1. Principles of Marketing “ Company and Marketing Strategy: Partnering to Build Customer Relationships”

2. Company & Marketing Marketing contributes to and is guided by the overall company philosophy. Marketing works with the other company functions to design marketing strategies that deliver value to the target market. Finally marketers put the ‘marketing mix’ into play to carry out the planned strategies successfully.

3. Strategic Planning: This is the process of : a) Developing & maintaining a strategic fit between the organizational GOALS and CAPABILITIES and its changing MARKETING ENVIRONMENT. b) Defining a clear company mission, setting supporting objectives, designing a sound product portfolio and coordinating functional strategies. c) The purpose of strategic planning is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment.

4. Strategic Planning: Define the company mission Set company objectives & goals Design business portfolio Plan marketing & other functional strategies Corporate level Business unit, product and market level

5. 1) Defining the company mission Overtime a company’s purpose of existence may become fuzzy as the organization grows, henceforth it becomes important to refresh its search for purpose. The purpose is redefined by answering these simple questions ; what is our business? Who is the customer? What do the customers value? What should our business be? Henceforth; A mission statement states the organization’s purpose i.e. what it wants to accomplish in the larger environment.

6. The company mission should be:- 1) Market oriented and defined in terms of customer needs as products and technologies become outdated but market needs exist forever 2) Realistic i.e. it should not be too narrow or too broad 3) Specific i.e. it should not lack specific, workable guidelines 4) Fit the market environment i.e. should keep the perspectives and needs of the current period in mind 5) Based on the company’s distinctive competencies i.e. should focus on the company’s strong points. 6) Motivating i.e. it should make the employees feel that they are making a valuable contribution to the lives of their customers

7. 2) Setting Company Objectives and Goals:- Once the purpose has been defined, the next step is to define this purpose in terms of detailed supporting objectives for each level of management i.e. business and marketing objectives. All objectives must follow the ‘mission’ guiding star, they will then not conflict with each other.

8. 3) Design the Business Portfolio A business portfolio is the products and services ( the collection of businesses) that make up the company. - A portfolio should be in accordance to the strengths and weaknesses of the company - A company starts the design by: 1) Analyzing the current Business portfolio 2) Developing Strategies for Growth and downsizing

9. Analyzing the Current Business Portfolio - Management must first identify the key businesses that make up the company. These key businesses are called ‘strategic business units’ or SBUs - An SBU is a unit of the company that has a separate mission and objectives which are planned independently of the other company businesses. It can be a division, a product line or at times just a product or a brand. - Portfolio analysis tells the manager what businesses are good to grow and which are good to go. By virtue of this analysis proper allocation of resources can be conducted.

10. The growth share matrix/BCG matrix High Low HighLow Relative market share Market growth rate CASH COW STAR ? QUESTION MARK DOG

11. STARS – High market share and high growth rate, these products require high investment to finance their rapid growth, eventually their growth slows down and they turn into cash cows. CASH COWS – These are the products with the high market share but a relatively low growth rate, these products survive because of a large loyal customer base and they do not need large investment to hold their market share. These products are termed as cash cows because they produce a lot of cash for the company to conduct its activities. QUESTION MARKS – These products have a low market share but a high growth rate hence the ‘question mark’. They require a lot of cash to hold or increase their market share. It is up to the management to decide which ‘questions marks’ to turn into stars and which ones to do away with. DOGS – these products have a low growth rate and a low market share, they may generate enough cash to survive but hold no promise of being large sources of cash.

12. Depending on where the SBU falls in the matrix, a company may decide to: - Invest more in order to build the share of the business - Invest just enough to hold the market share - Milk the short term cash flows in order to harvest the market share - Use the resources else where henceforth divesting the SBU. To keep products in the star and cash cow quadrants it is important that the company diversifies its portfolio and add new products and units continuously.

13. Developing Strategies for Growth & Downsizing Where ‘growth’ is pure oxygen for the company, ‘profitable growth’ should be the organization’s objective. Marketing’s main responsibility is to attain profitable growth for the company, henceforth it must identify, evaluate and select market opportunities and lay down strategies to capture them.

14. Strategies Market Penetration Product Development Market DevelopmentDiversification Existing Markets New Markets Existing Products New Products

15. When an organization sells more of its current/existing products to its existing target market, deeper ‘market penetration’ is achieved. When its sells new products to its existing target market, ‘product development’ takes place as the new product is modified to fit its market place. When existing products are introduced to new markets, ‘market development’ takes place i.e. the market is identified and developed to fit the product. When the organization starts up new products in new markets, it is termed as ‘diversification’. ‘Downsizing’ takes place in order to eliminate business units or products that no longer fit the company strategy.

16. 4) Planning Marketing: Partnering to Build Customer Relationships Marketing’s role in planning the strategy is : a) To work out the guiding philosophy i.e. the marketing concept. b) To provide ‘inputs’ to the planners by helping them identify attractive opportunities in the market. a) Help each business unit outline its objectives.

17. a) Partnering with other Company departments Building the ‘VALUE CHAIN’ i.e. each department contributes through value creating activities to design, produce, market, deliver and support a firms products. For a value chain to exist all departments must think CUSTOMER!!!

18. b) Partnering with Others in the marketing system Competitors Marketing Intermediaries End Users suppliers Company ( marketer) Companies today are partnering with other members of the marketing system in order create a ‘Value Delivery Network’ i.e. the network made up of suppliers, distributors, and ultimately the consumers who partner with each other to improve the overall performance of the system.

19. MARKETING STRATEGY This is the logic by which the marketing department steers itself in order to achieve the marketing objectives. The strategy : 1) Outlines which customers the company will serve and how, 2) Identifies the total market, 3) Divides the market into segments and selects the most lucrative segment, 4) Focuses on satisfying customer needs and delivering maximum value to them.

20. To Design a Customer Centered Strategy 1) Market Segmentation – The marketer starts off by dividing the market into distinctive groups termed as ‘market segments’ which are composed of consumers who respond in a similar way to a given set of marketing efforts. These consumers have distinct needs, characteristics or behavior. Henceforth it becomes easier for a company to focus its efforts.

21. To Design a Customer Centered Strategy 2) Target Marketing – Once the marketer has divided the market into ‘market segments’, the next step is to determine which segments are most profitable to enter. The marketer can either choose one segment i.e. a ‘niche’ or choose several related segments i.e. different type of customers with the same kind of needs.

22. To Design a Customer Centered Strategy 3) Market Positioning– Once the target market has been decided the marketer must decide what position the product must occupy in the market. The product must stand out against its competitor. It must have a ‘clear’, ‘distinctive’ and ‘desirable’ place in the mind of its target consumers. The company must differentiate its marketing offer and then it must take strong steps to deliver and communicate the position to target consumers.

23. THE MARKETING MIX (4 Ps) Product ( need satisfying marketing offer) Price ( charge for the offer) Place ( how offer will be made available) Promotion ( how the offer will be communicated to the target audience and how they will be persuaded to buy)

24. The 4 Ps Vs The 4 Cs Marketer’s PerspectiveCustomer’s Perspective Product (need satisfying marketing offer) Product (need satisfying marketing offer) Price (charge for the offer) Price (charge for the offer) Place (how offer will be made available) Place (how offer will be made available) Promotion (how the offer will be communicated to the TM) Promotion (how the offer will be communicated to the TM) Customer Solution Customer Solution Customer Cost Customer Cost Convenience Communication

25. Marketing Management This is “ the art and science of choosing target markets and building profitable relationships with them”. With Management comes the art of ANALYSIS, PLANNING, IMPLEMENTATION and CONTROL Analysis Planning Develop strategic Plans Develop marketing Plans Implementation Carry out the Plans Control Measure results Evaluate results Take corrective action

26. Marketing Analysis – A detailed market and SWOT analysis is conducted to target lucrative opportunities. This input is then provided by the Marketing Department to other functions. Marketing Planning – Once the market has been analyzed, the next step is to PLAN/DECIDE marketing strategies that will help the company attain its objectives. Marketing Implementation – This process turns the planned strategies into actions. This is where ‘ doing things right’ becomes important. For Successful implementation to take place the following things are important: 1. The company must blend its people, structure, resources into a cohesive action program that supports its strategies. 2. The marketing strategies must fit the company culture.

27. Who will implement the strategy?? Planning and Strategy implementation is dependent on the structure of the organization. 1. Functional ( Marketing activities are headed by a sales, advertising, marketing research, customer service or new product manager) 2. Geographic ( Sales and marketing people are assigned to specific countries) 3. Product Management (A product manager develops and manages strategies for several diff brands) 4. Market/Customer Management ( When selling one product line to many diff types of markets, this is focused more on the needs of the customer than on the product itself)

28. Marketing Control 1. Set specific marketing goals 2. Measure performance in the market place 3. Evaluate causes of differences b/w expected and actual performance 4. Take corrective actions to close gaps b/w goals and performance. Marketing Audit is usually conducted to point out problem areas and devise a plan of action to improve the company’s marketing performance.

29. Measuring & Managing ROM ROM – Return on Marketing is the net return from a marketing investment divided by cost of the marketing investment. Since its mostly subjective, ROM can be measured in terms of increased customer awareness, retention, satisfaction, increased sales and market share. A good ROM would be increased Customer life time value and the eventual increase in Customer Equity.

30. THE BOTTOM LINE! “Projections are made, marketing is delivered, results are measured, and the knowledge is applied to guide future marketing…the return on marketing investments is integral to strategic decisions at ( all levels) of the business”