Correction of Final Exam Day Final Exam is on 12/9 (Friday): 9:10-11:10.

Company and Marketing Strategy Partnering to Build Customer Relationships

Chapter Outline Corporate level planning: Business missions vs. marketing objectives Analyze business portfolio: BCG Approach Marketing Strategy and the Marketing Mix STP Process Marketing Mix Managing the Marketing Effort Measuring and Managing Return on Marketing Investment

Organizational capabilities and goals Marketing opportunities Strategic Planning Organizational capabilities and goals Marketing opportunities A fit between marketing opportunities and organizational goals and capabilities Notes to Accompany Slide: Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

Companywide Strategic Planning Notes to Accompany Slide: This figure provides steps in strategic planning and how it must start with the company goals which then leads to marketing planning.

Defining a Market-Oriented Mission Mission Statement Market oriented and based on satisfying customer needs Meaningful and specific yet motivating Emphasize company’s strengths in the market Should NOT be stated in sales or profits Notes to Accompany Slide: A mission statement is a statement of the organization’s purposes, what it wants to accomplish in the larger environment.

Market-oriented business definitions Company Product-oriented Market-oriented Charles Schwab We are a brokerage firm. Nike We sell athletic shoes and apparel Revlon We make cosmetics

Market-oriented business definitions Company Product-oriented Market-oriented Charles Schwab We are a brokerage firm. We are the guardian of our customers’ financial dreams. Nike We sell athletic shoes and apparel We bring inspiration and innovation to every athelete in the world. (f you have a body, you are an athlete.) Revlon We make cosmetics We sell lifestyle and self-expression; success and status; memories, hopes and dreams.

Which of the following mission statements is market-oriented? Revlon: We sell cosmetics Disney: We run theme parks Wal-Mart: We deliver value through low prices Xerox: We make copy, fax, and other office machines ©2011 Pearson Education, Inc. publishing as Prentice Hall

Which of the following mission statements is market-oriented? Disney: We run theme parks Revlon: We sell cosmetics Wal-Mart: We deliver value through low prices Xerox: We make copy, fax, and other office machines Market-oriented mission statements are defined in terms of customer needs, rather than products or technologies. ©2011 Pearson Education, Inc. publishing as Prentice Hall

Business Mission of Ebay What does e-bay offer? Comparing with other selling’s website, what makes ebay more competitive?

Business Missions: Ebay eBay – We help people trade practically anything on earth. We will continue to enhance the online trading experiences of all-collectors, dealers, small business, unique item seekers, bargain hunters, opportunity sellers, and browsers. www.ebay.com Eay: What kind of business is Ebay in? Based on the business missions, what services can/should ebay provide besides the online auction?

Setting Company Objectives and Goals What Marketing Objectives? Build profitable business relationships Marketing Objective? Notes to Accompany Slide: This slide demonstrates a company moving from a business objective to a marketing objective. Given this company’s objectives what might be the marketing objectives?

Marketing Objective A statement of what is to be accomplished through marketing activities Realistic, measurable, and time specific Examples of marketing objective statements

Example of Marketing Objective Our objective is to be a leader in the industry in terms of new-product development. Our objective is to spend 12 percent of sales revenue between 2007 and 2008 on research and development in an effort to introduce at least five new products in 2008 Add animation

Designing the Business Portfolio The Business Portfolio is the collection of businesses and products that make up the company

The Boston Consulting Group Approach Marketing growth rate provides a measure of market attractiveness. On the horizontal axis, relative market shares serves as a measure of company strength in the market.

Analyze Apple’s Product Portfolio Star (iphone,ipad) ? Apple TV Cashcow (ipod) Mac High Market Growth Rate low Marketing growth rate provides a measure of market attractiveness. On the horizontal axis, relative market shares serves as a measure of company strength in the market. High low Relative Market Share

Strategies for Growth and Downsizing

Market-Product Strategies: Ben and Jerry

Video case: Live Nation What is Live Nation’s mission? Based on the product/market expansion grid, what strategy is Live Nation pursuing

Outline Course Id to access mymktlab: CRSCDD5-258730 IE web browser preferred Marketing strategy STP Process Return on marketing investment Class activity 1

Marketing Strategy and the Marketing Mix Notes to Accompany Slide: This is a useful diagram to cover a roadmap of the book and of a marketing plan.

©2011 Pearson Education, Inc. publishing as Prentice Hall Schwinn Bicycle Company wants to grow by diversification. To accomplish this, Schwinn will: Introduce new bicycle models Introduce modifications to its existing bicycle products Identify new market segments for its current products Start up or acquire businesses outside of its current products and markets ©2011 Pearson Education, Inc. publishing as Prentice Hall

©2011 Pearson Education, Inc. publishing as Prentice Hall Schwinn Bicycle Company wants to grow by diversification. To accomplish this, Schwinn will: Introduce new bicycle models Introduce modifications to its existing bicycle products Identify new market segments for its current products Start up or acquire businesses outside of its current products and markets Diversification is the riskiest strategy as it requires that businesses develop new products in new markets. ©2011 Pearson Education, Inc. publishing as Prentice Hall

©2011 Pearson Education, Inc. publishing as Prentice Hall Procter & Gamble once had more that ten different brands of laundry detergent but now markets only six. This is an example of: Downsizing Diversification Market contraction Market penetration ©2011 Pearson Education, Inc. publishing as Prentice Hall

©2011 Pearson Education, Inc. publishing as Prentice Hall Procter & Gamble once had more that ten different brands of laundry detergent but now markets only six. This is an example of: Downsizing Diversification Market contraction Market penetration Downsizing is reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company’s overall strategy. ©2011 Pearson Education, Inc. publishing as Prentice Hall

Marketing Strategy Segmentation Targeting Positioning

Customer Driven Marketing Strategy Market segmentation is the process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs Notes to Accompany Slide: Here we have two segments of women who exercise – you can ask students how they are different when purchasing an athletic shoe.

Segmentation

Customer Driven Marketing Strategy Market targeting involves evaluating each market segment’s attractiveness and selecting one or more to enter Notes to Accompany Slide: The instructor can ask students what makes a market attractive and worth targeting.

Customer Driven Marketing Strategy Positioning is arranging for a product to occupy a clear distinctive, and desirable place relative to competing products in the minds of the customer. Notes to Accompany Slide: Some products are positioned very clearly. Volvo, for instance, is positioned on safety.

Discussion: Mapping SUVs Position these brands on a 2-dimension map (Price vs. performance) Range Rover Hummer H1 Hummer H2 Lexus LX 470 Lincoln Navigator Land Cruiser Escalade

Discussion: Mapping SUVs

The Gap Example What is Gap’s STP strategy? How do they segment the market? What are their target markets How do they position the brand? Summary How do they segment the market? By gender and age. What are their target market? What are their positionning?

Developing an Integrated Marketing Mix Notes to Accompany Slide: The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.

Managing the Marketing Effort Marketing Analysis Notes to Accompany Slide: Each of these steps will be described in the following slides

Marketing Analysis Notes to Accompany Slide: The goal with a SWOT analysis is to match the company’s strengths to attractive opportunities and to eliminate weakness and minimize the threats.

Marketing Control Set marketing goals Measures performance Evaluates causes of differences Take corrective actions Notes to Accompany Slide: Control is important because so many surprises can occur during the implementation of marketing plans.

Measuring and Managing Return on Marketing Investment Return on marketing investment (marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. Notes to Accompany Slide: ROI measures the profits generated by investments in marketing activities.

Class activity one Product Portfolio Analyze