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2 Company and Marketing Strategy: Partnering to Build Customer Relationships ROAD MAP: Previewing the Concepts Explain companywide strategic planning and its four steps. Discuss how to design business portfolios and growth strategies.

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2

Company and Marketing Strategy: Partnering to Build Customer Relationships


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ROAD MAP: Previewing the Concepts

  • Explain companywide strategic planning and its four steps.

  • Discuss how to design business portfolios and growth strategies.

  • Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.

  • Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

  • List the marketing management functions, including the elements of a marketing plan.


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Strategic Planning

Strategic Planningis 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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Questions a Mission Statement Should Answer

What is our Business?

Who is the Customer?

What do Consumers Value?

What Should our Business Be?


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The Mission Statement

  • A statement of the organization’s purpose

    • What it wants to accomplish in the larger environment

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



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Be Based on Distinctive Competencies

Fit the Market Environment

Be Motivating

Be Realistic

Be Specific

Mission Statements Should:


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Designing the Business Portfolio

  • The business portfolio is the collection of businesses and products that make up the company.

  • The company must:

    • analyze its current business portfolio or Strategic Business Units (SBUs),

    • decide which SBUs should receive more, less, or no investment,

    • develop growth strategies for growth or downsizing.


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Portfolio Analysis

  • An evaluation of the products and business making up the company.

  • Resources are directed to more profitable businesses and weaker ones are phased down or dropped.


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Strategic Business Unit (SBU)

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

  • Can be a company division, a product line within a division, or sometimes a single product or brand.


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Analyzing Current SBU’s:BCG Growth-Share Matrix

Relative Market Share

High Low

?

  • Question Marks

  • Low share SBUs in high growth

  • markets

  • Require cash to hold

  • market share

  • Build into Stars or phase out

  • Stars

  • High growth & share

  • May need heavy

  • investment to grow

  • Eventually, growth will slow

Market Growth Rate

Low High

  • Cash Cows

  • Low growth, high share

  • Established, successful

  • SBU’s

  • Produce cash

  • Dogs

  • Low growth & share

  • Generate cash to sustain self

  • Do not promise to be cash

  • sources


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Can be Difficult, Time Consuming, Costly to Implement

Difficult to Define SBUs & Measure Market Share/Growth

Focus on Current Businesses, Not Future Planning

Problems With Matrix Approaches

Can Place too Much Emphasis on Growth

Can Lead to Poorly Planned Diversification


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Product/Market Expansion Grid

P R O D U C T

Existing

New

Market Penetration

ProductDevelopment

Existing

M A R K E T

Market Development

New

Diversification


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Discussion Question

  • Sears recently purchased Lands’ End.

  • Which of the four growth strategies did Sears use in this acquisition?


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Growth at Starbucks

To maintain its phenomenal growth in an increasingly over-caffeinated marketplace, Starbucks has brewed up an ambitious, multi-pronged growth strategy.


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Product/Market Expansion Grid Based on Starbucks

  • Market Penetration: make more sales to current customers without changing products.

    • How? Add new stores in current market areas; improve advertising, prices, menu, service.

  • Market Development: identify and develop new markets for current products.

    • How? Review new demographic (seniors/ethnic consumers) or geographic (Asian, European, Australian, & South American) markets.


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Product/Market Expansion GridBased on Starbucks

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

    • How? Add food offerings, sell coffee in supermarkets, co-brand products.

  • Diversification: start up or buy businesses outside current products and markets.

    • How? Making and selling CDs, testing restaurant concepts, or branding casual clothing.


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Provide a Guiding Philosophy

Provide Inputs to Strategic Planners

Design Strategies to Reach Objectives

Marketing’s Role in Strategic Planning


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Value Delivery Network

Company’s Value Chain

Distributors

Suppliers

Customers


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The Value Chain

Wal-Mart’s ability to offer the right products at low prices depends on the contributions from people in all of the company’s departments—marketing, purchasing, information systems, and operations.



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Market Segmentation

  • The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.

  • A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.


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Market Segmentation

Marriott offers business travelers lodging designed to meet their particular needs.

Click the picture above to play video


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Target Marketing

  • Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.

  • Target segments that can sustain profitability.

  • Example:

    • Arm & Hammer’s baking soda.

    • Click to See Arm & Hammer's Website


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Market Positioning

  • Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (e.g., Chevy Blazer: “Like a rock”)

  • Process begins with differentiating the company’s marketing offer so it gives consumers more value.


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Positioning

Toyota’s hybrid Prius is “a revelation brilliantly disguised as a car.”

The Hummer is “Like nothing else—Sport utility? Define Sport!”


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Interactive Student

Assignment

  • Choose a partner and discuss some of the ways Pepsi goes about the process of positioning its products.

  • What market segments do you think Pepsi is trying to reach?


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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 P’s

    • Product

    • Price

    • Place

    • Promotion



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4 P’s - Seller’s View

Product

Price

Place

Promotion

4 C’s - Buyer’s View

Customer Solution

Customer Cost

Convenience

Communication

The 4 P’s & 4 C’s of theMarketing Mix



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Major Sections of Product/Brand Plan

Executive Summary

Current Marketing Situation

Analysis of Threats and Opportunities

Objectives for the Brand

Marketing Strategy

Action Programs

Marketing Budget

Controls


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Functional

Organization

Marketing Department Organization

Market or Customer

Organization

Geographic

Organization

Product Management

Organization

Combination of Two or More


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Marketing Department Organization

  • Functional Organization: Each marketing activity is headed by a functional specialist.

    • Sales Manager

    • Advertising Manager

    • Director of Marketing Research

    • Customer Service Manager

    • New Product Manager


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Marketing Department Organization

  • Geographic Organization: Sales and marketing people are assigned to specific countries, regions, and districts.

    • Coca-Cola staff assigned to the South American market

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


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Marketing Department Organization

  • Market or Customer Organization: Manager responsible for particular market or customer.

  • Combination Organization: Use some combination of the previous four approaches.

    • This is especially true in large companies (e.g., Procter & Gamble)

    • Click to Visit P&G's Website



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Rest Stop: Reviewing the Concepts

  • Explain companywide strategic planning and its four steps.

  • Discuss how to design business portfolios and develop strategies growth and downsizing.

  • Assess marketing’s role in strategic planning and explain how marketers partner with others inside and outside the firm to build profitable customer relationships.

  • Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

  • List the marketing management functions, including the elements of a marketing plan.


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