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Chapter 2
Objectives Explain strategic planning Describe business portfolios and growth
strategies Detail marketing’s role in strategic
planning Describe elements of customer-driven
marketing strategy List the marketing management
functions
Marketing Process
Research Research customer customer and the and the
market placemarket placeManaging Managing marketing marketing
information information and and
customer customer datadata
Select Select customer to customer to
serve: market serve: market segmentation segmentation and targetingand targeting
Decide on Decide on value value
proposition: proposition: differentiation differentiation
and and positioningpositioning
Product and Product and service service design: design:
building a building a strong brandstrong brand
Price Create Price Create real value real value
DistributionDistributionmanage manage
demand and demand and supply chain supply chain
Promotion Promotion CommunicatinCommunicatin
g the value g the value
Customer Customer relationship relationship
management: management: build strong build strong relationship relationship with chosen with chosen customerscustomers
Partner Partner relationship relationship
management : management : build a strong build a strong relationship relationship
with marketing with marketing partners partners
Create Create satisfied loyal satisfied loyal
customer customer
Capture Capture customer life customer life time value time value
Increase share Increase share of market and of market and
share of share of customer customer
Company Wide Strategy Planning: Defining Marketing’s Role Strategic Planning Defined:
The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities
Strategic planning sets the stage for the rest of the planning of the firm.
Market Oriented-Mission A mission statement asks..
What is our business? Who is the customer? What do consumers value? What should our business be?
A mission statement should be:serve as a guide for what the organization wants to
accomplish.be “market-oriented” rather than “product-oriented”.(Example: eBay’s mission statement isn’t simply to hold online trading.
Instead, it connect individual buyers to sellers in “the world’s online marketplace”
be neither too narrow, nor too broad.fit with the market environment.be motivating.
A mission statement is:“ A statement of the organization purpose – what it want to
accomplish in a larger environment.”
Setting Company Objectives and Goals The company’s mission needs to be turned
into detailed supporting objectives for each level of management.
The mission leads to a hierarchy of objectives, including business objectives and marketing objectives.
Marketing strategies and programs must be developed to support these objectives.
Setting Company Objectives and Goals
Designing The Business Portfolio The business portfolio is:The collection of businesses and products
that make up the company.
Business portfolio planning involves two steps:1. Analyzing the current business portfolio &
Determine what role each SBU will play in the future
2. designing strategies for growth and downsizing.
Designing The Business Portfolio Step 1:
A. Analyze the current business portfolio○ Identify strategic business units (SBUs)○ Assess each SBU:
The BCG growth-share matrix classifies SBUs into one of four categories using the:- Market growth rate
- SBU’s relative market share within the market.
Designing The Business Portfolio
BCG Growth – Share Matrix
High High Market Market GrowthGrowth
Low Low Market Market GrowthGrowth
High RelativeHigh RelativeMarket ShareMarket Share
Low RelativeLow RelativeMarket ShareMarket Share
StarsStars
Cash CowsCash Cows
Question MarksQuestion Marks
DogsDogs
Designing The Business PortfolioB. Determine the future role of each SBU and
choose the appropriate resource allocation strategy:
Build○ Increase market share○ Works well for question marks
Hold○ Preserve market share○ Good for cash cow
Harvest○ Increases short-term cash flow○ Good for weak cash cows, question marks and dogs
Divest○ Sell or liquidate○ Good for dogs and question marks
SBUs change positions over time
Designing The Business Portfolio Step 2:Designing strategies for growth and downsizing. Developing strategies for growth by identifying,
evaluating, and selecting promising new market opportunities.
○ Product/market expansion grid
Developing strategies for downsizing the business portfolio.
“ Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy”
Designing The Business Portfolio Product/Market Expansion Grid
Existing Products New Products
Existing Markets
New Markets
Market PenetrationA strategy for company
growth by increasing sales of current products to
current market segment without changing the
product
Product DevelopmentA strategy for company
growth by offering modified or new product to current market segments
Market DevelopmentA strategy for company
growth by identifying and developing new market segments for current
company product
DiversificationA strategy for company
growth through starting up or acquiring businesses outside the company’s current products and
markets
Marketing’s Role in Strategic Planning Marketing plays a key role in the
strategic planning process.Provide a guiding philosophy (the marketing
concept)Identify attractive opportunitiesDesign effective strategies for reaching
unit’s objectives. Build strong value chainsForm superior value delivery networks
Marketing Strategy and The Marketing Mix
Marketing Intermediary Marketing Intermediary CompetitorsCompetitors
supplierssuppliers PublicPublic
Marketing Strategy
Strategy
1. Market segmentation
2. Target marketing 3. Market positioning
The segmentation process divides the total market into market segments.
Market segment is a groups of consumers who respond in similar ways to marketing efforts.
Customers grouped by: Geographic Demographic Psychographic Behavioral
Marketing Strategy
Strategy
1. Market segmentation
2. Target marketing
3. Market positioning
valuation of each segment’s attractiveness
Selection of segments with greatest long-term profitability
A company can choose one or several segments to target
Marketing Strategy
Strategy
1. Market segmentation
2. Target marketing
3. Market positioning
The place the product occupies in the consumer’s mind
Products are positioned relative to competing products
Marketers look for clear, distinctive and desirable place in positioning
Marketing Mix
The marketing mix includes controllable and tactical marketing tools knows as the 4P’s
The 4P’s includeProduct PricePromotion place
Marketing Mix
Marketing Mix
The marketing mix from buyer’s viewpoint
Managing The Marketing Effort Managing the marketing process require
four marketing management function
Analysis Analysis
PlanninPlanning g
Develop a strategic
plane plane
Develop Develop Marketing Marketing
Plane Plane
IImplementationmplementation Carry out the plans Carry out the plans
Control Control Measure resultMeasure result
Evaluate ResultEvaluate Result
Take corrective Take corrective actionsactions
Market Analysis
Internal
External
Positive Negative
Finding opportunities
Avoiding threatsUnderstanding
strengthsAnalyzing
weaknesses
• Analysis
• Planning
• Implementation
• Control
Managing the Marketing EffortMarketing FunctionsMarketing Functions
Marketing plans include: ○ Executive summary○ Analysis of current situation○ Objectives○ Targets and positioning○ Marketing mix○ Budget○ Controls
Managing the Marketing EffortMarketing FunctionsMarketing Functions
• Analysis
• Planning
• Implementation
• Control
Plans are turned into action with day-to-day activities
Good implementation is a challenge
Managing the Marketing EffortMarketing Functions
• Analysis
• Planning
• Implementation
• Control
Evaluation of the results of marketing strategies
Checks for differences between goals and performance
Managing the Marketing EffortMarketing Functions
• Analysis
• Planning
• Implementation
• Control