Principles of Marketing

Chapter 3
Marketing Strategy and Corporate Strategy

Chapter 3- slide 1
 Corporate and Marketing Strategy
Topic Outline

• Understand the Marketing role in the companywide

strategic planning.

slide 2
 Corporate and Marketing Strategy
Strategic Planning and Marketing Strategy

Corporate Strategic planning:

▪ The process of determining a company's long-term goals and
identifying the best approach for achieving those goals by
considering the environment opportunities and threats and the
firm’s strengths and weaknesses.
▪ “Long Term” oriented (Time is culture-bound term)

▪ 3 to 5 years (western countries)

▪ Beyond 10 years in Asian countries

slide 3
 Corporate and Marketing Strategy
Strategic Planning and Marketing Strategy

Marketing Strategy:
▪ Defines the selected customers to target, the product
positioning, and the ideal product mix (product, price,
promotion, place), and other action programs to reach corporate
goals.
▪ The marketing strategy is set out in a marketing plan.

slide 4
 Corporate and Marketing Strategy
Strategic Planning and Marketing Strategy

Corporate Level Functional Level

Functional Srategies:
Corporate Strategic Marketing Strategy, HR Strategy,
Planning IT Strategy, Production Strategy,
etc.

slide 5
Corporate and Marketing Strategy
Strategic Planning and Marketing Strategy

Business objectives Marketing objectives

•Increase market •Increase promotion
share by 10% with budget
new products •Hire new sales force
•Invest in R&D to •Increase pricing of
develop new products slow moving items
•Improve profits by 2% •Invest in social media
and CRM to innovate
through crowd
sourcing.

slide 6
Marketing Organization and Strategy
Marketing Department Organization

Functional Organization

Mixed Organization
Geographic Organization

Business Unit / Product Organization

Market /Customer Organization

slide 7
 Marketing Organization and Strategy
Marketing Department Organization
• The most common form of marketing organization is the
functional organization. Under this organization functional
specialists head the various marketing activities.

Chief Marketing
Officer
Supermarkets

Stores
Category
CRM Pricing Simulations Promotions location and
Management
Layouts

Referencing

slide 8
Principals of Marketing
Components of Marketing Strategy

slide 9
 Marketing Organization and Strategy
Developing the Marketing Strategy

The Marketing Strategy is defined by the STP model and

the 4 Ps model

STP model 4Ps model

Marketing Strategy is about segmenting the market, targeting the right customers,
and positioning your products/services correctly on the targeted market.

slide 10
Marketing Organization and Strategy
Developing the Marketing Strategy
Market Segmentation
• Identify bases for Segmentation
Identify your market segments “you
• Determine important characteristics of each cannot please everyone”
market segments

Market Targeting
zero in on the segments that you feel will be
• Evaluate attractiveness of each segments
the most profitable for your business
• Select one or more segments

Market Positioning how to place your product effectively in

front of the market segments you selected?
• Develop detailed product positioning for each
How your product stands out from
segments
• Develop a marketing Mix for each segment
competitors?

slide 11
Marketing Organization and Strategy
Developing the Marketing Mix

• Product positioning must be supported by the

marketing mix

slide 12
 Marketing Organization and Strategy
Developing the Marketing Mix

• Marketing mix: One of the major

concepts in modern marketing
• Marketing mix is the set marketing
tools under the firm control: Product,
Price, Place, and Promotion.
• The firm blends these variables to
produce the response it wants in the
target market

slide 13
 Marketing Organization and Strategy
Developing the Marketing Mix

• Product. the goods-and-services combination the company

offers to the target market.
• Price. the amount of money customers pay to obtain the
product.
• Place. company activities that make the product available
to target consumers.
• Promotion. activities that communicate the merits of the
product and persuade target customers to buy it.

slide 14
 Marketing Organization and Strategy
Developing the Marketing Mix

PRODUCT PRICE PLACE PROMOTION

Features List(s) Price Channels Advertising
Services Discounts (on/offline) Sales force
Packaging Credit Terms Coverage Direct Marketing
Size Entry price Transportation Sales Promotion
Design Locations Public relations
Quality Logistics, WH Social media, WoM
Experience Stocks
Brand name Assortment
Assortment

slide 15
Service Marketing Strategy
Chapter 3- slide 16
Marketing Organization and Strategy
Marketing Strategy for Services

▪ A service is any act or performance, one party can offer to

another that is essentially intangible and does not result
in the ownership of anything its production may or may
not be tied to a physical product.

slide 17
 Marketing Organization and Strategy
Examples of Service Industries
▪ Health Care
▪ hospital, medical practice, dentistry, eye care
▪ Professional Services
▪ accounting, legal, architectural
▪ Financial Services
▪ banking, investment advising, insurance
▪ Hospitality
▪ restaurant, hotel/motel, bed & breakfast
▪ ski resort, rafting
▪ Travel
▪ airline, travel agency, theme park
▪ Others
▪ hair styling, pest control, plumbing, lawn maintenance, counseling
services, health club, interior design

slide 18
 Marketing Organization and Strategy
Service Marketing Triangle

Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler

slide 19
 Marketing Organization and Strategy
Marketing Strategy for Services

▪ External Marketing: occurs between the company and its

customers.
▪ Anything that communicates to the customers/users before service
delivery
▪ Internal Marketing: occurs between the company and its
employees.
▪ Interactive Marketing: occurs between the employees and the
customers.

slide 20
 Marketing Organization and Strategy
Marketing Strategy for Services

▪ EXTERNAL MARKETING
▪ Anything that communicates to the customers/users before
service delivery
▪ Making promises
1. Understand the customers needs
2. Managing expectations (setting price and service levels)
3. Maintaining marketing communications
▪ Advertising
▪ Personal selling
▪ Public relations (PR)
▪ Direct marketing

slide 21
 Marketing Organization and Strategy
Marketing Strategy for Services
▪ INTERNAL MARKETING
▪ Internal marketing refers to the activities the firm must carry on
to develop motivated and customer conscious employees.
▪ Within a services business, employees are viewed as internal
customers. They are a market which we must please first as a
company.
▪ Enabling the promises includes:
1. Hiring the right people
2. Training and developing people to deliver service
3. Empowering employees
4. Developing support systems
5. Applying appropriate technology and equipment
6. Rewarding employees

slide 22
 Marketing Organization and Strategy
Marketing Strategy for Services

▪ INTERNAL MARKETING
▪ Enabling promises
1. Hiring the right people
2. Motivating employees
3. Training and developing people to deliver service
4. Empowering employees
5. Developing support systems
6. Applying appropriate technology and equipment
7. Rewarding employees through good pays and working
conditions
8. Communicating company goals regularly

https://www.cnbc.com/2017/12/05/starbucks-is-opening-a-store-in-china-every-15-hours.html
slide 23
 Marketing Organization and Strategy
Marketing Strategy for Services

▪ INTERACTIVE MARKETING
▪ Interactive marketing occurs when employees and customers
interact.
▪ It is the moment of truth where the promises made during
external marketing are either kept or broken by employees or
sub-contractors.
▪ Each significant interaction between an employee and a
customer is known as a service encounter.
▪ Interactive marketing is important because it establishes both
short-term and long-term satisfaction.

slide 24
 Marketing Organization and Strategy
Service Marketing Mix

▪ MARKETING MIX FOR SERVICE INDUSTRIES

▪ Traditional Marketing Mix: 4 Ps
▪ Expanded Mix for Services: 7 Ps
▪ Building Customer Relationships Through: People,
Processes, and Physical Evidence
▪ Ways to Use the 7 Ps

slide 25
 Marketing Organization and Strategy
Service Marketing Mix

▪ TRADITIONAL MARKETING MIX

▪ All elements within the control of the firm that
communicate the firm’s capabilities and image to
customers or that influence customer satisfaction with the
firm’s product and services:
▪ Product
▪ Price
▪ Place
▪ Promotion

slide 26
 Marketing Organization and Strategy
Service Marketing Mix – 7 Ps
• Product
• Price
• Place
• Promotion

• People
– All human actors who play a part in service delivery and thus influence the buyer’s
perceptions: namely, the firm’s personnel, the customer, and other customers in
the service environment.
• Physical Evidence
– The environment in which the service is delivered and where the firm and
customer interact, and any tangible components that facilitate performance or
communication of the service.
• Process
– The actual procedures, mechanisms, and flow of activities by which the service is
delivered—the service delivery and operating systems.

slide 27
Marketing Organization and Strategy
Service Marketing Mix – 7 Ps

slide 28
Marketing Organization and Strategy
Service Marketing Mix – 7 Ps

slide 29
 Marketing Organization and Strategy
Ways to use the 7 Ps

Overall Strategic Assessment Specific Service Implementation

– How effective is a firm’s
services marketing mix?
– Is the mix well-aligned with
overall vision and strategy?
– What are the strengths and
weaknesses in terms of the 7
Ps?
– Who is the customer?
– What is the service?
– How effectively does the services
marketing mix for a service
communicate its benefits and
quality?
– What changes/ improvements are
needed?

slide 30
Marketing Organization and Strategy
Services Marketing Triangle Applications Exercise

▪ Focus on a service organization. In the context you are

focusing on, who occupies each of the three points of the
triangle?
▪ How is each type of marketing being carried out currently?
▪ Are the three sides of the triangle well aligned?
▪ Are there specific challenges or barriers in any of the three
areas?

slide 31
 The Marketing Process

Create Value Manage Relationships Capture Value

1 2 3 4 5

Understand the Design a Capture

Construct the Build Customer
Customer and Marketing
Marketing Plan Relationships Value
Marketplace Strategy

Analyzing the Segmenting & Product and Customer

Marketing Targeting Service design Create Satisfied,
Relationship
Environment Loyal customers
Management
Pricing
Research Value Proposition: Partners Increase share of
Differentiating and Relationship Market and share
Positioning Distribution Management of Customer
Marketing
Information
System Promotion:
communicate the
value proposition

slide 32