Chp 2 company & marketing strategy partnering to build customer relationship

Copyright © 2015 Pearson Education, Inc.

Learning Objectives

• Explain company-wide strategic planning and its four steps.

• Discuss how to design business portfolios and develop growth strategies.

• Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.

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Learning Objectives

• 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.

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First Stop: Nike’s Customer-Driven Marketing

• To build image and market share, Nike • Outspent competitors on big endorsements.• Conducted splashy promotional events.• Started big-budget ads.

• Nike sales slipped in the late 1990s. • Turnaround—new product innovation and a

focus on customer relationships• Mastered social networking, creating deep

engagement and community among customers2 - 4


Strategic Planning

• Strategic planning involves adapting the firm to take advantage of opportunities in its constantly changing environment.

• Strategic planning helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities.

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Figure 2.1 - Steps in Strategic Planning

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Mission Statement

• Statement of the organization’s purpose• What it wants to accomplish in the larger

environment

• Market oriented and defined in terms of satisfying basic customer needs

• Emphasizes the company’s strengths • Focuses on customers and the customer

experience the company seeks to create

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Setting Company Objectives and Goals

• The mission should be converted to supporting objectives at each level of management.

• The mission leads to setting a hierarchy of objectives.• Business objectives• Marketing objectives

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Business Portfolio

• Collection of businesses and products that make up the company

• Steps in business portfolio planning:• Analyze the firm’s current business portfolio • Develop strategies for growth and downsizing to

shape the future portfolio

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Portfolio Analysis

• Evaluation of the products and businesses that make up the company by the management

• Steps: • Identifying the strategic business units (SBUs)• Assessing the attractiveness of its various SBUs

and deciding the support each SBU deserves

• The purpose is to direct resources toward more profitable businesses while phasing out or dropping weaker ones.

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Figure 2.2 - The BCG Growth-Share Matrix

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Growth-Share Matrix

• Evaluates a company’s SBUs in terms of market growth rate and relative market share

• Problems• Difficult, time consuming, and costly to implement• Difficult to define SBUs and measure market share

and growth• Focuses on classifying current businesses but

provide little advice for future planning

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Figure 2.3 - The Product/Market Expansion Grid

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Downsizing

• Reduces the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy

• Reasons for downsizing:• Rapid growth of the company• Lack of experience in a market• Change in market environment• Decline of a particular product

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Role of Marketing in Strategic Planning

• Provides a guiding philosophy• Marketing concept—company strategy should

create customer value and build profitable relationships with the key customers

• Provides inputs to strategic planners• Helps identify market opportunities and assess the

firm’s potential to take advantage of them

• Designs strategies for reaching the unit’s objectives

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Partnering with Other Company Departments

• Value chain: Series of internal departments that carry out value-creating activities

• Firm’s success depends on how well the various departments coordinate their activities.

• Marketers should ensure all the departments are customer-focused and develop a smooth functioning value chain.

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Partnering with Others in the Marketing System

• Companies should assess:• Their internal value chains. • The value chains of their suppliers, distributors,

and their customers.

• Value delivery network: Made up of the company, its suppliers, its distributors, and its customers who partner with each other• To improve the performance of the entire system

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Marketing Strategy

• Marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

• Marketing mix: Integration of product, price, place, and promotion

• Activities for best marketing strategy and mix involve:• Marketing analysis• Planning, implementation, and control

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Market Segmentation and Market Targeting

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Positioning

• Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

• Begins with differentiation• Differentiation: Differentiating the market

offering to create superior customer value

• The entire marketing program should support the chosen positioning strategy.

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Figure 2.5 - The Four Ps of the Marketing Mix

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Criticisms of the Four Ps

• Omit or underemphasize service products• Need to include packaging as a product

decision• Does not cater to the buyer’s perspective of

the four Cs:• Customer solution• Customer cost• Convenience• Communication

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Figure 2.6 - Managing Marketing: Analysis, Planning, Implementation, and Control

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Figure 2.7 - SWOT Analysis: Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T)

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Contents of a Marketing Plan

Section PurposeExecutive summary Brief summary of the main goals and

recommendations

Current marketing situation

Gives the market description and the product, competition, and distribution review

Threats and opportunities analysis

Helps management to anticipate important positive or negative developments

Objectives and issues States and discusses marketing objectives and key issues

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Contents of a Marketing Plan

Section Purpose

Marketing strategy

Outlines the broad marketing logic and the specifics of target markets, positioning, marketing expenditure levels, and strategies for each marketing mix element

Action programs

Spells out how marketing strategies will be turned into specific action programs

Budgets Details a supporting marketing budget that is a projected profit-and-loss statement

Controls Outlines the controls that will be used to monitor progress, allow management to review implementationresults, and spot products that are not meeting their goals

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Market Implementation

• Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives

• Addresses the who, where, when, and how of the marketing activities

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Marketing Department Organization

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Marketing Control

• Measuring and evaluating the results of marketing strategies and plans

• Operating control ensures that the company achieves the sales, profits, and other goals set out in its annual plan.

• Strategic control involves looking at whether the company’s basic strategies are well matched to its opportunities.

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Marketing Return on Investment (ROI)

• Net return from a marketing investment divided by the costs of the marketing investment

• Assessed using:• Standard marketing performance measures • Customer-centered measures

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Figure 2.8 - Marketing Return on Investment

Source: Adapted from Roland T. Rust, Katherine N. Lemon, and Valerie A. Zeithaml, “Return on Marketing: Using Consumer Equity to Focus Marketing Strategy,” Journal of Marketing, January 2004, p. 112. Used with permission.

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Learning Objectives

• Explain company-wide strategic planning and its four steps.

• Discuss how to design business portfolios and develop growth strategies.

• Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.

2 - 32


Learning Objectives

• 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.

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Copyright © 2015 Pearson Education, Inc.Copyright © 2015 Pearson Education, Inc.

Chp 2 company & marketing strategy partnering to build customer relationship

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