The document discusses company and marketing strategy, explaining strategic planning, developing growth strategies, and marketing's role. It describes customer-driven marketing strategy and forces that influence the marketing mix. Finally, it discusses the importance of measuring return on marketing investment and managing the marketing effort.
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Marketing - Chapter 2
1. Chapter Two Company and Marketing Strategy: Partnering to Build Customer Relationships
2. Company and Marketing Strategy Explain companywide strategic planning and its four steps. Discuss how to design business portfolios and develop growth strategies. Explain marketings role in strategic planning and how marketing works with its partners to create and deliver customer value. Describe the elements of a customer-driven marketing strategy and mix and the forces that influence it. List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment. Objectives
3. Companywide 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
5. Companywide Strategic Planning The mission statement is the organizations purpose, what it wants to accomplish in the larger environment Market-oriented mission statement defines the business in terms of satisfying basic customer needs A clear mission statement acts as an invisible hand that guides people in the organization. Defining a Market-Oriented Mission What might be Googles mission statement?
6. Companywide Strategic Planning Defining a Market-Oriented Mission We help you organize the worlds information and make it universally accessible and useful.
7. Companywide Strategic Planning Company Product-Oriented Definition Market-Oriented Definition Amazon.com We sell books, videos, CDs, toys, consumer electronics and other products online We make the Internet buying experience fast, easy, and enjoyable were the place where you can find and discover anything you want to buy online Disney We run theme parks We create fantasies a place where dreams come true and America still works the way its 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 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 The best business portfolio is the one that best fits the companys strengths and weaknesses to opportunities in the environment. Designing the Business Portfolio
10. Companywide Strategic Planning 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 Analyzing the Current Business Portfolio
13. Companywide Strategic Planning Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning Problems with Matrix Approaches
14. Companywide Strategic Planning Product/market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification Developing Strategies for Growth and Downsizing
17. Companywide Strategic Planning 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 Developing Strategies for Growth and Downsizing
18. Companywide Strategic Planning 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 Developing Strategies for Growth and Downsizing
19. Companywide Strategic Planning 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 Developing Strategies for Growth and Downsizing
20. 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
21. 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
22. Mission Statement and Marketing Strategy Marketing Strategy and the Marketing Mix So we have our companys mission statement, and have a marketing strategy, but whats missing? At the centre of it all is our profitable customer relationship.
24. Marketing Strategy and the Marketing Mix Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behaviour 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 Customer-Driven Marketing Strategy
25. Marketing Strategy and the Marketing Mix Market targeting is the process of evaluating each market segments attractiveness and selecting one or more segments to enter Customer-Centered Marketing Strategy
26. 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
27. Marketing Strategy and the Marketing Mix Customer-Centered Marketing Strategy Write down three words that describes each company. WestJet Air Canada Starbucks Tim Hortons Would you say they are exactly the same as each other? How about: Nike Under Armour
28. Marketing Strategy and the Marketing Mix Marketing mix is the set of controllable tactical marketing tools p roduct, p rice, p lace, and p romotion that the firm blends to produce the response it wants in the target market Developing an Integrated Marketing Mix
29. Marketing Strategy and the Marketing Mix Developing an Integrated Marketing Mix Ever bought anything using in store credit? Has anyone used a shuttle bus?
30. Marketing Strategy and the Marketing Mix Developing an Integrated Marketing Mix from the customer point of view Seeing the 4 Ps from the customers perspective (example: Promotion in terms of Communication) can help us understand how we create value for our customers. 4 Ps 4 Cs Product Customer Solution Price Customer Cost Place Convenience Promotion Communication
36. Analysis Planning Implementation Control Process that turns strategies and plans into marketing actions that accomplish strategic marketing objectives Good implementation is a challenge Marketing department organization Managing the Marketing Effort
37. Managing the Marketing Effort 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 Marketing Implementation
38. Analysis Planning Implementation Control Involves Evaluating the results of marketing strategies and plans and taking corrective action Checks for differences between goals and performance Operating control, strategic control, marketing audit Managing the Marketing Effort
39. Managing the Marketing Effort Controlling is the measurement and evaluation of results and the taking of corrective action as needed Operating control Strategic control Marketing Control
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. Marketing ROI provides a measurement of the profits generated by investments in marketing activities.
41. Marketing Strategy and the Marketing Mix Environment (S.W.O.T.) Mission or Purpose Marketing Plan (4 Ps) Marketing Implementation P lace (location, website, intermediaries) P roduct (Layers, outsource) P romotion (Communications Mix) Budget P rice x Sales = Revenue Segmentation (Target Mkt.)
Note to Instructor Strategic planning sets the stage for the rest of the planning in the firm.
Note to Instructor A mission statement should: Not be myopic in product terms Meaningful and specific Motivating Emphasize the companys strengths Contain specific workable guidelines Not be stated as making sales or profits Discussion Question: Google Starbucks Mission statement, ask your students if it would help define the actions of individuals from the average barista to the CEO
Note to Instructor A mission statement should: Not be myopic in product terms Meaningful and specific Motivating Emphasize the companys strengths Contain specific workable guidelines Not be stated as making sales or profits Discussion Question: Google Starbucks Mission statement, ask your students if it would help define the actions of individuals from the average barista to the CEO
Instructors Note: This is a great opportunity to begin the discussion on positioning. Google Under Armour mission statement and compare it to Nikes mission
Note to Instructor 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.
Note to Instructor Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows. Cash c ows 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.
From Textbook, Ch. 2, Pg. 47
Instructors Note: see p 46 and discuss the way Tim Hortons has used Market penetration as a growth strategy.
Note to Instructor This Web link leads to the homepage for Virgin. This is a great company to discuss as they provide examples of market development, product development and diversification. Their homepage lists all their industries and products including tourism, leisure, shopping, media, finance, and healthcare.
Instructors Note: This web link leads to a copy newsletter from CTS Corp., the gas pedal supplier to Toyota that became involved in Toyotas acceleration recall
Note to Instructor 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 controlproduct, 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.
http://www.shutterstock.com/pic-31135552/stock-photo-an-arrow-hits-the-target-in-a-pyramid-of-balls-symolizing-targeted-marketing.html Note to Instructor This link goes to the nike.com site. Start by asking the students, What if Nike only made one pair of shoes, would all of you be wearing them? 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?
Instructors Notes: The key here is to get people thinking about positioning, differentiation and the place the product holds in the consumers mind. You might want to ask who is a user of the product or service and who purchases both.
Note to Instructor 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: ProductCustomer solution PriceCustomer cost PlaceConvenience PromotionCommunication
Note to Instructor Operating control involves checking ongoing performance against an annual plan and taking corrective action as needed. Strategic control involves looking at whether the companys basic strategies are well matched to its opportunities.