COMPANY AND

MARKETING
STRATEGY
Chapter 2

Chapter 2 Outline

Company-Wide Strategic Planning

Steps in Strategic Planning

1. Defining a Market Oriented Mission

2. Setting the Companys Objectives and Goals

3. Designing the Business Portfolio

A.

Analyze the Current Business Portfolio

B.

Shape the future portfolio by developing strategies for growth and downsizing

.
.
.
.
.
.

Partnering with Other Company Departments

Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
The 4 Ps (Sellers Viewpoint)
The 4 Cs (Buyers viewpoint)
Managing the Marketing Effort

Company-Wide Strategic Planning

Strategic planning is the process of developing and
maintaining a strategic fit between the organizations goals
and capabilities and its changing marketing opportunities.
:

Strategic planning sets the stage for the rest of the planning in
the firm.

The goal of strategic planning is to find ways in which a
company can best use its strengths to take advantage of
attractive opportunities in the environment.

.

Company-Wide Strategic
Planning

Steps in Strategic Planning

Defining a Market Oriented Mission. 1

.
1

The mission statement is the organizations

purpose, what it wants to accomplish in the larger
environment.

.
The mission statement addresses the
following questions:
What is our business?
Who is the customer?
What do consumers value?
What should our business be?

1. Defining a Market Oriented Mission

1.

Good mission statements should:

:
Be a clear guide to people in the
organization
.
Be market-oriented and defined in term
of satisfying basic customer needs

.

Defining a Market Oriented Mission

Highlight the companys strengths and explain
how the company will win the marketplace

.
Be meaningful and motivating

Focus on customers and the customer
experience that the company wants to create

.

Setting the Companys Objectives. 2

and Goals
.
2
Business objectives

Marketing objectives

Build profitable
customer
relationships

Invest in research

Improve profits

Increase market
share

Create local
partnerships

Increase
promotion

Designing the Business Portfolio . 3

.
3
The business portfolio is the
collection of businesses and products
that make up the company.

.
The best business portfolio is the one
the best fits the firms strengths and
weaknesses to opportunities in the
environment.

Designing the Business Portfolio

Business portfolio planning includes
two steps:
A. Analyze the Current Business Portfolio
B. Shape the future portfolio by
developing strategies for growth and
downsizing
:

(A). Analyzing the Current Business Portfolio

Portfolio analysis is a major activity in strategic

planning whereby management evaluates the
products and businesses that make up the company.


.
Companies will put strong resources into its more
profitable businesses and phase down or drop its
weaker ones.

.

Analyzing the Current Business Portfolio

Identify the key businesses that make up

the company which are called strategic
business units and decide how much
support each SBU deserves.


.

Analyzing the Current Business Portfolio

Strategic business units (SBUs) can be
a
:
Company division

Product line within a division

Single product or brand

Analyzing the Current Business Portfolio

SBUs are evaluated on two dimensions:

1. The attractiveness of the SBUs
market or industry
2. The strengths of the SBUs in the
market or industry
:
.
.
.

The Boston Consulting Group Approach

(BCG)

The Boston Consulting Group Approach

(BCG)

Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid
growth. They will eventually turn into cash cows.
)(
. .
Cash cows are low-growth, high-share businesses or products that are established and successful
SBUs requiring less investment to maintain market share.
:
.

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

:
.
Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain
themselves but do not promise to be large sources of cash.
:
.

New Approach to Strategic Planning

Today's companies are decentralizing

strategic planning and placing the
responsibility for strategic planning in
the hands of cross-functional teams
that are made up of divisional managers

Developing Strategies for Growth and Downsizing (. B)

)(.

Companies also need to find businesses and

products that could be part of the future of their
companies.

.
Product/market expansion grid is a tool for
identifying company growth opportunities through
market penetration, market development, product
development, or diversification.


.

Product/Market
expansion grid

Developing Strategies for Growth

Market penetration is a growth strategy
increasing sales to current market
segments without changing the product.
:

Market development is a growth
strategy that identifies and develops
new market segments for current
products.
:

.

Developing Strategies for Growth

Product development is a growth strategy
that offers new or modified products to
existing market segments.

Diversification is a growth strategy through
starting up or acquiring businesses outside
the companys current products and markets.

.

Developing Strategies for Downsizing

Companies must also develop strategies for

downsizing their businesses.

.
Downsizing is the reduction of the business
portfolio by eliminating products or business
units that are not profitable or that no longer fit
the companys overall strategy.
:

.

Partnering with Other Company

Departments

Value chain is a series of departments

that carry out value-creating activities to
design, produce, market, deliver, and
support a firms products.
The companys success depends on how
well the various departments work
together.
Other departments must understand
marketing and their role in creating
customer value.

Partnering with Others in the Marketing

System

Value delivery network is made up of

the company, suppliers, distributors, and
ultimately customers who partner with
each other to improve performance of
the entire system.
More companies are partnering with
other members of the supply chain.

Marketing Strategy and the Marketing Mix

Marketing strategy: The marketing logic by which the
company hopes to create customer value and achieve
profitable customer relationships.
:

A market segment is made up of consumers who respond in a

similar way to a given marketing effort.
.
Target marketing: Involves evaluating each market
segments attractiveness and selecting one or more segments
to enter.

Marketing Strategy and the Marketing

Mix

Positioning is arranging for a product to occupy a clear,

distinctive, and desirable place relative to competing
products in the minds of target consumers.
:

Differentiation: Actually differentiating the market offering

.to create superior value

A company can offer greater value by either charging lower
prices or offering more benefits to justify higher prices.

.

Developing an Integrated Marketing Mix

Marketing mix is the set of controllable tactical

marketing toolsproduct, price, place, and
promotionthat the firm blends to produce the
response it wants in the target market.

-
-

The 4 Ps (Sellers Viewpoint)

The 4 Ps

Product: The goods and services combination the company

offers to the target market.
:
Price: Is the amount of money customer pay to obtain the
product.
:
Place: Includes company activities that make the product
available to the target consumers.
:
Promotion: Are the activities that communicate the advantages
of the product to try to convince customers to buy.
. :

The 4 Cs (Buyers viewpoint)

The 4 Cs
Customer solution: Customers buy value or solutions to their
problems.
:

Customer cost: The total cost of obtaining, using, and disposing
of a product.
:

Convenience: Customers want products and services to be as
conveniently available as possible.
:
.
Communication: Customers want two-way communications.
:

Managing the Marketing

Effort

1. Market Analysis-SWOT
Analysis

Market Analysis-SWOT Analysis. 1

(SWOT
. )
1

Internal
:

Weaknesses: Internal limitation that may interfere with a companys ability to achieve its
objectives.
:
External
:
Opportunities: External factors that the company may be able to exploit to its advantage.
:

Strengths: Internal abilities that may help a company reach its objectives.

Threats: Current and emerging external factors that may challenge the companys
performance.
:

Marketing Planning. 2
.
2
Marketing planning involves choosing strategies that
will help the company attain its overall strategic
objectives.


A detailed marketing plan is needed for each
business, product, or brand.

A marketing plan is the central instrument for
directing and coordinating the marketing effort.

.

The Marketing Plan

Executive Summary: Summary of main

goals and recommendations of the plan.
Current Marketing Position: Describes
the target market and the companys
position in it, plus information about the
market, product performance, competition,
and distribution.
Threats and opportunities analysis:
Examines the threats and opportunities
that a product might face.

The Marketing Plan

Objectives and issues: States the

objectives that the company would like
to achieve.
Marketing strategy: How the company
will create value for customers and
capture value in return.
Action programs: How to turn
strategies into specific action programs.

The Marketing Plan

Budgets- A projected profit-and-loss

statement.
Controls- Outlines the control that will
be used to monitor progress, and allow
management to review implementation
results.

Marketing Implementation. 3
.
3

Implementing is the process that turns

marketing plans into marketing actions
to accomplish strategic marketing
objectives.

Marketing Control.4

Controlling is the measurement and
evaluation of results and the taking of
corrective action as needed to ensure
the objectives are achieved.


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Reference

Kotler, Philip and Gary Armstrong,

Principles of Marketing, 15th edition,
Pearson Education Limited, 2014.