Transcript The Marketing Process

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Company and Marketing Strategy: Partnering
to Build Customer Relationships
•Chapter 2
•Powerpoint slides
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Principles of Marketing: 6th Canadian Edition
Strategic Planning
2.2
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• Strategic planning:
– Developing/maintaining a strategic fit between
– organizational goals and capabilities, and
– changing marketing opportunities
• Strategic planning sets the stage for other planning
• Steps in strategic planning:
Figure 2.1
Principles of Marketing: 6th Canadian Edition
2.3
Mission Statements
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• Mission statement: statement of an organization’s purpose; what
it wants to accomplish in the larger environment; needs to be specific,
realistic, and motivating; today’s statements are market-oriented
Table 2.1
Principles of Marketing: 6th Canadian Edition
2.4
Designing the Business Portfolio
• Business portfolio: collection of businesses within the
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overall company
• Portfolio analysis: management tool to identify/evaluate
businesses; make resource allocation decisions
• Strategic business unit (SBU):
– Unit with separate
mission and objectives
– Planned independently
from other company
businesses
– Used as the building
block of portfolio
analysis
Figure 2.2
Principles of Marketing: 6th Canadian Edition
2.5
BCG Growth-Share Matrix
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• Growth-share matrix:
– Portfolio planning method that evaluates SBU’s
– Classifys SBU’s based on market growth rate and relative market share
– Four categories of companies:
• Stars: need heavy investment to
maintain rapid growth; become
future cash cows
Figure 2.2
• Cash cows: successful products
that generate cash to fund other
SBU’s
• Question marks: need cash to
hold share, could go either way
• Dogs: may be self-sustaining, but
with low prospects for growth;
targets for divesting
Principles of Marketing: 6th Canadian Edition
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Competitive Strategy
2.6
• Competitive strategy chosen will be influenced by:
– Industry structure
– Competitive position within that industry
• Five forces determining profitability:
– Barriers to entry to industry (patents
in pharmaceutical industry)
– Power of the customer relative to the
firm (Walmart)
– Power of suppliers relative to the firm
(Jean Coutu as a wholesaler)
– Presence of substitutes for the
products offered (direct and indirect)
– Degree of competitive rivalry within
industry
Principles of Marketing: 6th Canadian Edition
Strategies for SBU’s
2.7
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• Porter’s winning strategies:
– Overall cost leadership: achieving lowest costs of production and
•
distribution to allow low pricing strategy, sell standardized products and
use low cost media to promote. Ex. Wal-Mart
– Differentiation: creating a
highly differentiated product line
and marketing program; targeted
customers, pursue quality
leadership. Ex. Caterpillar
(customers with intense needs)
– Focus: serving only a few market
segments, offering products closely
aligned with their needs. Ex. MEC
(Mountain Equipment Co-op)
Losing strategy: middle of the road,
not standing out on any dimension. Ex.
Sears, Chrylser
Principles of Marketing: 6th Canadian Edition
Strategies for SBU’s
2.8
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• Treacy and Wiersema:
– Operational excellence: providing superior value by leading in price
and convenience; reliable, good-quality products; similar to cost
leadership strategy. Ex. Dell, IKEA
– Product leadership: provide superior
value by continuous stream of new,
leading-edge products; focus on new
product development. Ex. Cognos,
PeopleSoft
– Customer intimacy: providing
superior value by precise segmentation
of markets and matching product
offering to those needs; focus on being
responsive to the target customer’s
needs. Ex. FedEx
Principles of Marketing: 6th Canadian Edition
2.9
Strategies for Growth
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• Product-market expansion grid:
– Portfolio planning tool for identifying company growth
opportunities
– Uses products (new/existing) and markets (new/existing)
– Four strategies for growth
• Growth is necessary (but
not at any cost)
• Marketing’s job to:
– Identify,
– Evaluate, and
– Select growth
opportunities
Figure 2.3
Principles of Marketing: 6th Canadian Edition
Strategies for Growth: Tim Horton’s
2.10
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• Marketing penetration:
– Opening more locations in existing markets, advertising
– Continuous improvement of facilities and operations
• Market development:
– New demographic age groups, or geographical locations (U.S.A)
• Product development:
– Expanding the product
line to attract lunch
crowd
Figure 2.3
• Diversification:
– Entering new markets
with new products
– Growth by acquisition
or development
Principles of Marketing: 6th Canadian Edition
Strategic Planning and Small Business
2.11
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• Strategic planning is not just for large businesses
• Can provide a basis for contingency planning
• Steps:
– Identify major elements in the business environment
– Describe mission of the company
– Explain internal and external forces
that will have an impact
– Identify the basic driving force that
will direct the company
– Develop long-term objectives
– Outline general plan:
• Logistical factors
• Financial factors
• Personnel factors
Principles of Marketing: 6th Canadian Edition
Partnering to Build Customer Relationships
2.12
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• Marketing’s role in strategic planning:
– Provides a guiding philosophy (the type of relationship with
customers, quality product, servicing, delivery time, etc.)
– Provide inputs to help identify marketing opportunities and
assess potential for taking advantage of them (choice of
products)
– Designs strategies for reaching objectives
• Partner relationship
management:
– Working closely with partners from
• Other company departments
• Outside the company to
• Jointly bring greater value to
customers
Principles of Marketing: 6th Canadian Edition
Partnering to Build Customer Relationships
2.13
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• Value chain:
– Series of departments that carry out value-creating
activities
– Design, produce, market, deliver, and support a firm’s
products
• Value delivery network:
– Company, suppliers,
distributors, and customers
– Partner with each other to
– Improve the performance of
the whole system
Principles of Marketing: 6th Canadian Edition
The Marketing Process
2.14
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• The marketing process:
– Analyzing marketing
opportunities
– Selecting target markets
Figure 2.4
– Developing the
marketing mix, and
– Managing the marketing
effort
• Three key steps:
– Market segmentation
– Target marketing
– Market positioning
Principles of Marketing: 6th Canadian Edition
The Marketing Process (continued)
2.15
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• Market segmentation:
– Dividing a market into groups with distinct needs
– Who might require (respond to) different marketing mix
• Target marketing:
– Evaluating the attractiveness of each
market segment
– Deciding which segment(s) to enter
– Most profitably serve
Figure 2.4
• Market positioning:
– Occupying a clear, distinctive, and
desirable place
– Relative to competing products
– In the minds of target customers
Principles of Marketing: 6th Canadian Edition
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Strategies for Competitive Advantage
2.16
• To be successful, companies must do a better job of satisfying
customer needs than their competition (keep customers and grow
with them)
• Marketing strategy is not formulated in a vacuum
• Competitive intelligence is necessary to keep track
• Marketing strategy choice dependent on industry position,
resources, distinctive competencies, and objectives
• Strategic industry positions:
–
–
–
–
Market leader
Market challenger
Market followers
Market nichers
Principles of Marketing: 6th Canadian Edition
The Four P’s of the Marketing Mix
2.17
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• The marketing mix:
– Set of controllable,
tactical marketing
tools
– Product, price,
place, and
promotion
– Blended to produce
the desired response
in the target market
• Internal consistency
helps to be successful
• Represents the seller’s
view of the market
Figure 2.5
Principles of Marketing: 6th Canadian Edition
The 4 P’s Versus 4 C’s
2.18
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• A different (buyer’s) way of looking at the four P’s
Product
Customer solution
Price
Customer cost
Place
Convenience
Promotion
Communication
Principles of Marketing: 6th Canadian Edition
Managing the Marketing Effort
2.19
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• Four marketing management functions:
–
–
–
–
Marketing analysis
Marketing planning
Implementation
Control
• Marketing strategy:
– The marketing logic
by which the
business unit
– Hopes to achieves
its marketing
objectives
Figure 2.6
Principles of Marketing: 6th Canadian Edition
Contents of a Marketing Plan (Table 2.2)
2.20
• Executive summary:
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– Table of contents
• Current marketing situation:
– Market description, product review, competition, and distribution
• Threat and opportunity analysis:
• Marketing objectives and issues:
• Marketing strategy:
– Target markets, positioning, expenditure
levels, and marketing mix
• Action program:
• Budget:
• Controls:
Principles of Marketing: 6th Canadian Edition
Marketing Plan Implementation
2.21
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• Marketing implementation:
– Process that turns strategies and plans
– Into marketing actions
– That accomplish strategic marketing objectives
• Marketing department organization:
–
–
–
–
Functional organization
Geographic organization
Product management organization
Customer equity management (customer
profitability – total customer relationship)
– Market or customer management organization
(one product and several market segments)
Principles of Marketing: 6th Canadian Edition
2.22
The Control Process
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• Marketing audit:
– Comprehensive, systematic, independent, periodic
– Examination of a company’s environment, objectives, strategies,
and activities
– To identify problems, opportunities, and plans of action
Figure 2.7
Set goals
What do we
want to achieve?
Measure
performance
Evaluate
performance
Take corrective
action
What is
happening?
Why is it
happening?
What should
we do about it?
Principles of Marketing: 6th Canadian Edition
In Conclusion…
2.23
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• The learning objectives for this chapter were:
– Explain company-wide strategic planning and its four steps
– Discuss how to design business portfolios and develop
strategies for 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 marketing process and
the forces that influence it
– List the marketing management
functions, including the elements of
a marketing plan
Principles of Marketing: 6th Canadian Edition