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Chapter 2
Marketing Strategy:
Partnering to Build
Customer Relationships
Concept Connections
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Define strategic planning and its four steps.
Discuss how to design business portfolios and
growth strategies.
Explain how to build profitable customer
relationships.
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.
Jian Hong SHAO USTB
Formal Planning?
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Many companies operate without formal plans,
yet these plans can provide many benefits:
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Encouraging management to think ahead
systematically.
Forcing managers to clarify objectives and policies.
Better coordination of company efforts.
Clearer performance standards for control.
Helping the company to anticipate and respond
quickly to environmental changes and sudden
developments.
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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
Corporate Level
Business
unit,
product,
and market
level
Setting
Company
Objectives
and Goals
Planning,
marketing,
and other
functional
Strategies
Defining the
Company
Mission
Designing
the Business
Portfolio
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1 Defining the Company
Mission
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Mission Statement
“To provide a global
trading platform where
practically anyone can
trade practically anything
—you can get it at eBay”.
“It connects individual
buyers and sellers in the
world’s online
marketplace.”
Jian Hong SHAO USTB
Defining the Company’s
Business and Mission
A Mission Statement is a Statement of the Organization’s Purpose.
Market Oriented
Realistic
Specific
Characteristics
of a Good
Mission
Statement:
Fit Market Environment
Distinctive Competencies
Motivating
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2. Setting Company
Objectives and Goals
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Setting Company
Objectives and Goals
Mission
Statement
Marketing
Objective # 1
Marketing
Strategy
Marketing
Strategy
Marketing
Objective # 2
Marketing
Strategy
Marketing
Objective # 3
Marketing
Strategy
Marketing
Strategy
Jian Hong SHAO USTB
Steps in Strategic
Planning
Corporate Level
Business
unit,
product,
and market
level
Setting
Company
Objectives
and Goals
Planning,
marketing,
and other
functional
Strategies
Defining the
Company
Mission
Designing
the Business
Portfolio
Jian Hong SHAO USTB
3. Designing the
Business Portfolio
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Designing the
Business Portfolio
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The business portfolio is the collection of
businesses and products that make up the
company.
The company must do Portfolio Analysis :
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analyze its current business portfolio or Strategic
Business Units (SBU’s)
decide which SBU’s should receive more, less, or no
investment
develop growth strategies for adding new products
or businesses to the portfolio
Jian Hong SHAO USTB
Analyzing Current SBU’s:
-- Boston Consulting Group
Approach
Relative Market Share
Low
High
Market Growth Rate
High
Low
Stars
Question Marks
• High growth & share
• High growth, low share
• Profit potential
• May need heavy
investment to grow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
• Produce cash
?
• Build into Stars or phase out
• Require cash to hold
market share
Dogs
• Low growth & share
• Low profit potential
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Analyzing Current SBU’s:
-- GE’s Strategic BusinessPlanning Grid
Business Strength
Industry
Attractiveness
Strong
High
Medium
Average
Weak
C
A
B
D
Low
Jian Hong SHAO USTB
Problems With Matrix
Approaches
Can be Difficult, Time-Consuming, & Costly to Implement
Difficult to Define SBU’s & Measure Market Share/ Growth
Focus on Current Businesses, But Not future Planning
Can Place too Much Emphasis on Growth
Can Lead to Unwise Expansion or Diversification
Jian Hong SHAO USTB
Developing
Growth Strategies
Product/ Market Expansion Grid
Existing
Products
New
Products
Existing
Markets
Market
Penetration
Product
Development
New
Markets
Market
Development
Diversification
Jian Hong SHAO USTB
Developing Growth
Strategies -Downsizing
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Downsizing : The reduction of the business
portfolio.
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Reasons ?
The market environment might change
The company may have grown too fast or entered
areas where it lacks experience
Product life cycle
Jian Hong SHAO USTB
Partnering To Build
Customer Relationship
With Other Company
Departments
-Value chain is a
series of departments
that carry out valuecreating activities to
design, produce,
market, deliver, and
support a firm’s
products.
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With Others in the
Marketing System
Suppliers
(Marketer)
Marketing
Intermediaries
End User
Market
Environment
Environment
Competitors
Company
Jian Hong SHAO USTB
Marketing Strategy
DemographicEconomic
Environment
TechnologicalNatural
Environment
Marketing
Intermediaries
Product
Suppliers
Place
Target
Consumers
Price
Publics
Promotion
PoliticalLegal
Environment
Competitors
SocialCultural
Environment
Jian Hong SHAO USTB
Customer Centered
Marketing Strategy
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Market
Segmentation:
Determining distinct
groups of buyers
(segments) with
different needs,
characteristics, or
behavior.
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Customer Centered
Marketing Strategy
Target
Marketing:
Involves evaluating
each market segment’s
attractiveness
and selecting one or
more segments to
enter.
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Customer Centered
Marketing Strategy
Market Positioning: arranging for a product to
occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers.
Jian Hong SHAO USTB
Marketing Strategy
DemographicEconomic
Environment
TechnologicalNatural
Environment
Marketing
Intermediaries
Product
Suppliers
Place
Target
Consumers
Price
Publics
Promotion
PoliticalLegal
Environment
Competitors
SocialCultural
Environment
Jian Hong SHAO USTB
Developing the
Marketing Mix
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Price
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Pricing Strategy
Importance of:
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knowing the market
elasticity
keeping an eye
on rivals
Influence factors
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Product
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Promotion
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Strategies
to make the consumer
aware of the existence
of a product
or service
NOT just advertising
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Place
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The means by
which products and
services get from
producer to
consumer and
where they can be
accessed by the
consumer.
Jian Hong SHAO USTB
Managing the
Marketing Effort
Marketing Analysis of Company’s Situation
Marketing
Planning
Marketing
Implementation
Develop Strategic
Plans
Carry Out
The
Plans
Develop
Marketing
Plans
Control
Measure
Results
Evaluate
Results
Take
Corrective
Action
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Marketing Analysis
Analysis is the
complete analysis of the
company’s situation.
SWOT
-Internal
-External
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Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
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Marketing
Implementation
Marketing Strategy
Organizational
Structure
Action
Programs
Decision
and
Reward
Human
Resources
Climate and
Culture
Implementation
Marketing Performance
Jian Hong SHAO USTB
Marketing Department
Organization
Functional
Combination
Plan
Market
Management
Ways to
Carry Out
Marketing
Activities
Geographic
Product
Management
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Marketing Control
Process
The process of evaluating the results of marketing strategies
and taking corrective action to ensure that marketing
objectives are attained
Set
Goals
Measure
Performance
Evaluate
Performance
Take
Corrective
Action
Jian Hong SHAO USTB
Review of Concept
Connections




Define strategic planning and its four steps.
Discuss how to design business portfolios and
growth strategies.
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.
Jian Hong SHAO USTB