Principles: of Marketing

Principles of Marketing
Kotler and Armstrong
Chapter 2:
Insert Company and

Textbook Marketing Strategy
Cover
Image Partnering to Build
Customer Engagement,
Value, and Relationships
Copyright © 2016 Pearson Education, Inc. 2-1

Company and Marketing Strategy
Learning Objectives
• Objective 1: Explain company-wide strategic planning
and its four steps.
• Objective 2: Discuss how to design business portfolios

and develop growth strategies.
• Objective 3: Explain marketing’s role in strategic

planning and how marketing works with its partners to
create and deliver customer value.
Learning Objectives
• Objective 4: Describe the elements of a

customer value-driven marketing strategy and
mix, and the forces that influence it.
• Objective 5: List the marketing management

functions, including the elements of a marketing
plan, and discuss the importance of measuring
and managing marketing return on investment.

Learning Objective 1
• Explain company-wide strategic planning and its four

steps.
Company-Wide Strategic Planning: Defining Marketing’s
Role
- Strategic Planning
- Steps in Strategic Planning
- Defining a Market-Oriented Mission
- Setting Company Objectives and Goals

Company-Wide Strategic Planning
Strategic Planning
Strategic planning is 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:
Business Unit, product

Corporate level and Marketing Level
Designing the Setting Company Designing the Planning Marketing

Company Objective and Business and other function
Mission Goals Portfolio strategies

• Defining a Market Orientation Mission:
Mission Statement
A statement of the organizational purpose –
what it wants to accomplish the larger
environment
• Mission Statement should answer:
• Who is our business?
• Who is the customer?
• What do customer value?
• What should our business do?
2-7
Copyright © 2016 Pearson Education, Inc.
Example Honda Worldwide Mission Statement
Maintaining a global viewpoint, we are

dedicated to supplying products of the highest
quality, yet at a reasonable price for
worldwide customer satisfaction.
2-8
• Mission statements should . . .

• Serve as a guide for what the organization wants to
accomplish.
• Be “market-oriented” rather than “product-oriented”.
• Realistic and specifics.
• Fit with the market environment.
• Be motivating.

• Mission statements guide the development of

objectives and goals.
• Objectives are developed at each level in the
organization hierarchy.
• Strategies are developed to accomplish these
objectives.

• Discuss how to design business portfolios and develop

growth strategies.
Designing the Business Portfolio

The business portfolio is the collection of

businesses and products that make up the
company.
Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses that
make up the company.

Strategic business units can be a

• Company division
• Product line within a division
• Single product or brand
2-13
Analyzing the Current Business Portfolio
Growth-share matrix is a portfolio-planning

method that evaluates a company’s SBUs in
terms of market growth rate and relative
market share.

Analyzing the Current Business Portfolio
BCG Growth-share matrix
High Question
Market Stars
Marks
Growth
Low Cash
Dogs
Market Cows
Growth
High Relative Low Relative

Market Share Market Share

•Determine the future role of each SBU

and choose the appropriate resource
allocation strategy:
• Build Question Mark
• Hold Star
• Harvest Cash Cow
• Divest Dog
•SBUs change positions over time

Problems with Matrix Approaches
• Difficulty in defining SBUs and measuring market

share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning

Developing Strategies for Growth and Downsizing
Product/market expansion grid looks at new products,

existing products, new markets, and existing markets
for company growth opportunities.

Existing Products New Products
Existing Market Product Development

Markets Penetration
New
Market Development Diversification
Markets


Downsizing is when a company must prune,

harvest, or divest businesses that are
unprofitable or that no longer fit the
strategy.

• Explain marketing’s role in strategic planning and

how marketing works with its partners to create
and deliver customer value.
Planning Marketing: Partnering to Build

Customer Relationships

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 firm’s products.



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.

Partnering with Others in the Marketing System

• Describe the elements of a customer value-driven

marketing strategy and mix, and the forces that
influence it
Marketing Strategy and the Marketing Mix

Customer Value-Driven Marketing Strategy
Marketing strategy is the marketing logic by

which the company hopes to create customer
value and achieve profitable customer
relationships.
Copyright © 2016 Pearson Education, Inc . 2-29

Market segmentation is the division of a market into
distinct groups of buyers who have different needs,
characteristics, or behaviors and who might require
separate products or marketing mixes.
Market segment is a group of consumers who

respond in a similar way to a given set of marketing
efforts.

Market targeting is the process of evaluating each

market segment’s attractiveness and selecting one
or more segments to enter.
Market positioning is the arranging for a product to

occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers.
Differentiation begins the positioning process.

Developing an Integrated Marketing Mix
Marketing mix is the set of controllable, tactical

marketing tools—product, price, place, and
promotion—that the firm blends to produce the
response it wants in the target market.

• Strategy leads to tactics by way of the marketing

mix:
• The “Four Ps” – product, price, place, promotion (seller
viewpoint)
• The “Four Cs” – customer solution, cost, convenience,
and communication (customer viewpoint)

• Product means goods and services combination the company
offers to the target market
• Price amount of money customer have to pay to obtain the

product
• Place include company activities that make the product

available to target market
• Promotion means activities that communication the merits of

product and persuade target customer to buy


• List the marketing management functions, including the

elements of a marketing plan, and discuss the importance
of measuring and managing marketing return on
investment.
Managing the Marketing Effort

Measuring and Managing Return on Marketing
Investment

SWOT analysis
A overall evaluation of the company’s Strength (S),

Weaknesses (W), Opportunity (O) and Threats (T)

SWOT analysis

Marketing Implementation
• Turning marketing strategies and plans into

marketing actions to accomplish strategic
marketing objectives
• Addresses what, who, where, when, and how

Marketing Control
Process of measuring and evaluating the result
of marketing strategic and plan and taking
correction action to ensure that objective are
achieved
• Evaluating results
• Taking corrective action
• Operating control
• Strategic control

Marketing Audit
A comprehensive, systematic, independent and
periodic examination of a company’s
environment, objective, strategies and activity
to determine problem areas and opportunities
and to recommend a plan of action to improve
the company’s marketing performance

Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)

• Net return from a marketing investment divided by
the costs of the marketing investment
• Measurement of the profits generated by investments

in marketing activities

Measuring and Managing
Return on Marketing Investment

Principles: of Marketing

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Principles of Marketing

Kotler and Armstrong

Insert Company and

Copyright © 2016 Pearson Education, Inc. 2-1

• Objective 2: Discuss how to design business portfolios

• Objective 3: Explain marketing’s role in strategic

• Objective 4: Describe the elements of a

• Objective 5: List the marketing management

Copyright © 2016 Pearson Education, Inc. 2-3

• Explain company-wide strategic planning and its four

Copyright © 2016 Pearson Education, Inc. 2-4

Strategic planning is the process of developing

Copyright © 2016 Pearson Education, Inc. 2-5

Steps in strategic Planning:

Business Unit, product

Designing the Setting Company Designing the Planning Marketing

Copyright © 2016 Pearson Education, Inc. 2-6

Example Honda Worldwide Mission Statement

Maintaining a global viewpoint, we are

• Mission statements should . . .

Copyright © 2016 Pearson Education, Inc. 2-9

• Mission statements guide the development of

Copyright © 2016 Pearson Education, Inc. 2-10

• Discuss how to design business portfolios and develop

Designing the Business Portfolio

Copyright © 2016 Pearson Education, Inc. 2-11

The business portfolio is the collection of

Copyright © 2016 Pearson Education, Inc. 2-12

Strategic business units can be a

Analyzing the Current Business Portfolio

Growth-share matrix is a portfolio-planning

Copyright © 2016 Pearson Education, Inc. 2-14

BCG Growth-share matrix

High Relative Low Relative

Copyright © 2016 Pearson Education, Inc. 2-15

•Determine the future role of each SBU

Copyright © 2016 Pearson Education, Inc. 2-18

• Difficulty in defining SBUs and measuring market

Copyright © 2016 Pearson Education, Inc. 2-18

Developing Strategies for Growth and Downsizing

Product/market expansion grid looks at new products,

Copyright © 2016 Pearson Education, Inc. 2-18

Developing Strategies for Growth and Downsizing

Existing Products New Products

Existing Market Product Development

Copyright © 2016 Pearson Education, Inc. 2-19

Copyright © 2016 Pearson Education, Inc. 2-20

Developing Strategies for Growth and Downsizing

Downsizing is when a company must prune,

Copyright © 2016 Pearson Education, Inc. 2-21

• Explain marketing’s role in strategic planning and

Planning Marketing: Partnering to Build

Copyright © 2016 Pearson Education, Inc. 2-22

Value chain is a series of departments that carry

Copyright © 2016 Pearson Education, Inc. 2-23

Copyright © 2016 Pearson Education, Inc. 2-24

Partnering with Other Company Departments

Copyright © 2016 Pearson Education, Inc. 2-25

Partnering with Others in the Marketing System

Copyright © 2016 Pearson Education, Inc. 2-26

Copyright © 2016 Pearson Education, Inc. 2-27

• Describe the elements of a customer value-driven

Marketing Strategy and the Marketing Mix