Company and Marketing Strategy Chapter 2. 2 - 1 Known for films, animation, theme parks and customer...
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Transcript of Company and Marketing Strategy Chapter 2. 2 - 1 Known for films, animation, theme parks and customer...
Company and Company and Marketing StrategyMarketing Strategy
Chapter 2Chapter 2
2 - 2
Known for films, Known for films, animation, theme parks animation, theme parks and customer orientationand customer orientationParks offer a variety of Parks offer a variety of attractions as well as attractions as well as cleanliness, order, and cleanliness, order, and warmthwarmth
Satisfying the Satisfying the customer is customer is everyone’s jobeveryone’s job
Disney has grown Disney has grown via diversificationvia diversification
Sales and net Sales and net income have fallenincome have fallen
cWalt DisneyWalt Disney
Discussion:Discussion: How Can Disney Recover?How Can Disney Recover?
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Objectives
Understand companywide Understand companywide strategic strategic planningplanning and its four steps. and its four steps.
Learn how to design business Learn how to design business portfolios and develop portfolios and develop strategies strategies for growth and downsizing.for growth and downsizing.
..
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Objectives
Be able to describe the Be able to describe the marketing marketing processprocess and the forces that and the forces that influence it.influence it.
Understand the marketing Understand the marketing management functions, including management functions, including the the elements of the marketing planelements of the marketing plan..
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Strategic Planning*
Strategic planning is defined as:Strategic planning is defined as: ““The process of developing and The process of developing and
maintaining a strategic maintaining a strategic fit fit between between the organization’s the organization’s goals and goals and capabilitiescapabilities and its and its changing changing marketing opportunitiesmarketing opportunities.”.”
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Figure 2-1:
Steps in the Strategic Planning Process
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Market OrientedMarket Oriented
RealisticRealistic
Fit Market EnvironmentFit Market Environment
Distinctive CompetenciesDistinctive Competencies
MotivatingMotivating
Specific
Characteristics of a Good Mission
Statement:
A Mission Statement is a Statement of the Organization’s Purpose.
Defining the Company’s Business and Mission
Mission Statement:What the organization wants to accomplish inthe larger environment.
3m does more than just make adhesives, scientific equipment, health care, and communications products. It solves people’s problems by putting innovation to work for them. (Text page 49.)
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Strategic Planning
Mission statements guide the Mission statements guide the development of objectives and development of objectives and goals.goals. Objectives are developed at each level Objectives are developed at each level
in the organization hierarchy.in the organization hierarchy. Strategies are developed to Strategies are developed to
accomplish these objectives.accomplish these objectives.
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Example: Monsanto CompanyMission: Helping to Mission: Helping to feed the world populationfeed the world population and and sustain the environmentsustain the environment..
Overall objective: To create Overall objective: To create environmentally environmentally better productsbetter products and get them to market and get them to market fasterfaster at at lower costlower cost..
Objective of agricultural division: To increase Objective of agricultural division: To increase agricultural agricultural productivityproductivity and reduce chemical and reduce chemical pollutionpollution. .
General ElectricGeneral Electric
• Boundaryless…Speed…Stretch
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Strategic Planning
Business portfolio:Business portfolio: “the collection of businesses “the collection of businesses and products that make and products that make up the company.”up the company.” Designing the businessDesigning the business
portfolio is a key step in portfolio is a key step in the strategic planning the strategic planning process.process.
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Strategic Planning
Step 1: Step 1: Analyze the Analyze the current business current business portfolioportfolio
Step 2: Step 2: Shape the future Shape the future business portfoliobusiness portfolio
Identify strategic business Identify strategic business units (SBUs)units (SBUs)Assess each SBU:Assess each SBU: The BCG growth-share The BCG growth-share
matrix classifies SBUs matrix classifies SBUs into one of four into one of four categories using:categories using:Market growth rate Market growth rate The SBU’s relative market The SBU’s relative market
share within the market.share within the market.
Portfolio DesignPortfolio Design
Portfolio Analysis:On Your Firm’s
StrengthWhat share of the market ?What share of the market ?
what does market share mean?what does market share mean?
Portfolio Analysis:On Market Attractiveness
Is the market growing?Is the market growing?
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Question Marks
• High growth, low share • Build into Stars or phase out • Require cash to hold market share
Question Marks
• High growth, low share • Build into Stars or phase out • Require cash to hold market share
Stars
• High growth & share• Profit potential • May need heavy investment to grow
Cash Cows
• Low growth, high share• Established, successful SBU’s•Produce cash
Cash Cows
• Low growth, high share• Established, successful SBU’s•Produce cash
Dogs
• Low growth & share • Low profit potential
Dogs
• Low growth & share • Low profit potential
Relative Market ShareHigh Low
Mark
et
Gro
wth
Rate
Low
H
igh
Analyzing Current SBU’s:Boston Consulting Group
Approach
?
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Business Strength
High
Medium
Low
Strong Average Weak
A
B
C
D
Ind
ustr
y
Att
racti
ven
ess
Analyzing Current SBU’s:
GE’s Strategic Business-Planning Grid
General Electric Approach
how attractive is the industry?how attractive is the industry?Market sizeMarket size Industry profit marginIndustry profit marginCompetitive intensityCompetitive intensity Industry cost structureIndustry cost structure
what is the business strength?what is the business strength?Quality and price competitivenessQuality and price competitivenessCustomer knowledgeCustomer knowledgeGeographic advantageGeographic advantage
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Strategic Planning
Step 1: Step 1: Analyze the Analyze the current business current business portfolioportfolio
Step 2:Step 2: Shape the future Shape the future business portfoliobusiness portfolio
Determine the future role of Determine the future role of each SBU and choose the each SBU and choose the appropriate resource appropriate resource allocation strategy:allocation strategy: BuildBuild HoldHold HarvestHarvest DivestDivest
SBUs change positions SBUs change positions over timeover time
Portfolio DesignPortfolio Design
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Can be Difficult, Time-Consuming, & Costly to ImplementCan be Difficult, Time-Consuming, & Costly to Implement
Difficult to Define SBU’s & Measure Market Share/ GrowthDifficult to Define SBU’s & Measure Market Share/ Growth
Focus on Current Businesses, But Not future PlanningFocus on Current Businesses, But Not future Planning
Can Lead to Unwise Expansion or DiversificationCan Lead to Unwise Expansion or Diversification
Problems With Matrix Approaches
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Strategic Planning
Designing the business portfolio Designing the business portfolio also involves:also involves: Developing Developing strategies for growthstrategies for growth by by
identifying, evaluating, and selecting identifying, evaluating, and selecting promising new market opportunities.promising new market opportunities.
Developing strategies for Developing strategies for downsizingdownsizing the business portfolio.the business portfolio.
Strategies for Growth
ProductsProducts
MarketsMarkets
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Figure 2-3:
Product / Market Expansion Grid*
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Product/ Market Expansion Grid
Market PenetrationMarket Penetration: making more sales to : making more sales to current customers without changing its current customers without changing its products. products. How? Add new stores in current market How? Add new stores in current market
areas, improve advertising, prices, service areas, improve advertising, prices, service or store design.or store design.
Market Development: develop new markets for its current products.
How? Identify new demographic or geographic markets.
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Product/ Market Expansion Grid
Product DevelopmentProduct Development: offering modified or : offering modified or new products to current markets. new products to current markets. How? New styles, flavors, colors, or How? New styles, flavors, colors, or
modified products.modified products.
DiversificationDiversification: new products for new : new products for new markets. markets. How? Start up or buy new businesses. How? Start up or buy new businesses.
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The Marketing Process*
The strategic planning The strategic planning and business portfolio and business portfolio analysis processes analysis processes help to identify and help to identify and evaluate marketing evaluate marketing opportunities.opportunities.
The purpose of the The purpose of the marketing process is marketing process is to help the firm plan to help the firm plan how to capitalize on how to capitalize on these opportunities.these opportunities.
Key ElementsKey Elements
Analyzing marketing Analyzing marketing opportunitiesopportunities
Selecting target Selecting target marketsmarkets
Developing the Developing the marketing mixmarketing mix
Managing the Managing the marketing effortmarketing effort
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The Marketing Process
Analyzing marketing Analyzing marketing opportunitiesopportunities
Selecting target Selecting target marketsmarkets
Developing the Developing the marketing mixmarketing mix
Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements The segmentationThe segmentation process divides the process divides the total market into total market into market segments.market segments.
Target marketingTarget marketing chooses which chooses which segment(s) are segment(s) are pursued.pursued.
Market positioningMarket positioning for the product is for the product is then determined.then determined.
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Connecting With Customers
Market Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. i.e. Chevy Blazer is “like a rock.”
POSITIONING:Bentley: “You don’t park it. You position it.”
For what target market is Bentley positioned?
Text page 65
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The Marketing ProcessCompetitor analysis Competitor analysis guides competitive guides competitive marketing strategy marketing strategy development.development.Strategy leads to tactics Strategy leads to tactics via the marketing mix: via the marketing mix: The “Four Ps” – product, The “Four Ps” – product,
price, place, promotion price, place, promotion (seller viewpoint)(seller viewpoint)
The “Four Cs” – The “Four Cs” – customer solution, cost, customer solution, cost, convenience, and convenience, and communication communication (customer viewpoint)(customer viewpoint)
Analyzing marketing Analyzing marketing opportunitiesopportunities
Selecting target Selecting target marketsmarkets
Developing the Developing the marketing mixmarketing mix
Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements
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Figure 2-5:
The Marketing Mix
Developing the Marketing Mix
PricePrice
PlacePlace
PromotionPromotion
ProductProduct
QualityQuality
DesignDesign
FeaturesFeatures
PackagingPackaging
Sizes Sizes
ServicesServices
Goods and services offered to consumer
Developing the Marketing Mix
PricePrice
PlacePlace
PromotionPromotion
ProductProduct
AdvertisingAdvertising
Personal sellingPersonal selling
Sales PromotionSales Promotion
PublicityPublicity
Activities that communicate merits of product
Developing the Marketing Mix
PricePrice
PlacePlace
PromotionPromotion
ProductProduct
ChannelsChannels
LocationsLocations
AssortmentsAssortments
InventoryInventory
TransportationTransportation
Activities that make products available
Developing the Marketing MixPricePrice
PlacePlace
PromotionPromotion
ProductProduct
list pricelist price
discountsdiscounts
credit termscredit terms
payment payment periodperiod
allowancesallowancesMoney paid to obtain product
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The Marketing Process
Marketing analysisMarketing analysis Provides information Provides information
helpful in planning, helpful in planning, implementation, and implementation, and controlcontrol
Marketing planningMarketing planning Strategies and tacticsStrategies and tactics
Marketing Marketing implementationimplementation Turns plans into actionTurns plans into action
Marketing controlMarketing control Operating controlOperating control Strategic controlStrategic control
Analyzing marketing Analyzing marketing opportunitiesopportunities
Selecting target Selecting target marketsmarkets
Developing the Developing the marketing mixmarketing mix
Managing the Managing the marketing effortmarketing effort
Key ElementsKey Elements
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Figure 2-6:
Managing the Marketing Effort
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Marketing Control Process (Fig. 2.8)
Set Goals
Measure Performance
Evaluate Performanc
e
Take Corrective
Action
Marketing Plan
Where you want to goWhere you want to go
BA 499 BA 499 write a marketing planwrite a marketing plan
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Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
Contents of a Marketing Plan