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Chapter Two

Company and Marketing Strategy Partnering to Build Customer Relationships


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Company and Marketing Strategy


Topic Outline Companywide Strategic Planning: Defining Marketings 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
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Companywide Strategic Planning


Strategic Planning

Strategic planning is the process of developing and


maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities Strategic planning provides many benefits such as:

Encouraging management to think ahead systematically Helping the company to anticipate and respond quickly to environmental changes and sudden developments

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Companywide Strategic Planning


Defining a Market-Oriented Mission

The mission statement is the organizations purpose, what it wants to accomplish in the larger environment
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. Market-oriented mission statement defines the business in terms of satisfying basic customer needs
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Companywide Strategic Planning


Setting Company Objectives and Goals
Business objectives Marketing objectives

Build profitable customer relationships Invest in research Improve profits


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Increase market share Create local partnerships Increase promotion

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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 whereby management evaluates the products and businesses that make up the company
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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
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Companywide Strategic Planning


Analyzing the Current Business Portfolio
Identify key businesses (strategic business units, or SBUs) that make up the company Assess the attractiveness of its various SBUs

Decide how much support each SBU deserves


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Analyzing Current SBUs:


Boston Consulting Group Approach Growth-Share Matrix
Relative Market Share
Market Growth Rate
High Stars High
High mkt. growth & share
Profit potential Heavy investment needed to finance rapid growth

SBU Life-Cycle

?, Star, Cash Cow, Dog Low Question Marks

High mkt. growth, low share

Build into Stars or phase out Very heavy investment needed if to build share

Cash Cows
Low
Low growth, high share
Established, successful Produce cash

Dogs
Low mkt. growth & share
Low profit potential

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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

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Companywide Strategic Planning


Developing Strategies for Growth and Downsizing

Product/market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

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Companywide Strategic Planning


Developing Strategies for Growth and Downsizing Product/market expansion grid strategies

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Companywide Strategic Planning


Developing Strategies for Growth and Downsizing
Market penetration is a growth strategy increasing sales to current market segments without changing the product Market development is a growth strategy that identifies and develops new market segments for current products

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Companywide Strategic Planning


Developing Strategies for Growth and Downsizing

Product development is a growth strategy that offers new or modified products to existing market segments Diversification is a growth strategy through starting up or acquiring businesses outside the companys current products and markets
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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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 companys overall strategy

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Planning Marketing
Partnering to Build Customer Relationships

Value chain is a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firms products

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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

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Marketing Strategy and the Marketing Mix

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Marketing Strategy and the Marketing Mix


Customer-Driven Marketing Strategy

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Marketing strategy is the marketing logic by which the business unit hopes to achieve its marketing objectives 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
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Marketing Strategy and the Marketing Mix


Customer-Centered Marketing Strategy

Market targeting is the process of evaluating each market segments attractiveness and selecting one or more segments to enter

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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

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Marketing Strategy and the Marketing Mix


Developing an Integrated Marketing Mix

Marketing mix is the set of controllable tactical marketing toolsproduct, price, place, and promotionthat the firm blends to produce the response it wants in the target market
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Marketing Strategy and the Marketing Mix


Developing an Integrated Marketing Mix

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Managing the Marketing Effort

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Managing the Marketing Effort


Marketing Analysis
Analysis is the complete analysis of the companys situation in a SWOT analysis that evaluates the companys: Strengths Weaknesses Opportunities Threats
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Managing the Marketing Effort


Marketing Analysis
Strengths include internal capabilities, resources, and positive situational factors that may help to serve company customers and achieve company objectives Weaknesses include internal limitations and negative situational factors that may interfere with company performance
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Managing the Marketing Effort


Marketing Analysis
Opportunities are favorable factors or trends in the external environment that the company may be able to exploit to its advantage

Threats are unfavorable factors or trends that may present challenges to performance
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Managing the Marketing Effort


Market Planning
Planning is the development of strategic and marketing plans to achieve company objectives Marketing strategy consists of the specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels

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Managing the Marketing Effort


Market PlanningParts of a Marketing Plan

Executive summary Objective and issues

Marketing situation Marketing strategy

Threats and opportunities

Action programs

Budgets

Controls

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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
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Managing the Marketing Effort


Marketing Control

Controlling is the measurement and evaluation of results and the taking of corrective action as needed

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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. Marketing ROI provides a measurement of the profits generated by investments in marketing activities.

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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