Company and Marketing Strategy 1 PDF

MARK 2120: Marketing Management Lecture 3: Company and Marketing Strategy MARK 2120, L1, L2 & L3 Fall 2024 Prof. Sophie Fan 1 Course Roadmap Part I. Defining Marketing and the Marketing Process Introduction and the m...

MARK 2120: Marketing Management Lecture 3: Company and Marketing Strategy MARK 2120, L1, L2 & L3 Fall 2024 Prof. Sophie Fan 1 Course Roadmap Part I. Defining Marketing and the Marketing Process Introduction and the marketing process Part II. Understanding the Environments (3Cs) Company and marketing strategy (Company) Assessing (global) marketing environment (Competition) Understanding customer behaviors (Consumer) Managing marketing information (Marketing Research) Part III. Setting the Customer-Driven Marketing Strategy (STP) Segmentation, targeting, and positioning Part IV. Designing Integrated Marketing Mix (4Ps) Product Pricing and Place Promotion 2 What is Marketing? 1. What are the differences among needs, wants and demands? 2. Five types of marketing orientations 3. Any ideas why satisfied consumers are so important? 3  Marketing Structure What is my Business? Understanding the CUSTOMER COMPANY COMPETITION Environment Where do I want to go? SEGMENTATION TARGETING POSITIONING Setting the Strategy How do I get there? Designing the PRODUCT PRICE PLACE PROMOTION Marketing Mix 4 Topics of This Class Defining company mission Setting objectives Designing the business portfolio (SBUs) Developing marketing strategy 5 Strategic Planning Process Strategic planning : The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities. Planning Setting Defining the Designing marketing company company the business and other objectives mission portfolio functional and goals strategies 6 Guys’ picks Strategic Plan 8 Strategic Planning Process Strategic Planning involves developing an overall company strategy for long-run survival and growth. This process involves: 1) Defining the Company Mission: Statement of an organization’s purpose; should be market oriented. 2) Setting Company Objectives: Supporting goals and objectives to guide the entire company. 3) Designing the Business Portfolio: Collection of businesses and products that make up the company. 4) Planning Marketing Strategies: Detailed planning for each department designed to accomplish strategic objectives. 9 Topic 1: Defining the Company Mission Planning Setting Defining the Designing marketing company company the business and other objectives mission portfolio functional and goals strategies The mission statement is the organization’s purpose; what it wants to accomplish in the larger environment. 10 Mission Statement 3 essential components 1. Key market (customers) – who is your target client/customer? (generalize if needed) 2. Contribution (products/services) – what product or service do you provide to that client? 3. Distinction (competences) – what makes your product or service unique, so that the client would choose you? 11 Mission Statement 1. Key market (customers) – who is your target client/customer? (generalize if needed) 2. Contribution (products/services) – what product or service do you provide to that client? 3. Distinction (competences) – what makes your product or service unique, so that the client would choose you? 12 Good or Bad Mission Statement? Mission Statement (Worksheet_Lecture 3 Part I) Our goal for Citigroup is to be the most respected global financial services company. Like any other public company, we're obligated to deliver profits and growth to our shareholders. Of equal importance is to deliver those profits and generate growth responsibly. 1. Key market (customers)? 2. Contribution (products/services)? 3. Distinction (competences)? 13  Good or Bad Mission Statement? Mission Statement FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served……Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards. 1. Key market (customers)? 2. Contribution (products/services)? 3. Distinction (competences)? 14 Product vs. Market Orientations The broad mission leads to company objectives Companies often define themselves in terms of products: They are in the “auto business” or the “clothing business.” Market definitions of a business, however, describe the business as a customer satisfying process. Viewing businesses in terms of customer needs can suggest additional growth opportunities. 15 Product vs. Market Orientations Facebook § Product-oriented objective § Market-oriented objective 16 Product vs. Market Orientations HKUST § Product-oriented objective § Market-oriented objective 17 Product vs. Market Orientations Columbia Pictures § Product-oriented objective § Market-oriented objective 18 Topic 2: Company Objectives Planning Setting Defining the Designing marketing company company the business and other objectives mission portfolio functional and goals strategies The company needs to turn its mission into detailed supporting objectives for each level of management. Each manager should have objectives and be responsible for reaching them 19 Company Objectives Long Term Mission à Short Term Goals Goals have two components Criteria: What the goal is for “Marketing metrics”: Net income, profit margins, sales revenues, market share, awareness, etc. Benchmarks: Quantitative and temporal aspects of the goal Achieve X (quantitative) by Y (time) Goal = Criterion + Benchmark e.g., Consumer: “15% brand recall within 3 months”, Market: “10% market share within one year”, Finance: “$1.5 million net profit in the fourth quarter of 2018” 20 Topics 1 and 2 Review Mission and company objectives 3 essential components of mission statement Company definition should be market-oriented not product- oriented Two components of company’s objectives 21 22 Topic 3: Designing the Business Portfolio Planning Setting Defining the Designing marketing company company the business and other objectives mission portfolio functional and goals strategies Transitioning from corporate level to business unit level 23 Business Portfolio Mission/ To become an outstanding graduate ”Company” objective” Other Unit level GPA Student societies extracurricular activities 24 Business Portfolio From Corporate Level to Business Unit Level Define the corporate mission Establish business unit Assess growth opportunities Assign resources to each unit Business portfolio planning involves two steps. First, the company must analyze its current business portfolio and determine which businesses should receive more, less, or no investment. Second, it must shape the future portfolio by developing strategies for growth and downsizing. Corporate Level Business Unit 1 Business Unit 2 Business Unit 3 25 Business Portfolio An SBU (Strategic Business Units) must… 1. have its own mission, distinct from the missions of other SBU 2. have definable groups of competitors 3. prepare its own integrative plans, fairly distinct from those of other SBUs 4. manage its resources in key areas 5. have a proper size — neither too large nor too small 26 Analyzing Current SBU Portfolio Identify strategic business units (SBUs) Assess the attractiveness of its various SBUs Decide how much support each SBU deserves 27 Analyzing Current SBU Portfolio Business portfolio analysis studies a firm’s business units as though they were a collection of separate investments The goal: Assess the attractiveness and competitiveness of SBU Growth share matrix (BCG matrix) is a portfolio- planning method that evaluates a company’s SBUs in terms of their market growth rate and relative share 28 BCG Matrix high Low high Low 29 Analyzing Current SBU Portfolio Question marks or problem children are SBUs with a low share of high-growth markets. Ø They require a lot of cash to maintain or increase market share. Ø Management must choose which SBUs to invest in and phase out the rest. Dogs are SBUs with a low share of low-growth markets. Ø They may generate enough cash to sustain themselves but do not hold promise of becoming winners for the firm. Ø Management may consider dropping them. 30 BCG Matrix for Apple’s Business units 31 Analyzing Current SBU Portfolio (Worksheet_Lecture 3 Part II) Under the classic BCG portfolio planning approach, the company invests funds from mature, successful products and business (cash cows) to support promising products and businesses in faster- growing markets (stars and question marks), hoping to turn them into future cash cows. 32 Analyzing Current SBU Portfolio BCG Matrix Comments on BCG Matrix Strength Helps identify which SBUs will be future cash generators and users. Guides allocation of resources. Weakness Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning 33  Analyzing Growth Opportunities Product/Market Expansion Grid Growth strategies: Where do we want to go? Market-product analysis: Product/market expansion grid Product/market expansion grid is a tool to identify company growth opportunities through market penetration, market development, product development, or diversification Growth-Share Matrix (BCG Matrix) à Evaluating the current businesses Product/Market Expansion Grid à Finding future business opportunities 34 Analyzing Growth Opportunities Product/Market Expansion Grid Existing New Products Products Existing Market Product Markets Penetration Development New Market Diversification Markets Development 35 Topic 3 Review What is SBU? BCG matrix Product/market expansion grid– we will discuss it in detail on Friday 36 Session Overview Planning Setting Defining the Designing marketing company company the business and other objectives mission portfolio functional and goals strategies 37 Next class Company and marketing strategy : Read Chapter 2 before the class Read the lecture 4_slides & lecture 4_worksheet on Canvas before the class Photo-cards!!! (Deadline is approaching!) 38