Chapter 2 Company and Marketing Strategy: Partnering to

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• Chapter 2
• Company and Marketing Strategy Partnering to
  Build Customer Relationships

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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions

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Case StudyDisney What are its challenges?

• Satisfying the customer is everyones job. Is
  this culture changing?
• What can it do during travel and economic
  downturns?

• Disney has grown via diversification. Is it too
  large?
• Originally known for films, animation, theme
  parks. Will consumers/investors accept new
  businesses?

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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions

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What is Strategic Planning?

• Strategic Planning Defined
• The process of developing and maintaining a
  strategic fit between the organizations goals
  and capabilities and its changing marketing
  opportunities

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Steps in Strategic PlanningFigure 2.1
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Market-Oriented Mission

• A mission statement asks..
• What is our business?
• Who is the customer?
• What do consumers value?
• What should our business be?

• A mission statement should be
• An invisible hand
• Neither too narrow nor too broad
• Fitting of market environment
• Based on distinctive competencies
• Motivating

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Market-Oriented Mission
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Click on screenshot for website
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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?

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Marketing in Action
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Strategic Planning

• Company Objectives must tie to Marketing
  Objectives

• Company Mission

Business Objectives
Marketing Objectives
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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions

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The Business Portfolio

• A business portfolio is the collection of
  businesses and products that make up the company
• Business portfolio planning involves two steps
• Analyzing the current business portfolio
• Shaping the future portfolio by developing
  strategies

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The Business Portfolio BCG MatrixFigure 2.2
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BCG Matrix

• For PG, which categories are high growth? Low
  growth?
• Based on your experience, what market share does
  PG have in these categories?
• Which products are cash cows, stars?
• Are there any question marks or dogs?

Marketing in Action
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Click on screenshot for website with products
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The Business Portfolio BCG Matrix

• Build
• Increase market share
• Works well for question marks
• Hold
• Preserve market share
• Good for cash cow

• Harvest
• Increases short-term cash flow
• Good for weak cash cows, question marks and dogs
• Divest
• Sell or liquidate
• Good for dogs and question marks

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Product/Market Expansion GridFigure 2.3
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The Business Portfolio

• Which strategy
• is this?
• Market penetration
• Market development
• Product development
• Diversification

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Marketing in Action
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The Business Portfolio

• Which strategy is this?
• Market penetration
• Market development
• Product development
• Diversification

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Marketing in Action
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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions

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Marketings Role in Strategic Planning

• Provide a guiding philosophy
• Identify attractive opportunities
• Design effective strategies
• Build strong value chains
• Form superior value delivery networks

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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions

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Marketing StrategyFigure 2.4
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Marketing Strategy
Strategy

• Customers grouped by
• Geographic
• Demographic
• Psychographic
• Behavioral
• Market segment is a group of consumers who
  respond in similar ways to marketing efforts

• Market Segmentation
• Target marketing
• Market Positioning

Goal 4 Describe elements of customer-driven
strategy
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Market Segmentation

• Clinique for Men products are designed for a
  segment of men who will pay more for skin care
  products.

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Marketing in Action
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Marketing Strategy
Strategy

• Evaluation of each segments attractiveness
• Selection of segments with greatest long-term
  profitability
• A company can choose one or several segments to
  target

• Market Segmentation
• Target marketing
• Market Positioning

Goal 4 Describe elements of customer-driven
strategy
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Target Markets

• Lucky Magazine is targeted to younger women who
  are shoppers

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Marketing in Action
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Marketing Strategy
Strategy

• The place the product occupies in the consumers
  mind
• Products are positioned relative to competing
  products
• Marketers look for clear, distinctive and
  desirable places in positioning

• Market Segmentation
• Target marketing
• Market Positioning

Goal 4 Describe elements of customer-driven
strategy
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Saturn CorporationProduct Positioning

• Created in 1985
• Saturns mission was to create a Different Kind
  of Company
• Realized people dreaded the purchase process and
  established no-hassle, no haggle pricing policy
• Works to build loyalty from consumer

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Marketing in Action
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Saturn CorporationProduct Positioning

• By 1990 Saturn was winning awards from Popular
  Science, Popular Mechanics, AAA, MotorWeek.
• First Saturn Homecoming in 1994 at its
  manufacturing complex had 38,000 Saturn owners
  attending

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Marketing in Action
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Marketing Mix

• The marketing mix includes controllable and
  tactical marketing tools knows as the 4Ps
• The 4Ps include
• Product
• Place
• Promotion
• Price

Video Snippet Starbucks product is the coffee
house experience as much as the coffee
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The Marketing MixFigure 2.5
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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions

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Managing the Marketing Effort
Marketing Functions

• Finding opportunities
• Avoiding threats
• Understanding strengths
• Analyzing weaknesses

• Analysis
• Planning
• Implementation
• Control

Goal 5 List the marketing management functions
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Managing the Marketing Effort
Marketing Functions

• Marketing plans include
• Executive summary
• Analysis of current situation
• Objectives
• Targets and positioning
• Marketing mix
• Budget
• Controls

• Analysis
• Planning
• Implementation
• Control

Goal 5 List the marketing management functions
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Managing the Marketing Effort
Marketing Functions

• Plans are turned into action with day-to-day
  activities
• Good implementation is a challenge

• Analysis
• Planning
• Implementation
• Control

Goal 5 List the marketing management functions
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Managing the Marketing Effort
Marketing Functions

• Evaluation of the results of marketing strategies
• Checks for differences between goals and
  performance

• Analysis
• Planning
• Implementation
• Control

Goal 5 List the marketing management functions
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The Relationship Between Analysis Planning
Implementation and ControlFigure 2.6
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Measuring Effectiveness

• Return on marketing (marketing ROI)
• The net return from a marketing investment
  divided by the costs of the investments

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Learning Goals

• Explain strategic planning
• Describe business portfolios and growth
  strategies
• Detail marketings role in strategic planning
• Describe elements of customer-driven marketing
  strategy
• List the marketing management functions