mar 20 presentation #2
TRANSCRIPT
Company and Marketing Strategy: Partnering to Build
Customer Relationships
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““If you fail to plan, If you fail to plan, you plan to fail”you plan to fail”
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Strategic Planning
•Strategic planning is defined Strategic planning is defined as:as: ““The process of developing and The process of developing and
maintaining a strategic fit maintaining a strategic fit between the organization’s between the organization’s goals and capabilities and its goals and capabilities and its changing marketing changing marketing opportunities.”opportunities.”
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Strategic Planning
• Planning activities occur at the Planning activities occur at the business unit, product, and business unit, product, and market levels, and include:market levels, and include: Defining the purpose and missionDefining the purpose and mission Setting objectives and goalsSetting objectives and goals Designing the business portfolioDesigning the business portfolio Developing detailed marketing Developing detailed marketing
and departmental plansand departmental plans
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Strategic Planning
• Mission statements should . . .Mission statements should . . . serve as a guide for what the serve as a guide for what the
organization wants to accomplish.organization wants to accomplish. be “market-oriented” rather than be “market-oriented” rather than
“product-oriented”.“product-oriented”. be neither too narrow, nor too be neither too narrow, nor too
broad.broad. fit with the market environment.fit with the market environment. be motivating.be motivating.
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Defining the Organization’s
Mission•A mission may begin with these A mission may begin with these questions:questions: What business are we in?What business are we in? What customers should we What customers should we
serve?serve? How should we develop the firm’s How should we develop the firm’s
capabilities and focus its efforts?capabilities and focus its efforts?
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http://www.southwest.com/travel_center/customer_service_commitment.html
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Evolution of Harley Davidson Mission
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Evolution of Harley Davidson Mission
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Virgin Mission Statement
We believe in making a difference. In our We believe in making a difference. In our customers' eyes, Virgin stands for value for customers' eyes, Virgin stands for value for money, quality, innovation, fun and a sense money, quality, innovation, fun and a sense of competitive challenge. We deliver a of competitive challenge. We deliver a quality service by empowering our quality service by empowering our employees and we facilitate and monitor employees and we facilitate and monitor customer feedback to continually improve customer feedback to continually improve the customer's experience through the customer's experience through innovation. innovation.
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http://www.celestialseasonings.com/whoweare/corporatehistory/mission.php
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Strategic Planning
•Business portfolio: Business portfolio: “the collection of businesses “the collection of businesses and products that make up and products that make up the company.”the company.”
•Designing the business Designing the business portfolio portfolio is a key element of the is a key element of the strategic planning process.strategic planning process.
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Limited Brands
Limited Brands is committed to building a family of the world's best fashion brands offering captivating customer experiences that drive long-term loyalty and deliver sustained growth for our shareholders.
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Limited Brands• Current Brands Sold or Closed Co.• The Limited Abercrombie & Fitch• Express Women & Men Lane Bryant• (Structure) Lerner’s• Intimate Brands New York & Co.• Victoria’s Secret Gaylan’s • Bath and Body Works Cacique• White Barn Candle Penhaligons• Aura Science Limited Too
• Henri Bendel• Mast Industries• C.O. Bigelow
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Strategic Planning
• Step 1:Step 1: Analyze the Analyze the current business current business portfolioportfolio
• Step 2: Step 2: Shape the future Shape the future business portfoliobusiness portfolio
• Identify strategic Identify strategic business units (SBUs)business units (SBUs)
• Assess each SBU:Assess each SBU: The BCG growth-The BCG growth-
share matrix share matrix classifies SBUs into classifies SBUs into one of four categories one of four categories using the:using the:
Market growth rate Market growth rate SBU’s relative SBU’s relative
market share within market share within the market.the market.
Portfolio Portfolio DesignDesign
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BCG Growth-Share MatrixBCG Growth-Share Matrix
Strategic Planning
High RelativeHigh RelativeMarket ShareMarket Share
High High Market Market GrowthGrowth
Low Low Market Market GrowthGrowth
StarsStars
Cash Cash CowsCows
Question Question MarksMarks
DogsDogs
Low RelativeLow RelativeMarket ShareMarket Share
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Strategic Planning
• Step 1: Step 1: Analyze the Analyze the current business current business portfolioportfolio
• Step 2:Step 2: Shape the future Shape the future business portfoliobusiness portfolio
• Determine the Determine the future role of each future role of each SBU and choose SBU and choose the appropriate the appropriate resource allocation resource allocation strategy:strategy: BuildBuild HoldHold HarvestHarvest DivestDivest
• SBUs change SBUs change positions over timepositions over time
Portfolio Portfolio DesignDesign
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Strategic Planning• Matrix approaches to formal Matrix approaches to formal
planning share many problems:planning share many problems: Difficult, time-consuming, and costly Difficult, time-consuming, and costly
to implement.to implement. Difficult to define SBU’s & Measure Difficult to define SBU’s & Measure
Market Share/GrowthMarket Share/Growth Focus only on current businesses.Focus only on current businesses. Too strongly emphasize market Too strongly emphasize market
share growth or growth via share growth or growth via diversification.diversification.
Can lead to unwise expansion or Can lead to unwise expansion or diversificationdiversification
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Product/Market Expansion Product/Market Expansion GridGrid
Strategic Planning
Existing ProductsExisting Products New ProductsNew Products
Existing Existing MarketsMarkets
New New MarketsMarkets
Market Market PenetrationPenetration
Market Market DevelopmentDevelopment
Product Product DevelopmentDevelopment
DiversificatioDiversificationn
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The Business Portfolio
Which strategy is Which strategy is this?this?
• Market Market penetrationpenetration
• Market Market developmentdevelopment
• Product Product developmentdevelopment
• DiversificationDiversification
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The Business Portfolio
Which strategy Which strategy
is this?is this?
• Market Market penetrationpenetration
• Market Market developmentdevelopment
• Product Product developmentdevelopment
• DiversificationDiversification
2 -
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Market Penetration• Strategy: Strategy:
to to increase sales increase sales to current buyers to current buyers without changing without changing the products the products being sold. 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: Strategy:
identify and identify and develop new develop new markets – markets – demographidemographic or c or geographic geographic – for current – for current
productsproducts. . Bass Pro Shops has aggressively developed new geographic markets for its Outdoor World retail stores.
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Product Development•Strategy: Strategy: offering modified or offering modified or
new products to current new products to current markets. markets. How? Adding new sizes, How? Adding new sizes,
flavors, or offerings, co-flavors, or offerings, co-branding products, etc.branding products, etc.
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Diversification• Strategy: Strategy:
start up or buy businesses outside of start up or buy businesses outside of current products and markets.current products and markets. Diversification is the riskiest Diversification is the riskiest
strategy.strategy. Firms that diversify too broadly into Firms that diversify too broadly into
unfamiliar products or industries unfamiliar products or industries can lose their market focus.can lose their market focus.
www.timewarner.com/corp//
www.virgin.com
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Marketing’s Role in Strategic Planning
Provides a Guiding
Philosophy
Provides a Guiding
Philosophy
Provides Inputs to
Strategic Planners
Provides Inputs to
Strategic Planners
Designs Strategiesfor Reaching
Unit’s Objectives
Designs Strategiesfor Reaching
Unit’s Objectives
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The Marketing Process
TargetConsumers
Product
Place Price
Promotion
Mar
ketin
g
Im
plem
enta
tion
Marketing
Planning
Marketing
Control
Mar
ketin
g
Analys
is
Competitors
MarketingIntermediaries
PublicsSuppliers
Demographic-Economic
Environment
Technological-Natural
Environment
Political-Legal
Environment
Social-Cultural
Environment
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The Marketing Process
• The strategic The strategic planning planning and business and business portfolio analysis portfolio analysis processes help to processes help to identify and identify and evaluate marketing evaluate marketing opportunities.opportunities.
• The purpose of the The purpose of the marketing process is marketing process is to help the firm plan to help the firm plan how to capitalize on how to capitalize on these opportunities.these opportunities.
• Analyzing marketing Analyzing marketing opportunitiesopportunities
• Selecting target Selecting target marketsmarkets
• Developing the Developing the marketing mixmarketing mix
• Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements
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The Marketing Process
• The segmentation The segmentation process divides the process divides the total market into total market into market segments.market segments.
• Target marketingTarget marketing determines which determines which segment(s) are segment(s) are pursued.pursued.
• The The market market positioningpositioning for the for the product is then product is then determined.determined.
• Analyzing marketing Analyzing marketing opportunitiesopportunities
• Selecting target Selecting target marketsmarkets
• Developing the Developing the marketing mixmarketing mix
• Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements
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Process of Selecting Target Consumers• Market SegmentMarket Segment - consumers who respond in similar - consumers who respond in similar
way to a given set of marketing efforts.way to a given set of marketing efforts.
• Market Segmentation:Market Segmentation: process of dividing a market process of dividing a market into distinct groups buyers (segments) with different into distinct groups buyers (segments) with different needs, etc. who might require separate products.needs, etc. who might require separate products.
• Target MarketingTarget Marketing: evaluating each market segment’s : evaluating each market segment’s attractiveness and selecting one or more target attractiveness and selecting one or more target segments to enter.segments to enter.
• Market Positioning:Market Positioning: products and or services products and or services clear, distinctive and desirable place relative to clear, distinctive and desirable place relative to
competing products in the minds of target segments.competing products in the minds of target segments.
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What Market Segment is this targeted to ?
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Market Segmentation
Clinique for Men Clinique for Men products are products are designed for a designed for a segment of men segment of men who will pay who will pay more for skin more for skin care products.care products.
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Target Markets
Lucky Lucky Magazine is Magazine is targeted to targeted to
younger younger women who women who are shoppersare shoppers
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Saturn CorporationProduct Positioning
• Created in 1985Created in 1985• Saturn’s mission Saturn’s mission
was to create a was to create a “Different Kind of “Different Kind of Company”Company”
• Realized people Realized people dreaded the dreaded the purchase process purchase process and established and established no-hassle, no no-hassle, no haggle pricing haggle pricing policypolicy
• Works to build Works to build loyalty from loyalty from consumerconsumer
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• By 1990 Saturn was By 1990 Saturn was winning awards from winning awards from Popular Science, Popular Science, Popular Mechanics, Popular Mechanics, AAA, MotorWeek.AAA, MotorWeek.
• First Saturn First Saturn Homecoming in Homecoming in 1994 at its 1994 at its manufacturing manufacturing complex had 38,000 complex had 38,000 Saturn owners Saturn owners attendingattending
Saturn CorporationProduct Positioning
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Scion by Toyota
www.scion.com
What is the market segment?
Target Market?
Product Positioning?
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The Marketing Process
• Competitor analysis Competitor analysis guides competitive guides competitive marketing strategy marketing strategy development.development.
• Strategy leads to tactics Strategy leads to tactics by way of the marketing by way of the marketing mix:mix: The “Four Ps” – product, The “Four Ps” – product,
price, place, promotion price, place, promotion (seller viewpoint)(seller viewpoint)
The “Four Cs” – The “Four Cs” – customer solution, cost, customer solution, cost, convenience, and convenience, and communication communication (customer viewpoint)(customer viewpoint)
• Analyzing marketing Analyzing marketing opportunitiesopportunities
• Selecting target Selecting target marketsmarkets
• Developing the Developing the marketing mixmarketing mix
• Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements
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Figure 2-5:
The Marketing Mix
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The Marketing Process
• Marketing analysisMarketing analysis Provides information Provides information
helpful in planning, helpful in planning, implementation, and implementation, and controlcontrol
• Marketing planningMarketing planning Strategies and tacticsStrategies and tactics
• Marketing Marketing implementationimplementation Turns plans into actionTurns plans into action
• Marketing controlMarketing control Operating controlOperating control Strategic controlStrategic control
Marketing auditMarketing audit
• Analyzing marketing Analyzing marketing opportunitiesopportunities
• Selecting target Selecting target marketsmarkets
• Developing the Developing the marketing mixmarketing mix
• Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements
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Four Marketing Management Functions
Planning
Develop Strategic
Plans
DevelopMarketing
Plans
Planning
Develop Strategic
Plans
DevelopMarketing
Plans
Implementation
Carry Out the Plans
Implementation
Carry Out the Plans
Marketing Analysis of Company’s SituationMarketing Analysis of Company’s Situation
Control
MeasureResults
EvaluateResults
TakeCorrective
Action
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Figure 2-7SWOT Analysis
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• Brand / Product Marketing Plan:Brand / Product Marketing Plan:1.1. Executive summaryExecutive summary2.2. Current marketing situationCurrent marketing situation3.3. Analysis of threats and opportunitiesAnalysis of threats and opportunities4.4. Objectives for the brandObjectives for the brand5.5. Marketing strategyMarketing strategy6.6. Action programsAction programs7.7. Marketing budgetMarketing budget8.8. Controls Controls
Marketing Management: Planning
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Figure 2-8Return on Marketing
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Measuring Effectiveness
•Return on marketing Return on marketing (marketing ROI)(marketing ROI) The net return from a The net return from a
marketing investment marketing investment divided by the costs of the divided by the costs of the investmentsinvestments