Company and Marketing Company and Marketing Strategy: Partnering to Build Strategy: Partnering to Build Customer RelationshipsCustomer Relationships

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Strategic Strategic PlanningPlanning

Strategic PlanningStrategic Planning is the Process is the Process of Developing and Maintaining of Developing and Maintaining

a Strategic Fit Between the a Strategic Fit Between the Organization’s Goals and Organization’s Goals and

Capabilities and Its Changing Capabilities and Its Changing Marketing Opportunities.Marketing Opportunities.

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Steps in Strategic Steps in Strategic PlanningPlanning

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Questions a Mission Statement Questions a Mission Statement Should AnswerShould Answer

What is our Business?

Who is the Customer?

What do Consumers Value?

What Should our Business Be?

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The Mission StatementThe Mission Statement

• A statement of the organization’s A statement of the organization’s purposepurpose– What it wants to accomplish in the What it wants to accomplish in the

larger environmentlarger environment

• Should be market oriented and Should be market oriented and defined in terms of customer needs.defined in terms of customer needs.

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Mission Statements Should:Mission Statements Should:

Be Specific

Be Based on Distinctive Competencies

Be Motivating

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Designing the Business Designing the Business PortfolioPortfolio

• The business portfolio is the collection The business portfolio is the collection of businesses and products that make of businesses and products that make up the company.up the company.

• The company must:The company must:– analyze its analyze its currentcurrent business portfolio or business portfolio or

Strategic Business Units (SBUs),Strategic Business Units (SBUs),– decide which SBUs should receive more, decide which SBUs should receive more,

less, or no investment,less, or no investment,– develop growth strategies for growth or develop growth strategies for growth or

downsizing.downsizing.

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Portfolio AnalysisPortfolio Analysis

• An evaluation of the products and An evaluation of the products and business making up the company.business making up the company.

• Resources are directed to more Resources are directed to more profitable businesses and weaker profitable businesses and weaker ones are phased down or dropped.ones are phased down or dropped.

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Strategic Business Unit Strategic Business Unit (SBU)(SBU)

• A unit of the company that has a A unit of the company that has a separate mission and objectives and separate mission and objectives and that can be planned independently that can be planned independently from other company businesses.from other company businesses.

• Can be a company division, a Can be a company division, a product line within a division, or product line within a division, or sometimes a single product or brand.sometimes a single product or brand.

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Analyzing Current SBU’s:Analyzing Current SBU’s:BCG Growth-Share MatrixBCG Growth-Share Matrix

Question Marks

• Low share SBUs in high growth markets• Require cash to hold market share• Build into Stars or phase out

Question Marks

• Low share SBUs in high growth markets• Require cash to hold market share• Build into Stars or phase out

Stars

• High growth & share• May need heavy investment to grow• Eventually, growth will slow

Relative Market Share High Low

Mark

et

Gro

wth

Rate

Low

H

igh ?

Cash Cows

• Low growth, high share• Established, successful SBU’s• Produce cash

Cash Cows

• Low growth, high share• Established, successful SBU’s• Produce cash

Dogs

• Low growth & share • Generate cash to sustain self• Do not promise to be cash sources

Dogs

• Low growth & share • Generate cash to sustain self• Do not promise to be cash sources

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Can be Difficult, Time Consuming, Costly to ImplementCan be Difficult, Time Consuming, Costly to Implement

Difficult to Define SBUs & Measure Market Share/GrowthDifficult to Define SBUs & Measure Market Share/Growth

Can Place too Much Emphasis on GrowthCan Place too Much Emphasis on Growth

Problems With Matrix Problems With Matrix ApproachesApproaches

Can Lead to Poorly Planned DiversificationCan Lead to Poorly Planned Diversification

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Market Market PenetrationPenetration

ProductProductDevelopmentDevelopment

Market Market DevelopmentDevelopment

ExistingExisting NewNew

P R O D U C TP R O D U C T

NewNewM A

R K

E T

M A

R K

E T

DiversificationDiversification

ExistingExisting

Product/Market Expansion Product/Market Expansion GridGrid

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Product/Market Expansion Grid Product/Market Expansion Grid Based on StarbucksBased on Starbucks

• Market PenetrationMarket Penetration: make more sales to : make more sales to current customers without changing products. current customers without changing products. – How? Add new stores in current market areas; How? Add new stores in current market areas;

improve advertising, prices, menu, service.improve advertising, prices, menu, service.

• Market DevelopmentMarket Development: identify and develop : identify and develop new markets for current products. new markets for current products. – How? Review new demographic (seniors/ethnic How? Review new demographic (seniors/ethnic

consumers) or geographic (Asian, European, consumers) or geographic (Asian, European, Australian, & South American) markets.Australian, & South American) markets.

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Product/Market Expansion GridProduct/Market Expansion Grid Based on StarbucksBased on Starbucks

• Product DevelopmentProduct Development: offering modified : offering modified or new products to current markets. or new products to current markets. – How? Add food offerings, sell coffee in How? Add food offerings, sell coffee in

supermarkets, co-brand products.supermarkets, co-brand products.

• DiversificationDiversification: start up or buy : start up or buy businesses outside current products and businesses outside current products and markets.markets.– How? Making and selling CDs, testing How? Making and selling CDs, testing

restaurant concepts, or branding casual restaurant concepts, or branding casual clothing.clothing.

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Marketing’s Role in Strategic PlanningMarketing’s Role in Strategic Planning

Provide a Guiding PhilosophyProvide a Guiding Philosophy

Provide Inputs to Strategic PlannersProvide Inputs to Strategic Planners

Design Strategies to Reach ObjectivesDesign Strategies to Reach Objectives

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Value Delivery NetworkValue Delivery Network

Company’s Value Chain

Distributors Suppliers

Customers

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Market SegmentationMarket Segmentation

• The process of dividing a market into The process of dividing a market into distinct groups of buyers with distinct groups of buyers with different needs, characteristics, or different needs, characteristics, or behavior who might require separate behavior who might require separate products of marketing programs.products of marketing programs.

• A market segment consists of A market segment consists of consumers whoconsumers who

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Target MarketingTarget Marketing

• Involves evaluating each market Involves evaluating each market segment’s attractiveness and selecting segment’s attractiveness and selecting one or more segments to enter.one or more segments to enter.

• Target segments that can sustain Target segments that can sustain profitability.profitability.

• Example:Example:– Arm & Hammer’s baking soda.Arm & Hammer’s baking soda.– http://http://www.armandhammer.comwww.armandhammer.com

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Market PositioningMarket Positioning

• Arranging for a product to occupy a clear, Arranging for a product to occupy a clear, distinctive, and desirable place relative to distinctive, and desirable place relative to competing products in the minds of target competing products in the minds of target consumers (e.g., Chevy Blazer: “Like a consumers (e.g., Chevy Blazer: “Like a rock”)rock”)

• Process begins with differentiating the Process begins with differentiating the company’s marketing offer so it gives company’s marketing offer so it gives consumers more value.consumers more value.

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The Marketing MixThe Marketing Mix

• The set of The set of controllable, controllable, tactical tactical marketing tools marketing tools that the firm that the firm blends to blends to produce the produce the response it response it wants in the wants in the target market.target market.

• Consists of the 4 Consists of the 4 P’sP’s

1.1. ProductProduct

2.2. PricePrice

3.3. PlacePlace

4.4. PromotionPromotion

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The 4 P’s of the Marketing The 4 P’s of the Marketing MixMix

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The 4 P’s & 4 C’s of theThe 4 P’s & 4 C’s of theMarketing MixMarketing Mix

• 4 P’s - Seller’s 4 P’s - Seller’s ViewView– ProductProduct– PricePrice– PlacePlace– PromotionPromotion

• 4 C’s - Buyer’s 4 C’s - Buyer’s ViewView

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Managing the Marketing Managing the Marketing EffortEffort

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Major Sections of Product/Brand Major Sections of Product/Brand PlanPlan

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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GeographicOrganizationGeographic

OrganizationMarket or Customer

OrganizationMarket or Customer

Organization

FunctionalOrganizationFunctional

Organization

Product ManagementOrganization

Product ManagementOrganization

Marketing Department Marketing Department OrganizationOrganization

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• Functional OrganizationFunctional Organization: Each : Each marketing activity is headed by a marketing activity is headed by a functional specialist.functional specialist.– Sales ManagerSales Manager– Advertising ManagerAdvertising Manager– Director of Marketing ResearchDirector of Marketing Research– Customer Service ManagerCustomer Service Manager– New Product ManagerNew Product Manager

Marketing Department Marketing Department OrganizationOrganization

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Marketing Department Marketing Department OrganizationOrganization• Geographic OrganizationGeographic Organization: Sales and : Sales and

marketing people are assigned to marketing people are assigned to specific countries, regions, and specific countries, regions, and districts.districts.– Coca-Cola staff assigned to the South Coca-Cola staff assigned to the South

American marketAmerican market

• Product Management OrganizationProduct Management Organization: : One person given responsibility for One person given responsibility for complete strategy and marketing complete strategy and marketing program for a single product.program for a single product.

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Marketing Department Marketing Department OrganizationOrganization• Market or Customer OrganizationMarket or Customer Organization: :

Manager responsible for particular Manager responsible for particular market or customer.market or customer.

• Combination OrganizationCombination Organization: Use : Use some combination of the previous some combination of the previous four approaches.four approaches.– This is especially true in large This is especially true in large

companies (e.g., Procter & Gamble)companies (e.g., Procter & Gamble)– http://http://www.pandg.com/main.jhtmlwww.pandg.com/main.jhtml

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Marketing Control Marketing Control ProcessProcess