corporation.
An example of a strategic business unit is General Electric. Product offering typically encompasses a strategic business unit.
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A strategic business unit (SBU) is an organizational subunit that acts like an independent business in many major respects, including the formulation of its own strategic plans and its own marketing strategy. An SBU may share its parent organization’s corporate identity or develop its own brand identity, depending on the degrees of freedom allowed to the management of the division.
A one-fit-all strategic approach would be inadequate in large, diversified organizations and multinational companies. Dividing the corporation’s operations into SBUs increases efficiency and market focus and efficiently organizes the business portfolio of a broadly diversified company.
SBUs are found to be a viable form of organizational sectioning because they ensure that products and product lines are given specialized focus, as if they were developed and marketed by an independent company. Products with smaller sales volumes and profit margins than a corporation’s top performers would still be nurtured and promoted by its SBU. The division would focus on a market sector that may be small in comparison but still constitutes a profitable market niche.
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The introductory definition of the marketing environment stated that, “it is the sum of the total of the factors or variables which potentially influence the marketing of a product or service".
In order to expose a list of possible influencing factors, it is necessary to refer to references made to the marketing environment by recognized authors.
It consists of a number of external components (i.e., external sub-environments) which influence the organization’s marketing practices either directly or indirectly. In the first chapter of this book, it is indicated that the evolution of the marketing concept and the stages through which it passed, was an outgrowth of the changes in the surrounding environment. This indicates that examining and responding to the marketing environment is considered an important practice for the success of any organization. It is worthwhile to note that marketing is probably the function that is most influenced by the external environment in an organization.
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Consumerism is the belief that personal wellbeing and happiness depends to a very large extent on the level of personal consumption, particularly on the purchase of material goods. The idea is not simply that wellbeing depends upon a standard of living above some threshold, but that at the center of happiness is consumption and material possessions. A consumerist society is one in which people devote a great deal of time, energy, resources and thought to “consuming”. The general view of life in a consumerist society is consumption is good, and more consumption is even better.
Consumerism --the consumption of goods and services in excess of one’s basic needs, usually in greater and greater quantities --is not a new phenomenon, and early examples of consumerism can be traced back to the fist human civilizations. A significant consumerist tide hit Europe and North America in the mid-18th Century as a result of the Industrial Revolution and the transformation of Western Europe’s and North America’s economies.
The mechanization of a number of processes such as farming freed a certain percentage of the workforce from farming, fuelled both the Industrial Revolution and population growth. As industrialization created the conditions for mass production and mass consumption, for the first time in history, immense quantities of manufactured goods were suddenly available at outstandingly low prices, and thus made available to nearly everyone.
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Customer satisfaction is defined as a customer’s overall evaluation of the performance of an offering to date. This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories.
The satisfaction judgment is related to all the experiences made with a certain business concerning its given products, the sales process, and the after- sale service. Whether the customer is satisfied after purchase also depends on the offer’s performance in relation to the customer’s expectation. Customers form their expectation from past buying experience, friends’ and associates’ advice, and marketers’ and competitors’ information and promises.
Factors which determine the extent of expectations are: customer needs, total customer value and total customer cost. It is mentioned by researchers who study customer choice that choosing a product or service is only one of the stages customers go through.
There is general agreement that: Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. Based on this review, customer satisfaction is defined as the result of a cognitive and effective evaluation, where some comparison standard is compared to the actually perceived performance. If the perceived performance is less than expected, customers will be dissatisfied. On the other hand, if the perceived performance exceeds expectations, customers will be satisfied. Otherwise, if the perceived expectations are met with performance, customers are in an indifferent or neutral stage.
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