Principles of Marketing

Chapter 2
Company and Marketing
Strategy
Partnering to Build Customer
Relationships
 Companywide 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
• sets the vision, mission, objectives,
goals and target
Defining the company mission

•What is the nature of the business?

•Who are the customers/stakeholders?
•How to ensure value for stakeholders?
 Mission Statement
• A formal statement of organizational
purpose
• Serves as Invisible hand
“Improving Livelihood”
-Pran
“To bring inspiration and innovation to
every athlete”
- Nike
 Setting company objectives and goal

Goals > Objectives

• Something to achieve • Something to achieve
goals
• Not specific • Specific
• May not be measurable • Measurable
• Long term in nature • Short term in nature
• For example: Becoming • For example: achieving
industry leader market share > 50%
 Some examples of SMART business
objectives
• E-commerce: Increase our lead base of site
registrations by increasing our downloadable
materials by 25% by the end of the year.
• Clothing Store: Sell 30% more evening dresses
during the month of May, when weddings occur in our
region. Introduce a credit card based hire-purchase
plan for up to 10 installments.
• Fast-food Network: Open 25 new stores by the end
of the year, 10 in our state and 5 in each of the 3
neighboring states.
Porter’s five forces model
Corporate appraisal (SWOT analysis)

…….

.
.
……… ;..
….. .
Threats .
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Weirich’s TOWS Analysis
Gap Analysis
 Designing the business
portfolio
• Business portfolio- Combination of
products/service
• Best business portfolio fits the
strength and weakness to the
opportunities
• Two steps:
1. Analyzing the current business portfolio
2.Developing strategies for growth
Analyzing the current
business portfolio
BCG Matrix
Product life cycle and BCG matrix
 Limitations of BCG Matrix
• Difficulty in defining SBUs
• Difficulty in measuring market share and
growth rate
• Time consuming
• Expensive
• Focus on current businesses, not future
planning
Designing the growth strategies
 Growth Strategy
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
Product development is a growth strategy that offers new
or modified products to existing market segments
Diversification is a growth strategy for starting up or
acquiring businesses outside the company’s current
products and markets
Types of Diversification
Diversification types
 Downsizing
• Downsizing is the reduction of the
business portfolio by eliminating products
or business units that are not profitable or
that no longer fit the company’s overall
strategy
• Divesting strategy
 Planning Marketing
Partnering to Build Customer Relationships
-Partner Relationship Management (PRM)
-Value Delivery network
 Marketing Strategy

Market Segmentation Market Targeting

Market Positioning Differentiation

Marketing Mix (4Ps & 4Cs)
 Marketing Plan
Company Specific
info (Name,
Executive tagline, Vision,
Marketing
summary Situation analysis
Mission, goals,
objectives)

Budgets
Marketing Action
(Including
Strategies programs
Marketing ROI)

TVC Video Controls Conclusions

Marketing management

Marketing Analysis

Marketing
Marketing Control
Implementation
Marketing ROI
Marketing ROI
 Marketing ROI- Calculation
Say, your company has invested $3,500 in a
particular Marketing campaign. This campaign
has generated $9,725 in additional sales for
your business.

ROI= (Sales Growth - Marketing Cost) / Marketing Cost 

= (9,725 - 3,500) / 3,500 = 1.78 = 178%

That means for every one dollar you put into this Marketing
campaign you get your one dollar back and then an additional $1.78.
 Thanks
for your kind patience
 Case
ABC Ltd has been in business for 25 years, during which time profits
have risen by an average of 3% per annum, although there have been
peaks and troughs in profitability due to the ups and downs of trade in
the customers' industry. The increase in profits until five years ago was
the result of increasing sales in a buoyant market, but more recently, the
total market has become somewhat smaller and ABC has only increased
sales and profits as a result of improving its market share. The company
produces components for manufacturers in the engineering industry.

In recent years, the company has developed many new products and
currently has 40 items in its range compared to 24 only five years ago.
Over the same five year period, the number of customers has fallen from
20 to nine, two of whom together account for 60% of the company's
sales.
Requirements: Give your appraisal of the
company's future, and use a SWOT analysis
to suggest what it is probably doing wrong.
Apply the TOWS analysis to develop the
strategy.