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

2. Company and Marketing Strategy
Topic Outline
Companywide Strategic Planning: Defining Marketing’s Role
Designing the Business Portfolio
Planning Marketing: Partnering to Build Customer Relationships
Marketing Strategy and the Marketing Mix
Managing the Marketing Effort
Measuring and Managing Return on Marketing Investment

3. Companywide Strategic Planning
Strategic Planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities
Strategic planning sets the stage for the rest of the planning in the firm.
In slideshow view, click on movie icon to launch Live Nation video snippet. See accompanying DVD for full video segment.
Discussion Question
How might the strategic plan of the college or university influence decisions in the schools programs and offerings. How might it influence decisions in food services, dormitories, executive education, and undergraduate versus graduate programs.

4. Companywide Strategic Planning
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

5. Companywide Strategic Planning
Steps in Strategic Planning

6. Companywide Strategic Planning
Defining a Market-Oriented Mission
The Mission Statement is the organization’s purpose, what it wants to accomplish in the larger environment
Market-oriented mission statement defines the business in terms of satisfying basic customer needs
Google’s Mission?
We help you organize the world’s information and make it universally accessible and useful
A mission statement should:
Not be myopic in product terms
Meaningful and specific
Motivating
Emphasize the company’s strengths
Contain specific workable guidelines
Not be stated as making sales or profits

7. Market-Oriented Mission
A mission statement answers...
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 the market environment
Based on distinctive competencies
Motivating

8. Companywide Strategic Planning
Product-Oriented Definition
Market-Oriented Definition
Disney
We run amusement parks
We create fantasies - a place where dreams come true and the world works the way it’s supposed to
Nike
We sell athletic shoes and apparel
We bring inspiration and innovation to every athlete* in the world
(*if you have a body, you are an athlete)

9. Companywide Strategic Planning
Mission statements guide the development of objectives and goals
Objectives are developed at each level in the organization hierarchy
Strategies are developed to accomplish these objectives

10. Companywide Strategic Planning
Setting Company Objectives and Goals
Business objective
Increase profits by 15% within two years
Marketing objective
Increase market share to 60% in one year

11. Companywide Strategic Planning
Designing the Business Portfolio
The Business Portfolio is the collection of businesses and products that make up the company Portfolio Analysis is a major activity in strategic planning where management evaluates the current products and businesses that make up the company

12. Companywide Strategic Planning
Analyzing the Current Business Portfolio
Strategic Business Unit (SBU) is a unit of the company that has a separate mission and objectives that can be planned separately from other company businesses
Company division
Product line within a division
Single product or brand
This Web link is to Procter & Gamble is an interesting site to explore with the students. Click on the Family of products.
Discussion Question
Which product categories might be growing markets, slower markets, and emerging markets. This site can be explored again when viewing Figure 2.2—the BCG grid.

13. Companywide Strategic Planning
Analyzing the Current Business Portfolio
Identify key businesses (strategic business units) that make up the company
Assess the attractiveness of the company’s various SBUs
Decide how much support each SBU deserves

14. Companywide Strategic Planning BCG Growth/Share Matrix
Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows.
Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.
Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share.
Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash.

15. Shape The Future Business Portfolio
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
Downsizing
Good for dogs and question marks

16. Companywide Strategic Planning
Problems with Matrix Approaches
Difficulty in defining SBUs and measuring market share and growth
Time consuming
Expensive
Focus on current businesses, not future planning & products
Too strongly emphasize market share growth

17. Companywide Strategic Planning
Designing the business portfolio also involves developing strategies for growth by identifying, evaluating, and selecting promising new product & market opportunities

18. Companywide Strategic Planning
Developing Strategies for Growth
Product/Market Expansion Grid is a tool for identifying company growth opportunities through:
Market penetration
Market development
Product development
Diversification

19. Companywide Strategic Planning
Developing Strategies for Growth
Product/Market Expansion Grid Strategies

20. The Business Portfolio
Which strategy
is this?
Market penetration
Market development
Product development
Diversification
There are several potential answers to this categorization:
Starbucks is appealing to the at-home coffee drinking market. This is market development. Some students might argue this is market penetration if it is selling ADDITIONAL coffee to current drinkers. The answer could also be product development where Starbucks is offering coffee in areas where there are no Starbucks retail outlets.

21. Companywide Strategic Planning
Developing Strategies
for Growth and Downsizing
Downsizing is the reduction of the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy

22. Marketing’s Role in Strategic Planning
Provide a guiding philosophy
Identify attractive opportunities
Design effective strategies
Build strong value chains
Form superior value delivery networks

23. Partnering to Build Customer Relationships
Planning Marketing
Partnering to Build Customer Relationships
Value Chain is a series of departments within the company that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products

24. Partnering to Build Customer Relationships
Planning Marketing
Partnering to Build Customer Relationships
Value Delivery Network is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system

25. Marketing Strategy and the Marketing Mix
Consumers stand in the center. The goal is to create value for customers and build profitable customer relationships. Next comes marketing strategy—the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. The company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). It identifies the total market, then divides it into smaller segments, selects the most promising segments, and focuses on serving and satisfying the customers in these segments. Guided by marketing strategy, the company designs an integrated marketing mix made up of factors under its control—product, price, place, and promotion (the four Ps). To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment.

26. Marketing Strategy and the Marketing Mix
Customer-Centered Marketing Strategy
Market Segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes Market Segment is a group of consumers who respond in a similar way to a given set of marketing efforts

27. Marketing Strategy and the Marketing Mix
Customer-Centered Marketing Strategy
Market Targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
This link goes to the nike.com site. Explore with the students the different segments including gender Nike Women, psychographics (sports centric including football), and age.
Discussion Questions (can include the topic of positioning which is on the following slide).
Specific questions for the students:
How does Nike segment their market?
What appears to be their most important segments?
How does Nike position their products in the marketplace?

28. Market Targeting
Lucky Magazine is targeted to younger women who enjoy shopping

29. Marketing Strategy and the Marketing Mix
Customer-Centered Marketing Strategy
Market Positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer

30. Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
Marketing Mix is the set of controllable tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market. “Four Ps” are seller viewpoint
The corresponding “Four Cs”, customer solution, cost, convenience, and communication, are the customer viewpoint

31. Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
It is interesting to ask how to make the 4Ps more customer centric? This leads to a redefining of the 4Ps to the 4Cs as follows:
Product—Customer solution
Price—Customer cost
Place—Convenience
Promotion—Communication

32. Managing the Marketing Effort

33. Managing the Marketing Effort
Marketing Analysis – SWOT Analysis

34. Managing the Marketing Effort
Market Planning - Parts of a Marketing Plan
Executive summary
Marketing situation
Threats and opportunities
Objective and issues
Marketing strategy
Action programs
Budgets
Controls

35. Managing the Marketing Effort
Marketing Implementation
Implementing is the process that turns marketing plans into marketing actions, to accomplish strategic marketing objectives
Successful implementation depends on how well the company blends its people, organizational structure, decision and reward system, and company culture into a cohesive action plan that supports its strategies

36. Managing the Marketing Effort
Marketing Control
Controlling is the measurement and evaluation of results and the taking of corrective action as needed
Checks for differences between goals and performance
Strategic control: Are the company’s basic strategies well matched to its opportunities?
Operating control: Checking ongoing performance against an annual plan and taking corrective action as needed

37. Managing the Marketing Effort
Marketing Department Organization
Functional organization
Geographic organization
Product management organization
Market or customer management

38. Marketing Department Organization
Functional Organization: The most common form of marketing organization with different marketing functions headed by a functional specialist
Sales manager
Advertising manager
Geographic Organization: Useful for companies that sell across the country or internationally. Managers are responsible for developing strategies and plans for a specific region

39. Marketing Department Organization
Product Management: Useful for companies with different products or brands. Managers are responsible for developing strategies and plans for a specific product or brand
Market or customer management organization: Useful for companies with one product line sold to many different markets and customers. Managers are responsible for developing strategies and plans for their specific markets or customers

40. Measuring and Managing Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
Return On Marketing Investment (Marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment
Provides a measure of the profits generated by investments in marketing activities