2

Principles of Marketing

Company and Marketing

Strategy: Partnering to
Build Customer
Relationships
Companywide Strategic
Planning: Defining Marketing’s
Role

Strategic Planning

Strategic planning is the process of

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

2-4
Companywide Strategic
Planning: Defining Marketing’s
Role

Defining a Market-Oriented Mission

Mission statement: The organization’s

purpose, what it wants to accomplish
in the larger environment
Market-oriented mission statement:
Defines the business in terms of
satisfying basic customer needs

2-5
Companywide Strategic
Planning: Defining Marketing’s
Role

Setting Company Objectives and Goals

• Business objectives
• Marketing objectives

2-6
 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 the current business portfolio
2. Shaping the future portfolio by
developing strategies

2-5
Goal 2: Describe business portfolios and growth
 Strategic Planning

BCG Growth-Share Matrix

High Question
Market Stars
Marks
Growth

Low Cash
Dogs
Market Cows
Growth

High Relative Low Relative

Market Share Market Share 2- 6
 Marketing
Analyzing the Current
Business Portfolio
Management
 Build  Harvest
 Increase market  Increases short-
share term cash flow
 Good for weak
 Works well for
cash cows,
question marks question marks
 Hold and dogs
 Preserve market  Divest
share  Sell or liquidate
 Good for cash  Good for dogs
cow and question
marks
2-7
Goal 2: Describe business portfolios and growth
 Strategic Planning
• Matrix approaches to formal planning
share many problems:
 Difficult, time-consuming, and costly to
implement.
 Focus only on current businesses.
 Too strongly emphasize market share
growth or growth via diversification.

2- 8
 Strategic Planning
• Designing the business portfolio
also involves:
 Developing strategies for growth by
identifying, evaluating, and selecting
promising new market opportunities.
 Product/market expansion grid
 Developing strategies for downsizing
the business portfolio.

2- 9
 Strategic Planning

Product/Market Expansion
Grid
Existing Products New Products

Existing Market Product

Markets Penetration Development

New Market Diversificatio

Markets Development n

2- 10
 Marketing’s Role
in Strategic Planning
• Provide a guiding philosophy
• Identify attractive
opportunities
• Design effective strategies
• Build strong value chains
• Form superior value delivery
networks

2 - 11
Goal 3: Detail marketing's role in strategic planning
 The Marketing
Process
Key Elements • The strategic
planning
and business
• Analyzing portfolio analysis
marketing processes help to
opportunities identify and evaluate
marketing
• Selecting target opportunities.
markets • The purpose of the
• Developing the marketing process is
marketing mix to help the firm plan
how to capitalize on
• Managing the
these opportunities.
marketing effort
2- 12
 The Marketing
Process
Key Elements • The segmentation
process divides the
total market into
• Analyzing market segments.
marketing • Target marketing
determines which
opportunities segment(s) are
• Selecting target pursued.
markets • The market
• Developing the positioning for the
product is then
marketing mix determined. (read
• Managing the differentiation)
marketing effort 2- 13
 Marketing Strategy
Strategy  Customers grouped
by:
• Geographic
1. Market • Demographic
Segmentation • Psychographic
• Behavioral
2. Target  Market segment is
marketing a groups of
consumers who
3. Market respond in similar
Positioning ways to marketing
efforts.

2 - 14
Goal 4: Describe elements of customer-driven
 Marketing Strategy
Strategy  Evaluation of each
segment’s
1. Market attractiveness
 Selection of
Segmentation segments with
2. Target greatest long-
marketing term profitability
 A company can
3. Market choose one or
Positioning several segments
to target

2 - 15
Goal 4: Describe elements of customer-driven
 Marketing Strategy
Strategy  The place the product
occupies in the
consumer’s mind
1. Market  Products are positioned
relative to competing
Segmentation products
2. Target  Marketers look for clear,
distinctive and
marketing desirable place in
positioning
3. Market
Positioning

2 - 16
Goal 4: Describe elements of customer-driven
 The Marketing
Process
Key Elements • Competitor analysis guides
competitive marketing
strategy development.
• Analyzing • Strategy leads to tactics by
marketing way of the marketing mix:
 The “Four Ps” – product,
opportunities price, place, promotion
• Selecting target (seller viewpoint)
 The “Four Cs” – customer
markets solution, cost,
• Developing the convenience, and
communication (customer
marketing mix viewpoint)
• Managing the
marketing effort
2- 17
 The Marketing Mix
• Marketing mix: the set of controllable tactical
marketing tools-product, price, place, and promotion-
that the firm blends to produce the response it wants
in the target market
Product Price
Variety List price
Design Discounts
Features Allowances
Brand name Payment period
Packaging Target Credit terms
Services customers

Intended Place
Promotion
positioning Channels
Advertising
Coverage
Personal Selling
Assortments
Sales Promotion
Locations
Public relations
Inventory
Logistics

2- 18
Marketing Today – 4 P’s or 4C’s?

• Marketing is about building relationships

• Hence, the development of “relationship
marketing”
• Price Cost to Customer
• Place Convenience
• Product Customers needs and

wants
• Promotion Communication
2- 19
 The Marketing
Process
Key Elements • Marketing analysis
 Provides information
helpful in planning,
• Analyzing implementation, and
control
marketing
• Marketing planning
opportunities
 Strategies and tactics
• Selecting target • Marketing
markets implementation
• Developing the  Turns plans into action
marketing mix • Marketing control
 Operating control
• Managing the
 Strategic control
marketing effort  Marketing audit 2- 20
 Managing the Marketing Effort

Analysis

Planning Implementation Control

Develop
Carry out Measure results
strategic
the plans
plans
Evaluate results
Develop
Take corrective
marketing
action
plans

2- 21
 Managing the
Marketing Effort
Marketing Functions  Finding
opportunities
• Analysis  Avoiding
threats
• Planning  Understanding
• Implementation strengths
• Control  Analyzing
weaknesses

2 - 22
Goal 5: List the marketing management functions
Managing the Marketing Effort

Marketing Analysis

Analysis is the complete analysis of

the company’s situation in a SWOT
analysis that evaluates the
company’s:
• Strengths
• Weaknesses
• Opportunities
• Threats
2-34
Managing the Marketing Effort

Marketing Analysis

Strengths include internal capabilities,

resources, and positive situational factors
that may help to serve company customers
and achieve company objectives

Weaknesses include internal limitations and

negative situational factors that may
interfere with company performance

2-35
Managing the Marketing Effort
Marketing Analysis

Opportunities are favorable factors or

trends in the external environment
that the company may be able to
exploit to its advantage

Threats are unfavorable factors or trends

that may present challenges to
performance

2-36
 Managing the
Marketing Effort
Marketing Functions  Marketing plans
include:
• Executive summary
• Analysis • Analysis of current
situation
• Planning • Objectives
• Targets and positioning
• Implementation • Marketing mix
• Budget
• Control • Controls

2 - 26
Goal 5: List the marketing management functions
 Managing the
Marketing Effort
Marketing Functions  Plans are
turned into
• Analysis action with day-
to-day
• Planning activities
• Implementation  Good
• Control implementation
is a challenge

2 - 27
Goal 5: List the marketing management functions
 Managing the
Marketing Effort
Marketing Functions  Evaluation of
the results of
• Analysis marketing
strategies
• Planning  Checks for
• Implementation differences
• Control between goals
and
performance

2 - 28
Goal 5: List the marketing management functions
 Measuring
Effectiveness
Return on marketing
(marketing ROI)
 The net return from a marketing
investment divided by the costs
of the investments

2 - 29
Goal 5: List the marketing management functions