Company and Marketing Strategy: Partnering to Build

Customer Relationships

Chapter 2Chapter 2

2- 2

Strategic Planning

•Strategic planning is defined Strategic planning is defined as:as: ““The process of developing and The process of developing and

maintaining a strategic fit maintaining a strategic fit between the organization’s between the organization’s goals and capabilities and its goals and capabilities and its changing marketing changing marketing opportunities.”opportunities.”

2- 3

Strategic Planning

• Planning activities occur at the Planning activities occur at the business unit, product, and business unit, product, and market levels, and include:market levels, and include: Defining the purpose and missionDefining the purpose and mission Setting objectives and goalsSetting objectives and goals Designing the business portfolioDesigning the business portfolio Developing detailed marketing Developing detailed marketing

and departmental plansand departmental plans

2- 4

Strategic Planning

• Mission statements should . . .Mission statements should . . . serve as a guide for what the serve as a guide for what the

organization wants to accomplish.organization wants to accomplish. be “market-oriented” rather than be “market-oriented” rather than

“product-oriented”.“product-oriented”. be neither too narrow, nor too be neither too narrow, nor too

broad.broad. fit with the market environment.fit with the market environment. be motivating.be motivating.

2- 5

Strategic Planning

•Mission statements guide Mission statements guide the development of the development of objectives and goals.objectives and goals. Objectives are developed at Objectives are developed at

each level in the organization each level in the organization hierarchy.hierarchy.

Strategies are developed to Strategies are developed to accomplish these objectives.accomplish these objectives.

2- 6

Strategic Planning

•Business portfolio: Business portfolio: “the collection of businesses “the collection of businesses and products that make up and products that make up the company.”the company.”

•Designing the business Designing the business portfolio portfolio is a key element of the is a key element of the strategic planning process.strategic planning process.

2- 7

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 Identify strategic business units (SBUs)business units (SBUs)

• Assess each SBU:Assess each SBU: The BCG growth-The BCG growth-

share matrix share matrix classifies SBUs into classifies SBUs into one of four categories one of four categories using the:using the:

Market growth rate Market growth rate SBU’s relative SBU’s relative

market share within market share within the market.the market.

Portfolio Portfolio DesignDesign

2- 8

BCG Growth-Share MatrixBCG Growth-Share Matrix

Strategic Planning

High RelativeHigh RelativeMarket ShareMarket Share

High High Market Market GrowthGrowth

Low Low Market Market GrowthGrowth

StarsStars

Cash Cash CowsCows

Question Question MarksMarks

DogsDogs

Low RelativeLow RelativeMarket ShareMarket Share

2- 9

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 Determine the future role of each future role of each SBU and choose SBU and choose the appropriate the appropriate resource allocation resource allocation strategy:strategy: BuildBuild HoldHold HarvestHarvest DivestDivest

• SBUs change SBUs change positions over timepositions over time

Portfolio Portfolio DesignDesign

2- 10

Strategic Planning

• Matrix approaches to formal Matrix approaches to formal planning share many problems:planning share many problems: Difficult, time-consuming, and Difficult, time-consuming, and

costly to implement.costly to implement. Focus only on current businesses.Focus only on current businesses. Too strongly emphasize market Too strongly emphasize market

share growth or growth via share growth or growth via diversification.diversification.

2- 11

Strategic Planning

• Designing the business Designing the business portfolio also involves:portfolio also involves: Developing strategies for growth Developing strategies for growth

by identifying, evaluating, and by identifying, evaluating, and selecting promising new market selecting promising new market opportunities.opportunities. Product/market expansion gridProduct/market expansion grid

Developing strategies for Developing strategies for downsizing the business portfolio.downsizing the business portfolio.

2- 12

Product/Market Expansion Product/Market Expansion GridGrid

Strategic Planning

Existing ProductsExisting Products New ProductsNew Products

Existing Existing MarketsMarkets

New New MarketsMarkets

Market Market PenetrationPenetration

Market Market DevelopmentDevelopment

Product Product DevelopmentDevelopment

DiversificatioDiversificationn

2- 13

Planning Marketing

• Marketing plays a key role in the Marketing plays a key role in the strategic planning process.strategic planning process.

• Marketers must practice CRM Marketers must practice CRM andand Partner Relationship Management.Partner Relationship Management. Partnering with other Partnering with other

departments in the company as departments in the company as well as other firms in the well as other firms in the marketing system helps to build a marketing system helps to build a superior superior value delivery-networkvalue delivery-network..

2- 14

The Marketing Process

• The strategic The strategic planning planning and business and business portfolio analysis portfolio analysis processes help to processes help to identify and 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.

• 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

2- 15

The Marketing Process

• The segmentation The segmentation process divides the process divides the total market into total market into market segments.market segments.

• Target marketingTarget marketing determines which determines which segment(s) are segment(s) are pursued.pursued.

• The The market market positioningpositioning for the for the product is then product is then determined.determined.

• 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

2- 16

The Marketing Process

• Competitor analysis Competitor analysis guides competitive guides competitive marketing strategy marketing strategy development.development.

• Strategy leads to tactics Strategy leads to tactics by way of the marketing by way of the marketing mix: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

2- 17

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

Marketing auditMarketing audit

• 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