Download Partnering to Build Customer Relationships

CHAPTER 2
Company and Marketing
Strategy:
Partnering to Build
Customer Relationships
Roadmap: Previewing the Concepts
 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.
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NIKE – Strategy: Then and Now
Early Days
 Characterized by “seat of



the pants” management.
Innovative sneaker tread
drove early success.
Technological product
superiority, big-name
endorsements, and “Just
Do It” ads revolutionized
sport marketing.
1980s – 1990s: Nike
leverages brand strength
into new product areas.
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Late 1990s - Present
 Changes in consumer



shoe preference, declining
product innovation, and
negative PR plague Nike.
Anti-establishment image
no longer works: brand
backlash occurs.
Strategic planning is
embraced & Nike focuses
on innovation & exploring
new market opportunities.
Nike has global success.
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Strategic Planning
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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Figure 2-1
Steps in Strategic Planning
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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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Market-Oriented Mission Statements
 Should address the
following questions:
– What is our
business?
– Who is our
customer?
– What do consumers
value?
– What should our
business be?
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 Mission statement
must also be:
– Realistic.
– Specific.
– One that fits the
market environment.
– Based on distinctive
competencies.
– Motivating.
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Let’s Talk!
The mission statement now
In 2002 Microsoft’s
reads, "At Microsoft, we
mission was "To
work to help people and
empower people
businesses throughout the
through great
world realize their full
software -- any
potential.”
time, any place,
Evaluate
and on
any Microsoft’s new mission against
device.” the criteria previously discussed.
How does it fare?
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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 strategies for growth or downsizing.
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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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Marketing in Action
Strategic Business Units
The Symrise company
creates ingredients used
in flavors, fragrances,
and cosmetics.
The Flavors Division is
structured into SBUs
which are responsible
for developing the
product categories
shown at left.
http://www.symrise.com
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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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Figure 2-2
The BCG Growth-Share Matrix
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Problems with Matrix Approaches
 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.
Can place too much emphasis on growth.
Can lead to poorly planned diversification.
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Product/Market Expansion Grid
 Helps in the
identification,
evaluation, and
selection of market
growth
opportunities.
– Marketing must
achieve profitable
growth for the firm.
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Figure 2-3
The Product/Market Expansion Grid
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Market Penetration
 Strategy:
to increase sales
to current buyers
without changing
the products
being sold.
Market penetration can be achieved by adding
new stores in current market areas, improving
advertising, lowering prices, adding services, etc.
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Market Development
 Strategy:
identify and
develop new
markets –
demographic
or geographic
– for current
products.
Bass Pro Shops has aggressively
developed new geographic markets
for its Outdoor World retail stores.
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Product Development
 Strategy: offering modified or new
products to current markets.
– How? Adding new sizes, flavors, or
offerings, co-branding products, etc.
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Diversification
 Strategy:
start up or buy businesses outside of
current products and markets.
– Diversification is the riskiest strategy.
– Firms that diversify too broadly into
unfamiliar products or industries can
lose their market focus.
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Let’s Talk!
Video Snippet
After watching the Mayo
Clinic video clip, answer
the following questions:
What growth strategies were
used by the Mayo Clinic?
Are there additional growth
opportunities that could be
pursued? Explain.
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Planning Marketing
 Marketing plays a key role in strategic
planning:
– Provides a guiding philosophy.
 The Marketing Concept
– Provides input to strategic planners.
– Designs strategies to reach objectives.
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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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Value Delivery Network
 Components include:
– Company’s value chain
 Each department
is a link in the
value chain.
– Distributors
Many groups contribute
– Suppliers
to Wal*Mart’s value chain
– Customers
 Improved performance in delivery value to
customers is the goal.
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Figure 2-4
Managing Marketing Strategy and the
Marketing Mix
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Market Segmentation
The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products or
marketing programs.
A market segment consists of
consumers who respond in a similar
way to a given set of marketing efforts.
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Target Marketing
 Involves evaluating
each market
segment’s
attractiveness and
selecting one or
more segments to
enter.
Target those segments that
can sustain profitability.
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Marketing in Action
Target Marketing
Jones Soda caters to its
niche of 12- to 24-yearolds who “appreciate the
brand’s wacky and
irrelevant attitude”.
Loyal consumers help
design product flavors,
colors, labels, and brand
names. Visit the Web site
to learn more.
www.jonessoda.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.
 Begins with differentiating the
company’s marketing offer so it gives
consumers more value.
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Marketing in Action
Positioning
Promoting attributes,
benefits, usage
situations, or users
can help to establish a
product’s position in
the consumer’s mind.
How is the Gelstat
Migraine medicine
being positioned?
Is this ad effective?
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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.
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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 –
Seller’s View
– Product
– Price
– Place
– Promotion
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 4 Cs –
Buyer’s View
– Customer Solution
– Customer Cost
– Convenience
– Communication
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Let’s Talk!
Select either ultimate
consumers or businesses
as your target market.
Explain each element of
Visa’s marketing mix –
product, price, place, and
promotion – in the context
of marketing Visa towards
your selected target
market.
Copyright 2007, Prentice-Hall Inc.
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Figure 2-6
Marketing Analysis, Implementation,
Planning, and Control
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Marketing Management Functions
 Analysis feeds the development of
strategic plans.
 Division, product, and brand level
plans are implemented.
 Marketing activities are evaluated and
corrected as part of control process.
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Marketing Management: Analysis
 The SWOT analysis
is critical:
– Finding
opportunities
– Avoiding threats
– Understanding
strengths
– Analyzing
weaknesses
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Figure 2-7
SWOT Analysis
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Marketing Management: Planning
 Brand / Product Marketing Plan:
1.
2.
3.
4.
5.
6.
7.
8.
Executive summary
Current marketing situation
Analysis of threats and opportunities
Objectives for the brand
Marketing strategy
Action programs
Marketing budget
Controls
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Marketing Management:
Implementation
 Plans are turned into action with
day-to-day activities.
 Good implementation is a challenge.
 Marketing departments must be
properly organized to ensure timely
implementation.
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Marketing Department Organization
 Function
 Geography
 Product

Geographic organization is
very common for national
and international marketers.
Copyright 2007, Prentice-Hall Inc.

management
Market or
customer
Combination of
two or more of
the above
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Let’s Talk!
Under what circumstances
does it make sense to structure
the marketing department by
combining a product
management organizational
system with a customer
organizational system?
Offer an example of a specific
manufacturer for which you
feel this would be appropriate.
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Marketing Control Process
 Set Goals
 Measure Performance
 Evaluate Performance
– Operating Control
– Strategic Control
 The marketing audit is major tool.
 Take Corrective Action
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Figure 2-8
Return on Marketing
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Rest Area: Reviewing the Concepts
 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.
Copyright 2007, Prentice-Hall Inc.
2-45