Chapter 2

Company and Marketing Strategy: Partnering to Build Customer Relationships

Copyright 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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Case Study Disney What are its challenges?

Began as animated films 75 years ago Theme parks: four major North American resorts Walt Disney world: worlds #1 tourist destination Key success factors:
Sparkling cleanliness Friendliness of employees Mission: make people happy; dream come true Outstanding customer service

Now a diversified, media and entertainment conglomerate Disney has grown via diversification. Is it too large? Originally known for films, animation, theme parks. Will consumers/investors accept new businesses? Satisfying the customer is everyones job. Is this culture changing? What can it do during travel and economic downturns?

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Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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Companywide Strategic Planning: Defining Marketings Role

Strategic Planning Defined
The process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities

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Defining a Market-Oriented Mission

Mission statement
A statement of an organizations purpose; what it wants to accomplish in the larger environment; needs to be specific, realistic, and motivating; todays statements are market-oriented

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Defining a Market-Oriented Mission

A mission statement asks..
What is our business? Who is the customer? What do consumers value? What should our business be?

A mission statement should be:

An invisible hand Neither too narrow nor too broad Fitting of market environment Based on distinctive competencies Motivating

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Discussion Questions Mission Statements

Under what circumstances would you suggest a company change its mission? What challenges might it encounter as it implements a change in its mission?
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Setting Company Objectives and Goals

The mission is turned into detailed business and marketing objectives Marketing strategies and programs must develop to support marketing objectives

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Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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Principles of Marketing, Seventh Canadian Edition

Designing The Business Portfolio

A business portfolio is the collection of businesses and products that make up the company Business portfolio planning involves two steps:
1. Analyzing its current business portfolio 2. Shaping the future portfolio by developing strategies for growth and down sizing

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Designing The Business Portfolio

Analyzing the Current Business Portfolio
Portfolio analysis is a strategic planning tool to identify/evaluate businesses that make up the firm and make resource allocation decisions

Strategic business unit (SBU):

Unit with separate mission and objectives Planned independently from other company businesses Used as the building block of portfolio analysis

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The Business Portfolio BCG Matrix

Build
Increase market share Works well for question marks

Harvest
Increases short-term cash flow Good for weak cash cows, question marks and dogs

Hold
Preserve market share Good for cash cow

Divest
Sell or liquidate Good for dogs and question marks

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Principles of Marketing, Seventh Canadian Edition

Designing The Business Portfolio

Developing Strategies for growth and Downsizing
Marketing must identify, evaluate, and select market opportunities and lay down strategies for capturing them Product Market Expansion Grid
A portfolio-planning tool for identifying company growth opportunities

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Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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Principles of Marketing, Seventh Canadian Edition

Planning Marketing: Partnering to Build Customer Relationships

Provide a guiding philosophy Identify attractive opportunities Design effective strategies Build Customer and Partner Relationship management
Form strong value chains Form superior value delivery networks

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Planning Marketing: Partnering to Build Customer Relationships

Partnering with Other Company Departments
Coordination of the value-creating activities performed by each department within the company

Partnering with Others in the Marketing System

The objective is to improve the performance of the customer value-delivery network.
Copyright 2008 Pearson Education Canada 2-17 Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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Marketing Strategy and the Marketing Mix

Marketing Strategy
The marketing logic by which the business unit hopes to achieve its marketing objectives

Marketing Mix
The company designs a mix made up of factors under its control

The company engages in marketing analysis, planning, implementation, and control

Copyright 2008 Pearson Education Canada 2-19 Principles of Marketing, Seventh Canadian Edition

Customer-Centered Marketing Strategy

1. 2. 3. Market Segmentation Target marketing Market Positioning Dividing a market into groups with distinct needs who might require (respond to) different marketing mixes Market segment is a group of consumers who respond in similar ways to marketing efforts Bases for segmentation

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Principles of Marketing, Seventh Canadian Edition

Customer-Centered Marketing Strategy

1. 2. 3. Market Segmentation Target marketing Market Positioning Evaluating the attractiveness of each market segment Selection of segments with greatest long-term profitability Deciding which segment(s) to enter A company can choose one or several segments to target

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Principles of Marketing, Seventh Canadian Edition

Customer-Centered Marketing Strategy

1. 2. 3. Market Segmentation Target marketing Market Positioning The place the product occupies in the consumers mind Products are positioned relative to competing products Marketers look for clear, distinctive and desirable places in positioning Differentiation by offering and delivering greater value

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Developing the Marketing Mix

The marketing mix includes controllable and tactical marketing tools knows as the 4Ps The 4Ps include
Product Place Promotion Price

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Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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Managing the Marketing Effort

1. 2. 3. 4. Analysis Planning Implementation Control Finding opportunities Avoiding threats Understanding strengths Analyzing weaknesses

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Managing the Marketing Effort

1. 2. 3. 4. Analysis Planning Implementation Control Marketing plans include:
Executive summary Analysis of current situation Objectives Targets and positioning Marketing mix Budget Controls

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Managing the Marketing Effort

1. 2. 3. 4. 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

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Managing the Marketing Effort

1. 2. 3. 4. 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
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Measuring and Managing Return on Marketing

Return on marketing (marketing ROI)
The net return from a marketing investment divided by the costs of the investments

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Principles of Marketing, Seventh Canadian Edition

Learning Goals
1. 2. 3. 4. Explain company-wide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing 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 them List the marketing management functions, including the elements of a marketing plan

5.

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