Transcript Chapter 2 slides

Company and Marketing
Strategy - Partnering to Build
Customer Relationships
Chapter 2
Rest Stop: Previewing the Concepts
• Explain companywide strategic planning and
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its four steps
Discuss how to design business portfolios and
growth strategies
Explain marketing’s role in strategic planning
and how marketing works with its partners to
create and deliver customer value
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Rest Stop: Previewing the Concepts
• Describe the elements of a customer-driven
•
marketing strategy and mix, and the forces
that influence it
List the marketing management functions,
including the elements of a marketing plan,
and discuss the importance of measuring and
managing return on marketing investment
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First Stop - McDonald’s: A CustomerFocused “Plan to Win” Strategy
• Loss of identity
• Rapid expansion causes McDonald’s to lose
product focus
• Faces criticism for nutritional quality and service
standards
• The turnaround
• From “being the world’s best quickservice
restaurant” to “being our customers’ favorite
place and way to eat”
• Increase in share price, sales, and profits
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Strategic planning
• The process of developing
and maintaining a strategic fit
between the organization’s
goals and capabilities and its
changing marketing
opportunities
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Figure 2.1 - Steps in Strategic Planning
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Mission statement
• A statement of the
organization’s purpose—
what it wants to accomplish
in the larger environment
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The Mission Statement
• Questions the mission statement should
answer
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What is our business?
Who is our customer?
What do consumers value?
What should our business be?
• Mission statements should be marketoriented, not product-oriented
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Fuel for Thought
Evaluate the following mission statement for a
real estate agency against the criteria
previously discussed:
“We sell houses and commercial property.”
Rewrite the mission statement.
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Setting Company Objectives and Goals
• The mission should
be translated into
supporting
objectives for each
level of management
• Marketing strategies
and programs must
be developed to
support these
objectives
Heinz ties its diverse product portfolio
together under the mission: “As the
trusted leader in nutrition and wellness,
Heinz—the original Pure Food Company—
is dedicated to the sustainable health of
people, the planet, and our company”
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Business portfolio
• The collection of businesses
and products that make up
the company
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Designing the Business Portfolio
• 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 downsizing that
will shape the future business portfolio
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Marketing at Work
• ESPN’s business
portfolio includes
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Television
Radio
Digital media
Publishing
Event management
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Portfolio analysis
• The process by which
management evaluates the
products and businesses that
make up the company
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Portfolio Analysis
• Purpose of portfolio analysis
• To direct resources toward more profitable
businesses while phasing out or dropping weaker
ones
• Basis of evaluation
• Attractiveness of SBU’s market or industry
• Strength of SBU’s position within that market or
industry
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Figure 2.2 - The BCG Growth-Share
Matrix
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BCG Growth-Share Matrix
• Strategies for categories of the BCG Matrix
• Stars need heavy investments to finance their
rapid growth
• Cash cows need less investment to hold their
market share
• Question marks require a lot of cash to hold their
share, let alone increase it
• Dogs do not promise to be large sources of cash
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Figure 2.3 - The Product/Market
Expansion Grid
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Market penetration
• Increasing sales of current products
to current market segments without
changing the product
Market development
• Identifying and developing new
market segments for current
company products
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Product development
• Offering modified or new products to
current market segments
Diversification
• Starting up or acquiring businesses
outside the company’s current products
and markets
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Developing Strategies for Growth
• Under Armour has
grown at a blistering
rate under its
multipronged growth
strategy
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Downsizing
• Reduces the business portfolio by eliminating
products of business units that are not
profitable or that no longer fit the company’s
overall strategy
• Reasons for downsizing
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Rapid growth of the company
Lack of experience in a market
Change in market environment
Decline of a particular product
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Planning Marketing
• Marketing plays a key role in strategic
planning by
• Providing a guiding philosophy for the company
strategy
• Providing inputs to strategic planners
• Designing strategies to help individual business
units reach their objectives
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Creating Customer Value
• Marketers must practice partner relationship
management
• Working with partners internally within the
company can create an effective value chain
• Working with external partners in the marketing
system helps to form a superior value delivery
network
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Value chain
• The series of internal
departments that carry out
value-creating activities to
design, produce, market, deliver,
and support a firm’s products
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Partnering with Other Company
Departments
• Wal-Mart’s ability to
help buyers “Save
money. Live better”
depends on the
contributions of its
value chain – people
in all of the
company’s
departments
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Value delivery network
• The network made up of the
company, its suppliers, its
distributors, and, ultimately, its
customers who partner with
each other to improve the
performance of the entire
system
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Marketing strategy
• The marketing logic by which the
company hopes to create
customer value and achieve
profitable customer relationships
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Figure 2.4 - Managing Marketing Strategies
and the Marketing Mix
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Market segmentation
• 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
• A group of consumers who respond in a
similar way to a given set of marketing efforts
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Market targeting
• The process of evaluating each market
segment’s attractiveness and selecting
one or more segments to enter
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Positioning
• Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers
Differentiation
• Actually differentiating the market offering to
create superior customer value
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Market Differentiation and Positioning
• Burt’s Bees offers
“Earth friendly
natural personal care
products for The
Greater Good”, a
deceptively simple
statement that forms
the backbone of its
marketing strategy
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Marketing at Work
• Allegiant’s “Go where
they ain’t” strategy
focuses on serving
niches neglected by
competitors
• Targets customers
who might not
otherwise fly
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Marketing mix
.
• The set of tactical marketing tools—
product, price, place, and promotion—
that the firm blends to produce the
response it wants in the target market
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Figure 2.5 - The Four Ps of the
Marketing Mix
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The 4 Ps and the 4 Cs of
the Marketing Mix
• 4 Ps - Seller’s view • 4 Cs - Buyer’s view
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Product
Price
Place
Promotion
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Customer Solution
Customer Cost
Convenience
Communication
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Figure 2.6 - Managing Marketing: Analysis,
Planning, Implementation, and Control
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Figure 2.7 - SWOT Analysis
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Contents of a Marketing Plan
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Executive summary
Current marketing situation
Analysis of threats and opportunities
Objectives and issues
Marketing strategy
Action programs
Budgets
Controls
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Fuel for Thought
• External factors – including trends stemming
from the economic, technological, social,
legal-political, and competitive environments
– may represent threats or opportunities to
many businesses
How have recent technological changes
impacted the marketing of various goods and
services?
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Marketing implementation
• Turning marketing strategies and plans
into marketing actions to accomplish
strategic marketing objectives
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Organizing Marketing Departments
• Functional organization
• Each marketing activity is headed by a functional
specialist
• Geographic organization
• Sales and marketing people are assigned to
specific countries, regions, and/or districts
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Marketing Department Organization
• Product management organization
• One person is given responsibility for complete
strategy and marketing program for a single
product
• Market or customer organization
• Manager responsible for particular market or type
of customer (e.g., government buyers)
• Combination organization
• Uses some combination of the previous four
approaches
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Marketing control
• Measuring and evaluating the results of
marketing strategies and plans and
taking corrective action to ensure that
the objectives are achieved
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Marketing Control
Operating control
• Evaluates performance against the
annual plan and takes corrective
action
Strategic control
• Evaluates whether strategies match
opportunities
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Return on Marketing Investment
• The net return from a marketing investment
(Marketing ROI) divided by the costs of the
marketing investment
• Marketing ROI is assessed using
• Standard marketing performance measures
• Brand awareness, sales, market share
• Customer-centered measures
• Customer acquisition, customer retention, customer
lifetime value, customer equity
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Figure 2.8 - Return on Marketing
Investment
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Rest Stop: Reviewing the Concepts
• Explain companywide strategic planning and
•
•
its four steps
Discuss how to design business portfolios and
growth strategies
Explain marketing’s role in strategic planning
and how marketing works with its partners to
create and deliver customer value
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
2 - 49
Rest Stop: Reviewing the Concepts
• Describe the elements of a customer-driven
•
marketing strategy and mix, and the forces
that influence it
List the marketing management functions,
including the elements of a marketing plan,
and discuss the importance of measuring and
managing return on marketing investment
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
2 - 50
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2013 Pearson Education, Inc.
Publishing as Prentice Hall
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