marketing strategy PDF

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Chapter 2 Company and Marketing Strategy 1. Understand company-wide strategic planning. 2. Learn how to design business portfolios and develop strategies for growth. 3. Learn the marketing management functions, including the elements of the marketing plan. Company-Wide Strategic Planning: Defining Marketing’s Role Strategic planning: 

Is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities

Purpose: To find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment Strategic Planning Strategic planning sets the stage for the rest of the planning in the firm. 1. Define mission Mission: The organization’s purpose, what it wants to accomplish in the larger environment. Vision: Characteristics of a good mission statement :

2. Set objectives  The company’s mission needs to be turned into detailed objectives for each level of management.  Marketing strategies and programs must be developed to support these marketing objectives. Marketers usually set three types of objectives in marketing plans: A. Marketing objectives: related to the marketing functions Target: Customer acquisition Customer retention Customer satisfaction Channel relationships Unit sales Market share Product development Order fulfillment

Chapter 2 Company and Marketing Strategy B. Financial objectives: related to company profits Generally include: a. Sales volume and product targets b. Profitability targets c. Return on Investment (ROI) targets d. Break-even targets C. Societal objectives: for the betterment of the society and community Fulfilling societal objectives:  Polishes company and/or brand image.  Shows the organization is doing something constructive about important issues. Some of the key issues include:  “Greener” products  Charitable donations  Involvement in community projects  Energy conservation  Issue awareness 3. Design the business portfolio  The business portfolio is the collection of products/businesses that make up the company  Portfolio analysis is a major activity in strategic planning whereby management evaluates the products/businesses that make up the company  Analysing its current business portfolio and deciding which businesses should receive more, less, or no investment.  Shaping the future portfolio by developing strategies for growth and downsizing  The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.

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Analyzing the Current Business Portfolio A strategic business unit (SBU) is a unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. Examples include: • Company division • Product line within a division • Single product or brand Portfolio analysis calls for management to assess the attractiveness of its various SBUs and decide how much support each deserves. Portfolio Analysis  Most standard portfolio-analysis methods evaluate SBUs on two important dimensions A. The attractiveness of the SBU’s market or industry and B. The strength of the SBU’s position in that market or industry

Boston Consulting Group (BCG) evaluates a company’s strategic business units in terms of their market growth rate and relative share

Chapter 2 Company and Marketing Strategy The BCG Growth-Share Matrix

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Stars: High-growth, high-share businesses requiring heavy investment to finance rapid growth. They will eventually turn into cash cows

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Cash cows: low-growth, high-share businesses that are established and successful SBUs requiring less investment to maintain market share

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

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Dogs: low-growth, low-share businesses that may generate enough cash to maintain themselves but do not promise to be large sources of cash. Problems with Matrix Approaches A. Difficulty in defining SBUs and measuring market share and growth B. Time consuming C. Expensive D. Focus on current businesses, not future planning Develop Growth Strategies  

Part of strategic planning entails evaluating growth strategies. Marketing must identify, evaluate, and select growth opportunities and lay down strategies for capturing them

Chapter 2 Company and Marketing Strategy

The Product Market Expansion Grid

1. Market penetration is a growth strategy increasing sales to current market segments without changing the product E.g. Add new stores in current market areas improve advertising, prices, service or store design 2. Market development is a growth strategy that identifies and develops new market segments for current products E.g. identify new demographic or geographic markets 3. Product development is a growth strategy that offers new or modified products to existing market segments E.g. New styles, flavors, colors, or modified products 4. Diversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and markets E.g. start up or buy new businesses Growth is not always possible! Non-growth strategies include:  Filing for bankruptcy  Withdrawing from certain markets  Deleting products  Limiting distribution  Closing a division

Chapter 2 Company and Marketing Strategy 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. Reasons for Downsizing 

Market environments may change

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The firm may have grown too fast or entered areas where it lacks experience

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The firm may have entered too many foreign markets without proper research

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The company introduces new products that do not offer superior customer value.

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Finally, some products or business units simply age and die

SWOT Analysis Internal Factors: 

Mission

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Resource

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Offerings

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Previous Results

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Business Relationships

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Keys to Success and Warning Signs

External Factors: 

Consumer Demographics

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Economic/Ecological/Technological/

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Political/Social Trends

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Competitors

The Marketing Plan •

Involves deciding on marketing strategies that will help the company attain its overall strategic objectives....