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Chapter Two

Copyright 2007, Prentice Hall, Inc. . 2-2. Strategic Planning. The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities.. Copyright 2007, Prentice Hall, Inc. . 2-3. Steps in Strategic Planning. Defining

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Chapter Two

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    1. Chapter Two Company and Marketing Strategy: Partnering to Build Customer Relationships

    2. Copyright 2007, Prentice Hall, Inc. 2-2 Strategic Planning The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

    3. Copyright 2007, Prentice Hall, Inc. 2-3 Steps in Strategic Planning Defining the company mission. Setting company objectives and goals. Designing the business portfolio. Planning marketing and other functional strategies.

    4. Copyright 2007, Prentice Hall, Inc. 2-4 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.

    5. Copyright 2007, Prentice Hall, Inc. 2-5 The Mission Statement Questions the mission statement should answer include: What is our business? Who is our customer? What do consumers value? What should our business be?

    6. Copyright 2007, Prentice Hall, Inc. 2-6 The Mission Statement: Should be realistic. Should be specific. Should fit the market environment. Should be based on distinctive competencies. Should be motivating.

    7. Copyright 2007, Prentice Hall, Inc. 2-7 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.

    8. Copyright 2007, Prentice Hall, Inc. 2-8 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.

    9. Copyright 2007, Prentice Hall, Inc. 2-9 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.

    10. Copyright 2007, Prentice Hall, Inc. 2-10 Analyzing Current SBU’s: BCG Growth-Share Matrix

    11. Copyright 2007, Prentice Hall, Inc. 2-11 Problems with Matrix Approaches 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. Can place too much emphasis on growth. Can lead to poorly planned diversification.

    12. Copyright 2007, Prentice Hall, Inc. 2-12 Product/Market Expansion Grid

    13. Copyright 2007, Prentice Hall, Inc. 2-13 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.

    14. Copyright 2007, Prentice Hall, Inc. 2-14 Product/Market Expansion Grid Based 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.

    15. Copyright 2007, Prentice Hall, Inc. 2-15 Planning Marketing Marketing plays a key role in strategic planning: Provides a guiding philosophy. The Marketing Concept Provides inputs to strategic planners. Designs strategies to reach objectives.

    16. Copyright 2007, Prentice Hall, Inc. 2-16 Value Delivery Network Components include: Company’s value chain Each department is a link Distributors Suppliers Customers Improved performance in delivery value to customers is the goal.

    17. Copyright 2007, Prentice Hall, Inc. 2-17 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.

    18. Copyright 2007, Prentice Hall, Inc. 2-18 Target Marketing Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. Target segments that can sustain profitability.

    19. Copyright 2007, Prentice Hall, Inc. 2-19 Market Positioning Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Begins with differentiating the company’s marketing offer so it gives consumers more value.

    20. Copyright 2007, Prentice Hall, Inc. 2-20 Positioning

    21. Copyright 2007, Prentice Hall, Inc. 2-21 The Marketing Mix The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. Product Price Place (distribution) Promotion

    22. Copyright 2007, Prentice Hall, Inc. 2-22 The 4 P’s of the Marketing Mix

    23. Copyright 2007, Prentice Hall, Inc. 2-23 The 4 Ps & the 4 Cs of the Marketing Mix 4 Ps – Seller’s View Product Price Place Promotion 4 Cs – Buyer’s View Customer Solution Customer Cost Convenience Communication

    24. Copyright 2007, Prentice Hall, Inc. 2-24 Managing the Marketing Effort Four marketing management functions: Marketing Analysis SWOT analysis is key. Marketing Planning Create brand marketing plan. Marketing Implementation Determine who, where, when, and how. Marketing Control Evaluate results, take corrective action.

    25. Copyright 2007, Prentice Hall, Inc. 2-25 SWOT Analysis Strengths: Internal capabilities that may help a company reach its objectives. Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its objectives.

    26. Copyright 2007, Prentice Hall, Inc. 2-26 SWOT Analysis Opportunities: External factors that the company may be able to exploit to its advantage. Threats: Current and emerging external factors that may challenge the company’s performance.

    27. Copyright 2007, Prentice Hall, Inc. 2-27 Brand / Product Marketing Plan Executive summary Current marketing situation Analysis of threats and opportunities Objectives for the brand Marketing strategy Action programs Marketing budget Controls

    28. Copyright 2007, Prentice Hall, Inc. 2-28 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

    29. Copyright 2007, Prentice Hall, Inc. 2-29 Marketing Department Organization Geographic Organization: Sales and marketing people are assigned to specific countries, regions, and districts. Product Management Organization: One person given responsibility for complete strategy and marketing program for a single product.

    30. Copyright 2007, Prentice Hall, Inc. 2-30 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)

    31. Copyright 2007, Prentice Hall, Inc. 2-31 Marketing Control Process Set Goals Measure Performance Evaluate Performance Take Corrective Action

    32. Copyright 2007, Prentice Hall, Inc. 2-32 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.

    33. Copyright 2007, Prentice Hall, Inc. 2-33 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

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