Principles of Marketing

Strategic Planning:
Company and Business Unit

Topic #2
Strategy Planning Process
Create Keep Strategy Planning
Customers Customers Process

Company / Corporate level Business Unit level

Market- Company Designing Strategies at business

Oriented Objectives Business units, market, product
Mission and Goals Portfolio level

Purpose of the Detail supporting

organization objectives
consistent with
mission

Where What How How and What

1) Defining Market-Oriented Mission
• Define purpose of the organization
• Answering the following questions:
Who are our customers?
What is our business?
Where are we going?
• Should be market-oriented  satisfying needs, not product-oriented
Marketing philosophy differences
Avoid marketing myopia
• Affect entire organization
Market Oriented Mission: The Purpose of the Company
The mission statement is the organization’s purpose; what it wants
to accomplish in the larger environment.

VISION
To be the largest home improvement retailer
in Asia Pacific

MISSION
To create a globally recognized
ASEAN retail brand.
To maintain wide variety, good quality and
value of money
Holding true of our company motto
“ALWAYS LOW PRICES”
Characters of Good Market Oriented Statement
2) Setting Company Objectives and Goal

Market Oriented Business Marketing

Mission objectives objectives
• Build profitable • Increase
customer market share
relationships • Create local
• Invest in partnerships
research • Increase
• Improve profits promotion
2) Setting Company Objectives and Goals
Detail supporting objectives consistent with mission
Company Vision:
“To be the best food company, growing a better world”
Brand objectives:
Build profitable customer relationship by developing foods “superior in quality, taste,
nutrient, and convenience” through Research & Development (R&D)

But R&D costs money!

Marketing Objective:
Improving profits

Marketing strategies
Increase market share
Expand product lines
Increase product availability & promotion
Expand to new market
3) Designing Business Portfolio
• Large companies have multiple businesses which arrange in different portfolio
• The business portfolio is the collection of businesses and products that make up the
company
• Portfolio analysis is a major activity in strategic planning whereby management
evaluates the products and businesses that make up the company.
• Business portfolio management help big companies:
Maximize returns
Efficiently distribute resources
Minimize risk of losses

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3) Designing Business Portfolio
• Strategic Business Unit (SBU)
Unit of company with separate mission and vision from the parent company
• Strategic business units can be a
Company division
Product line within a division
Single product or brand

• Characteristic of SBU:
Single/stand alone business or a group of related business that can be planned
differently from the parent company
It has it own competitors
It has it own management team accountable for planning and business
performance
BU by Product Line BU by Brand
 BCG Growth-Share Matrix

Build or
Build Divest
Measures how
attractive the
market is

Harvest Divest

Measures how
competitive the
*First Introduced in 1979 business is
Now a classic framework
Use BCG Matrix to Create a Balanced Portfolio

Product movement (represent product life cycle

Cash Movement
Problems with Matrix Approaches
• Difficulty in defining SBUs and measuring market share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning
• Many companies have dropped formal matrix methods in favor of
more customized approaches that better suit their specific situation
cross-functional teams of divisional managers who are close to their markets.
 Designing Future Portfolio: Ansoff Matrix

Ansoff Matrix*
Existing New
Products Products
Existing Market Product
Markets Penetration Development

New Market
Diversification
Markets Development

*First Introduced in 1958

Now a classic framework
Example: Proton Passenger Car Business Portfolio Development

Existing New
Products Products
Existing Market Product
Markets Penetration? Development?

New Market
Diversification?
Markets Development?
Strategy Planning Process: At the Business Unit / Product Level

Company / Corporate level Business Unit level

Market- Company Designing Strategies at business

Oriented Objectives Business units, market,
Mission and Goals Portfolio product level

Purpose of the Detail supporting Collection of Develop Consumer

organization objectives businesses and Value-driven Marketing
consistent with products Strategy
mission

Where What How How and What

Developing Consumer Value-driven Marketing Strategy
Business/Product level

Develop Consumer Value-

driven Marketing Strategy

Marketing Activity / Process

Identify Develop Develop Implement

Developing
Market’s Needs Consumer Value- Relationship
Marketing Mix
Driven marketing with customers
Strategy Organization

• Marketing • Segmentation • Product • Customer Control

Environment • Targeting • Price Relationship
Analysis – • Positioning • Place Building
5Cs • Promotion
 Identify Market Needs : Marketing Analysis / 5Cs

Company Competitors

Mr. High 5 CUSTOMERs

Collaborators Context

To be elaborate in Topic #3
Developing SWOT from Marketing Analysis

• Strength Strengths Weaknesses

(Internal) (Internal)
• Weakness
• Opportunities Opportunities Threats
(External) (External)
• Threats* *Introduced in 1969
Now a classic tool
 Developing SWOT from Marketing Analysis SWOT

Strengths Weaknesses
Internal (Internal) (Internal)
Company Internal capabilities that Internal limitations that
Collaborators Company level
may help a company may interfere with a
reach its objectives company’s ability to
achieve its objectives

Opportunities Threats
(External) (External) Overall Industry
External factors that a Current and emerging / Market /
External company ma be able to external factors that may
business level,
Competitors
exploit to its advantage challenge the company’s
Context performance
not at the brand
• X
level
Positive Negative
Transforming SWOT Analysis to TOWS For Actionable Strategies

Internal Strengths Weaknesses

.................... ....................
…………………. ………………….
…………………. ………………….
Strengths Weaknesses External
(Internal) (Internal)
Opportunities
....................
S-O Strategy W-O Strategy
…………………
…………………. Attack/Fortified Built strength
Opportunities Threats
(External) (External)
Threats
....................
………………….
S-T Strategy W-T Strategy
…………………. Defend Build Strengths
to defend

• SWOT is a method of analyzing Mr. Sun Tzu

• TOWS extends SWOT to form actionable strategies / tactics
 TOWS For Actionable Strategies: SO Strategy

Strengths Weaknesses
(Internal, Positive) (Internal, Negative)

S-O Strategies
Opportunities Use the firms’ Strengths to
(External, Positive) take advantage of
opportunities
(ATTACKING)

Threats
(External, Negative)
 TOWS For Actionable Strategies: ST Strategy

Strengths Weaknesses
(Internal, Positive) (Internal, Negative)

Opportunities
Unifi market leader
(External, Positive)
position is threaten
pricing deregulation
(External factors)

S-T Strategies
Threats Astro market leader
Use Strengths to reduce position TV Box and
(External, Negative) threatening conditions Netflix (external
(Defensive) factors)
 TOWS For Actionable Strategies: WO Strategy

Strengths Weaknesses
(Internal, Positive) (Internal, Negative)

W - O Strategies
Opportunities Overcome weaknesses to
(External, Positive) exploit opportunities
(Build Strength to
Attack)

Threats
(External, Negative)
 TOWS For Actionable Strategies: WT Strategy

Strengths Weaknesses
(Internal, Positive) (Internal, Negative)

Opportunities
(External, Positive)

W - T Strategies
Counter weakness
Threats and threats
(External, Negative)
(Build Strength
for defend)
TOWS Summary & Applications

Became basis for

• Marketing objectives setting
• Segmentation and target market
decision making
• Marketing mix decision
 Shown your TOWS in your Presentation Assignment

Internal Strengths Weaknesses

.................... ....................
…………………. ………………….
Key external …………………. ………………….
opportunities & External
Threats that affect
the entire Opportunities Key Internal
industry/market .................... strengths &
………………… weaknesses that
…………………. affect company
Detail of actionable performance
strategies
Threats
....................
………………….
………………….
Developing Consumer Value-driven Marketing Strategy
Business/Product level

Develop Consumer Value-

driven Marketing Strategy

Marketing Activity / Process

Identify Develop Develop Implement

Developing
Market’s Needs Consumer Value- Relationship
Marketing Mix
Driven marketing with customers
Strategy Organization

• Marketing • Segmentation • Product • Customer Control

Environment • Targeting • Price Relationship
Analysis – • Positioning • Place Building
5Cs • Promotion
Segmentation, Targeting, Positioning (STP)

SEGMENTATION TARGETING POSITIONING

Group customers Assess attractiveness Define value
based on similar needs of each segment proposition for
target segments
Select segment to
target Develop a
marketing mix plan
Marketing Mix / 4Ps

Product Price

Target
Customer

Place Promotion

To be elaborate in Topic #6 - 9
Developing Consumer Value-driven Marketing Strategy
Business/Product level

Develop Consumer Value-

driven Marketing Strategy

Marketing Activity / Process

Identify Develop Develop Implement

Developing
Market’s Needs Consumer Value- Relationship
Marketing Mix
Driven marketing with customers
Strategy Organization

• Marketing • Segmentation • Product • Customer Control

Environment • Targeting • Price Relationship
Analysis – • Positioning • Place Building
5Cs • Promotion
Develop Customer Relationships
• Customer relationship management—the overall process of building and
maintaining profitable customer relationships by delivering superior
customer value and satisfaction.

Customer Relationship
Building Block
Refer Topic #1
Developing Consumer Value-driven Marketing Strategy
Business/Product level

Develop Consumer Value-

driven Marketing Strategy

Marketing Activity / Process

Identify Develop Develop Implement

Developing
Market’s Needs Consumer Value- Relationship
Marketing Mix
Driven marketing with customers
Strategy Organization

• Marketing • Segmentation • Product • Customer Control

Environment • Targeting • Price Relationship
Analysis – • Positioning • Place Building
5Cs • Promotion
PLANNING—Parts of a Marketing Plan
Marketing Planning Process
Marketing situation SWOT

Executive summary

Objectives and issues: TOWS Marketing strategy: STP Action programs: Mkting Mix

Budgets Controls
 This would be what a
written marketing plan
should consists

… and the basic of

your presentation
assignment (exclude
bugeting)
IMPLEMENTATION
• Turning marketing strategies and plans into marketing actions to
accomplish strategic marketing objectives
• Addresses who, where, when, and how

Marketing Strategy Market penetration

Activity (What) Celebrity to promote shampoo and give shampoo samples
for university students
Time (When) January 2019
Person in charge Brand Manager
(Who)
Method (How) Road show on major university
Estimated cost (how RM35,000
much)
 ORGANIZATION
• The design of the marketing department must be able to implement
the plan
• Multiple organization structures
Product / Brand
Functional Management
Product Category
Marketing VP
Manager

Marketing A&P Sales

Manager Manager Manager Cereal Pet Food Beverage
product product product
Marketing manager manager manager
research
manager
ORGANIZATION

Market/ Customer
Geographical
Management
Market National sales
Manager Manager

Children Infant Female Northern Southern Central Eastern

product product product sales sales sales sales
manager manager manager manager manager manager manager

Infant Infant
Formula Clothing
manager manager
Marketing Control
• Return on Marketing Investment
(Marketing ROI)
Net return from a marketing
investment divided by the costs of the
marketing investment
Measurement of the profits generated
by investments in marketing activities
• Marketing strategy fits company
culture
System of value, belief (Google &
Pentagon example)
Recap: Developing Consumer Value-driven Marketing Strategy at the Business Unit
Level

Business/Product level

Develop Consumer Value-

driven Marketing Strategy

Marketing Activity / Process

Identify Develop Develop Implement

Developing
Market’s Needs Consumer Value- Relationship
Marketing Mix
Driven marketing with customers
Strategy Organization

• Marketing • Segmentation • Product • Customer Control

Environment • Targeting • Price Relationship
Analysis – • Positioning • Place Building
5Cs • Promotion
Readings
• Kotler & Armstrong (2018). Chapter 2