Principles of

Marketing
Company and Marketing
Strategy- Partnering to
Build Customer
Relationships.
Lecture # 3
Strategic Planning:

The process of developing and maintaining a

strategic fit between the organizations goals
and capabilities and its changing marketing
opportunities
 Market Oriented Mission

A statement of organization`s purpose- what

it wants to accomplish in larger environment.

Mission statements should be market oriented and

defined in terms of satisfying basic customer needs.

• Shop victoriously- eBay

• Connect People- Nokia
 Market-Oriented Mission

A mission statement should be:

 An “invisible hand”
 Neither too narrow nor too broad
 Fitting of market environment
 Based on distinctive competencies
 Motivating
 Sample Mission

“We help you organize the world’s

information and make it universally
accessible and useful.”
Disney
“We create fantasies—
a place where dreams
come true and
America still works the
way it’s supposed to”
Setting Company Objectives and Goals
 Designing the Business Portfolio

Business Portfolio:
The collection of businesses and products that
makes up the company.

Planning of Business Portfolio involves two steps:

• Analyse current portfolio (more or less
investments)
• Shape the future portfolio (growth,
downsizing)
 Unilever’s portfolio
of categories

Homecare Savoury,
Dressings
& Spreads

Personal Care

Ice Cream &

Beverages
* As at end 2009
Portfolio Analysis:
The process by which management evaluates the
products and businesses that make up the
company.

Strategic Business Unit

An SBU can be a company division, a product line
with in a division or sometime a single product or
brand.

Return on Marketing (marketing ROI)

The net return from a marketing investment
divided by the costs of the investments
 Boston Consulting Group
Growth Share Matrix- BCG Matrix
 Analyzing the Current Business Portfolio
The Boston Group Approach

Growth share matrix is a portfolio planning method

that evaluates a company’s strategic business units
in terms of their market growth rate and relative
share.

Strategic business units are classified as:

• Stars
• Cash Cows
• Question marks
• Dogs
Stars are high-growth, high-share businesses or
products requiring heavy investment to finance
rapid growth. They will eventually turn into cash
cows.

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.

Cash cows are low-growth, high-share businesses or

products that are established and successful SBUs
requiring less investment to maintain market share.
 SONY Pakistan

 Digital Camera - STAR

 DVD Player - DOG
 PlayStations - STAR
 Smart phones – CASH COW
 Projectors – CASH COW
 Walkman - DOG
 CD Players - DOG
 VAIO Computers – QUESTION MARK
 CRT TV – DOG
 Mobile Phones- QUESTION MARK
Group Activity

Choose a company. List down its products

and categorise them in appropriate SBUs.
• Marketing has the main responsibility
for achieving profitable growth for the
company.
The Business Portfolio
BCG Matrix

• Build • Harvest
– Increase market – Increases short-term
share cash flow
– Works well for – Good for weak cash
question marks cows, question
marks and dogs

• Hold • Divest
– Preserve market – Sell or liquidate
share – Good for dogs and
– Good for cash question marks
cow
Developing Strategies for Growth and
Downsizing

• Developing Strategies for growth and

Downsizing
– Marketing must identify, evaluate, and
select market opportunities and lay down
strategies for capturing them
– Product Market Expansion Grid
• A portfolio-planning tool for identifying
company growth opportunities
Case Study: National Foods Pakistan
Ian Ansoff has proposed a useful framework
called the product/market expansion grid for
detecting new intensive growth opportunities.
There are four strategies, one for each of the
quadrants:
Diversification:
When a new product is launched in a new market,
diversification makes good sense as better
opportunities are found outside the present
business. The diversification strategies are of three
types:
1. Concentric Diversification Strategy: Develop new
products with the earlier technology for new
segments
2. Conglomerate Diversification Strategy: Develop
new products for new markets.
3. Horizontal Diversification Strategy: Develop new
products with new technology for old customers.
Planning Marketing: Partnering to Build
Customer Relationships
Partnering with other Company Departments
• Value Chain:
The series of departments that carry out value-
creating activities to design, produce, market, deliver
and support a firms product.
e.g.: Walmart.
Partnering with others in the Marketing
System
Value Delivery Network
The network made up of the company, suppliers,
distributors, and ultimately customers who partner
with each other to improve the performance of the
entire system.
e.g.: Toyota
Apple Supply Chain