Chapte2 strategic marketing management

Chapter 2:
Company and Marketing
Strategy
2-1
Strategic Marketing Management
Kotler and Armstrong
Partnering to Build
Customer Engagement,
Value, and Relationships
Copyright © 2016 Pearson Education, Inc.

• Objective 1: Explain company-wide strategic
planning and its four steps.
• Objective 2: Discuss how to design business
portfolios and develop growth strategies.
• Objective 3: Explain marketing’s role in strategic
planning and how marketing works with its
partners to create and deliver customer value.
Learning Objectives
Company and Marketing Strategy
Copyright © 2016 Pearson Education, Inc. 2-2

• Objective 4: Describe the elements of a
customer value-driven marketing strategy
and mix, and the forces that influence it.
• Objective 5: List the marketing
management functions, including the
elements of a marketing plan, and discuss
the importance of measuring and managing
marketing return on investment.
Learning Objectives

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
Company-Wide Strategic Planning

Steps in Strategic Planning
2.SWOT
3. Segmentation,
targeting,
positioning
Implementing
marketing mix
Planning,
implementation,
control
Evaluate
performance
using marketing
metrics

• The mission statement is
the organization’s
purpose; what it wants to
accomplish in the larger
environment.
Defining a Market-Oriented Mission

• AT&T’S Mission statement focuses on the communication rather on telephones; it is
why Exxon Mobil focuses on energy rather than on telephones; it is why Union Pacific’s
mission statement focuses on transportation rather than on railroads; universal studios
mission statement focuses on entertainment rather than on movies.
1. Do not offer me things
2. Do not offer me clothes. Offer me comfort for my feet and the pleasure of walking
3. Do not offer me shoes. Offer me security, comfort and a place that is clean and
happy
4. Do not offer me a house. Offer me security, comfort, and a place that is clean and
happy
5. Do not offer me books. Offer me hours of pleasure and the benefit of knowledge
6. Do not offer me CD’s. offer me leisure and the sound of music
7. Do not offer me tools. Offer me benefits and the pleasure that come from making
beautiful things
8. Do not offer me furniture. Offer me comfort and the quietness of a cozy place
9. Do not offer me things. Offer me ideas, emotions, ambience, feelings, and benefits
..please do not offer me things………
MISSION STATEMENT COMPONENTS

• What the customer thinks he/she is buying, what he/she considers
value, is decisive- it determines what a business is, what it produces, and
whether it will prosper, it is always utility, meaning what a product or
service does for him or her. The customer is the foundation of a business
and keeps its existence.
• 1. customers- who are the firm’s customers?
• 2. products or services- what are the firm’s major products and services?
• 3. Markets- Geographically, where does the firm compete?
• 4. Technology- is the firm technologically current??
• 5.concern for survival, growth and profitability- is the firm committed to
growth and financial soundness?
• 6. Philosophy- what are the basic beliefs, values, aspirations, and ethical
priorities of the firm?
• 7. Self-concept- what is the firm’s distinctive competence or major
competitive advantage?
• 8. concern for public image- is the firm responsive to social, community,
and environmental concerns?
• 9. concern for employees- are employees a valuable asset to a firm?
Mission statement

Step 1: Define the business mission
• The mission statement, a broad description of a firm’s
objectives and the scope of activities. It attempts to
answer two main questions: What type of business are
we? What do we need to do to accomplish our goals and
objectives?

• PEPSICos Mission Statement “To provide consumer’s
around the world with delicious, affordable, convenient
and complementary foods and beverages from
wholesome breakfasts to healthy and fun daytime snacks
and beverages to evening treats”
• Coke’s Mission Statement “ To refresh the world… To
inspire moments of optimism and happiness….To create
value and make a difference”
11

PINK RIBBON INTERNATIONAL’S MISSION STATEMENT:
“To create a global community to support breast cancer
patients, survivors and their families all over the world….by
facilitating forums and blogs where thoughts, experience
and information can be shared”
12

13
“To provide consumer’s around the world with delicious, affordable,
convenient and complementary foods and beverages from wholesome
breakfasts to healthy and fun daytime snacks and beverages to evening
treats”

Business
objectives
• Build profitable
customer
relationships
• Invest in
research
• Improve profits
Marketing
objectives
• Increase
market share
• Create local
partnerships
• Increase
promotion
Setting Company Objectives and Goals

The business portfolio is the collection of
businesses and products that make up the
company.
Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses that
make up the company.
Designing the Business Portfolio

Strategic business units can be a
• Company division
• Product line within a division
• Single product or brand

Identify strategic business
units (SBUs)
Assess the attractiveness of
its various SBUs
Decide how much support
each SBU deserves
Analyzing the Current Business Portfolio

Analyzing the Current Business Portfolio
Growth-share matrix is a portfolio-planning
method that evaluates a company’s SBUs
in terms of market growth rate and relative
market share.

Analyzing the Current Business
Portfolio
The Boston
Consulting
Group
Approach
FIGURE 2.2 The BCG Growth-Share Matrix

• Difficulty in defining SBUs and measuring
market share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future
planning
Problems with Matrix Approaches

Developing Strategies for Growth and
Downsizing
Product/market expansion grid looks at new
products, existing products, new markets, and
existing markets for company growth
opportunities.

Downsizing
Existing
products
New
products
Existin
g
market
s
New
market
s
FIGURE 2.3 The Product/Market Expansion Grid

Downsizing is when a company must
prune, harvest, or divest businesses that
are unprofitable or that no longer fit the
strategy.
Downsizing

Value chain is a series of departments that
carry out value-creating activities to design,
produce, market, deliver, and support a
firm’s products.
Partnering with Other Company Departments
Planning Marketing: Partnering to
Build Customer Relationships

Partnering with Other Company
Departments

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.
Partnering with Others in the Marketing
System

Marketing Strategy and the Marketing
Mix

Marketing strategy is the marketing logic by
which the company hopes to create
customer value and achieve profitable
customer relationships.
Mix
Customer Value-Driven Marketing Strategy

Developing a marketing strategy

37
If an organization’s overall strategy is wrong (ineffective), then all
the efficiency in the world may not be enough to allow success.
Business or military success is generally not the happy result of
accidental strategies. Rather, success is the product of both
continuous attention to changing external and internal conditions
and the formulation and implementation of insightful adaptations to
those conditions. The element of surprise provides great
competitive advantages in both military and business strategy;
information systems that provide data on opponents’ or competitors’
strategies and resources are also vitally important.

Market segmentation is the division of a market
into distinct groups of buyers who have
different needs, characteristics, or behaviors
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.
Marketing Strategy and the Marketing Mix

Market targeting is the process of evaluating
each market segment’s attractiveness and
selecting one or more segments to enter.
Market positioning is the arranging for a
product to occupy a clear, distinctive, and
desirable place relative to competing products
in the minds of target consumers.
Differentiation begins the positioning process.
Mix

Mix
Positioning: The 100-year-
old Del Monte brand
positions itself as “Bursting
with Life: Made in America.
Picked and packed at the
peak of ripeness.
Same essential ingredients
as fresh.”- Del Monte Corporation

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.
Developing an Integrated Marketing Mix

Mix
Developing an Integrated Marketing
Mix

-Customer Value-Driven Marketing
Strategy
-Developing an Integrated Marketing Mix
Learning Objective 4
• Describe the elements of a customer value-driven
marketing strategy and mix and the forces that
influence it.

Managing the Marketing Effort
Marketing Analysis

Marketing Analysis – SWOT
Analysis
Internal
External
Positive Negative

Executive
summary
Marketing
situation
Threats and
opportunities
Objectives and
issues
Marketing
strategy
Action
programs
Budgets Controls
Market Planning—Parts of a Marketing Plan

• Turning marketing strategies and plans into
marketing actions to accomplish strategic
marketing objectives
• Addresses who, where, when, and how
Marketing Implementation

Functional
Geographic
Product management
Market
Customer management
Marketing Department Organization

• Evaluating results
• Taking corrective action
• Operating control
• Strategic control
Marketing Control

• Net return from a marketing investment divided
by the costs of the marketing investment
• Measurement of the profits generated by
investments in marketing activities
Return on Marketing Investment (Marketing
ROI)
Measuring and Managing
Return on Marketing Investment

Measuring and Managing
Return on Marketing Investment

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