chapter 2 discusses the strategic planning process 470

8/3/2019 Chapter 2 Discusses the Strategic Planning Process 470

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Company and MarketingStrategy: Partnering to

Build CustomerRelationships

A Global Perspective

2

Philip KotlerGary ArmstrongSwee Hoon Ang

Siew Meng LeongChin Tiong Tan

Oliver Yau Hon-Ming

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Background


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Strategic Planning


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Managing Marketing Strategy and Marketing

Mix


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Managing the marketing effort requires:

Analysis, Planning, Implementing and Controlling

Managing the Marketing Effort


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Companywide Strategic Planning:

Defining Marketings Role

Strategic Planning

Strategic planningis the process

of developing andmaintaining a strategic fit

between the organizations

goals and capabilities and its

changing marketingopportunities.


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Defining a Market-Oriented Mission

Mission statement:The organizations purpose, what

it wants to accomplish in the larger environment

Market-oriented mission statement:Defines the

business in terms of satisfying basic customer

needs




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Setting Company Objectives and Goals

Business objectives

Marketing objectives




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Designing the Business Portfolio

Thebusiness portfolio is the collection of businesses

and products that make up the company.




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Analyzing the Current Business Portfolio

Analyzing the current business portfolio is the process

by which management evaluates the products andbusinesses making up the company.




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Steps in Analyzing the Current Business Portfolio

Identify key businesses making up the company

Assess the attractiveness of its various SBUs Decide how much support each SBU deserves




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Steps in Analyzing the Current Business Portfolio

Identify key businesses making up the company:

A strategic business unit (SBU) is a unit of the company that

has a separate mission and objectives that can be plannedseparately from other company businesses.

Company division

Product line within a division

Single product or brand




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Steps in Analyzing the Current

Business Portfolio

Assess the attractiveness of various SBUs

and decide how much support each

deserves.




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The Boston Group Approach

Growth share matrix is a portfolio planning method that

evaluates a companys strategic business units in terms oftheir market growth rate and relative share.

Strategic business units are classified as:

Stars

Cash Cows

Question marks Dogs




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The BCG Growth-Share Matrix


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Starsare high-growth, high-share businesses or productsrequiring heavy investment to finance rapid growth. Theywill eventually turn into cash cows.

Cash cows are low-growth, high-share businesses or productsthat are established and successful SBUs requiring less

investment to maintain market share.




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Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their

share.

Dogsare low-growth, low-share businesses and productsthat may generate enough cash to maintain

themselves but do not promise to be large sources ofcash.




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Problems with Matrix Approaches

Difficulty in defining SBUs and measuring market shareand growth

Time consuming

Expensive

Focus on current businesses, not future planning




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Developing Strategies for Growth and Downsizing

The product/market expansion grid is a tool for

identifying company growth opportunities throughmarket penetration, market development, product

development, or diversification.




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The Product/Market Expansion Grid


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Market penetrationis a growth strategy increasing sales tocurrent market segments without changing the product.

Market development is a growth strategy that identifies anddevelops new market segments for current products.




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Product development is a growth strategy that offers new ormodified products to existing market segments.

Diversificationis a growth strategy through starting up oracquiring businesses outside the companys currentproducts and markets.




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Downsizingis the reduction of the business portfolio by

eliminating products or business units that are not

profitable or that no longer fit the companys overall

strategy.




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Partner Relationship Management

Partner relationship management is the process of workingclosely with partners in other company departments to

form an effective value chain that serves the customer, as

well as partnering effectively with other companies in themarketing system to form a competitively superior value-

delivery network.

Planning Marketing: Partnering to Build

Customer Relationships


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Partnering with Other Company Departments

Avalue chain is a series of departments that carry out value-

creating activities to design, produce, market, deliver, and

support a firms products.




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Partnering with Others in the Marketing System

A value delivery network is made up of the company,

suppliers, distributors, and ultimately customers who partner

with each other to improve performance of the entire

system.




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Marketing Strategy

A marketing strategyis the marketing logic by which

the business unit hopes to achieve its marketingobjectives.

Marketing Strategy and

the Marketing Mix


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Customer-Driven Marketing Strategy

Market segmentationis the division of a market intodistinct groups of buyers who have distinct needs,

characteristics, or behavior and who might requireseparate products or marketing mixes.


the Marketing Mix


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A market segmentis a group of consumers whorespond in a similar way to a given set of marketing

efforts.

Target marketingis the process of evaluating eachmarket segments attractiveness and selecting one

or more segments to enter.


the Marketing Mix


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Market positioning is the arranging for a product to occupy

a clear, distinctive, and desirable place relative to

competing products in the minds of the targetconsumer.


the Marketing Mix


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Developing an Integrated Marketing Mix

The marketing mix is the set of controllable tactical marketing

toolsproduct, price, place, and promotionthat the firm

blends to produce the response it wants in the targetmarket.


the Marketing Mix


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The four Ps

Product

Price

Place

Promotion


the Marketing Mix


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The four Ps

Place is the company activities that make the product availableto target customers.

Promotionis the activities that communicate the merits of theproduct and persuade target customers to buy it.


the Marketing Mix


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the Marketing Mix

The 4 Ps versus The 4 Cs

Product Customer solution

Price Customer cost

Place Convenience

Promotion Communication


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Marketing Analysis

Marketing analysisis the complete analysis of the companys

situation in aSWOTanalysis that evaluates the companys:

Strengths

Weaknesses

Opportunities

Threats



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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 negativesituational factors that may interfere with company

performance.

Opportunities are favorable factors or trends in the

external environment that the company may be able toexploit to its advantage.

Threats are unfavorable factors or trends that

may present challenges to performance.



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Market Planning

Planningis the development of strategic and marketing plans toachieve company objectives.

Marketing strategy consists of the specific strategies for target

markets, positioning, the marketing mix, and marketingexpenditure levels.



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Market Planning

Sections of a marketing plan include:

Executive summary

Current marketing situation Threats and opportunities

Objective and issues

Action programs

Budgets

Controls



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Marketing Implementation

Implementing is the process that turns marketing plans intomarketing actions to accomplish strategic marketing

objectives. Successful implementation depends on how well the

company blends its people, organizational structure,decision and reward system, and company culture into a

cohesive action plan that supports its strategies.



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Marketing Department Organization

Functional

Geographic

Product Market or customer management



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Functional organization:This is the most common form ofmarketing organization with different marketing functionsheaded by a functional specialist.

Sales manager

Market research manager

Customer service manager

New product manager



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Geographic organization:

Useful for companies that sell across the country orinternationally.

Managers are responsible for developing strategies andplans for a specific region.

Product management:

Useful for companies with different products or brands.

Managers are responsible for developing strategies andplans for a specific product or band.



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Market or customer management organization:

Useful for companies with one product line sold to many

different markets and customers.

Managers are responsible for developing strategies and

plans for their specific markets or customers.

Customer management involves a customer focus and not a

product focus for managing customer profitability andcustomer equity.



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Marketing Control

Controllingis measuring and evaluating results and taking

corrective action as needed.

Operating control

Strategic control

Operating control involves checking ongoing performanceagainst annual plan and taking corrective action as needed.

Strategic control involves looking at whether the companysbasic strategies are well matched to its opportunities.



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Marketing Control

A marketing auditis a comprehensive, systematic, independent,

and periodic examination of a companys environment,

objectives, strategies, and activities to determine problemareas and opportunities.



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Return on Marketing Investment (ROI)Return on marketing investment(ROI) is the net return

from a marketing investment divided by the costs of

the marketing investment. Marketing ROI provides ameasurement of the profits generated by investments

in marketing activities.

Measuring and Managing Return on

Marketing Investment


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Customer-Centered Measures

Customer acquisition

Customer retention

Customer lifetime value

Measuring and Managing Return on

Marketing Investment


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Return on Marketing

chapter 2 discusses the strategic planning process 470

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