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Chapter 2
Company and
Marketing Strategy:
Partnering to Build
Customer
Relationships
Copyright © 2008 Pearson Education Canada
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-2
Principles of Marketing, Seventh Canadian Edition
Case Study Disney –What are its
challenges?
• Began as animated films 75
years ago
• Theme parks: four major
North American resorts
• Walt Disney world: world’s #1
tourist destination
• Key success factors:
• Now a diversified, media and
entertainment conglomerate
Disney has grown via
diversification. Is it too large?
• Originally known for films,
animation, theme parks. Will
consumers/investors accept
new businesses?
• Satisfying the customer is
everyone’s job. Is this culture
changing?
• What can it do during travel
and economic downturns?
– Sparkling cleanliness
– Friendliness of employees
– Mission: make people happy;
dream come true
– Outstanding customer service
Copyright © 2008 Pearson Education Canada
2-3
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-4
Principles of Marketing, Seventh Canadian Edition
Companywide Strategic Planning:
Defining Marketing’s Role
• Strategic Planning Defined
–The process of developing and maintaining a
strategic fit between the organization’s goals
and capabilities and its changing marketing
opportunities
Copyright © 2008 Pearson Education Canada
2-5
Principles of Marketing, Seventh Canadian Edition
Defining a
Market-Oriented Mission
• Mission statement
– A statement of an organization’s purpose;
what it wants to accomplish in the larger
environment; needs to be specific, realistic,
and motivating; today’s statements are
market-oriented
Copyright © 2008 Pearson Education Canada
2-6
Principles of Marketing, Seventh Canadian Edition
Defining a
Market-Oriented Mission
• A mission statement
asks..
• A mission statement
should be:
– What is our business?
– Who is the customer?
– What do consumers
value?
– What should our
business be?
Copyright © 2008 Pearson Education Canada
– An “invisible hand”
– Neither too narrow
nor too broad
– Fitting of market
environment
– Based on distinctive
competencies
– Motivating
2-7
Principles of Marketing, Seventh Canadian Edition
Discussion Questions
Mission Statements
• Under what
circumstances would
you suggest a
company change its
mission?
• What challenges
might it encounter as
it implements a
change in its
mission?
Copyright © 2008 Pearson Education Canada
2-8
Principles of Marketing, Seventh Canadian Edition
Setting Company
Objectives and Goals
• The mission is turned into detailed
business and marketing objectives
• Marketing strategies and programs must
develop to support marketing objectives
Copyright © 2008 Pearson Education Canada
2-9
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-10
Principles of Marketing, Seventh Canadian Edition
Designing The Business Portfolio
• A business portfolio is the collection of
businesses and products that make up
the company
• Business portfolio planning involves
two steps:
1. Analyzing its current business portfolio
2. Shaping the future portfolio by developing
strategies for growth and down sizing
Copyright © 2008 Pearson Education Canada
2-11
Principles of Marketing, Seventh Canadian Edition
Designing The Business Portfolio
•
Analyzing the Current Business Portfolio
– Portfolio analysis is a strategic planning tool to
identify/evaluate businesses that make up the firm
and make resource allocation decisions
•
Strategic business unit (SBU):
– Unit with separate mission and objectives
– Planned independently from other company
businesses
– Used as the building block of portfolio analysis
Copyright © 2008 Pearson Education Canada
2-12
Principles of Marketing, Seventh Canadian Edition
The Business Portfolio
BCG Matrix
• Build
• Harvest
– Increase market
share
– Works well for
question marks
– Increases short-term
cash flow
– Good for weak cash
cows, question
marks and dogs
• Divest
• Hold
– Sell or liquidate
– Good for dogs and
question marks
– Preserve market
share
– Good for cash
cow
Copyright © 2008 Pearson Education Canada
2-13
Principles of Marketing, Seventh Canadian Edition
Designing The Business Portfolio
• Developing Strategies for growth and
Downsizing
– Marketing must identify, evaluate, and select
market opportunities and lay down strategies
for capturing them
– Product Market Expansion Grid
• A portfolio-planning tool for identifying company
growth opportunities
Copyright © 2008 Pearson Education Canada
2-14
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-15
Principles of Marketing, Seventh Canadian Edition
Planning Marketing: Partnering to
Build Customer Relationships
• Provide a guiding philosophy
• Identify attractive opportunities
• Design effective strategies
• Build Customer and Partner Relationship
management
– Form strong value chains
– Form superior value delivery networks
Copyright © 2008 Pearson Education Canada
2-16
Principles of Marketing, Seventh Canadian Edition
Planning Marketing: Partnering to
Build Customer Relationships
• Partnering with Other Company
Departments
– Coordination of the value-creating activities
performed by each department within the
company
• Partnering with Others in the Marketing
System
– The objective is to improve the performance of
the customer value-delivery network.
Copyright © 2008 Pearson Education Canada
2-17
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-18
Principles of Marketing, Seventh Canadian Edition
Marketing Strategy and the
Marketing Mix
• Marketing Strategy
– The marketing logic by which the business
unit hopes to achieve its marketing objectives
• Marketing Mix
– The company designs a mix made up of
factors under its control
• The company engages in marketing
analysis, planning, implementation, and
control
Copyright © 2008 Pearson Education Canada
2-19
Principles of Marketing, Seventh Canadian Edition
Customer-Centered
Marketing Strategy
1.
2.
3.
Market Segmentation
Target marketing
Market Positioning
Copyright © 2008 Pearson Education Canada
• Dividing a market into
groups with distinct
needs who might require
(respond to) different
marketing mixes
• Market segment is a
group of consumers who
respond in similar ways
to marketing efforts
• Bases for segmentation
2-20
Principles of Marketing, Seventh Canadian Edition
Customer-Centered
Marketing Strategy
1.
2.
3.
Market Segmentation
Target marketing
Market Positioning
Copyright © 2008 Pearson Education Canada
• Evaluating the
attractiveness of each
market segment
• Selection of segments
with greatest long-term
profitability
• Deciding which
segment(s) to enter
• A company can choose
one or several segments
to target
2-21
Principles of Marketing, Seventh Canadian Edition
Customer-Centered
Marketing Strategy
1.
2.
3.
Market Segmentation
Target marketing
Market Positioning
Copyright © 2008 Pearson Education Canada
• The place the product
occupies in the
consumer’s mind
• Products are positioned
relative to competing
products
• Marketers look for clear,
distinctive and desirable
places in positioning
• Differentiation by
offering and delivering
greater value
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Principles of Marketing, Seventh Canadian Edition
Developing the Marketing Mix
– The marketing mix includes controllable and
tactical marketing tools knows as the 4P’s
– The 4P’s include
• Product
• Place
• Promotion
• Price
Copyright © 2008 Pearson Education Canada
2-23
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-24
Principles of Marketing, Seventh Canadian Edition
Managing the
Marketing Effort
1.
2.
3.
4.
Analysis
Planning
Implementation
Control
Copyright © 2008 Pearson Education Canada
• Finding opportunities
• Avoiding threats
• Understanding
strengths
• Analyzing
weaknesses
2-25
Principles of Marketing, Seventh Canadian Edition
Managing the
Marketing Effort
1.
2.
3.
4.
Analysis
Planning
Implementation
Control
Copyright © 2008 Pearson Education Canada
• Marketing plans
include:
– Executive summary
– Analysis of current
situation
– Objectives
– Targets and
positioning
– Marketing mix
– Budget
– Controls
2-26
Principles of Marketing, Seventh Canadian Edition
Managing the
Marketing Effort
1.
2.
3.
4.
Analysis
Planning
Implementation
Control
Copyright © 2008 Pearson Education Canada
• Process that turns
strategies and plans
into marketing actions
that accomplish
strategic marketing
objectives
• Good implementation
is a challenge
• Marketing department
organization
2-27
Principles of Marketing, Seventh Canadian Edition
Managing the
Marketing Effort
1.
2.
3.
4.
Analysis
Planning
Implementation
Control
Copyright © 2008 Pearson Education Canada
• Involves Evaluating
the results of
marketing strategies
and plans and taking
corrective action
• Checks for differences
between goals and
performance
• Operating control,
strategic control,
marketing audit
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Principles of Marketing, Seventh Canadian Edition
Measuring and Managing
Return on Marketing
• Return on marketing (marketing ROI)
– The net return from a marketing investment divided
by the costs of the investments
Copyright © 2008 Pearson Education Canada
2-29
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Explain company-wide strategic planning and its four
steps
Discuss how to design business portfolios and develop
strategies for growth and downsizing
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 them
List the marketing management functions, including
the elements of a marketing plan
Copyright © 2008 Pearson Education Canada
2-30
Principles of Marketing, Seventh Canadian Edition