Relationship marketing- strategy that focuses on keeping and improving

relationships with customers

Successful strategies need:
Customer-oriented personnel
Effective training programs
Empowered employees
Teamwork
Defining a firms business:
Sales orientation- goods and services
Market orientation- benefits that customers seek

Chapter 2: Strategic Planning for Competitive Advantage

The nature of strategic planning:
-Mid-late 1970s General Electric invited in Boston Consulting group to
evaluate the business in order to better the company
-Introduces the importance of evaluations and planning
Strategic planning- the managerial process of creating and maintaining a fit
between the organizations objectives and resources and the evolving
market opportunities
Strategic marketing management addresses two questions:
What is the organizations main activity at a particular time? What
business are you in?
How will it reach its goals?
Characteristic of Strategic Business Units (SBUs):
A SBU has:
A distinct mission and specific target market
Control over its resources
Its own competitors
A single business or a collection of related businesses
Plans independent of other SBUs
Strategic alternatives:
Market penetration increase market share among existing customers
Market development- attract new customer to existing products
selling the same products to new customer
Could be selling to different countries
Product development- create new products for present markets
Diversification- introduce new products into new markets
Corporations that went of into areas that were far stray from their

Ex. Hotels owned airlines

Present Market

New Market

Present Product
Market Penetration
Starbucks sells more
coffee to customers
who register their
reloadable Starbucks
cards
Market Development
Starbucks opens stores
in Brazil and Chile

New Product
Product Development
Starbucks develops
powdered instant coffee
called Via
Diversification
Starbucks launches
Hear Music and buys
Ethos Water

Boston Consulting Group

Portfolio matrix
-star
-cash cow
more cash cow= more profitable the company is
at some point the company will decline in profit and share and move
back to stars
-question mark
-dog
refurbish it or get rid of it
as the company progresses it moves right to left and then down to cash cow