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Chapter 2

Company and Marketing


Strategy

Learning Goals
1. Explain strategic planning
2. Describe business portfolios and growth
strategies
3. Detail marketings role in strategic planning
4. Describe elements of customer-driven marketing
strategy
5. List the marketing management functions
6. Describe the goal of market analysis.
7. Enumerate and classify the different dimensions
of market analysis.
8. Discuss the dimensions of market analysis and
relate them to an organization.
9. Discuss situational analysis for an organization.
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Part 1: 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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Goal 1: Explain strategic planning

Four Critical Elements


in Strategic Planning
1.
2.
3.
4.

Establish the business mission


Identify the business vision
Define the business objectives
Develop the business portfolio

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Goal 1: Explain strategic planning

Marketing
Market-Oriented
Mission
Management
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

Goal 1: Explain strategic planning

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Strategic Business Unit


SBU A unit of the company that has a separate mission and
objectives and can be planned independently from other
company businesses.
SBU - can be a company division, a product line within a division,
or sometimes a single product or brand.
Purpose of the strategic planning is to find ways in which the
company can best use its strengths to take advantage of
attractive opportunities in the environment.
Most portfolio analysis methods evaluate SBU on two dimension:
- the attractiveness of the SBU market or industry
- and the strength of the SBU position in the market or industry.
The best known portfolio planning methods were developed by
the two leading consulting firms and are called :
1. The Boston Consulting Group Approach
2. The General Electric Approach

SBU as a
Unit/Department
Company ABC

SBU
Marketing

SBU
Account/Financ
e

SBU
Production

SBU
HR

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SBU can be
PRODUCTS
PRODUCTION
DEPARTMENT

Product
A

Product
B

Product
C

Product
D

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The Business
Portfolio

A business portfolio is the


collection of businesses and
products that make up the
company.

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Goal 2: Describe business portfolios and growth

Business portfolio planning


involves two steps:
1. Analyzing the current business
portfolio;
2. Shaping the future portfolio by
developing strategies:

decide which SBUs should receive more,


less, or no investment.
develop growth strategies for adding
new products or businesses to the
portfolio.
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The
The Boston
Boston Consulting
Consulting Group
Group Approach
Approach

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Analyzing
Analyzing Current
Current SBUs:
SBUs:
Boston
Boston Consulting
Consulting Group
Group Approach
Approach

Low

High

Market Growth Rate

Relative Market Share


High
Stars
High growth & share
Profit potential
May need heavy
investment to grow

Cash
CashCows
Cows
Low
Lowgrowth,
growth,high
highshare
share
Established,
Established,successful
successful
SBUs
SBUs
Produces
Producescash
cash

Low
Question
QuestionMarks
Marks
High
Highgrowth,
growth,low
lowshare
share
Build
into
Stars/
phase
Build into Stars/ phaseout
out
Requires
cash
to
hold
Requires cash to hold
market
marketshare
share

Dogs
Dogs
Low
Lowgrowth
growth&&share
share
Low
profit
potential
Low profit potential

Analyzing
the
Current
Marketing
Business Portfolio

Management

Build
Increase market
share
Works well for
question marks

Hold
Preserve market
share
Good for cash
cow

Harvest
Increases shortterm 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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Goal 2: Describe business portfolios and growth

Part 2
SWOT ANALYSIS

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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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Goal 3: Detail marketing's role in strategic planning

Situational
Situational Analysis
Analysis and
and Marketing
Marketing
Planning
Planning

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Situational analysis: An analysis that involves


identifying the key factors that will be used as a
basis for the development of marketing strategy
Marketing plan: An ongoing process that
combines organizational objectives and
situational analyses to formulate and maintain a
marketing plan that moves the organization from
where it currently is to where it wants to be

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Situational
Situational Analysis
Analysis and
and Marketing
Marketing
Planning
Planning

Situational Analysis
(SWOT Analysis)

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Goal 3: Detail marketing's role in strategic planning

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Goal
Goal of
of Market
Market Analysis
Analysis
To determine the attractiveness of a market and to
understand its evolving opportunities and threats as
they relate to the strengths and weaknesses of the
firm.

Dimensions
Dimensions of
of Market
Market Analysis
Analysis
Market size (current and future)
Market growth rate
Market trends
Competitors analysis
Key success factors

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Competitor
Competitor Analysis
Analysis

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Market
Market Size
Size

The size of the market can be evaluated based on:


Present sales
Potential sales (if expanded)
Some information sources for determining market
size:
Government data
Trade associations
Financial data from major players
Customer survey

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Market
Market Growth
Growth Rate
Rate
A simple means of forecasting the market growth rate is to
extrapolate (infer or estimate) historical data into the future.

While this method may provide a first-order estimate, it


does not predict important turning points.
A better method is to study growth drivers such as
demographic information and sales growth in
complementary products.

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Market
Market Trends
Trends

Changes in the market are important because


they often are the source of new opportunities
and threats.
The relevant trends are industry-dependent,
but some examples include changes in price
sensitivity, demand for variety, and level of
emphasis on service and support.
Regional trends also may be relevant.

Marketing Strategy
Strategy
1. Market

Segmentation
2. Target
marketing
3. Market
Positioning

Customers
grouped by:
Geographic
Demographic
Psychographic
Behavioral
Market segment is
a groups of
consumers who
respond in similar
ways to marketing
efforts.
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Goal 4: Describe elements of customer-driven

Marketing Strategy
Strategy
1. Market

Segmentation
2. Target
marketing
3. Market
Positioning

Evaluation of each
segments
attractiveness
Selection of
segments with
greatest long-term
profitability
A company can
choose one or
several segments to
target
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Goal 4: Describe elements of customer-driven

Marketing Strategy
Strategy
1. Market

Segmentation
2. Target
marketing
3. Market
Positioning

The place the


product occupies in
the consumers mind
Products are
positioned relative to
competing products
Marketers look for
clear, distinctive and
desirable place in
positioning
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Goal 4: Describe elements of customer-driven

Marketing Planning

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Goal 3: Detail marketing's role in strategic planning

Managing the
Marketing Effort
Marketing Functions Finding

opportunities

Analysis
Planning
Implementation
Control

Avoiding threats
Understanding
strengths
Analyzing
weaknesses
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Goal 5: List the marketing management functions

Managing the
Marketing Effort
Marketing FunctionsMarketing plans
include:

Analysis
Planning
Implementation
Control

Executive summary
Analysis of current
situation
Objectives
Targets and
positioning
Marketing mix
Budget
Controls
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Goal 5: List the marketing management functions

Managing the
Marketing Effort
Marketing Functions
Plans are turned

into action with


day-to-day
activities

Analysis
Planning
Implementation
Good
Control

implementation
is a challenge
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Goal 5: List the marketing management functions

Managing the
Marketing Effort
Marketing Functions
Evaluation of the

results of
marketing
strategies

Analysis
Planning
Implementation
Checks for
Control

differences
between goals
and performance
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Goal 5: List the marketing management functions

Marketing Mix
The marketing mix includes
controllable and tactical
marketing tools knows as the
4Ps
The 4Ps include
Product
Place
Promotion
Price
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Goal 4: Describe elements of customer-driven

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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Goal 5: List the marketing management functions

Key
Key Success
Success Factors
Factors

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Elements that are necessary in order for the


firm to achieve its marketing objectives.
Few examples are:
Access to essential unique resources
Ability to achieve economies of scale
Access to distribution channels
Technological progress
It is important to consider that key success factors
may change over time, especially as the product
progresses through its life cycle.

The End

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