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Principles of Marketing,
Arab World Edition
Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed
Tolba
Presentation prepared by Annelie Moukaddem Baalbaki
CHAPTER TWO
Company and Marketing
Strategy:
Partnering to Build Customer
Relationships
Lecturer: Lulu Saud Altweem
Ch 1
2 -0
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Ch
Copyright
© 2011
Pearson
Education
Copyright
© 2011
Pearson
Education
Company and Marketing Strategy
Topic Outline
2.1 Companywide Strategic Planning: Defining Marketing’s
Role.
Explain company-wide strategic planning and its four steps.
2.2 Designing the Business Portfolio.
Discuss how to design business portfolios and develop growth
strategies.
2.3 Planning Marketing: Partnering to Build Customer
Relationships.
Explain Marketing’s role in strategic planning and how marketing
works with its partners to create and deliver customer value.
Ch 2 -1
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Company and Marketing Strategy
Topic Outline
2.4 Marketing Strategy and the Marketing Mix.
Describe the elements of a customer-driven marketing strategy and
mix and the forces that influence it.
2.5 Managing the Marketing Effort
2.6 Measuring and Managing Return on Marketing Investment
List the marketing management functions, including the elements of a
marketing plan, and discuss the importance of measuring and
managing return on marketing investment.
Ch 2 -2
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Companywide Strategic Planning
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.
 Companies usually prepare annual plans, long-range plans,
and strategic plans.
 The annual and long-range plans deal with the company’s
current businesses and how to keep them going.
 In contrast, the strategic plan involves adapting the firm to
take advantage of opportunities in its constantly changing
environment
Ch 2 -3
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Companywide Strategic Planning
Ch 2 -4
•
Like the marketing strategy, the broader company strategy must
be customer focused.
•
Company-wide strategic planning guides marketing strategy and
planning.
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Companywide Strategic Planning
Defining a Market-Oriented Mission
The mission statement is the organization’s purpose;
what it wants to accomplish in the larger environment.
A market-oriented mission statement defines the
business in terms of satisfying basic customer needs.
Ch 2 -5
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Companywide Strategic Planning
Ch 2 -6
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Companywide Strategic Planning
Setting Company Objectives and Goals
The company needs to turn its mission statement into
detailed supporting objectives for each level of
management.
Ch 2 -7
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Designing the Business Portfolio
The business portfolio is the collection of businesses and
products that make up the company.
Business portfolio planning involves two steps:
the company must analyze
its current business
portfolio and determine
the investment
Ch 2 -8
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shape the future portfolio
by developing strategies
for growth and
downsizing
Designing The Business Portfolio
Analyzing the Current Business Portfolio
Strategic business unit (SBU) is a unit of the company that
has a separate mission, and objectives that can be planned
separately from other company businesses.
•
Company division
•
Product line within a division
•
Single product or brand
Ch 2 -9
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Companywide Strategic Planning
Analyzing the Current Business Portfolio
Ch 2 -10
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Companywide Strategic Planning:
The Boston Consulting Group Approach
A company classifies all its SBUs according to the growth-share
matrix. The growth-share matrix defines four types of SBU’s:
(read book pg. no 41-42)
Ch 2 -11
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Companywide Strategic Planning
Problems with Matrix Approaches
It have some limitations:
Difficulty
in defining SBUs and measuring market
share and growth
•
Time consuming
•
Expensive
•
Focus on current businesses, not future planning
 Methods to improve:
•
Dropped formal matrix methods in favor of more customized
approaches that better suit their specific situations
•
Today’s strategic planning has been decentralized
Ch 2 -12
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Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product/market expansion grid is a portfolio-planning
tool for identifying company growth opportunities through
market penetration, market development, product
development, or diversification.
Ch 2 -13
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Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Market penetration is a growth strategy increasing sales
to current market segments without changing the product.
Market development is a growth strategy identifying and
developing new market segments for current products.
Ch 2 -14
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Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product development is a growth strategy through offering
new or modified products to current market segments.
Diversification is a growth strategy through starting up or
acquiring businesses outside the company’s current products
and markets.
Downsizing is the reducing of the business portfolio by
eliminating products or business units that are not profitable
or that no longer fit the company’s overall strategy.
Ch 2 -15
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Planning Marketing: Partnering to Build
Customer Relationships
Marketing plays a key role in the company’s
strategic planning in several ways:
First, marketing provides a guiding philosophy—the marketing
concept—that suggests the company strategy should revolve
around building profitable relationships with important
consumer groups.
Second, marketing provides inputs to strategic planners by
helping to identify attractive market opportunities and
assessing the firm’s potential to take advantage of them.
Finally, within individual business units, marketing designs
strategies for reaching the unit’s objectives. Once the unit’s
objectives are set, marketing’s task is to help carry them out
profitably.
Ch 2 -16
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Planning Marketing: Partnering to Build
Customer Relationships
Partnering 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.
That is, each department carries out value-creating activities
to design, produce, market, deliver, and support the firm’s
products.
Ch 2 -17
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Planning Marketing
Partnering with Others in the Marketing System
Value delivery network is made up of the company,
suppliers, distributors, and ultimately the customers who
partner with each other to improve performance of the
entire system.
Toyota’s performance against Ford depends on the quality of
Toyota’s overall value delivery network versus Ford’s
Ch 2 -18
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Marketing Strategy and the Marketing Mix
Ch 2 -19
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Marketing Strategy and the Marketing Mix
Customer-Driven Marketing Strategy
Most companies are in a position to serve some segments
better than others.
Thus, each company must divide up the total market, choose
the best segments, and design strategies for profitably
serving chosen segments.
This process involves:
Ch 2 -20
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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, is called market segmentation.
Market segment is a group of consumers who
respond in a similar way to a given set of
marketing efforts.
Ch 2 -21
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Marketing Targeting
Market targeting is the process of evaluating each market
segment’s attractiveness and selecting one or more
segments to enter.
A company with limited resources might decide to serve only
one or a few special segments or market niches.
Most companies enter a new market by serving a single
segment; if this proves successful, they add more
segments.
Ch 2 -22
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Marketing Differentiation and Positioning
Positioning is arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing
products in the minds of the target consumer.
Thus, effective positioning begins with differentiation—
actually differentiating the company’s market offering so
that it gives consumers more value.
Ch 2 -22
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Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
Marketing mix is the set of controllable tactical marketing
tools—product, price, place, and promotion—that the firm
blends to produce the response it wants in the target market.
Ch 2 -23
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Developing an Integrated Marketing Mix
It holds that the four Ps concept takes the seller’s view
of the market, not the buyer’s view. From the
buyer’s viewpoint, in this age of customer value and
relationships, the four Ps might be better described
as the four Cs:
4Cs
4Ps
Ch 2 -23
Product
Customer solution
Price
Customer cost
Place
Convenience
Promotion
Communication
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Managing the Marketing Effort
Managing the marketing process requires the four
marketing management functions:
Ch 2 -24
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Marketing Analysis
The marketer should conduct a SWOT analysis ,by which it
evaluates the company’s overall strengths (S), weaknesses (W),
opportunities (O), and threats (T).
Ch 2 -25
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Market Planning
from book pg. no 55, table 2.2)
Through strategic planning, the company decides what it
wants to do with each business unit. Marketing planning
involves choosing marketing strategies that will help the
company attain its overall strategic objectives.
Positioning
Marketing Strategy:
It outlines how the
company intends to create
value for target customers
in order to capture value in
return.
Target
markets
Market mix
Marketing
expenditure
level
Ch 2 -26
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Marketing Implementation
Marketing implementation is the process that
turns marketing plans into marketing actions
to accomplish strategic marketing objectives.
Whereas marketing planning addresses:
what
why
who
where
when
how
Ch 2 -28
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Marketing Control
Marketing Control is the process of measuring and
evaluating the results of marketing strategies and plans and
taking corrective action to ensure that objectives are
achieved. Operating control
Strategic control
Management
first sets specific
marketing goals.
Measures its
performance in
the market place
Four steps of
marketing
control:
Management takes
corrective action to
close the gaps
between goals and
performance
Ch 2 -29
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Evaluates the
causes of any
differences
between expected
and actual
performance
Measuring and Managing Return on Marketing
Investment
Return on Marketing Investment (Marketing ROI)
Return on marketing investment (Marketing ROI) is the
net return from a marketing investment divided by the costs
of the marketing investment.
Marketing ROI provides a measurement of the profits
generated by investments in marketing activities.
Ch 2 -30
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From Book
 Read reveiwing objectives and key terms (pg. 60
and 61)
 Read all 'Key Terms' (pg. 61)
 Company case- Bahrain Bay (pg. 63).
Ch 2 -31
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