Marketing Management

Lecture 2a:

Fundamental Marketing strategy

Dr. Stephen Poon

 Learning Objectives

Explain company-wide strategic planning and

its four steps.
Discuss how to design business portfolios and
develop growth strategies.
Explain marketings role in strategic planning
and how marketing works with its partners to
create and deliver customer value.

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 Learning Objectives
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,
and discuss the importance of measuring and
managing return on marketing investment.

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 First Stop: Nikes
Customer-Driven Marketing
To build image and market share, Nike
Outspent competitors on big endorsements.
Conducted splashy promotional events.
Started big-budget ads.
Nike sales slipped in the late 1990s.
Turnaroundnew product innovation and a
focus on customer relationships
Mastered social networking, creating deep
engagement and community among customers
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 Strategic Planning
Strategic planning involves adapting the firm
to take advantage of opportunities in its
constantly changing environment.
Strategic planning helps a firm to maintain a
strategic fit between its goals and capabilities
and its changing marketing opportunities.
Is strategic planning part of marketers job?

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Figure 2.1 - Steps in
Strategic Planning

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 Mission Statement
Statement of the organizations purpose
What it wants to accomplish in the larger
environment
Market oriented and defined in terms of
satisfying basic customer needs
Emphasizes the companys strengths
Focuses on customers and the customer
experience the company seeks to create

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 Setting Company Objectives
and Goals
The mission should be converted to
supporting objectives at each level of
management.
The mission leads to setting a hierarchy of
objectives.
Business objectives
Marketing objectives

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 Business Portfolio
Collection of businesses and products that
make up the company
Steps in business portfolio planning:
Analyze the firms current business portfolio
Develop strategies for growth and downsizing to
shape the future portfolio

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 Portfolio Analysis
Evaluation of the products and businesses that
make up the company by the management
Steps:
Identifying the strategic business units (SBUs)
Assessing the attractiveness of its various SBUs
and deciding the support each SBU deserves
The purpose is to direct resources toward more
profitable businesses while phasing out or
dropping weaker ones.
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Figure 2.2 - The BCG
Growth-Share Matrix

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 Growth-Share Matrix
Evaluates a companys SBUs in terms of
market growth rate and relative market share
Problems
Difficult, time consuming, and costly to implement
Difficult to define SBUs and measure market share
and growth
Focuses on classifying current businesses but
provide little advice for future planning
Omits market changes and competitors actions

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Figure 2.3 - The Product/Market
Expansion Grid

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 Downsizing
Reduces the business portfolio by eliminating
products or business units that are not
profitable or that no longer fit the companys
overall strategy
Reasons for downsizing:
Rapid growth of the company
Lack of experience in a market
Change in market environment
Decline of a particular product

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 Role of Marketing in
Strategic Planning
Provides a guiding philosophy
Marketing conceptcompany strategy should
create customer value and build profitable
relationships with the key customers
Provides inputs to strategic planners
Helps identify market opportunities and assess
the firms potential to take advantage of them
Designs strategies for reaching the units
objectives

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 Partnering with Other
Company Departments
Value chain: Series of internal departments
that carry out value-creating activities
Firms success depends on how well the
various departments coordinate their
activities.
Marketers should ensure all the departments
are customer-focused and develop a smooth
functioning value chain.

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 Partnering with Others in
the Marketing System
Companies should assess:
Their internal value chains.
The value chains of their suppliers, distributors,
and their customers.
Value delivery network: Made up of the
company, its suppliers, its distributors, and its
customers who partner with each other
To improve the performance of the entire system

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 Marketing Strategy
Marketing logic by which the company hopes
to create customer value and achieve
profitable customer relationships
Marketing mix: Integration of product, price,
place, and promotion
Activities for best marketing strategy and mix
involve:
Marketing analysis
Planning, implementation, and control

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Market Segmentation and
Market Targeting

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 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 differentiation
Differentiation: Differentiating the market
offering to create superior customer value
The entire marketing program should support
the chosen positioning strategy.

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Figure 2.5 - The Four Ps of
the Marketing Mix

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 Criticisms of the Four Ps
Omit or underemphasize service products
Need to include packaging as a product
decision
Does not cater to the buyers perspective of
the four Cs:
Customer solution
Customer cost
Convenience
Communication

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Figure 2.6 - Managing Marketing: Analysis,
Planning, Implementation, and Control

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 Figure 2.7 - SWOT Analysis: Strengths (S),
Weaknesses (W), Opportunities (O), and Threats (T)

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 Contents of a Marketing Plan
Section Purpose
Executive summary Brief summary of the main goals and
recommendations
Current marketing Gives the market description and the
situation product, competition, and distribution
review
Threats and Helps management to anticipate
opportunities analysis important positive or negative
developments
Objectives and issues States and discusses marketing
objectives and key issues
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 Contents of a Marketing Plan
Section Purpose
Marketing Outlines the broad marketing logic and the specifics of
strategy target markets, positioning, marketing expenditure levels,
and strategies for each marketing mix element
Action Spells out how marketing strategies will be turned into
programs specific action programs
Budgets Details a supporting marketing budget that is a projected
profit-and-loss statement
Controls Outlines the controls that will be used to monitor
progress, allow management to review implementation
results, and spot products that are not meeting their
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 Market Implementation
Turning marketing strategies and plans into
marketing actions to accomplish strategic
marketing objectives
Addresses the who, where, when, and how of
the marketing activities

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Marketing Department Organization

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 Marketing Control
Measuring and evaluating the results of
marketing strategies and plans
Operating control ensures that the company
achieves the sales, profits, and other goals set
out in its annual plan.
Strategic control involves looking at whether
the companys basic strategies are well
matched to its opportunities.

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Marketing Return on Investment (ROI)
Net return from a marketing investment
divided by the costs of the marketing
investment
Assessed using:
Standard marketing performance measures
Customer-centered measures

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 Figure 2.8 - Marketing Return
on Investment

Source: Adapted from Roland T. Rust, Katherine N. Lemon, and Valerie A. Zeithaml, Return on Marketing: Using Consumer Equity to Focus Marketing
Strategy, Journal of Marketing, January 2004, p. 112. Used with permission.
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 Acknowledgement
The instructor of this course would
acknowledge Pearsons assistance in providing
teaching materials to prepare this set of slide.
This set of slide is used only for teaching in
this course and should be accompanied with
the assigned textbook written by Armstrong
and Kotler (Pearson).