Transcript Chapter 2

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Company and Marketing
Strategy: Partnering to Build
Customer Relationships
ROAD MAP: Previewing the Concepts
• Explain companywide strategic planning and its
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four steps.
Discuss how to design business portfolios and
growth strategies.
Explain marketing’s role in strategic planning
and how marketing works with its partners to
create and deliver customer value.
Describe the elements of a customer-driven
marketing strategy and mix, and the forces that
influence it.
List the marketing management functions,
including the elements of a marketing plan.
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Strategic Planning
Strategic Planning is the Process of
Developing and Maintaining a
Strategic Fit Between the
Organization’s Goals and
Capabilities and Its Changing
Marketing Opportunities.
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Steps in Strategic Planning
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Questions a Mission Statement
Should Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?
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The Mission Statement
• A statement of the organization’s purpose
– What it wants to accomplish in the larger
environment
• Should be market oriented and defined in
terms of customer needs.
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The Mission of the Girl Scouts
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Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
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Designing the Business Portfolio
• The business portfolio is the collection of
businesses and products that make up the
company.
• The company must:
– analyze its current business portfolio or
Strategic Business Units (SBUs),
– decide which SBUs should receive more, less,
or no investment,
– develop growth strategies for growth or
downsizing.
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Portfolio Analysis
• An evaluation of the products and
business making up the company.
• Resources are directed to more profitable
businesses and weaker ones are phased
down or dropped.
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Strategic Business Unit (SBU)
• A unit of the company that has a separate
mission and objectives and that can be
planned independently from other
company businesses.
• Can be a company division, a product line
within a division, or sometimes a single
product or brand.
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Analyzing Current SBU’s:
BCG Growth-Share Matrix
Relative Market Share
High
Low
Market Growth Rate
High
Stars
• High growth & share
• May need heavy
investment to grow
• Eventually, growth will slow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
• Produce cash
Low
Question Marks
?
• Low share SBUs in high growth
markets
• Require cash to hold
market share
• Build into Stars or phase out
Dogs
• Low growth & share
• Generate cash to sustain self
• Do not promise to be cash
sources
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Problems With Matrix Approaches
Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Can Place too Much Emphasis on Growth
Can Lead to Poorly Planned Diversification
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Product/Market Expansion Grid
PRODUCT
MARKET
Existing
New
Existing
Market
Penetration
Product
Development
New
Market
Development
Diversification
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Discussion Question
• Sears recently purchased Lands’ End.
• Which of the four growth strategies
did Sears use in this acquisition?
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Growth at Starbucks
To maintain its phenomenal growth in an increasingly overcaffeinated marketplace, Starbucks has brewed up an ambitious,
multi-pronged growth strategy.
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Product/Market Expansion Grid
Based on Starbucks
• Market Penetration: make more sales to
current customers without changing products.
– How? Add new stores in current market areas;
improve advertising, prices, menu, service.
• Market Development: identify and develop
new markets for current products.
– How? Review new demographic (seniors/ethnic
consumers) or geographic (Asian, European,
Australian, & South American) markets.
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Product/Market Expansion Grid
Based on Starbucks
• Product Development: offering modified or
new products to current markets.
– How? Add food offerings, sell coffee in
supermarkets, co-brand products.
• Diversification: start up or buy businesses
outside current products and markets.
– How? Making and selling CDs, testing restaurant
concepts, or branding casual clothing.
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Marketing’s Role in Strategic Planning
Provide a Guiding Philosophy
Provide Inputs to Strategic Planners
Design Strategies to Reach Objectives
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Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers
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The Value Chain
Wal-Mart’s ability to offer the right products at low prices depends on the
contributions from people in all of the company’s departments—marketing,
purchasing, information systems, and operations.
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Managing Marketing Strategy
and Marketing Mix
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Market Segmentation
• The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
• A market segment consists of consumers
who respond in a similar way to a given
set of marketing efforts.
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Market Segmentation
Marriott offers
business travelers
lodging designed to
meet their particular
needs.
Click the picture above to play video
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Target Marketing
• Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
• Target segments that can sustain profitability.
• Example:
– Arm & Hammer’s baking soda.
– Click to See Arm & Hammer's Website
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Market Positioning
• Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers (e.g., Chevy Blazer: “Like a rock”)
• Process begins with differentiating the
company’s marketing offer so it gives
consumers more value.
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Positioning
Toyota’s hybrid Prius is “a revelation brilliantly disguised as a car.”
The Hummer is “Like nothing else—Sport utility? Define Sport!”
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Interactive Student
Assignment
• Choose a partner and discuss some of
the ways Pepsi goes about the
process of positioning its products.
• What market segments do you think
Pepsi is trying to reach?
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The Marketing Mix
• The set of
controllable,
tactical marketing
tools that the
firm blends to
produce the
response it wants
in the target
market.
• Consists of the 4 P’s
1.
2.
3.
4.
Product
Price
Place
Promotion
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The 4 P’s of the Marketing Mix
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The 4 P’s & 4 C’s of the
Marketing Mix
• 4 P’s - Seller’s View
– Product
– Price
– Place
– Promotion
• 4 C’s - Buyer’s View
– Customer Solution
– Customer Cost
– Convenience
– Communication
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Managing the Marketing Effort
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Major Sections of Product/Brand Plan
Executive Summary
Current Marketing Situation
Analysis of Threats and Opportunities
Objectives for the Brand
Marketing Strategy
Action Programs
Marketing Budget
Controls
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Marketing Department Organization
Functional
Organization
Market or Customer
Organization
Geographic
Organization
Product Management
Organization
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Marketing Department Organization
• Functional Organization: Each marketing
activity is headed by a functional specialist.
– Sales Manager
– Advertising Manager
– Director of Marketing Research
– Customer Service Manager
– New Product Manager
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Marketing Department Organization
• Geographic Organization: Sales and
marketing people are assigned to specific
countries, regions, and districts.
– Coca-Cola staff assigned to the South
American market
• Product Management Organization: One
person given responsibility for complete
strategy and marketing program for a
single product.
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Marketing Department Organization
• Market or Customer Organization:
Manager responsible for particular market
or customer.
• Combination Organization: Use some
combination of the previous four
approaches.
– This is especially true in large companies
(e.g., Procter & Gamble)
– Click to Visit P&G's Website
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Marketing Control Process
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Rest Stop: Reviewing the Concepts
• Explain companywide strategic planning and its four
•
•
•
•
steps.
Discuss how to design business portfolios and
develop strategies growth and downsizing.
Assess marketing’s role in strategic planning and
explain how marketers partner with others inside and
outside the firm to build profitable customer
relationships.
Describe the elements of a customer-driven
marketing strategy and mix, and the forces that
influence it.
List the marketing management functions, including
the elements of a marketing plan.
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