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2-11

PRINCIPLES OF MARKETING
Tenth Edition
Philip Kotler and Gary Armstrong

Chapter
Chapter 22
Company and
Marketing Strategy

 Copyright 1999 Prentice Hall

Strategic
Strategic Planning
Planning Process
Process
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• Strategic Planning involves developing an

overall company strategy for long-run
survival and growth.

• This process involves:

– Defining a Mission: Statement of an organization’s
purpose; should be market oriented.
– Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
– Designing a Business Portfolio: Collection of businesses
and products that make up the company.
– Planning Functional Strategies: Detailed planning for each
department designed to accomplish strategic objectives.

 Copyright 1999 Prentice Hall

Mission
Mission Statements
2- 33
2-3
Statements
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2-3

Market
Market
Oriented
Oriented

Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies
Fit
Fit Market
Market
Environment
Environment

 Copyright
Copyright 1999
1998 Prentice
Prentice Hall
Hall
Designing
Designing the
the Business
Business Portfolio
Portfolio
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• The best portfolio is the one that best fits the

company’s strengths and weaknesses to the
opportunities in the environment.

• The company must:

– analyze its current business portfolio or Strategic
Business Units (SBU’s)
– decide which SBU’s should receive more, less, or no
investment
– develop growth strategies for adding new products or
businesses to the portfolio

 Copyright 1999 Prentice Hall

Analyzing
Analyzing Current
Current SBU’s:
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SBU’s:
Boston
Boston Consulting
Consulting Group
Group
Approach
Approach
Relative Market Share
High Low
Stars Question
QuestionMarks
Marks
Market Growth Rate
High

• High growth & share ••High

Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Buildinto
intoStars/
Stars/phase
phaseout
out
• May need heavy ••Requires
Requirescash
cashtotohold
hold
investment to grow market share
market share
Cash
CashCows
Cows Dogs
Dogs
••Low ••Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare share
Low

share
••Established, ••Low
Lowprofit
profitpotential
Established,successful
successful potential
SBU’s
SBU’s
••Produces
Producescash
cash

 Copyright 1999 Prentice Hall

Analyzing
Analyzing Current
Current SBU’s:
SBU’s:
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GE
GE Strategic
Strategic Business-Planning
Business-Planning
Grid
Grid
Business Strength
Industry Attractiveness

Strong Average Weak

C
High
A

Medium
B D

Low

 Copyright 1999 Prentice Hall

Developing
Developing Growth
Growth Strategies
Strategies
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Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development

 Copyright 1999 Prentice Hall

Product/
Product/ Market
Market Expansion
Expansion Grid
Grid
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• Market Penetration:
Penetration increase sales to present customers
with current products. How? Cut prices, increase
advertising, get products into more stores.

• Market Development:
Development develop new markets with current
products. How? Identify new demographic or
geographic markets.

• Product Development:
Development offering modified or new products
to current customers. How? New styles, flavors, colors,
or modified products.

• Diversification:
Diversification new products for new markets. How?
Start up or buy new businesses.

 Copyright 1999 Prentice Hall

Marketing’s
Marketing’s Role
Role in
in Strategic
Strategic
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Planning
Planning
• Process of Selecting Target Consumers
– Market Segmentation:
Segmentation determining distinct groups of
buyers (segments) with different needs.
– Market Targeting:
Targeting evaluating and selecting which target
segments to enter.
– Market Positioning:
Positioning products distinctive and desirable
place in the minds of target segments compared to
competing products.
• Marketing Strategies for Competitive Advantage
– Market-Leader
– Market Challenger
– Market-Follower
– Market-Nicher

 Copyright 1999 Prentice Hall

 2-
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The
The Marketing
Marketing Process
Process
10

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

ys n g

M lan
ar n
al eti

P
is

ke in
An ark
Product

tin g
M

g
Target
Suppliers Place Price Publics
Consumers

n
ti o
en ing
M Con

Promotion
ar tr

ta
em et
ke ol

pl rk
tin

Im Ma
g

Political- Social-
Legal Competitors Cultural
Environment Environment

 Copyright 1999 Prentice Hall

Marketing
Marketing Mix-
Mix- The
The Four
Four P’s
P’s
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11

Price
Product
“Goods-and-service” Amount of money
combination that a that consumers
company offers a have to pay to obtain
target market the product

Target
Customers

Intended
Positioning

Activities that Company activities

persuade target that make the
customers to buy product available
the product
Promotion  Copyright 1999 Prentice Hall Place
Managing
Managing the
the Marketing
Marketing Effort
Effort
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Marketing
Marketing Analysis
Analysis of
of Company’s
Company’s Situation
Situation

Control
Marketing
Marketing Planning
Planning Marketing
Marketing
Implementation
Implementation Measure
Develop
DevelopMarketing
Marketing Results
Strategies
Strategiesto
to Turn
Turn Marketing
Marketing Plans
Plans
Achieve
Achieve Marketing
Marketing into
into Evaluate
Objectives
Objectives Action
Action Plans
Plans Results
to
to Achieve
Achieve
Develop
Develop Marketing
Marketing
Marketing Objectives Take
Marketing Objectives Corrective
Plans
Plans&&Budget
Budget Action

 Copyright 1999 Prentice Hall

Elements
Elements of
of aa Marketing
Marketing Plan
Plan
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Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

 Copyright 1999 Prentice Hall

 2-
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Marketing
Marketing Implementation
Implementation
14

Marketing
Marketing Strategy
Strategy

Decision
and Human
Organizational Reward
Resources
Structure

Action Climate and

Programs Culture

Implementation

Marketing
Marketing Performance
Performance
 Copyright 1999 Prentice Hall
Marketing
Marketing Control
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Control
15

Set
Set Marketing
Marketing Goals
Goals

Measure
Measure
Performance
Performance

Evaluate
Evaluate
Performance
Performance

Take
Take Corrective
Corrective
Action
Action

 Copyright 1999 Prentice Hall

Marketing
Marketing Audits
Audits
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16

Environment
Function Strategy
Types
Types
of
of Marketing
Marketing
Audits
Audits
Productivity Organization
Systems

 Copyright 1999 Prentice Hall