Chapter Outline

A. Companywide Strategic Planning: Defining

Marketing’s Role
B. Designing the Business Portfolio
C. Planning Marketing: Partnering to Build
Customer Relationships
D. Marketing Strategy and the Marketing Mix
E. Managing the Marketing Effort

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 A. Company-Wide Strategic Planning:
Defining Marketing’s Role
Strategic planning refers to the process of
developing and maintaining a strategic fit
between the organization’s goals and
capabilities and its changing marketing
opportunities.

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Steps in Strategic Planning

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1. Defining a Market-Oriented Mission
 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 satisfying basic
customer needs.
 Meaningful and specific yet motivating.
 Emphasize the company’s strengths in the marketplace.
 Focus on customers and the customer experience

 Ask the following questions:

 What is our business?
 Who is the customer?
 What do consumers value?
 What should our business be?
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 Product-Oriented VS Market-
Oriented Definitions
Facebook
• Product: We are an online social network
• Market: We connect people around the world
and help them share important moments in
their live

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 2. Setting Company Objectives and Goals

The broad mission leads to a hierarchy of objectives,

including business and marketing objective. Marketing
strategies developed to support marketing objective.

Business Marketing
objectives objectives
• Build • Increase
profitable market share
customer • Create local
relationships partnerships
• Invest in
research
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 3. Designing the Business
Portfolio
The Business Portfolio is the collection of
businesses and products that make up the
company.

Portfolio analysis is the process by which

management evaluates the products and
businesses that make up the company.

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 Designing the Business Portfolio

Business portfolio planning involves 2 steps:

i. Analyze its current business portfolio and
determine which businesses should receive more,
less or no investment.

ii. It must shape the future portfolio by developing

strategies for growth and downsizing.

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i. Analyzing the current business portfolio

Management first step is to identify the key

businesses that make up the company called
strategic business unit (SBUs).

SBUs can be
• Company division
• Product line within a division
• Single product or brand
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i. Analyzing the current business portfolio

Identify key businesses (strategic

business units, or SBUs) that make up
the company

Assess the attractiveness of its various

SBUs

Decide how much support each SBU

deserves (Build, hold, harvest and
divest)

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The Boston Consulting Group Approach

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 Boston Consulting Group (BCG)

4 types of SBUs:
Stars – They are high-growth, high-share
business or products. They often need heavy
investments to finance their rapid growth.
Eventually their growth will slow down, and
they will turn into cash cows.

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 Boston Consulting Group (BCG)

Cash cows – They are low-growth, high-share

businesses or products. These established and
successful SBUs need less investment to hold
their market share. Thus, they product a lot of
the cash that the company uses to pay its bills
and support other SBUs that need investment.

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 Boston Consulting Group (BCG)

Question marks – They are low-share

business units in high-growth markets.
They require a lot of cash to hold their
share, let alone increase it.

Management has to think hard about

which questions marks it should try to
build into stars and which should be
phased out.
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 Boston Consulting Group (BCG)

Dogs – They are low-growth, low-share

businesses and products. They may generate
enough cash to maintain themselves but do
not promise to be large sources of cash.

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 ii. Developing Strategies for Growth and
Downsizing

Downsizing prune, harvest or divest businesses

that are unprofitable or that no longer fit the
strategy

Reasons to abandon products or markets

• Rapid growth of the company
• Lack of experience in a market
• Change in market environment
• Decline of a particular product

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 ii. Developing Strategies for Growth and
Downsizing
Product/Market Expansion Grid

a tool for identifying

company growth
opportunities

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 The Product/Market Expansion Grid

Market penetration – Company growth by

increasing sales of current products to current
market segments without changing the
product.

Market development – Company growth by

identifying and developing new market
segments for current company products.
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 The Product/Market Expansion Grid

Product development – Company growth by

offering modified or new products to current
market segments.

Diversification – Company growth through

starting up or acquiring businesses outside the
company’s current products and markets.

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 4. Planning Marketing: Partnering to Build
Customer Relationships

A series of departments that carry out

value-creating activities to design, produce, Look beyond its own value chain
market, deliver, and support a firm’s and into the value chains of its
products suppliers, distributors & customers.

Other Company Others in the

Departments Marketing system
Internal Value Chain Value delivery network
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 Figure 2.5 Managing Marketing
Strategy and the Marketing Mix

Creating
customer
value and
profitable
customer
relationships
Which customers to is at the core
serve ? of marketing.
(segmentation and
targeting)

How will we create

value for them?
(differentiation and
positioning)

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 Marketing Strategy and the
Marketing Mix

a. Customers-Driven Marketing Strategy

b. Developing an Integrated Marketing
Mix

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a. Customers-Driven Marketing Strategy

Market segmentation is the process of

dividing a market into distinct groups of
buyers who have different needs,
characteristics, or behaviors, and who
might require separate products or
marketing programs.

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 Customers-Driven Marketing Strategy

Market targeting involves evaluating each

market segment’s attractiveness
and selecting one or more to enter.

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 Marketing Strategy and the
Marketing Mix
Differentiation – Actually differentiating
the market offering to create superior
customer value.

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 Customers-Driven Marketing Strategy

Positioning is arranging for a product to

occupy a clear, distinctive and desirable
place relative to
competing
products in the
minds of target
customers.

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b. Developing an Integrated Marketing
Mix

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 Marketing Mix
• To make the 4Ps more buyer’s perspective
emphasize, 4Ps redefining to the 4As:
– Acceptability
– Affordability
– Accessibility
– Awareness

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Managing Marketing: Analysis, Planning,
Implementation and Control

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 Managing the Marketing Effort

Managing the marketing process requires

the 4 marketing management functions:
i. Analysis
ii. Planning
iii. Implementation
iv. Organization
v. Control

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i. Marketing Analysis:
SWOT Analysis

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 ii. Marketing Planning

Marketing planning involves choosing

marketing strategies that will help its company
attain its overall strategies objective.

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Contents of a Marketing Plan
Executive summary
Current marketing situation
Threats and opportunity analysis
Objectives and issues
Marketing strategy
Action programs
Budgets
Controls

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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 goals

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 iii. Marketing Implementation

Marketing implementation – Turning

marketing strategies and plans into
marketing actions to accomplish strategic
marketing objectives.

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 iv. Organization

The company must design a marketing

organization that can carry out marketing
strategies and plan. As the company
expand, marketing department emerge to
plan and carry out activities.
– If the company is very small, one person might do
all the marketing work.
– In large company, the marketing department
contain many specialist. CMO created to head
large marketing activities. 2 - 38

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Managing the Marketing Effort
Marketing Department Organization
Functional
Geographic
Product management
Market
Customer management

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 v. Marketing Control

Evaluates Take
Set marketing Measures
causes of corrective
goals performance
differences actions

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 Looking Ahead to Chapter 3

Analyzing the Marketing

Environment