Principles Of Marketing PDF MKT1014/ MKT2224 Week 3 Lecture 3

PRINCIPLES OF MARKETING MKT1014/ MKT2224 WEEK 3 – LECTURE 3 These teaching materials are protected under the Copyright Act 1987. Duplication, in any form, including digitally, is prohibited by law and a pun...

PRINCIPLES OF MARKETING MKT1014/ MKT2224 WEEK 3 – LECTURE 3 These teaching materials are protected under the Copyright Act 1987. Duplication, in any form, including digitally, is prohibited by law and a punishable offence. ©2021 Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Principles of Marketing Eighteenth Edition Chapter 2 Company and Marketing Strategy Partnering to Build Customer Engagement, Value, and Relationships Copyright © 2021, 2018, 2016 Pearson Education, Inc. Learning Objectives 2.1 Explain company-wide strategic planning and its four steps. 2.2 Discuss how to design business portfolios and develop growth strategies. 2.3 Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value. 2.4 Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. 2.5 List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Copyright © 2021, 2018, 2016 Pearson Education, Inc. NIKE: Building Customer Value through Brand Engagement and Community “Nike’s outstanding success results from much more than just making good sports gear. The iconic company’s strategy is to build deep engagement and a sense of community with and between the Nike brand and its customer.” Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 1 Explain company-wide strategic planning and its four steps.. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Company-Wide Strategic Planning (1 of 5) Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities, and its changing marketing opportunities. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Company-Wide Strategic Planning (2 of 5) Figure 2.1 Steps in Strategic Planning Copyright © 2021, 2018, 2016 Pearson Education, Inc. Company-Wide Strategic Planning (3 of 5) The mission statement is the organization’s purpose; what it wants to accomplish in the larger environment. CVS Health’s overall mission is to be a “pharmacy innovation company,” one that is “helping people on their way to better health.” Its marketing strategies and programs must support this mission. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Apple’s Corporate Mission Statement Apple’s corporate mission is “to bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons and consumers in over 140 countries around the world.” Company-Wide Strategic Planning (4 of 5) Product- versus Market-Oriented Business Definitions Company Product-Oriented Definition Market-Oriented Definition Starbucks We sell coffee and snacks. We sell “The Starbucks Experience,” one that enriches people’s lives in one moment, one human being, one extraordinary cup of coffee at a time. Panera We sell fast-casual food in our We give customers “Food restaurants. as it should be”: food that tastes good; food that feels good; food that does good things for them and the world around them. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Company-Wide Strategic Planning (5 of 5) Setting Company Objectives and Goals Business objectives – Build profitable customer relationships – Invest in research – Improve profits Marketing objectives – Increase market share – Create local partnerships – Increase promotion Copyright © 2021, 2018, 2016 Pearson Education, Inc. Real Marketing 2.1: Airbnb’s Mission Belong Anywhere–Don’t Stay There. Live There. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 2 Discuss how to design business portfolios and develop growth strategies.. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (1 of 8) 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. Mars Inc. is not only the world’s number-one candy maker; it is also a world- leading pet nutrition and health-care company. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (2 of 8) Strategic business units can be a Company division Product line within a division Single product or brand Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (3 of 8) Analyzing The Current Business Portfolio Identify strategic business units (SB Us) Assess the attractiveness of its various SBUs Decide how much support each SBU deserves Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (4 of 8) Figure 2.2 The BCG Growth-Share Matrix Copyright © 2021, 2018, 2016 Pearson Education, Inc. The best-known portfolio-planning method is the now-classic Boston Consulting Group (BCG) approach. The growth-share matrix defines four types of SBUs. Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows. Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share. Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share. Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (5 of 8) Problems with Matrix Approaches Difficulty in defining S B U s and measuring Over the years, ESPN has grown market share and growth to become a huge and complex Time consuming brand portfolio consisting of more than 50 different entities. Expensive Focus on current businesses, not future planning Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (6 of 8) Figure 2.3 The Product/Market Expansion Grid Copyright © 2021, 2018, 2016 Pearson Education, Inc. Market penetration involves making more sales to current customers without changing its original product such as by adding new stores in current market areas to make it easier for customers to visit. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Market development involves identifying and developing new markets for its current products. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Product development involves offering modified or new products to current markets such as by moving into new product categories. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Diversification involves starting up or buying businesses beyond its current products and markets. For example, the company could acquire a company that operates in different market segments with a different product mix. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (7 of 8) Developing Strategies for Growth and Downsizing Strategies for growth: To maintain its incredible growth, Starbucks has brewed up an ambitious, multipronged growth strategy. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing The Business Portfolio (8 of 8) Developing Strategies for Growth and Downsizing Downsizing is when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 3 Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Planning Marketing: Partnering to Build Customer Relationships (1 of 3) 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. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Planning Marketing: Partnering to Build Customer Relationships (2 of 3) Partnering with Other Company Departments The value chain: Walmart’s ability to help you “Save Money. Live Better.” by offering the right products at lower prices depends on the contributions of people in all of the company’s departments. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Planning Marketing: Partnering to Build Customer Relationships (3 of 3) Partnering with Others in the Marketing System Value delivery network is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 4 Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (1 of 7) Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (2 of 7) Customer Value-Driven Marketing Strategy Marketing strategy is the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (3 of 7) Customer Value-Driven Marketing Strategy Market segmentation is the division of a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or marketing mixes. Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (4 of 7) Customer Value-Driven Marketing Strategy Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Differentiation begins the positioning process. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (5 of 7) Customer Value-Driven Marketing Strategy Positioning is arranging for a product to Positioning: Sharable urban occupy a clear, distinctive, and desirable transportation company Lime place relative to competing products from positions itself as “Smart mobility for competing brands and give them the the modern world.” Such simple greatest advantage in their target markets. statements form the backbone of a brand’s marketing strategy. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (6 of 7) Developing an Integrated Marketing Mix Marketing mix is the set of controllable, tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Marketing Strategy and the Marketing Mix (7 of 7) Figure 2.5 The Four Ps of the Marketing Mix Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 5 List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing the Marketing Effort (1 of 4) Figure 2.6 Manging Marketing: Analysis, Planning, Implementation, and Control Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing the Marketing Effort (2 of 4) Figure 2.7 SW OT Analysis: Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T) Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing the Marketing Effort (3 of 4) Market Planning—Parts of a Marketing Plan Executive summary Marketing situation Threats and opportunities Objectives and issues Marketing strategy Action programs Budgets Controls Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing the Marketing Effort (4 of 4) Marketing Implementation Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives Addresses who, where, when, and how Copyright © 2021, 2018, 2016 Pearson Education, Inc. Measuring and Managing Return on Marketing Investment (1 of 2) 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 Copyright © 2021, 2018, 2016 Pearson Education, Inc. Measuring and Managing Return on Marketing Investment (2 of 2) Figure 2.8 Marketing Return on Investment Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2021, 2018, 2016 Pearson Education, Inc.