Principles of

MARKETING
Reference: Principle of Marketing
Phillip Kotler & Gary Armstrong

Course Instructor:
Shagufta Saleem Shaikh
Batch: BBA 2K22
 CHAPTER : 2

COMPANY AND MARKETING STRATEGY:

PARTNERING TO BUILD
CUSTOMER RELATIONSHIPS
 PARTNERING TO BUILD
RELASHIONSHIP
1. Explain strategic planning
4. Describe elements of customer-
driven marketing strategy and
marketing mix

LEARNING
GOALS
2. Describe business portfolios and
growth strategies
5. List the marketing
management functions
3. Detail marketing’s role in
strategic planning
WHAT IS
STRATEGIC PLANNING?

The process of
developing and
maintaining a strategic
fit between the
organization’s goals and
capabilities and its
changing marketing
opportunities
STEPS IN
STRATEGIC PLANNING:

STEP 1 STEP 2 STEP 3 STEP 4

BUSINESS UNIT,
CORPORATE LEVEL PRODUCT AND
MARKET LEVEL

Defining the Setting Designing Planning

Company company the business marketing,
Mission objectives portfolio and other
and goals functional
Strategies
MISSION STATEMENT:
A statement of the organization’s
purpose- what it wants to
accomplish in the larger
environment.

• Mission statements should be market

oriented, not product-oriented.
• A market-oriented mission statement
should define the business in terms of
satisfying basic customer needs.
 MISSION STATEMENT:
A mission statement asks..
• What is our business?
• Who is our customer?
• What do consumers value?
• What should our business be?

Example: Nike’s mission is “to

bring inspiration and innovation
to every athlete in the world (if
you have a body, you are an
athlete).”
 DEFINING A
MARKET-ORIENTED MISSION:
MARKET ORIENTED Characteristics
of a Good
Mission
REALISTIC
Statement:

SPECIFIC

FIT MARKET
ENVIRONMENT

DISTINCTIVE COMPETENCES

MOTIVATING
1
GOAL 1: EXPLAIN STRATEGIC PLANNING
 SETTING FIRM OBJECTIVES
AND GOALS
The mission should be translated into
supporting objectives for each level of
management.

It creates a hierarchy of objectives that

are consistent with one another.

Example:
Business objective: Increase profits.
Marketing objective: Increase market share of
domestic and international markets.
 DESIGNING
THE BUSINESS PORTFOLIO:
• A business portfolio is the collection of businesses
and products that make up the company
• Business portfolio planning involves two steps:
STEP 1 STEP 2

Analyzing the current Shaping the future

business portfolio or strategic portfolio by developing
business units (SBUs) and strategies for growth
decide which businesses
and downsizing.
should receive more, less or
no investment.
2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 STRATEGIC BUSINESS UNIT
(SBU)
Strategic business unit:
A unit of the company that has a separate
mission and objectives and that can be planned
independently from other company businesses.

An SBU can be a company division, a product line

within a division, or sometimes a single product
or brand

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 PORTFOLIO ANALYSIS

Portfolio analysis: is a process by which

management evaluates the products and
businesses making up the company.

Resources are directed toward more

profitable businesses while weaker ones are
phased out or dropped.

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 PORTFOLIO ANALYSIS (CONT..)
Standard portfolio analysis evaluates SBUs
on two important dimensions:

Attractiveness of SBUs market or

industry.
Strength of SBUs position within that
market or industry.

BCG Growth Share Matrix uses market

growth rate and relative market share to
classify SBUs into four groups.
2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 ANALYZING CURRENT
BUSINESS PORTFOLIO:

1 Build 2 Harvest
 Increase market share  Increases short-term
cash flow

3 Hold 4 Divest
 Preserve market share  Sell or liquidate

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 ANALYZING CURRENT SBU’s:
BOSTON CONSULTING GROUP APPROACH:

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 ANALYZING CURRENT SBU’s:
BOSTON CONSULTING GROUP APPROACH:
Stars: High-share of high-growth market.
Strategy: Build into cash cow via investment.

Cash cows: High-share of low-growth market.

Strategy: Maintain or harvest for cash to build STARS.

Question marks: Low-share of high-growth market.

Strategy: Build into STAR via investment OR reallocate
funding and let slip into DOG status.

Dogs: Low-share of low-growth market.

Strategy: Maintain or divest (selling it or phasing out).

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 DEVELOPING STRATEGIES
FOR GROWTH:
PRODUCT/ MARKET EXPANSION GRID

(Existing markets, (New markets,

existing products) existing products)
MARKET PRODUCT
PENETRATION DEVELOPMENT

(Existing markets, (New products,

new products) new markets)
MARKET
DIVERSIFICATION
DEVELOPMENT

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 PRODUCT/ MARKET
EXPANSION GRID:

MARKET
PENETRATION Making more sales to current
customers without changing its
MARKET products.
DEVELOPMENT

• How? Add new stores in

PRODUCT
DEVELOPMENT current market areas,
improve advertising, prices,
service or store design.
DIVERSIFICATION

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 PRODUCT/ MARKET
EXPANSION GRID:

MARKET
PENETRATION

Develop new markets for its

MARKET
DEVELOPMENT current products

PRODUCT • How? Identify new

DEVELOPMENT demographic or geographic
markets.
DIVERSIFICATION

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 PRODUCT/ MARKET
EXPANSION GRID:

MARKET
PENETRATION

offering modified or new products

MARKET to current markets.
DEVELOPMENT

PRODUCT • How? New styles, flavors,

DEVELOPMENT colors, or modified
products.
DIVERSIFICATION

2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 PRODUCT/ MARKET
EXPANSION GRID:

MARKET
PENETRATION

MARKET
DEVELOPMENT

PRODUCT
DEVELOPMENT New products for new markets.

DIVERSIFICATION
• How? Start up or buy new
businesses.
2
GOAL 2: DESCRIBE BUSINESS PORTFOLIOS AND GROWTH STRATEGIES
 MARKETING’s ROLE
IN STRATEGIC PLANNING:

Provide a guiding philosophy

Identify attractive opportunities

Design effective strategies

Build strong value chains

3
GOAL 3: DETAIL MARKETING’s ROLE IN STRATEGIC PLANNING
 CREATING CUSTOMER
VALUE
 Marketers must practice partner relationship
management to enhance customer value,
through:

Working with partners internally within

the company which can create an
effective value chain.

Working with external partners in the

marketing system that helps form a
superior value delivery network.
3
GOAL 3: DETAIL MARKETING’s ROLE IN STRATEGIC PLANNING
 VALUE CHAIN

 Each company department engages

in some type of value-creating
activity (e.g. Purchasing, Marketing.
operations, etc).

 Coordination between departments is

key to providing superior value.

3
GOAL 3: DETAIL MARKETING’s ROLE IN STRATEGIC PLANNING
 VALUE DELIVERY NETWORK
Today, companies are partnering with the
other members of the supply chain to
improve the performance of the customer
value delivery network.
 Components of the value delivery
network include:
 Company’s value chain (Each department is a
link)
 Distributors
 Suppliers
3  Customers
GOAL 3: DETAIL MARKETING’s ROLE IN STRATEGIC PLANNING
 CUSTOMER DRIVEN
MARKETING STRATEGY:
MARKET SEGMENT
 A group of consumers who respond in a similar
way to a given set of marketing effort
TARGETING
 Evaluating each segment’s attractiveness and
selecting one or more segments to enter.
POSITIONING
 Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
3
consumers.
GOAL 3: DETAIL MARKETING’s ROLE IN STRATEGIC PLANNING
 MARKETING MIX:

The marketing mix includes controllable

and tactical marketing tools knows as the
4P’s

The 4P’s include

 Product
 Promotion
 Place
 Price
4
GOAL 4: DESCRIBE ELEMENTS OF CUSTOMER-DRIVEN STRATEGY
 THE 4P’s & 4C’s OF THE
MARKETING MIX:
4 Ps – 4 Cs –
Seller’s View Buyer’s View

4
GOAL 4: DESCRIBE ELEMENTS OF CUSTOMER-DRIVEN STRATEGY
 MANAGING THE
MARKETING EFFORT:
Marketing Functions

ANALYSIS
• Finding opportunities
• Avoiding threats
PLANNING
• Understanding strengths

IMPLEMENTATION • Analyzing weaknesses

CONTROL

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
MANAGING THE
MARKETING EFFORT:
Marketing Functions

ANALYSIS

SWOT analysis:
Strength (S): internal capabilities that may help a company reach its
objectives.

Weakness (W): internal limitations that may interfere with a company’s

ability to achieve its objectives.

Opportunity (O): external factors that the company may be able to

exploit to its advantage.

Threat (T): current and emerging external factors that may challenge
the company’s performance.
 MANAGING THE
MARKETING EFFORT:
Marketing Functions

ANALYSIS
Marketing plans include:
Executive summary
Current market situation
PLANNING Threats and opportunities
analysis
Objectives and issues
IMPLEMENTATION Marketing strategy
Action programs
Budget
CONTROL Controls

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 MANAGING THE
MARKETING EFFORT:
Marketing Functions

ANALYSIS

• Plans are turned into action

PLANNING
with day-to-day activities

IMPLEMENTATION • Good implementation is a

challenge

CONTROL

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 MANAGING THE
MARKETING EFFORT:
Marketing Functions

ANALYSIS

• Evaluation of the results of

PLANNING marketing strategies and
plans

IMPLEMENTATION • Checks for differences

between goals and
performance
CONTROL
• Corrective actions

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 MANAGING MARKETING
Analysis, Planning, Implementation, and Control

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 CONTENTS OF A MARKETING PLAN

1. Executive summary
2. Current marketing situation
3. Analysis of threats and opportunities
4. Objectives and issues
5. Marketing strategy
6. Action programs
7. Budgets
8. Controls

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 MARKETING IMPLEMENTATION

Turns marketing plans into marketing

actions by addressing:
 Who
 Where
 When
 How
Implementation can be difficult but is
critical to success.

5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 ORGANIZING MARKETING
DEPARTMENTS

(1) Chief Marketing Officer (CMO): in small

companies, one person may perform all the
marketing functions under Chief Marketing Officer
(CMO) position. Today, this type is becoming more
common.
(2) Functional organization: used mainly by big
companies
Each marketing activity is headed by a
functional specialist.
E.g., sales manager, advertising manager,
marketing research manager, etc.
(3) Geographic organization:
Sales and marketing people are assigned to
specific countries, regions, and/or districts.
5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
 ORGANIZING MARKETING
DEPARTMENTS CONTI……

(4) Product management organization:

One person is given responsibility for complete
strategy and marketing program for a single
product.

(5) Market or customer organization:

A Manager is fully responsible for particular
market or type of customer (e.g., government
buyers). Often used in companies that sell one
product to many different kinds of buyers.

(6) Combination organization:

Uses any combination of the previous
approaches.
5
GOAL 5: LIST THE MARKETING MANAGEMENT FUNCTIONS
END OF LECTURE