Chapter 2
Company and Marketing Strategy
Principles of Marketing _ Lai Vinh Phuc, MBA
Content:
I. Company-wide Strategic Planning: Defining Marketing’s Role
II. Designing the Business Portfolio
III. Planning Marketing: Partnering to Build Customer Relationship
IV. Marketing Strategy & Marketing Mix
V. Marketing Effort & Marketing Return on Investment
Principles of Marketing _ Lai Vinh Phuc, MBA
I. Company-Wide 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
Figure 2.1: Steps in Strategic Planning
Principles of Marketing _ Lai Vinh Phuc, MBA
I. Company-Wide Strategic Planning
1. Defining the Company Mission:
• Mission Statement: is the organization’s purpose – what it wants to
accomplish in the larger environment.
• Product Oriented: Definition of business’s product
• Market Oriented: is the mission statement defines the business in terms of
satisfying basic customer needs.
• E.g: Choose a Company and write the Market-Oriented Definition
Principles of Marketing _ Lai Vinh Phuc, MBA
I. Company-Wide Strategic Planning
2. Setting Company Objectives and Goals:
• Business Objectives: Turning the “mission statement” into support objectives
for the business
• E.g: Business Objectives/Goals => Build profitable customer relationships,
invest in research, improve profit
• E.g: Marketing Objectives:
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Designing the Business Portfolio
1. 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.
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Designing the Business Portfolio
2. Analyzing the Current Business Portfolio:
• Strategic Business Unit (SBU): is a unit of the company that has a separate
mission and objectives that can be planned separately from other company
businesses.
• Company Division
• Product Line within a Division
• Single Product or Brand
Principles of Marketing _ Lai Vinh Phuc, MBA
Figure 2.2: Boston Consulting Group Approach
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Designing the Business Portfolio
Boston Consulting Group Approach
• Star: High-growth, High-share business or product. Require heavy investment
to finance the rapid growth.
• Cash Cow: Low-growth, High-share. Successful SBUs require less investment to
hold market share.
• Question Marks: High-growth, low-share. Required investment to hold the
share
• Dogs: Low-growth, low-share. Generate enough cash to maintain the business.
https://www.youtube.com/watch?v=sNAUWpk_yvs
Principles of Marketing _ Lai Vinh Phuc, MBA
Discussion Question
What are the problems of Matrix Approaches?
ANSWER:
• Difficulty in defining SBUs and measuring market share and growth
• Time Consuming
• Expensive
• Focus on the current businesses, not future planning
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Designing the Business Portfolio
3. Developing Strategies for Growth and Downsizing:
• Product/Market Expansion Grid: is a tool for identifying company growth
opportunities through market penetration, market development, product
development, or diversification.
Figure 2.3: Market/Product Expansion Grid
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Designing the Business Portfolio
3. Developing Strategies for Growth and Downsizing:
• 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 products
• Product Development: Company growth by offering modified or new products
to current market segments.
• Diversification: Company growth by starting up or acquiring businesses outside
the company’s current products and markets.
https://www.youtube.com/watch?v=6LIy3jHhKhg
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Designing the Business Portfolio
3. Developing Strategies for Growth and Downsizing:
• Downsizing: is the reduction of the business portfolio by eliminating products
or business units that are not profitable or that no longer fit the company’s
overall strategy.
Principles of Marketing _ Lai Vinh Phuc, MBA
III. Planning Marketing: Partnering to Build
Customer Relationships
1. Partnering with Other Company Departments:
• Value Chain: is a series of departments that carry out value-creating activities
to design, produce, market, deliver, and support a firm’s products.
2. Partnering with Others in the Marketing System:
• Value Delivery Network: is made up for the company, suppliers, distributors,
and ultimately customers who partner with each other to improve
performance of the entire system.
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Marketing Strategy and the Marketing Mix
1. Customer Value – Driven Marketing Strategy:
a. Market Segmentation: is the division of a market into distinct groups of buyers
who have distinct needs, characteristics, or behavior and who might require
separate products or marketing mixes.
• E.g: Car market, food market.
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Marketing Strategy and the Marketing Mix
Principles of Marketing _ Lai Vinh Phuc, MBA
Figure 2.4: Market Strategies and the Marketing Mix
IV. Marketing Strategy and the Marketing Mix
1. Customer Value – Driven Marketing Strategy:
b. Market Targeting: is the process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter.
• E.g:
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Marketing Strategy and the Marketing Mix
1. Customer Value – Driven Marketing Strategy:
c. Market Differentiation and Positioning:
• Positioning: the arranging for a product to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of the target
consumer.
• Differentiation: the market offering create superior customer value.
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Marketing Strategy and the Marketing Mix
2. Developing an Integrated Marketing Mix
• Marketing Mix: the set of tactical marketing tools – product, price, place, and
promotion – that the firm blends to produce the response it wants in the
target market.
- Product: goods and services combination the company offers to the target
market
- Price: the amount of money customers must pay to obtain the product.
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Marketing Strategy and the Marketing Mix
2. Developing an Integrated Marketing Mix
- Place: company activities that make the product available to target consumers.
- Promotion: activities that communicate the merits of the product and
persuade target customers to buy it.
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Marketing Strategy and the Marketing Mix
Principles of Marketing _ Lai Vinh Phuc, MBA
Figure 2.5: 4Ps Marketing Mix
IV. Marketing Strategy and the Marketing Mix
Principles of Marketing _ Lai Vinh Phuc, MBA
V. Marketing Effort and Marketing Return on
Investment
1. Managing the Marketing Effort:
Principles of Marketing _ Lai Vinh Phuc, MBA
Figure 2.6: Managing Marketing
V. Marketing Effort and Marketing Return on
Investment
1. Managing the Marketing Effort:
• Marketing Analysis: conducting “SWOT” analysis to evaluate the overall of the
company
Principles of Marketing _ Lai Vinh Phuc, MBA
V. Marketing Effort and Marketing Return on
Investment
1. Managing the Marketing Effort:
• Marketing Planning: Contents of a Marketing Plan
1. Executive Summary
2. Current Marketing Situation
3. Threats and Opportunities Analysis
4. Objectives and Issues
5. Marketing Strategy
6. Action Programs
7. Budgets
8. Controls
Principles of Marketing _ Lai Vinh Phuc, MBA
V. Marketing Effort and Marketing Return on
Investment
1. Managing the Marketing Effort:
• Marketing Implementation: turning marketing strategies and plans into
marketing actions to accomplish strategic marketing objectives.
• Marketing Control: is the measurement and evaluation of results and the
taking of corrective action as needed
- Operating Control: checking ongoing performance against the annual plan for
corrective action
- Strategic Control: checking company’s basic strategies whether it matched
to its opportunities
Principles of Marketing _ Lai Vinh Phuc, MBA
V. Marketing Effort and Marketing Return on
Investment
2. Measuring and Managing Marketing Return on Investment:
• Return on Marketing Investment (ROI): is the net return from a marketing
investment divided by the costs of the marketing investment.
=> Providing a measurement of the profits generated by investment in marketing
activities
Principles of Marketing _ Lai Vinh Phuc, MBA
Recap
Company-wide Strategic Planning: Defining Marketing’s Role
Designing the Business Portfolio
Planning Marketing: Partnering to Build Customer Relationship
Marketing Strategy & Marketing Mix
Marketing Effort & Marketing Return on Investment
Principles of Marketing _ Lai Vinh Phuc, MBA
Next Week
Chapter 4: Managing Marketing Information to Gain Customer
Insighgts
Principles of Marketing _ Lai Vinh Phuc, MBA
