Transcript Chapter 2

2
Company and Marketing Strategy:
Partnering to Build Customer
Relationships
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.
2-1
Steps in Strategic Planning
2-2
Questions a Mission Statement
Should Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?
2-3
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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Mission Statements Should:
Be Specific
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
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
2-11
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
2-15
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
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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.
– http://www.armandhammer.com
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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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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
• 4 C’s - Buyer’s View
– Product
– Price
– Place
– Promotion
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Managing the Marketing Effort
2-22
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
2-23
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)
– http://www.pandg.com/main.jhtml
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Marketing Control Process
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