Download Company and Marketing Strategy:

Company and Marketing
Strategy:
Partnering to Build Customer
Relationships
Chapter
2
Rest Stop: Previewing the Concepts
1.
2.
3.
4.
5.
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.
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 marketing ROMI.
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2-2
First Stop
NIKE: Creating Brand Experiences & Community
Nike’s Early Success
Challenge & Solution
 1970s: Nike’s earliest
 Late 1990s: Nike became a
success was the waffle
victim of its own success; sales
trainer and by 1979 the
slipped, ad creativity declined, &
firm owned 50% of U.S.
customer relationships cooled.
running shoe market.
 Nike Turnaround: Refocused
 1980s: Endorsements,
promotional events, and
on product innovation, revised
heavy ad spending on
mission statement, sought
“Just Do It” campaign
deeper, stronger, customer
revolutionized sports
relationships via interactions
marketing. Nike built
with customers.
customer relationships by
marketing a way of life.
 Building Brand Experiences:
Reduced mass media spending
 1990s: Nike Swoosh logo
became prominent; firm
in favor of customer community
expanded into other sports
building via social networking
and product offerings.
and in-person events, resulting
in large market share gains.
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Strategic Planning Defined
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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Steps in Strategic Planning Process
 Corporate level:
– Defining the company mission.
– Setting objectives and goals.
– Designing the business portfolio.
 Business unit, product, and market
level:
– Planning marketing strategy as well as
other functional strategies.
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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 include:
– What is our business?
– Who is our customer?
– What do consumers value?
– What should our business be?
 Mission statements should be market
oriented, not product oriented.
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Marketing in Action
Nike’s mission
is “to bring
inspiration and
innovation to
every athlete*
in the world
(*if you have a
body, you are
an athlete).”
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The Mission Statement
 Well-defined mission statements should
also be:
–
–
–
–
Meaningful.
Specific.
Motivating.
Based on the firm’s strengths in the
marketplace.
– Focused on customers and the customer
experience rather than on sales and profits.
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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 Firm Objectives and Goals
 The mission should be translated
into supporting objectives for
each level of management.
– Creates a hierarchy of objectives
that are consistent with one
another. For example:
•Business objective: Increase profits.
•Marketing objective: Increase market
share of domestic and international
markets.
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Marketing in Action
McDonald’s revised
mission, “Being our
customers’ favorite
place and way to
eat,” now steers the
company towards
the goal of achieving
exceptional
experiences for its
customers.
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Marketing in Action
Kohler’s overall
objective is to build
profitable customer
relationships by
developing efficient
yet beautiful products
that embrace the
“essence of gracious
living.” Visit their web
site at Koler.com to
see how it works to
meet this objective.
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Business Portfolio
The collection of businesses
and products that make up
the country.
The businesses chosen for the portfolio
should be those that fit the firm’s
strengths and weaknesses.
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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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Strategic Business Unit
A unit of the company that
has a separate mission and
objectives and that can be
planned independently from
other company businesses.
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Strategic Business Unit (SBU)
 Strategic
business unit:
– An SBU can be a
company
division, a
product line
within a
division, or
sometimes a
single product
or brand.
Theme resorts are just one
SBU within Disney
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Portfolio Analysis
A process by which
management evaluates the
products and businesses
making up the company.
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Portfolio Analysis
 Purpose of portfolio analysis:
– Resources are directed toward more
profitable businesses while weaker ones
are phased out or dropped.
 Standard portfolio analysis evaluates
SBUs on two important dimensions:
– 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
 Stars: High-share of high-growth market.
– Strategy: Build into cash cow via investment.
 Cash cows: High-share of low-growth market.
– Strategies: Maintain or harvest for cash to build
STARS.
 Question marks: Low-share of high-growth
market.
– Strategies: Build into STAR via investment OR
reallocate funding and let slip into DOG status.
 Dogs: Low-share of low-growth market.
– Strategies: Maintain or divest.
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Problems with Matrix Approaches
 Several problems exist:
– Can be difficult, time consuming, and costly to
implement.
– Difficult to define SBUs and measure market
share and growth rate.
– Focus is on current businesses; gives little help
with future planning.
 These problems have led to changes in the
strategic planning process used by firms.
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Figure 2.3:
The Product/Market Expansion Grid
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Marketing in Action
Under Armour has grown substantially by means
of its market penetration, market development,
and product development strategies.
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Marketing in Action
The key to growth in
many consumer goods
companies is new
product development.
New products provide
customers with value
when they satisfy
needs better than
existing offerings.
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Downsizing
 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.
– Many reasons exist for downsizing.
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Planning Marketing
 Marketing plays a key role in strategic
planning:
– Provides a guiding philosophy.
• The marketing concept
– Provides inputs to strategic planners.
• Identifies opportunities
– Designs strategies to reach 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
 Each company department engages in
some type of value-creating activity.
– Purchasing
– Marketing
– Operations, etc.
 Coordination between departments is
key to providing superior value.
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Marketing in Action
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
 Components include:
– Company’s value
chain
– Distributors
– Suppliers
– Customers
 Improved
performance in delivery value to
customers is the goal.
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Figure 2.4:
Managing Marketing Strategies &
the Marketing Mix
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Marketing Strategy
and the Marketing Mix
 Goal: create value for customers and
build customer relationships.
 Marketing strategy decisions include:
– Market segmentation and targeting
– Differentiation and positioning
 Marketing strategy must guide
marketing mix decisions.
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Segmentation
The process of dividing the
market into distinct groups of
buyers who have different needs,
characteristics, or behaviors and
who might require separate
marketing programs or products.
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Market Segmentation and
Targeting
 Targeting:
– Involves
evaluating
each market
segment’s
attractiveness
and selecting
one or more
segments to
enter.
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Marketing in Action
Logitech focuses on
niche marketing by
marketing “personal
peripherals”
including every
variety of computer
mouse imaginable. In
the niches it services,
Logitech is the
undisputed market
leader.
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Differentiation and Positioning
 Positioning:
– Arranging for a
product to occupy a
clear, distinctive,
and desirable place
relative to
competing
products in the
minds of target
consumers.
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Burger King’s worldwide
marketing campaign is
built around its “Have it
your way” positioning.
Visit www.bk.com
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Differentiation and Positioning
 Differentiation:
– Creating
superior
customer value
by actually
differentiating
the market
offering.
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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.
– These tools are often called the 4 P’s:
• Product
• Price
• Place (distribution)
• Promotion
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Marketing Mix
The set of controllable,
tactical marketing tools 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 –
 4 Cs –
Seller’s View
Buyer’s View
– Product
– Price
– Place
– Promotion
– 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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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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Contents of a Marketing Plan
1.
2.
3.
4.
5.
6.
7.
8.
Executive summary
Current marketing situation
Analysis of threats and opportunities
Objectives and issues
Marketing strategy
Action programs
Budgets
Controls
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Marketing Implementation
 Turns marketing plans into marketing
actions by addressing:
– Who
– Where
– When
– How
 Implementation can be difficult, but is
critical to success.
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Organizing Marketing Departments
 Chief marketing officer (CMO) positions
are becoming more common.
 Functional organization:
– Each marketing activity is headed by a
functional specialist.
• E.g., sales manager, advertising manager,
marketing research manager, etc.
 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 Process
 Marketing control
involves four steps:
–
–
–
–
Set goals
Measure performance
Evaluate performance
Take corrective action
• May require changing
action programs or
goals.
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Marketing Control Process
 Operating control
– Evaluates performance against the
annual plan and takes corrective action.
 Strategic control
– Evaluates whether strategies match
opportunities.
• The marketing audit is a major tool.
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Figure 2.8:
Return on Marketing Investment
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Return on Marketing Investment
 Return on marketing investment is
assessed using one or more methods:
– Standard marketing performance
measures (marketing dashboards):
• Brand awareness, sales, market share.
– Customer-centered measures:
• Customer acquisition, customer retention,
customer lifetime value, customer equity.
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Rest Stop: Reviewing the Concepts
1.
2.
3.
4.
5.
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.
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 marketing ROMI.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
2 - 55
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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 © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
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