Chapter Two
Company and Marketing Strategy
Partnering to Build Customer
Relationships
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Company and Marketing Strategy
Topic Outline
• Companywide Strategic Planning:
Defining Marketing’s 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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Companywide Strategic Planning
Strategic Planning
Strategic planning is the process of
developing and maintaining a strategic
fit between the organization’s goals and
capabilities and its changing marketing
opportunities
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Companywide Strategic Planning
Strategic Planning
• Steps in strategic planning:
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Companywide Strategic Planning
Defining a Market-Oriented Mission
• The mission statement is the
organization’s purpose, what it wants to
accomplish in the larger environment
• Market-oriented mission statement
defines the business in terms of
satisfying basic customer needs
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Companywide Strategic Planning
Setting Company Objectives and Goals
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Companywide Strategic Planning
Designing the Business Portfolio
The business portfolio is the collection
of businesses and products that make
up the company
Portfolio analysis is a major activity in
strategic planning whereby
management evaluates the products
and businesses that make up the
company
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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
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Companywide Strategic Planning
Analyzing the Current Business Portfolio
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Companywide Strategic Planning
Analyzing the Current Business Portfolio
The Boston Group Approach
Growth share matrix is a portfolio planning method that
evaluates a company’s strategic business units in terms
of their market growth rate and relative share
Strategic business units are classified as:
• Stars
• Cash Cows
• Question marks
• Dogs
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Companywide Strategic Planning
BCG Growth-Share Matrix
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Companywide Strategic Planning
Analyzing the Current Business Portfolio
The Boston Group Approach
Stars are high-growth, high-share businesses or products
requiring heavy investment to finance rapid growth. They
will eventually turn into cash cows.
Cash cows are low-growth, high-share businesses or products
that are established and successful SBUs requiring less
investment to maintain market share
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Companywide Strategic Planning
Analyzing the Current Business Portfolio
The Boston Group Approach
Question marks are low-share business units in high-growth
markets requiring a lot of cash to hold their share
Dogs are low-growth, low-share businesses and products that
may generate enough cash to maintain themselves but do
not promise to be large sources of cash
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Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product/market expansion grid is a tool
for identifying company growth
opportunities through market
penetration, market development,
product development, or diversification
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Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product/Market Expansion Grid Strategies
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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
Market development is a growth strategy
that identifies and develops new market
segments for current products
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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
Diversification is a growth strategy for
starting up or acquiring businesses
outside the company’s current products
and markets
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Companywide Strategic Planning
Developing Strategies
for Growth and Downsizing
Downsizing is the reduction of the
business portfolio by eliminating
products or business units that are not
profitable or that no longer fit the
company’s overall strategy
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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 firm’s products
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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
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Marketing Strategy and the
Marketing Mix
Customer-Driven Marketing Strategy
Market strategy:
“the marketing logic by which the
business unit hopes to create customer
value and achieve profitable customer
relationship”
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Marketing Strategy and the
Marketing Mix
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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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Marketing Strategy and the
Marketing Mix
Customer-Centered Marketing Strategy
Market targeting is the process of
evaluating each market segment’s
attractiveness and selecting one or
more segments to enter
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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.
• The image of a product in consumers
mind.
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Marketing Strategy and the Marketing
Mix
Developing an Integrated Marketing Mix
Marketing mix is the set of controllable
tactical marketing tools—product, price,
place, and promotion—that the firm
blends to produce the response it wants
in the target market
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Marketing Strategy and the Marketing
Mix
The Four P’s of the Marketing Mix
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Marketing Strategy and the Marketing
Mix
The Four P’s Versus C’s
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
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Managing the Marketing Effort
• Four marketing management functions:
– Marketing analysis
– Marketing planning
– Implementation
– Control
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Managing the Marketing Effort
Marketing Analysis
Analysis is the complete analysis of the
company’s situation in a SWOT analysis that
evaluates the company’s:
• Strengths
• Weaknesses
• Opportunities
• Threats
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Managing the Marketing Effort
Marketing Analysis
Strengths include internal capabilities,
resources, and positive situational factors
that may help to serve company customers
and achieve company objectives
Weaknesses include internal limitations and
negative situational factors that may
interfere with company performance
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Managing the Marketing Effort
Marketing Analysis
Opportunities are favorable factors or trends in
the external environment that the company
may be able to exploit to its advantage
Threats are unfavorable factors or trends that
may present challenges to performance
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Managing the Marketing Effort
Market Planning
Planning is the development of strategic and
marketing plans to achieve company
objectives
Marketing strategy consists of the specific
strategies for target markets, positioning, the
marketing mix, and marketing expenditure
levels
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Managing the Marketing Effort
Market Planning
Sections of a marketing plan include:
• Executive summary
• Current marketing situation
• Threats and opportunities
• Objective and issues
• Action programs
• Budgets
• Controls
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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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Managing the Marketing Effort
Marketing Department Organization
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Managing the Marketing Effort
Marketing Department Organization
Marketing Department Organization
Functional organization: This is the most
common form of marketing organization with
different marketing functions headed by a
functional specialist
• Sales manager
• Market research manager
• Customer service manager
• New product manager
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Managing the Marketing Effort
Marketing Department Organization
Marketing Department Organization
Geographic organizations: Useful for companies that
sell across the country or internationally. Managers
are responsible for developing strategies and plans
for a specific region.
Product Management: Useful for companies with
different products or brands. Managers are
responsible for developing strategies and plans for
a specific product or band.
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Managing the Marketing Effort
Marketing Department Organization
Marketing Department Organization
Market or customer management
organization: Useful for companies with
one product line sold to many different
markets and customers. Managers are
responsible for developing strategies and
plans for their specific markets or
customers.
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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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Managing the Marketing Effort
Marketing Control
Operating control involves checking ongoing
performance against annual plan and taking
corrective action as needed
Strategic control involves looking at whether
the company’s basic strategies are well
matched to its opportunities
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Managing the Marketing Effort
Marketing Control
Measure Evaluate Take corrective
Set goals
performance performance action
What do we
What is Why is it What should
want to achieve?
happening? happening? we do about it?
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Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
Return on marketing investment (marketing
ROI) is the net return from a marketing
investment divided by the costs of the
marketing investment. Marketing ROI
provides a measurement of the profits
generated by investments in marketing
activities.
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