2. Marketing Strategy

8/7/2019 2. Marketing Strategy

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Company and MarketingStrategy: Partnering to Build

Customer Relationships

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Principles of Marketing


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Companywide Strategic Planning:

Defining Marketings Role

Defining a Market-Oriented Mission

Mission statement: The organizationspurpose, what it wants to accomplish in thelarger environment

Market-oriented mission statement:Defines the business in terms of satisfyingbasic customer needs

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Setting Company Objectives and Goals

Business objectives

Marketing objectives

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Designing the Business Portfolio

The business portfolio is the collection ofbusinesses and products that make up thecompany

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Analyzing the Current Business Portfolio

Analyzing the current business portfolio isthe process by which managementevaluates the products and businesses

making up the company

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Steps in Analyzing the Current Business Portfolio

1. Identify key businesses making up thecompany

2. Assess the attractiveness of its various SBUs

3. Decide how much support each SBUdeserves

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Analyzing the Current Business PortfolioThe Boston Group Approach

Growth share matrix is a portfolio planning method thatevaluates a companys strategic business units in terms oftheir market growth rate and relative share

Strategic business units are classified as:

Stars Cash Cows

Question marks

Dogs

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The Boston Group Approach

Stars are high-growth, high-share businesses or productsrequiring heavy investment to finance rapid growth. Theywill eventually turn into cash cows.

Cash cows are low-growth, high-share businesses or productsthat are established and successful SBUs requiring lessinvestment to maintain market share

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The Boston Group Approach

Question marks are low-share business units in high-growthmarkets requiring a lot of cash to hold their share

Dogs are low-growth, low-share businesses and products thatmay generate enough cash to maintain themselves but donot promise to be large sources of cash

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Problems with MatrixApproaches

Difficulty in defining SBUs and measuringmarket share and growth

Time consuming

Expensive

Focus on current businesses, not futureplanning

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Product/market expansion grid strategies Market penetration

Market development

Product development

Diversification

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Developing Strategies for Growth andDownsizing


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Market penetration is a growth strategyincreasing sales to current market segmentswithout changing the product

Market development is a growth strategythat identifies and develops new marketsegments for current products

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Companywide Strategic Planning



Product development is a growth strategythat offers new or modified products toexisting market segments

Diversification is a growth strategy throughstarting up or acquiring businesses outsidethe companys current products and markets

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Companywide Strategic Planning



Downsizing is the reduction of the businessportfolio by eliminating products or businessunits that are not profitable or that nolonger fit the companys overall strategy

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Planning Marketing: Partnering

to Build Customer Relationships

Partner Relationship Management

Partner relationship management is theprocess of working closely with partners inother company departments to form aneffective value chain that serves the

customer, as well as partnering effectivelywith other companies in the marketingsystem to form a competitively superiorvalue-delivery network

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Value chain is a series of departments thatcarry out value-creating activities todesign, produce, market, deliver, andsupport a firms products

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Partnering with Other Company Departments


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Value delivery network is made up of the

company, suppliers, distributors, andultimately customers who partner witheach other to improve performance of theentire system

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Partnering with Others in the Marketing System


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Marketing Strategy and the

Marketing Mix

Customer-Driven Marketing Strategy

Market segmentation is the division of amarket into distinct groups of buyers whohave distinct needs, characteristics, orbehavior and who might require separate

products or marketing mixes

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Marketing Mix


Market segment is a group of consumers whorespond in a similar way to a given set ofmarketing efforts

Target marketing is the process of evaluatingeach market segments attractiveness andselecting one or more segments to enter

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Marketing Mix


Market positioning is the arranging for aproduct to occupy a clear, distinctive, anddesirable place relative to competingproducts in the minds of the targetconsumer

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Marketing Mix

Developing an Integrated Marketing Mix

Marketing mix is the set of controllabletactical marketing toolsproduct, price,place, and promotionthat the firm blendsto produce the response it wants in thetarget market

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Marketing Mix


The four Ps

Product is the goods and services incombination that the company offers to thetarget market

Price is the amount of money customers haveto pay to obtain the product

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Marketing Mix

Developing an Integrated Marketing MixThe four Ps

Place is the company activities that make theproduct available to target customers

Promotion is the activities that communicatethe merits of the product and persuadetarget customers to buy it

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Marketing Mix


The 4 Ps versus The 4 Cs

Product Customer solution

Price Customer cost

Place Convenience

Promotion Communication

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Managing the Marketing Effort

MarketingAnalysis

Analysis is the complete analysis of thecompanys situation in a SWOT analysis thatevaluates the companys:

Strengths

Weaknesses Opportunities

Threats

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MarketingAnalysis

Strengths include internal capabilities,resources, and positive situational factorsthat may help to serve company customersand achieve company objectives

Weaknesses include internal limitations andnegative situational factors that mayinterfere with company performance

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MarketingAnalysis

Opportunities are favorable factors or trends inthe external environment that the companymay be able to exploit to its advantage

Threats are unfavorable factors or trends thatmay present challenges to performance

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Market Planning

Planning is the development of strategic andmarketing plans to achieve companyobjectives

Marketing strategy consists of the specificstrategies for target markets, positioning,the marketing mix, and marketingexpenditure levels

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Sections of a marketing plan include:

Executive summary

Current marketing situation

Threats and opportunities

Objective and issues

Action programs

Budgets

Controls

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Market Planning


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MarketingDepartment Organization

Geographic organizations: Useful for companies thatsell across the country or internationally.Managersare responsible for developing strategies and plansfor a specific region.

Product Management: Useful for companies with

different products or brands.Managers areresponsible for developing strategies and plans for aspecific product or band.

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Market or customer managementorganization: Useful for companies withone product line sold to many differentmarkets and customers.Managers areresponsible for developing strategies andplans for their specific markets orcustomers.

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Customer management involves a customerfocus and not a product focus for managingcustomer profitability and customer equity

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Marketing Control

Controlling is measuring and evaluatingresults and taking corrective action asneeded

Operating control

Strategic control

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Marketing Control

Marketing audit is a comprehensive,systematic, independent, and periodicexamination of a companys environment,objectives, strategies, and activities todetermine problem areas and opportunities

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Documents

2. Marketing Strategy