Chapter Two

Company and Marketing

Strategy
Partnering to Build Customer
Relationships
Chapter 2- slide 1

Company and Marketing Strategy

Topic Outline
Companywide Strategic Planning:
Defining Marketings Role
Designing the Business Portfolio
Planning Marketing: Partnering to Build
Customer Relationships
Marketing Strategy and the Marketing
Mix
Managing the Marketing Effort
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Chapter 2- slide 2

Companywide Strategic Planning

Strategic Planning
Strategic planning is the process of developing and
maintaining a strategic fit between the organizations goals
and capabilities and its changing marketing opportunities.
Strategic planning sets the stage for the rest of the
planning in the firm.
Strategic planning starts with defining its overall purpose
and mission.
This mission is then turned into detailed supporting
objectives that guide the whole company.
Then what portfolio of businesses and product is best for
company and how much support to give each one.
Then businesses and product develops detailed marketing
and other departmental plans that supports the company
plans.
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Chapter 2- slide 3

Companywide Strategic Planning

Defining a Market-Oriented Mission

An organization exists to accomplish something,
and this purpose should be clearly stated.
Such as: what is our business, who is the
customer, what do consumer value, what should
our business be?
It acts as an invisible hand that guide people in
the organization.
The mission statement is the organizations
purpose, what it wants to accomplish in the
larger environment
Market-oriented mission statement defines the
business in terms of satisfying basic customer
needs
Products and technologies may become outdated
but basic market needs may last forever.
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Chapter 2- slide 4

Companywide Strategic Planning

Setting Company Objectives and Goals

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Chapter 2- slide 5

Companywide Strategic Planning

Designing the Business Portfolio
The business portfolio is the collection of businesses
and products that make up the company
It involves two steps: first the company must analyze its
current business portfolio and decide which
businesses should receive more, less or no
investment.
Second it must shape the future portfolio by developing
strategies for growth or downsizing.
Portfolio analysis is a major activity in strategic
planning whereby management evaluates the
products and businesses that make up the company.
The company puts strong resources into its more
profitable businesses and phase down or drop its
weaker ones.
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Chapter 2- slide 6

Companywide Strategic Planning

Analyzing the Current Business Portfolio
Strategic business unit (SBU) is a unit of the
company that has a separate mission and
objectives that can be planned separately from
other company businesses
Company division
Product line within a division
Single product or brand
The company next assesses the attractiveness of its
various SBUs and decides how much support each
deserves.
The best known portfolio analysis method was
developed by Boston consulting group, a leading
management consulting firm.
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Chapter 2- slide 7

Companywide Strategic Planning

Analyzing the Current Business Portfolio

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Chapter 2- slide 8

Companywide Strategic Planning:

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Chapter 2- slide 9

 Defines four types of SBUs:

Stars: are high growth, high share businesses or products.
They often need heavy investments to finance their rapid
growth. Eventually their growth will slow down and they will
turn into cash cows.
Cash cows: are low growth, high share businesses or
products. The established SBUs needs less investment to
hold their market share. They produce a lot of cash that the
company uses to pay its bills and support other SBUs that
needs investment.
Question marks: are low share business units in high growth
markets. They require a lot of cash to hold their share,
management has to think hard about which question marks
it should try to build into stars and which should be phased
out.
Dogs: are low growth, low share businesses and products.
They may generate enough cash to maintain them selves
but do not promise to be large sources of cash.
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Chapter 2- slide 10

Companywide Strategic Planning

Problems with Matrix Approaches

Difficulty in defining SBUs and

measuring market share and growth
Time consuming
Expensive
Focus on current businesses, not future
planning

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Chapter 2- slide 11

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing
Marketing has the main responsibility for
achieving profitable growth for the company.
The useful tool for identifying growth opportunities
is:
Product/market expansion grid is a tool for
identifying company growth opportunities through
market penetration, market development, product
development, or diversification.
For example: national foods, a leading company
started in 1970 and introduced branded and
packaged spice in Pakistan. The first year revenue
was not enough, so marketing played a role in
business expansion.
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Chapter 2- slide 12

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing Product/Market Expansion Grid Strategies

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Chapter 2- slide 13

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing
Product/market expansion grid strategies

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Chapter 2- slide 14

Companywide Strategic Planning

Developing Strategies
for Growth and Downsizing
Market penetration is a growth strategy increasing
sales to current market segments without changing
the product by improvements in the marketing mix.
National introduced chili, coriander, kasuri, turmeric,
achar gosht, biryani and haleem, it established nation
wide distribution system, it started communication
with customers by internet.
Market development is a growth strategy that
identifies and develops new market segments for
current products. For example national managers
explored new geographical markets and expanded
into middle east and north America. In 2000 national
entered Australia with raj spices a new brand to suit
their local taste buds. It also entered India.
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Chapter 2- slide 15

Companywide Strategic Planning

Developing Strategies
for Growth and Downsizing
Product development is a growth strategy that offers
new or modified products to existing market
segments. For example national added tomato
ketchup, various Chinese sauces, jams and jellies,
custards and kheer mix and variety of pickles to its
product lines.
Diversification is a growth strategy through starting up
or acquiring businesses outside the companys
current products and markets. For socio economic
pressures have brought about major changes in the
life styles of urban house holds. To address the needs
of these consumers national has introduced ronaq
brands ready to eat meals including chicken qorma,
karahi, ginger.
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Chapter 2- slide 16

Companywide Strategic Planning

Developing Strategies
for Growth and Downsizing
Firms not only develop strategies for growing their
business portfolios but also strategy for downsizing them.
Downsizing is the reduction of the business portfolio by
eliminating products or business units that are not
profitable or that no longer fit the companys overall
strategy.
The market environment might change, making some of the
companys products or markets less profitable.
The firm might have grown too fast or entered areas where it
lacks experiences.
This happens when the firm enters too many international
markets with out proper research or when introducing
products that do not offer superior customer value.
So some products or business units die.
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Chapter 2- slide 17

Planning Marketing
Partnering to Build Customer Relationships

Value chain is a series of departments that carry

out value-creating activities to design, produce,
market, deliver, and support a firms products.
For example: Wal-marts goal is to create customer
value and satisfaction by providing shoppers with
the products they want at the lowest possible
prices. The marketing department needs help
from the companys other departments.

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Chapter 2- slide 18

Planning Marketing

Partnering to Build Customer Relationships

Value delivery network is made up of the

company, suppliers, distributors, and ultimately
customers who partner with each other to
improve performance of the entire system
For example: Toyota knows the importance of
building close relationships with its suppliers. it
even includes the phrase achieve supplier
satisfaction in its mission statement. The Toyota
can rely on its suppliers to help it improve its own
quality, reduce costs, and develop new products
quality.
Indus
motor
company
limited,
manufacturers of Toyota cars in Karachi, Pakistan
works very closely with over seventy small
vendors.
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Chapter 2- slide 19

Marketing Strategy and the Marketing

Mix

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Chapter 2- slide 20

Marketing Strategy and the

Marketing Mix
Customer-Driven Marketing Strategy

Market segmentation is the division of

a market into distinct groups of buyers
who have distinct needs,
characteristics, or behavior and who
might require separate products or
marketing mixes
Market segment is a group of
consumers who respond in a similar
way to a given set of marketing efforts
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Chapter 2- slide 21

Marketing Strategy and the

Marketing Mix
Customer-Centered Marketing Strategy

Market targeting is the process of

evaluating each market segments
attractiveness and selecting one or
more segments to enter

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Chapter 2- slide 22

Marketing Strategy and the Marketing

Mix
Customer-Centered Marketing Strategy

Market positioning is the

arranging for a product to occupy a
clear, distinctive, and desirable
place relative to competing
products in the minds of the target
consumer

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Chapter 2- slide 23

Marketing Strategy and the Marketing

Mix
Developing an Integrated Marketing Mix

Marketing mix is the set of

controllable tactical marketing
toolsproduct, price, place, and
promotionthat the firm blends to
produce the response it wants in
the target market
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Chapter 2- slide 24

Marketing Strategy and the Marketing

Mix
Developing an Integrated Marketing Mix

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Chapter 2- slide 25

Managing the Marketing Effort

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Chapter 2- slide 26

Managing the Marketing Effort

Marketing Analysis SWOT Analysis

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Chapter 2- slide 27

Managing the Marketing Effort

Market PlanningParts of a Marketing Plan

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Chapter 2- slide 28

Managing the Marketing Effort

Marketing Implementation

Implementing is the process that turns

marketing plans into marketing actions to
accomplish strategic marketing objectives
Successful implementation depends on
how well the company blends its people,
organizational structure, decision and
reward system, and company culture into
a cohesive action plan that supports its
strategies
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Chapter 2- slide 29

Managing the Marketing Effort

Marketing Department Organization

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Chapter 2- slide 30

Managing the Marketing Effort

Marketing Control

Controlling is the measurement

and evaluation of results and the
taking of corrective action as
needed
Operating control
Strategic control

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Chapter 2- slide 31

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Copyright 2010 Pearson Education, Inc.

Publishing as Prentice Hall
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall

Chapter 2- slide 33