CCHAPTER HAPTER 22
Company and Marketing Company and Marketing Strategy:Strategy:
Partnering to Build Partnering to Build Customer RelationshipsCustomer Relationships
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Explain companywide strategic planning and its four steps.
Discuss how to design business portfolios and growth strategies.
Explain marketing’s 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 it.
List the marketing management functions, including the elements of a marketing plan.
Roadmap: Previewing the Concepts
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Early Days Characterized by “seat of
the pants” management. Innovative sneaker tread
drove early success. Technological product
superiority, big-name endorsements, and “Just Do It” ads revolutionized sport marketing.
1980s – 1990s: Nike leverages brand strength into new product areas.
Late 1990s - Present Changes in consumer
shoe preference, declining product innovation, and negative PR plague Nike.
Anti-establishment image no longer works: brand backlash occurs.
Strategic planning is embraced & Nike focuses on innovation & exploring new market opportunities.
Nike has global success.
NIKENIKE – Strategy: Then and Now – Strategy: Then and Now
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Strategic Planning
The process of developing The process of developing and maintaining a strategic and maintaining a strategic
fit between the organization’s fit between the organization’s goals and capabilities and goals and capabilities and
its changing marketing its changing marketing opportunities.opportunities.
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Figure 2-1Steps in Strategic Planning
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The Mission Statement
A statement of the organization’s purpose.– What it wants to
accomplish in the larger environment.
Should be market oriented and defined in terms of customer needs.
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Market-Oriented Mission Statements
Should address the following questions:– What is our
business?– Who is our
customer?– What do consumers
value?– What should our
business be?
Mission statement must also be:– Realistic.– Specific.– One that fits the
market environment.– Based on distinctive
competencies.– Motivating.
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Let’s Talk!
Evaluate Microsoft’s new mission against the criteria previously discussed.
How does it fare?
In 2002 Microsoft’s mission was "To empower people through great software -- any time, any place, and on any device.”
The mission statement now reads, "At Microsoft, we work to help people and businesses throughout the world realize their full potential.”
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Designing the Business Portfolio
The business portfolio is the collection of businesses and products that make up the company.
The company must:– Analyze its current business portfolio or
Strategic Business Units (SBUs);– Decide which SBUs should receive more, less, or
no investment;– Develop strategies for growth or downsizing.
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Strategic Business Unit (SBU)
Can be a company division, a product line within a division, or sometimes a single product or brand.
A unit of the company that has a A unit of the company that has a separate mission and objectives separate mission and objectives
and that can be planned and that can be planned independently from other independently from other
company businesses.company businesses.
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Strategic Business Units
The Symrise company creates ingredients used in flavors, fragrances, and cosmetics.
The Flavors Division is structured into SBUs which are responsible for developing the product categories shown at left.
Marketing in Action
http://www.symrise.com
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An evaluation of the products and business making up the company.
Resources are directed to more profitable businesses and weaker ones are phased down or dropped.
Portfolio Analysis
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Figure 2-2The BCG Growth-Share Matrix
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Problems with Matrix Approaches
Can be difficult, time consuming, and costly to implement.
Difficult to define SBUs and measure market share and growth rate.
Focus is on current businesses; gives little help with future planning.
Can place too much emphasis on growth. Can lead to poorly planned diversification.
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Product/Market Expansion Grid
Helps in the identification, evaluation, and selection of market growth opportunities. – Marketing must
achieve profitable growth for the firm.
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Figure 2-3The Product/Market Expansion Grid
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Market Penetration
Strategy: to increase sales to current buyers without changing the products being sold.
Market penetration can be achieved by adding new stores in current market areas, improving advertising, lowering prices, adding services, etc.
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Market Development
Strategy: identify and develop new markets – demographic or geographic – for current products.
Bass Pro Shops has aggressively developed new geographic markets for its Outdoor World retail stores.
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Product Development
Strategy: offering modified or new products to current markets. – How? Adding new sizes, flavors, or
offerings, co-branding products, etc.
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Diversification
Strategy: start up or buy businesses outside of current products and markets.– Diversification is the riskiest strategy.– Firms that diversify too broadly into
unfamiliar products or industries can lose their market focus.
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Let’s Talk!
After watching the MayoClinic video clip, answer the following questions:
What growth strategies were used by the Mayo Clinic?
Are there additional growth opportunities that could be pursued? Explain.
Video Snippet
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Planning Marketing
Marketing plays a key role in strategic planning:– Provides a guiding philosophy.
The Marketing Concept– Provides input to strategic planners.– Designs strategies to reach objectives.
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Value Chain
Each company department engages in some type of value-creating activity.– Purchasing– Marketing– Operations, etc.
Coordination between departments is key to providing superior value.
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Value Delivery Network
Components include: – Company’s value chain
Each department is a link in the value chain.
– Distributors– Suppliers– Customers
Improved performance in delivery value to customers is the goal.
Many groups contribute to Wal*Mart’s value chain
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Figure 2-4Managing Marketing Strategy and the
Marketing Mix
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A market segment consists of consumers who respond in a similar
way to a given set of marketing efforts.
Market Segmentation
The process of dividing a market The process of dividing a market into distinct groups of buyers with into distinct groups of buyers with different needs, characteristics, or different needs, characteristics, or
behavior who might require behavior who might require separate products or marketing separate products or marketing
programs.programs.
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Target Marketing
Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Target those segments that can sustain profitability.
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Target Marketing
Jones Soda caters to its niche of 12- to 24-year-olds who “appreciate the brand’s wacky and irrelevant attitude”.
Loyal consumers help design product flavors, colors, labels, and brand names. Visit the Web site to learn more.
Marketing in Action
www.jonessoda.com
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Market 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 differentiating the company’s marketing offer so it gives consumers more value.
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Marketing in Action
Promoting attributes, benefits, usage situations, or users can help to establish a product’s position in the consumer’s mind.
How is the Gelstat Migraine medicine being positioned?
Is this ad effective?
Positioning
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The Marketing Mix
The set of controllable, tactical The set of controllable, tactical marketing tools that the firm marketing tools that the firm
blends blends to produce the response it wants to produce the response it wants
in in the target market.the target market.
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Figure 2-5The Four “Ps” of the Marketing Mix
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4 Ps – Seller’s View– Product– Price– Place– Promotion
4 Cs – Buyer’s View– Customer Solution– Customer Cost– Convenience– Communication
The 4 Ps and the 4 Cs of the Marketing Mix
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Let’s Talk!
Select either ultimate consumers or businesses as your target market.
Explain each element of Visa’s marketing mix – product, price, place, and promotion – in the context of marketing Visa towards your selected target market.
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Figure 2-6Marketing Analysis, Implementation,
Planning, and Control
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Analysis feeds the development of strategic plans.
Division, product, and brand level plans are implemented.
Marketing activities are evaluated and corrected as part of control process.
Marketing Management Functions
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Marketing Management: Analysis
The SWOT analysis is critical:– Finding
opportunities– Avoiding threats– Understanding
strengths– Analyzing
weaknesses
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Figure 2-7SWOT Analysis
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Brand / Product Marketing Plan:1. Executive summary2. Current marketing situation3. Analysis of threats and opportunities4. Objectives for the brand5. Marketing strategy6. Action programs7. Marketing budget8. Controls
Marketing Management: Planning
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Plans are turned into action with day-to-day activities.
Good implementation is a challenge. Marketing departments must be
properly organized to ensure timely implementation.
Marketing Management: Implementation
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Marketing Department Organization
Function Geography Product
management Market or
customer Combination of
two or more of the above
Geographic organization is very common for national and international marketers.
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Under what circumstances does it make sense to structure the marketing department by combining a product management organizational system with a customer organizational system?
Offer an example of a specific manufacturer for which you feel this would be appropriate.
Let’s Talk!
?
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Marketing Control Process
Set Goals Measure Performance Evaluate Performance
– Operating Control– Strategic Control
The marketing audit is major tool.
Take Corrective Action
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Figure 2-8Return on Marketing
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Explain companywide strategic planning and its four steps.
Discuss how to design business portfolios and growth strategies.
Explain marketing’s 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 it.
List the marketing management functions, including the elements of a marketing plan.
Rest Area: Reviewing the Concepts