Chapter Two :

Company and Marketing Strategy Partnering to Build

Customer Relationships
 Ch 2 Company and Marketing Strategy
Topic Outline
1. Companywide Strategic Planning: Defining Marketing’s Role
2. Designing the Business Portfolio
3. Planning Marketing: Partnering to Build Customer Relationships
4. Marketing Strategy and the Marketing Mix
5. Managing the Marketing Effort
6. Measuring and Managing Return on Marketing Investment
 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

.The strategic plan involves adapting the firm to take

advantage of opportunities in its continuously changing
environment.
Levels of Strategic Planning Process

1. Corporate level:
 Defining the company mission.
 Setting objectives and goals.
 Designing the business portfolio.
2. Business unit, product, and market level
3. Functional level: setting functional strategies
for each function.
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. Steps in Strategic Planning

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 The Mission Statement Defined
 A mission statement is a statement of the organization’s purpose–
what it wants to accomplish in the larger environment.

Example: Nike’s mission is “to bring inspiration and

innovation to every athletic (sporty) in the world (if you have a
body, you are athletic).”
 .Questions the mission statement should answer include:
 What is our business?
 Who is our customer?
 What do consumers value?
 What should our business be? 2-6
. A market-oriented mission statement should define the business
in terms of satisfying basic customer needs.

 . Well-defined Mission Statement should be…

 Simplicity

 Meaningful
 Specific

 Motivating

Realistic
 Based on the firm’s strengths in the marketplace.
 Focused on customers and the customer experience rather than on sales and
profits.
Designing the Business Portfolio
 The business portfolio is the collection of businesses
that make up the company.

 The company must:

 Analyze its current business portfolio or strategic
business units (SBUs) and decide which SBUs
should receive more, less, or no investment.
 Develop strategies for growth and/or downsizing that
will shape the future business portfolio.

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Business portfolio
 The business portfolio is the collection of businesses that make
up the company.

 A business portfolio is defined as a collection of products,

services, and other company divisions.

 This portfolio can also be referred to as the company's set of

accessible resources that it uses to achieve its goals.

 It consists of investments, holdings, products, businesses, and

trademarks
 Portfolio Analysis

 Portfolioanalysis: is a process by which

management evaluates the products and
businesses making up the company.

Resources are directed toward more profitable businesses while weaker

ones are phased out or dropped.

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Strategic Business Unit (SBU)
 Strategic business unit:
 A unitof the company that has a separate mission
and objectives and that can be planned independently
from other company businesses.
 An SBU can be a company division, a product line
within a division, or sometimes a single product or
brand.
 Portfolio Analysis (cont’d)

 Standard portfolio analysis evaluates SBUs on two

important dimensions:
1. Attractiveness of SBUs market or industry.
2. Strength of SBUs position within that market or
industry.
 BCG Growth Share Matrix uses :
market growth rate
and relative market share
to classify SBUs into four groups.
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The Boston Consulting Group Approach

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 BCG Growth-Share Matrix
1. Stars: High-share of high-growth market.
Strategy: Build into cash cow via investment.

2. Cash cows: High-share of low-growth market.

Strategy: Maintain or harvest for cash to build STARS.

3. Question marks: Low-share of high-growth market .

Strategy: Build into STAR via investment OR reallocate funding and let slip into DOG
status.

4. Dogs: Low-share of low-growth market.

Strategy: Maintain or divest (selling it or phasing out).

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Developing Strategies for Growth and Downsizing

A portfolio-planning tool for identifying company growth

 Product/market expansion grid is a tool for
identifying company growth opportunities through :
1. Market penetration
2. Market development
3. Product development
4. Diversification
product/market expansion grid: Strategies for
Growth opportunities

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 Product/Market
 The product/market can identify growth opportunities. Through:

1. . Market penetration (Existing markets, existing products)

 making more sales to current customers without changing products :through
 tactics like pricing, promotion, distribution, or customer loyalty.

2. . Market development (New markets, existing products)

identifying and developing new markets for its current products :
by targeting new segments, regions, channels , New geographical markets; exporting
the product to a new country
3. Product development (Existing markets, new products)
3. offering modified or new products to current markets : The marketing
emphasis on:
4. Research & development and innovation
5. Detailed insights into customer needs (and how they change)

4. Diversification (New products, new markets)

 starting up or buying businesses outside of its current products and markets.
 switch to a different line of business,
 more risk strategy because the business is moving into markets in which it
has little or no experience.
 the right balance between risk and reward,
 Customer-Driven Marketing Strategy

 Market Segmentation:

: The process of dividing a market into distinct groups of buyers who have different needs,
characteristics, or behaviors and who might require separate products or marketing programs.

Market segment is a group of consumers who respond in a similar way to a given set of
marketing efforts

 Market Targeting:

:Involves evaluating each market segment’s attractiveness and selecting one or more
segments to serve.
 Differentiation and Positioning

 Market Positioning:
 Arranging for a product to (stay in )occupy a clear, distinctive,
and desirable place relative to competing products in the
minds of target consumers.
 Differentiation:
 Creatingsuperior customer value by actually differentiating the
market offering.

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Marketing Analysis :
SWOT Analysis : SWOT analysis is a framework for identifying and analyzing an organization's
strengths, weaknesses, opportunities and threats.

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

 Weaknesses:
 Internal limitations that may interfere with a company’s ability to achieve its
objectives.

 Opportunities:
 External factors that the company may be able to exploit to its advantage.

 Threats:
 Current and emerging external factors that may challenge the company’s
EXMPLE : SWOT
 Subway

Founded in 1965, Subway is a Connecticut-based

fast food restaurant franchise known for its
submarine sandwiches (subs), salads, and
beverages. The food giant became popular in 2002
and now has outlets in 100+ countries.
SWOT analysis example of Subway

Strengths Weaknesses

•The highest number of outlets among •Brand value

competitors •Varying customer satisfaction
•High brand loyalty •The old design of the outlets
•Health benefits

Opportunities Threats

•Offer more healthy options •Similar new restaurants

•Home delivery and drive-through •Potential backlash causing harm to
services brand reputation
•Diversification of the menu
Contents of a Marketing Plan

1. Executive summary
2. Current marketing situation
3. Analysis of threats and opportunities
4. Objectives and issues
5. Marketing strategy
6. Action programs
7. Budgets
8. Controls
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THANK YOU