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Chapter 2 Marketing Strategy Planning

At the end of this presentation, you should be able to:. Understand what a marketing manager does.Know what marketing strategy planning is

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Chapter 2 Marketing Strategy Planning

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Chapter 2

Marketing Strategy Planning

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At the end of this presentation, you should be able to:

  • Understand what a marketing manager does.

  • Know what marketing strategy planning is—and why it is the focus of this book.

  • Understand target marketing.

  • Be familiar with the four Ps in a marketing mix.

  • Know the difference between a marketing strategy, a marketing plan, and a marketing program.

  • Understand what customer equity is and why marketing strategy planners seek to increase it.

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At the end of this presentation, you should be able to:

  • Be familiar with the text’s framework for marketing strategy planning— and why it involves a process of narrowing down from broad opportunities to the most attractive marketing strategy.

  • Know four broad types of marketing opportunities that help in identifying new strategies.

  • Understand why strategies for opportunities in international markets should be considered.

  • Understand the important new terms.

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The Management Job in Marketing


Control Marketing Plan(s) and Program

Implement Marketing Plan(s) and Program

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What is a Marketing Strategy?






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Production-oriented manager sees everyone as basically similar and practices “mass marketing”

Marketing-oriented manager sees everyone as different and practices “target marketing”

Selecting a Marketing-Oriented Strategy Is Target Marketing

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An Application of Target Marketing

Whatever your perishable, BWI has your number.

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Developing Marketing Mixes for Target Markets


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Customer Equity-- expected earnings or profitability of firm’s current and prospective customers over time.

Profits depend on customer equity

Owners expect financials returns

Marketing Program should benefitfirm

All parts of program work as a whole

Profit growth comes from customers

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The Product Element of the Marketing Mix

Courtesy of Clear Blue Inc.

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The Place Element of the Marketing Mix

Manufacturer or producer



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The Promotion Element of the Marketing Mix

Personal Selling

Mass Selling

Telling and Selling the Customer


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The Price Element of the Marketing Mix

Pricing Objectives

Price Flexibility



Price Changes Over the Life Cycle

Geographic Pricing Terms

Discounts and Allowances

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Selectionof TargetMarket




All Four Ps Contribute to the Whole

Understanding the Target Market Leads to Good Strategies!

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General Motors is considering increasing the length of its bumper-to-bumper warranty on new vehicles from 3 years to 5 years. The marketing mix variable being considered here is:

A. product.

B. personnel.

C. place.

D. promotion.

E. price

Checking Your Knowledge

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A television network is trying to generate interest in a new television show in advance of its premiere. The network sends out press releases and makes the star of the new show available for guest appearances on TV and radio talk shows. The marketing mix variable involved here is:

A. product.

B. personnel.

C. place.

D. promotion.

E. price

Checking Your Knowledge

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Elements of a Firm’s Marketing Program

Target Market

Marketing Strategy



Marketing Mix

Marketing Plan



A Firm’s Marketing Program

Time-Related Details



Other Marketing Plans

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An entrepreneurial teenager decides to start a new dog- walking business aimed at dog owners who have to leave their pets at home alone during regular working hours. The teenager develops a thorough description of the people in her target market and their needs. She then comes up with a general outline of the services she will offer, some price ranges, the geographic area she will serve, and some low- cost promotion ideas. What has she developed so far?

A. A marketing program

B. A marketing plan

C. A SWOT analysis

D. A marketing strategy

E. Differentiation and segmentation

Checking Your Knowledge

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A large consumer products company markets several different lines of products, with many individual products in each line. Each product has its own marketing plan. The company president wants to bring together all of the different marketing plans into a single integrated document that can become part of the company’s strategic plan. It appears that the company president plans to create a(n):

A. marketing super-plan.

B. marketing program.

C. marketing strategy.

D. operational plan.

E. mass-marketing approach.

Checking Your Knowledge

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Mid-1920s: Model A launched in more than 20 different styles

Model T produced using an assembly line

Ford and Microsoft has cooperated to develop the SYNC

2004: Launched Escape, the first hybrid SUV

1960s: Launched Mustang, a sporty car

The Importance of Marketing Strategy Planning

Revising Marketing Strategies to Address Evolving Customer Needs

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Attractive Opportunities

Breakthrough Opportunities

Competitive Advantage

Avoid Hit-or-Miss Marketing

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Marketing Strategy Planning Process Highlights Opportunities

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Marketing Strategy Planning

© 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Present products

New products












Interactive Exercise: Marketing Strategy

© 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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A large metropolitan university has an established summer- school program that offers a wide variety of classes to its current students. To expand enrollment, the school started promoting its summer school to students who live in the area and are home for the summer, even though they attend other universities during the regular school year. This effort is an example of:

A. market penetration.

B. market development.

C. product development.

D. diversification.

E. a breakthrough opportunity.

Checking Your Knowledge

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Market Penetration

© 2011 Starbucks Corporation. All rights reserved. Used with permission.

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An electronics superstore sends a special coupon to its current customers offering them a special discount for purchases made during an upcoming week that occurs during a traditionally slow sales period. This is an example of:

A. market penetration.

B. market development.

C. product development.

D. diversification.

E. a breakthrough opportunity.

Checking Your Knowledge

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Product Development

Courtesy of McNeil Consumer Healthcare.

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Product Development

© 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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International Opportunities Should Be Considered

Smaller World

Risks Involved

Competitive Advantage

Better Trends?

Early Start

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Global Competitive Advantage

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Study Question 1

Which of the following is NOT considered a product?

A. tax advice from a financial consultant.B. a computer.C. a haircut.D. a chair.E. All of the above are considered products.

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Study Question 2

Suzuki's 3 year/36,000 mile new car warranty is part of which marketing mix decision area?

A. priceB. target marketC. placeD. productE. promotion

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Study Question 3

Hewlett-Packard sells personal computers through specialty computer stores, electronics superstores, and its own Internet site. The marketing mix variable that is being considered here is: 

A. Pricing.B. Promotional.C. Personnel.D. Product.E. Placement.

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Study Question 4

Lipton has increased sales by developing ads that encourage it current customers to drink Lipton tea instead of coffee at morning "coffee breaks." This effort focuses on 

A. diversification.B. market penetration.C. product development.D. mass marketing.E. market development.

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Study Question 5

Converse started selling its "high-top" canvas basketball shoes in colors such as hot pink, lime green, and purple, to accompany their traditional colors of black and white. Converse seems to be pursuing a _____________ opportunity. 

A. Market penetration.B. Market development.C. Product development.D. Diversification.E. Breakthrough.