Company and Marketing Strategy: Partnering to Build Customer Relationships

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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.

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Steps in Strategic Planning

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Questions a Mission Statement Should Answer What is our Business?

Who is the Customer?

What do Consumers Value?

What Should our Business Be?

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The Mission Statement

• A statement of the organization’s purpose – What it wants to accomplish in the larger environment • Should be market oriented and defined in terms of customer needs.

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Mission Statements Should:

Be Specific Be Based on Distinctive Competencies Be Motivating

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Designing the Business Portfolio

• • The business portfolio is the collection of businesses and products that make up the company.

The company must: – analyze its current business portfolio or Strategic Business Units (SBUs), – decide which SBUs should receive more, less, or no investment, – develop growth strategies for growth or downsizing.

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Portfolio Analysis

• An evaluation of the products and business making up the company.

• Resources are directed to more profitable businesses and weaker ones are phased down or dropped.

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Strategic Business Unit (SBU)

• A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.

• Can be a company division, a product line within a division, or sometimes a single product or brand.

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Analyzing Current SBU’s: BCG Growth-Share Matrix High Relative Market Share Low Stars • High growth & share • May need heavy investment to grow • Eventually, growth will slow Question Marks • Low share SBUs in high growth markets • Require cash to hold market share • Build into Stars or phase out

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Cash Cows Dogs • Low growth, high share • Established, successful SBU’s • Produce cash • Low growth & share • Generate cash to sustain self • Do not promise to be cash sources 2-9

Problems With Matrix Approaches

Can be Difficult, Time Consuming, Costly to Implement Difficult to Define SBUs & Measure Market Share/Growth Can Place too Much Emphasis on Growth Can Lead to Poorly Planned Diversification 2-10

Product/Market Expansion Grid

Existing P R O D U C T Existing New Market Penetration Product Development New Market Development Diversification

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Product/Market Expansion Grid Based on Starbucks • • Market Penetration : make more sales to current customers without changing products. – How? Add new stores in current market areas; improve advertising, prices, menu, service.

Market Development : identify and develop new markets for current products. – How? Review new demographic (seniors/ethnic consumers) or geographic (Asian, European, Australian, & South American) markets.

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Product/Market Expansion Grid Based on Starbucks • • Product Development : offering modified or new products to current markets. – How? Add food offerings, sell coffee in supermarkets, co-brand products.

Diversification : start up or buy businesses outside current products and markets.

– How? Making and selling CDs, testing restaurant concepts, or branding casual clothing.

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Marketing’s Role in Strategic Planning Provide a Guiding Philosophy Provide Inputs to Strategic Planners Design Strategies to Reach Objectives 2-14

Value Delivery Network

Company’s Value Chain Distributors Suppliers Customers 2-15

Market Segmentation

• The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.

• A market segment consists of consumers who 2-16

Target Marketing

• • • Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Target segments that can sustain profitability.

Example: – Arm & Hammer’s baking soda.

– http://www.armandhammer.com

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Market Positioning

• Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (e.g., Chevy Blazer: “Like a rock”) • Process begins with differentiating the company’s marketing offer so it gives consumers more value.

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The Marketing Mix

• The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.

• Consists of the 4 P’s 1. Product 2. Price 3. Place 4. Promotion 2-19

The 4 P’s of the Marketing Mix

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The 4 P’s & 4 C’s of the Marketing Mix

• 4 P’s - Seller’s View – Product – Price – Place – Promotion • 4 C’s - Buyer’s View 2-21

Managing the Marketing Effort

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Major Sections of Product/Brand Plan Executive Summary Current Marketing Situation Analysis of Threats and Opportunities Objectives for the Brand Marketing Strategy Action Programs Marketing Budget Controls 2-23

Marketing Department Organization Functional Organization Market or Customer Organization Geographic Organization Product Management Organization 2-24

Marketing Department Organization • Functional Organization : Each marketing activity is headed by a functional specialist.

– Sales Manager – Advertising Manager – Director of Marketing Research – Customer Service Manager – New Product Manager 2-25

Marketing Department Organization • • Geographic Organization : Sales and marketing people are assigned to specific countries, regions, and districts.

– Coca-Cola staff assigned to the South American market Product Management Organization single product.

: One person given responsibility for complete strategy and marketing program for a 2-26

Marketing Department Organization • • Market or Customer Organization or customer.

: Manager responsible for particular market Combination Organization approaches.

: Use some combination of the previous four – This is especially true in large companies (e.g., Procter & Gamble) – http://www.pandg.com/main.jhtml

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Marketing Control Process

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