Company and Marketing Strategy Chapter 2

2 - 1 Strategic Planning Strategic planning is defined as:  “The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.”

2 - 2 Steps in the Strategic Planning Process

2 - 3 Marketing Management A mission statement asks..  What is our business?  Who is the customer?  What do consumers value?  What should our business be? A mission statement should be:  An “invisible hand”  Neither too narrow nor too broad  Fitting of market environment  Based on distinctive competencies  Motivating Market-Oriented Mission

2 - 4 Strategic Planning Business portfolio: “the collection of businesses and products that make up the company.”  Designing the business portfolio is a key step in the strategic planning process.

2 - 5 Strategic Planning Step 1: Analyze the current business portfolio Step 2: Shape the future business portfolio Identify strategic business units (SBUs) Assess each SBU:  The BCG growth- share matrix classifies SBUs into one of four categories using:  Market growth rate  The SBU’s relative market share within the market. Portfolio Design

2 - 6 Growth-Share Matrix

2 - 7 Marketing Management  Build  Increase market share  Works well for question marks  Hold  Preserve market share  Good for cash cow  Harvest  Increases short- term cash flow  Good for weak cash cows, question marks and dogs  Divest  Sell or liquidate  Good for dogs and question marks Analyzing the Current Business Portfolio

2 - 8 Strategic Planning Step 1: Analyze the current business portfolio Step 2: Shape the future business portfolio Determine the future role of each SBU and choose the appropriate resource allocation strategy:  Build  Hold  Harvest  Divest SBUs change positions over time Portfolio Design

2 - 9 Product / Market Expansion Grid

The Marketing Process The strategic planning and business portfolio analysis processes help to identify and evaluate marketing opportunities. The purpose of the marketing process is to help the firm plan how to capitalize on these opportunities. Key Elements Analyzing marketing opportunities Selecting target markets Developing the marketing mix Managing the marketing effort

The Marketing Process Analyzing marketing opportunities Selecting target markets Developing the marketing mix Managing the marketing effort Key Elements The segmentation process divides the total market into market segments. Target marketing chooses which segment(s) are pursued. Market positioning for the product is then determined.

 Customers grouped by:  Geographic  Demographic  Psychographic  Behavioral  Market segment is a groups of consumers who respond in similar ways to marketing efforts. 1. Market Segmentation 2. Target marketing 3. Market Positioning Marketing Strategy Strategy

 Evaluation of each segment’s attractiveness  Selection of segments with greatest long-term profitability  A company can choose one or several segments to target Marketing Strategy Strategy 1. Market Segmentation 2. Target marketing 3. Market Positioning

 The place the product occupies in the consumer’s mind  Products are positioned relative to competing products  Marketers look for clear, distinctive and desirable place in positioning Marketing Strategy Strategy 1. Market Segmentation 2. Target marketing 3. Market Positioning

The Marketing Process Competitor analysis guides competitive marketing strategy development. Strategy leads to tactics via the marketing mix:  The “Four Ps” – product, price, place, promotion (seller viewpoint)  The “Four Cs” – customer solution, cost, convenience, and communication (customer viewpoint) Analyzing marketing opportunities Selecting target markets Developing the marketing mix Managing the marketing effort Key Elements

Marketing Mix The marketing mix includes controllable and tactical marketing tools knows as the 4P’s The 4P’s include  Product  Place  Promotion  Price

The Marketing Mix

The Marketing Process Marketing analysis  Provides information helpful in planning, implementation, and control Marketing planning  Strategies and tactics Marketing implementation  Turns plans into action Marketing control  Operating control  Strategic control Analyzing marketing opportunities Selecting target markets Developing the marketing mix Managing the marketing effort Key Elements

 Finding opportunities  Avoiding threats  Understanding strengths  Analyzing weaknesses Analysis Planning Implementation Control Managing the Marketing Effort Marketing Functions

 Marketing plans include:  Executive summary  Analysis of current situation  Objectives  Targets and positioning  Marketing mix  Budget  Controls Managing the Marketing Effort Marketing Functions Analysis Planning Implementation Control

 Plans are turned into action with day-to-day activities  Good implementation is a challenge Managing the Marketing Effort Marketing Functions Analysis Planning Implementation Control

 Evaluation of the results of marketing strategies  Checks for differences between goals and performance Managing the Marketing Effort Marketing Functions Analysis Planning Implementation Control

Managing the Marketing Effort

The Marketing Process