2

Company and Marketing

Strategy: Partnering to Build
Customer Relationships

Rest Stop: Previewing the

Concepts

1.
2.
3.
4.
5.

Explain companywide strategic planning

and its four steps.
Discuss how to design business portfolios
and growth strategies.
Explain marketings role in strategic
planning and how marketing works with its
partners to create and deliver customer
value.
Describe the elements of a customerdriven marketing strategy and mix, and
the forces that influence it.
List the marketing management functions,
including the elements of a marketing plan
and discuss the importance of measuring
and managing marketing ROMI.

2-2

Strategic Planning Defined

Process of
developing and
maintaining a
strategic fit
between the
organizations
goals and
capabilities and its
2-3

Elements of a Plan

Specific measurable objectives

A time horizon
Operating programs explicitly

defining strategies and tactics

Evaluation procedure
2-4

Organizational Strategic
Planning
Strategic planning for multibusiness,

multiproduct organizations typically occurs

at each organizational level. Strategic plans
at higher organizational levels provide
direction for strategic plans at lower levels.

2-5

Steps in Strategic
Planning

2-6

The Mission Statement

A statement of the organizations purpose

What it wants to accomplish in the larger environment

Questions the mission statement should

answer include:

What is our business?

Who is our customer?
What do consumers value?
What should our business be?

Mission statements should be market oriented,

not product oriented.

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

2-7

Marketing in Action
Nikes mission
is to bring
inspiration and
innovation to
every athlete*
in the world
(*if you have a
body, you are
an athlete).

2-8

Marketing-Oriented Mission

2-9

The Mission Statement

Well-defined mission statements should

also be:
Meaningful.
Specific.
Motivating.
Based on the firms strengths in the
marketplace.
Focused on customers and the customer
experience rather than on sales and
profits.
2-10

Fuel for Thought

Evaluate the following mission statement
for a real estate agency against the
criteria previously discussed:
We sell houses and commercial
properties.
Rewrite the mission statement.

2-11

Setting Firm Objectives and

Goals
The mission should

be translated into
supporting objectives
for each level of
management.
Marketing strategies
and programs must
be developed to
support these
objectives

Heinz ties its diverse

product portfolio together
under the mission: As the
trusted leader in nutrition
and wellness, Heinzthe
original Pure Food Company
is dedicated to the
sustainable health of
people, the planet, and our

2-12

Marketing in Action
McDonalds revised
mission, Being our
customers favorite
place and way to
eat, now steers
the company
towards the goal of
achieving
exceptional
experiences for its
customers.
2-13

Marketing in Action
Kohlers overall
objective is to build
profitable customer
relationships by
developing efficient
yet beautiful
products that
embrace the
essence of gracious
living. Visit their
web site at Koler.com
to see how it works
to meet this
objective.
2-14

Vision vs. Mission

A vision statement is what the organization

wants to become.
A mission statement concerns what an
organization is all about.
Centers for Disease Control
Mission: To promote health and quality of life by
preventing and controlling disease, injury, and disability
Vision: Healthy People in a Healthy World
Minnesota Department of Health
Mission: To protect, maintain and improve the health of
all Minnesotans.
Vision: Keeping All Minnesotans Healthy

2-15

Vision vs. Mission

East Tennessee State University
Our Vision

To become the best regional university in the nation.

Our Mission (abbreviated)

Educate students to become responsible,

enlightened, and productive citizens;
Conduct scholarship that improves the human
condition;
Serve business, education, government, health care
systems, and community; and
Enhance the cultural environment of the region.
2-16

Business Portfolio
The collection of businesses
and products that make up
the company.
The businesses chosen for the portfolio should be those that fit the firms
strengths and weaknesses.

2-17

Designing the Business Portfolio

The company must:

Analyze its current business portfolio or
strategic business units (SBUs);
Decide which SBUs should receive more,
less, or no investment; and
Develop strategies for growth and
downsizing.

2-18

Marketing at Work
ESPNs

business
portfolio
includes

2 - 19

Television
Radio
Digital media
Publishing
Event
management
2-19

Strategic Business Unit

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

2-20

Strategic Business Unit

(SBU)
Strategic

business unit:

An SBU can be
a company
division, a
product line
within a
division, or
sometimes a
single product
or brand.
Theme resorts are just
one SBU within Disney
2-21

Portfolio Analysis
A process by which
management
evaluates the
products and
businesses making
up the company.

2-22

Portfolio Analysis
Purpose of portfolio analysis:

Resources are directed toward more

profitable businesses while weaker
ones are phased out or dropped.

Standard portfolio analysis

evaluates SBUs on two important

dimensions:

Attractiveness of SBUs market or

industry.
Strength of SBUs position within that
market or industry.
2-23

The BCG Growth-Share Matrix

2-24

Problems with Matrix Approaches

Several problems exist:
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.

These problems have led to changes in the

strategic planning process used by firms.

2-25

The Product/Market Expansion

Grid

2-26

Marketing in Action

Under Armour has grown substantially

by means of its market penetration,
market development, and product
development strategies.
2-27

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.
2-28

Market Development
Strategy:

Bass Pro Shops has aggressively

developed new geographic markets
for its Outdoor World retail stores.

identify and
develop new
markets
demographic
or
geographic
for current
products.
2-29

Product Development
Strategy: offering modified or new
products to current markets.

How? Adding new sizes, flavors, or

offerings, co-branding products, etc.

2-30

Marketing in Action
The key to growth in
many consumer
goods companies is
new product
development. New
products provide
customers with value
when they satisfy
needs better than
existing offerings.
2-31

Marketing in Action

Product Development
The key to growth in
many consumer goods
companies is new
product development.
New products
provide customers
with value when
they satisfy needs
better than existing
offerings.
Visit www.pg.com to see more examples
2-32

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.

2-33

Downsizing
Downsizing reduces the business portfolio

by eliminating products of business units

that are not profitable or that no longer fit
the companys overall strategy.
Reasons for downsizing

Rapid growth of the company

Lack of experience in a market
Change in market environment
Decline of a particular product

2-34

Planning Marketing
Marketing plays a key role in
strategic planning:

Provides a guiding philosophy.

Provides inputs to strategic planners.
Designs strategies to reach objectives.

But marketing/marketers alone cannot produce

superior value for customers.

2-35

Value Delivery Network

Companys Value Chain

Distributors

Suppliers

Customers
2-36

Marketing in Action

Wal-Marts ability to help buyers Save money.

Live better. depends on the contributions of its
value chain people in all of the companys
departments.
2-37

Customer-Driven Marketing Strategy

Succeeding in todays competitive

marketplace requires that firms be

customer centered.
Firms often must win customers away
from the competition by delivering
greater value.
Understanding customer needs and
wants is key to being able to provide
value.
2-38

Managing Marketing Strategy and

the Marketing Mix

2-39

Strategy: Generalship
the science or art of combining and
employing the means of war in
planning and directing large military
movements and operations

2-40

Strategies...
specific major actions or patterns of
actions for attainment of objectives
They may be planned ahead of time or
emerge over time based on ad hoc
decisions
2-41

Tactics...
the art or science of disposing
military or naval forces for battle
and maneuvering them in battle

2-42

Marketing Strategy and the

Marketing Mix

Goal: create value for customers

and build customer relationships.

Marketing strategy decisions
include:
Market segmentation and targeting
Differentiation and positioning

Marketing strategy must guide

marketing mix decisions.

2-43

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.
2-44

Dimensions of Market Segmentation

Geographic
Demographic
Psychographic: Attitudes, Interests,
Opinions(AIOs)

Benefit
2-45

Market Segmentation
Marriott offers
business travelers
lodging designed
to meet their
particular needs.
Click the picture above to play video

2-46

Targeting
Targeting:
Involves
evaluating
each market
segments
attractiveness
and
profitability
and selecting
one or more
segments to
enter.
2-47

Marketing in Action
Logitech focuses
on niche marketing
by marketing
personal
peripherals
including every
variety of computer
mouse imaginable.
In the niches it
services, Logitech
is the undisputed
market leader.
2-48

Differentiation and
Positioning
Positioning:
Arranging for a
product to occupy
a clear,
distinctive, and
desirable place
relative to
competing
products in the
minds of target
consumers.

Burger Kings worldwide marketing

campaign is built around its Have it
your way positioning.
Visit www.bk.com

2-49

Differentiation and
Positioning
Differentiation:
Creating
superior
customer
value by
actually
differentiating
the market
offering.

2-50

Marketing in Action

Positioning
Promoting attributes,
benefits, usage
situations, or users
can help to establish a
products position in
the consumers mind.
How is the Gelstat
Migraine medicine
being positioned?
Is this ad effective?

2-51

Positioning is...
Effective Marketing Individualizing
Oriented
Communication

Communicating

Your Identity to the

Market

Developing

Diversity and
Distinction

Yourself

Placing Yourself
Uniquely in
Relation to Your
Competition

Projecting Your

Identity into Your

Prospect's Mind

2-52

Positioning

Toyotas hybrid Prius is a revelation brilliantly disguised as a

car.
The Hummer is Like nothing elseSport utility? Define

2-53

Marketing at Work
Allegiants Go

where they aint

strategy focuses
on serving niches
neglected by
competitors
Targets
customers who
might not
otherwise fly
2 - 54

2-54

The Marketing Mix

The set of

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

Consists of the 4
Ps

1.
2.
3.
4.

Product
Price
Place
Promotion

2-55

The Four Ps of the Marketing

Mix

2-56

Variables Beyond the Control of

the Marketing Manager

Cultural and Social Environment

Political and Legal Environment
Economic Environment
Existing Business Structure
Resources and Objectives of the
Firm
2-57

The 4 Ps & 4 Cs of the

Marketing Mix
4 Ps - Sellers View

Product
Price
Place
Promotion

4 Cs - Buyers
View

Customer Solution
Customer Cost
Convenience
Communication

2-58

Marketing Analysis,
Implementation, Planning, and
Control

2-59

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.

2-60

Marketing Management: Analysis

The SWOT analysis
is critical:

Finding
opportunities
Avoiding threats
Understanding
strengths
Analyzing
weaknesses

2-61

SWOT Analysis

2-62

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

2-63

Marketing Implementation
Turns marketing plans into day-to-day
marketing actions by addressing:

Who
Where
When
How

Good implementation is a challenge.

Marketing departments must be properly
organized to ensure timely
implementation.

2-64

Organizing Marketing
Departments

Chief marketing officer (CMO) positions are

becoming more common.

Functional organization:
Each marketing activity is headed by a
functional specialist.
E.g., sales manager, advertising manager,
marketing research manager, etc.
Geographic organization:
Sales and marketing people are assigned to
specific countries, regions, and/or districts.

2-65

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

Market or Customer Organization:

Manager responsible for particular market or

customer.

Combination Organization:

Uses some combination of the previous four

approaches.
2-66

Marketing Control
Process

2-67

Marketing Control Process

Operating Control
Evaluates performance against the plan
and takes corrective action.

Strategic control
Evaluates whether strategies match
opportunities.
The marketing audit is major tool.

2-68

Return on Marketing

2-69

Return on Marketing
Assessed using one or more
methods:

Standard marketing performance

measures
Brand awareness, sales, market share
Customer-centered measures
Customer acquisition, customer retention,
customer lifetime value

2-70

Rest Stop: Reviewing the

Concepts
1.
2.
3.
4.
5.

Explain companywide strategic planning

and its four steps.
Discuss how to design business portfolios
and growth strategies.
Explain marketings role in strategic
planning and how marketing works with its
partners to create and deliver customer
value.
Describe the elements of a customerdriven marketing strategy and mix, and
the forces that influence it.
List the marketing management functions,
including the elements of a marketing plan
and discuss the importance of measuring
and managing marketing ROMI.
2-71