Company And Marketing Strategy PDF

**COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD CUSTOMER ENGAGEMENT, VALUE, AND RELATIONSHIPS** MARKETING Starter: Chapter 2 ---------------------------- **NIKE: Building Customer Value through Brand Engagement and Community** ### Synopsis Over the past 55 years, Nike has used innovative m...

**COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD CUSTOMER ENGAGEMENT, VALUE, AND RELATIONSHIPS** MARKETING Starter: Chapter 2 ---------------------------- **NIKE: Building Customer Value through Brand Engagement and Community** ### Synopsis Over the past 55 years, Nike has used innovative marketing and product innovation to revolutionize sports marketing. Nike outspent competitors on big-name endorsements, splashy promotional events, and big budget ads to build image and market share. Nike's mission is to "bring inspiration and innovation to every athlete in the world." Nike ranks at or near the top of almost every list of innovative users of digital marketing, and it uses its social media presence to engage customers deeply, to get customers to talk to each other about the brand, and weave the brand into their daily lives. It recently featured controversial and long-time Nike athlete Colin Kaepernick, the NFL player who started the movement of taking a knee instead of standing during the pregame National Anthem in protest of police brutality against people of color, which resulted in a dramatic social media response. Nike mentions spiked 1,400 percent to 2.7 million in the 24 hours after the ad aired, an estimated \$43 million worth of media exposure. Online sales grew 31% in the 24 hour period following the release of the Kaepernick ad. ### Discussion Objective A brief discussion of the Nike story will help to solidify the importance of creating a company-wide marketing strategy that is customer focused, and revamping it when necessary. This theme began in Chapter 1 and continues in Chapter 2. It also provides a nice opportunity to examine overall company strategy and mission, brand purpose, and their relationship to marketing strategy and activities. ### Starting the Discussion To make the chapter-opening Nike story more personally relevant to the class, begin by asking, "How many of you purchase Nike products? Has Nike changed how it communicates about its offerings in the time you have been buying its products? In what way?" After a brief opening discussion, go online with students to explore Nike's website (www.nike.com). Direct the discussion using the following questions. As always, keep the discussion moving with plenty of student input. ### Discussion Questions 1. 2. 3. Chapter Overview ---------------- Use Power Point Slide 2-1 here In the first chapter, we explored the marketing process by which companies create value for the consumer in order to capture value in return. In this chapter, we look at designing customer-driven marketing strategies and constructing marketing programs. First, we look at the organization's overall strategic planning, which guides marketing strategy and planning. Next, we discuss how marketing partners work closely with others inside and outside the firm to create value for customers. We then examine marketing strategy and planning---how marketers choose target markets, position their market offerings, develop a marketing mix, and manage their marketing programs. Lastly, we will look at the step of measuring and managing return on marketing investment. Chapter **OBJECTIVES** ---------------------- Use Power Point Slide 2-2 here 1. Explain company-wide strategic planning and its four steps. 2. Discuss how to design business portfolios and develop growth strategies. 3. Explain marketing's role under strategic planning and how marketing works with its partners to create and deliver customer value. 4. Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence them. 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. **Chapter Outline** ------------------- +-----------------------+-----------------------+-----------------------+ | p\. 38 | **INTRODUCTION** | p\. 37 | | | | | | PPT 2-3 | Nike's outstanding | Photo: Nike swoosh | | | success results from | | | | creating deep | | | | brand-customer | | | | engagement, valued | | | | brand experiences, | | | | and close brand | | | | community with and | | | | among customers. | | +=======================+=======================+=======================+ | | - **Assignments, | | | | Resources** | | +-----------------------+-----------------------+-----------------------+ | | - **Opening | | | | Vignette | | | | Questions** | | | | | | | | 1. Discuss Nike's | | | | marketing | | | | strategy in terms | | | | of delivering | | | | increased | | | | customer value. | | | | What is | | | | inherently better | | | | about the current | | | | Nike marketing | | | | from the | | | | customer's point | | | | of view? | | | | | | | | 2. What new | | | | marketing | | | | strategies might | | | | Nike develop to | | | | remain fresh and | | | | relevant? | | +-----------------------+-----------------------+-----------------------+ | p\. 38 | **Explain | Learning Objective 1 | | | company-wide | | | PPT 2-4 | strategic planning | p\. 38 | | | and its four steps.** | | | PPT 2-5 | | Key Term: | | | **COMPANY-WIDE | | | PPT 2-6 | STRATEGIC PLANNING: | Strategic planning | | | DEFINING MARKETING'S | | | | ROLE** | p\. 39 | | | | | | | The hard task of | Figure 2.1: | | | selecting an overall | | | | company strategy for | Steps in Strategic | | | long-run survival and | Planning | | | growth is called | | | | strategic planning. | | | | | | | | **Strategic | | | | planning** is the | | | | process of developing | | | | and maintaining a | | | | strategic fit between | | | | the organization's | | | | goals and | | | | capabilities and its | | | | changing market | | | | opportunities. | | | | | | | | Strategic planning | | | | sets the stage for | | | | the rest of the | | | | planning in the firm. | | | | | | | | Companies typically | | | | prepare annual plans, | | | | long-range plans, and | | | | strategic plans. | | | | | | | | At the corporate | | | | level, the company | | | | starts the strategic | | | | planning process by | | | | defining its overall | | | | purpose and mission | | | | (see Figure 2.1). It | | | | then creates detailed | | | | supporting objectives | | | | that guide the entire | | | | company. Next, | | | | headquarters decides | | | | what portfolio of | | | | businesses and | | | | products is best for | | | | the company and how | | | | much support to give | | | | each one. In turn, | | | | each business and | | | | product develops | | | | detailed marketing | | | | and other | | | | departmental plans | | | | that support the | | | | company-wide plan. | | | | Thus, marketing | | | | planning occurs at | | | | the business-unit, | | | | product, and market | | | | levels. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignment, | | | | Resources** | | | | | | | | Use *Discussion | | | | Question 2-1* here | | | | | | | | - **Troubleshooting | | | | Tip** | | +-----------------------+-----------------------+-----------------------+ | p\. 38 | **Defining a | p\. 39 | | | Market-Oriented | | | PPT 2-7 | Mission** | Key Term: Mission | | | | statement | | PPT2-8 | Many organizations | | | | develop formal | p\. 40 | | | mission statements. A | | | | **mission statement** | Table 2.1: Product- | | | is a statement of the | versus | | | organization's | Market-Oriented | | | purpose---what it | Business Definitions | | | wants to accomplish | | | | in the larger | | | | environment. | | | | | | | | A clear mission | | | | statement acts as an | | | | "invisible hand" that | | | | guides people in the | | | | organization. | | | | | | | | A market-oriented | | | | mission statement | | | | defines the business | | | | in terms of | | | | satisfying basic | | | | customer needs. | | | | | | | | Management should | | | | avoid making its | | | | mission too narrow or | | | | too broad. | | | | | | | | Missions should be | | | | realistic, specific, | | | | consistent with the | | | | market environment, | | | | based on the | | | | company's distinctive | | | | competencies, and | | | | motivating. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | +-----------------------+-----------------------+-----------------------+ | p\. 39 | **Setting Company | p\. 40 | | | Objectives and | | | PPT 2-9 | Goals** | Photo: CVS Health | | | | | | PPT 2-10 | The company's mission | Learning Objective 2 | | | needs to be turned | | | PPT 2-11 | into detailed | p\. 42 | | | supporting objectives | | | p\. 42 | for each level of | Key Term: Business | | | management. | portfolio | | PPT 2-12 | | | | | The mission leads to | | | | a hierarchy of | | | | objectives, including | | | | business objectives | | | | and marketing | | | | objectives. | | | | | | | | Marketing strategies | | | | and programs must be | | | | developed to support | | | | these marketing | | | | objectives. | | | | | | | | Use *Real Marketing | | | | 2.1* here | | | | | | | | **Review Learning | | | | Objective 1:** | | | | Explain company-wide | | | | strategic planning | | | | and its four steps. | | | | | | | | **Discuss how to | | | | design business | | | | portfolios and | | | | develop growth | | | | strategies.** | | | | | | | | **Designing the | | | | Business Portfolio** | | | | | | | | A **business | | | | portfolio** is the | | | | collection of | | | | businesses and | | | | products that make up | | | | the company. | | | | | | | | The best portfolio is | | | | the one that best | | | | fits the company's | | | | strengths and | | | | weaknesses to | | | | opportunities in the | | | | environment. | | +-----------------------+-----------------------+-----------------------+ | p\. 43 | **Analyzing the | p\. 43 | | | Current Business | | | PPT 2-13 | Portfolio** | Key Terms: Portfolio | | | | analysis | | PPT 2-14 | The major activity in | | | | strategic planning is | p\. 43 | | PPT 2-15 | business **portfolio | | | | analysis**, whereby | Key Term: | | | management evaluates | Growth-share matrix | | | the products and | | | | businesses making up | p\. 43 | | | the company. | | | | | Figure 2.2: The BCG | | | The first step in | Growth-Share Matrix | | | business portfolio | | | | analysis is to | | | | identify the key | | | | businesses that make | | | | up the company, the | | | | strategic business | | | | units (SBUs). An SBU | | | | can be a company | | | | division, a product | | | | line within a | | | | division, or a single | | | | product or brand. | | | | | | | | The next step in | | | | business portfolio | | | | analysis calls for | | | | management to assess | | | | the attractiveness of | | | | its various SBUs and | | | | decide how much | | | | support each | | | | deserves. | | | | | | | | Most standard | | | | portfolio-analysis | | | | methods evaluate SBUs | | | | on two important | | | | dimensions---the | | | | attractiveness of the | | | | SBU's market or | | | | industry and the | | | | strength of the SBU's | | | | position in that | | | | market or industry. | | | | | | | | ***The Boston | | | | Consulting Group | | | | Approach.*** The | | | | best-known | | | | portfolio-planning | | | | method was developed | | | | by the Boston | | | | Consulting Group. | | | | | | | | This matrix defines | | | | four types of SBUs: | | | | | | | | - Stars: | | | | high-growth | | | | market, | | | | high-share | | | | product | | | | | | | | - Cash cows: | | | | low-growth | | | | market, | | | | high-share | | | | product | | | | | | | | - Question marks: | | | | low-share | | | | product, | | | | high-growth | | | | market | | | | | | | | - Dogs: low-share | | | | product, | | | | low-growth market | | | | | | | | Once it has | | | | classified its SBUs, | | | | the company must | | | | determine what role | | | | each will play in the | | | | future. | | | | | | | | The company can | | | | invest more in the | | | | business unit in | | | | order to grow its | | | | share. It can invest | | | | just enough to hold | | | | the SBU's share at | | | | the current level. It | | | | can harvest the SBU, | | | | milking its | | | | short-term cash flow | | | | regardless of the | | | | long-term effect. Or, | | | | it can divest the SBU | | | | by selling it or | | | | phasing it out. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | | | | | | | | | | | | | | | - **Troubleshooting | | | | Tip** | | +-----------------------+-----------------------+-----------------------+ | p\. 46 | ***Problems with | p\. 44 | | | Matrix Approaches*** | | | PPT 2-16 | | Photo: ESPN | | | Portfolio-analysis | | | p\. 45 | approaches have | p\. 45 | | | limitations. | | | PPT 2-17 | | Figure 2.3: The | | | - They can be | Product/Market | | PPT 2-18 | difficult, | Expansion Grid | | | time-consuming, | | | | and costly to | p\. 45 | | | implement. | | | | | Key Term: | | | - Management may | Product/market | | | find it difficult | expansion grid | | | to define SBUs | | | | and measure | p\. 45 | | | market share and | | | | growth. | Key Terms: Market | | | | penetration, market | | | - These approaches | development, product | | | focus on | development, | | | classifying | diversification | | | current | | | | businesses but | p\. 46 | | | provide little | | | | advice for future | Photo: Starbucks | | | planning. | | | | | | | | Because of such | | | | problems, many | | | | companies have | | | | dropped formal matrix | | | | methods in favor of | | | | more customized | | | | approaches that are | | | | better suited to | | | | their specific | | | | situations. | | | | | | | | **Developing | | | | Strategies for Growth | | | | and Downsizing** | | | | | | | | Designing the | | | | business portfolio | | | | involves finding | | | | businesses and | | | | products the company | | | | should consider in | | | | the future. | | | | | | | | Marketing has the | | | | main responsibility | | | | for achieving | | | | profitable growth for | | | | the company. | | | | | | | | Marketing must | | | | identify, evaluate, | | | | and select market | | | | opportunities and lay | | | | down strategies for | | | | capturing them. The | | | | product/market | | | | expansion grid looks | | | | for new | | | | opportunities. | | | | | | | | The **product/market | | | | expansion grid** is | | | | shown in Figure 2.3. | | | | | | | | - **Market | | | | penetration** | | | | involves making | | | | more sales to | | | | current customers | | | | without changing | | | | the product. | | | | | | | | - **Market | | | | development** | | | | involves | | | | identifying and | | | | developing new | | | | markets for its | | | | current products. | | | | | | | | - **Product | | | | development** | | | | involves offering | | | | modified or new | | | | products to | | | | current markets. | | | | | | | | - **Diversification | | | | ** | | | | involves a | | | | company starting | | | | up or buying | | | | businesses | | | | outside of its | | | | current products | | | | and markets. | | +-----------------------+-----------------------+-----------------------+ | PPT 2-19 | Companies must also | | | | develop strategies | | | | for downsizing their | | | | businesses. The | | | | company must | | | | carefully prune, | | | | harvest, or divest | | | | brands or businesses | | | | that no longer fit | | | | its overall strategy | | | | or are unprofitable. | | | | | | | | **Review Learning | | | | Objective 2:** | | | | Discuss how to design | | | | business portfolios | | | | and develop growth | | | | strategies. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | | | | | | | | | | | | | | | - **Troubleshooting | | | | Tip** | | +-----------------------+-----------------------+-----------------------+ | p\. 47 | **Explain marketing's | Learning Objective 3 | | | role in strategic | | | PPT 2-20 | planning and how | p\. 47 | | | marketing works with | | | p\. 47 | its partners to | Key Term: Value chain | | | create and deliver | | | PPT 2-21 | customer value.** | p\. 47 | | | | | | PPT 2-22 | **PLANNING MARKETING: | Photo: Walmart | | | PARTNERING TO BUILD | | | p\. 48 | CUSTOMER | p\. 48 | | | RELATIONSHIPS** | | | PPT 2-23 | | Key Term: Value | | | Within each business | delivery network | | | unit, more detailed | | | | planning takes place. | | | | The major functional | | | | departments in each | | | | unit must work | | | | together to | | | | accomplish strategic | | | | objectives. | | | | | | | | Marketing provides a | | | | guiding | | | | philosophy---the | | | | marketing | | | | concept---that | | | | suggests that company | | | | strategy should | | | | revolve around | | | | building profitable | | | | relationships with | | | | important customer | | | | groups. | | | | | | | | Marketing provides | | | | inputs to strategic | | | | planners by helping | | | | to identify | | | | attractive market | | | | opportunities and by | | | | assessing the firm's | | | | potential to take | | | | advantage of them. | | | | | | | | Marketing designs | | | | strategies for | | | | reaching the unit's | | | | objectives. | | | | | | | | **Partnering with | | | | Other Company | | | | Departments** | | | | | | | | Each company | | | | department can be | | | | thought of as a link | | | | in the company's | | | | value chain. | | | | | | | | A **value chain** is | | | | the series of | | | | departments that | | | | carry out | | | | value-creating | | | | activities to design, | | | | produce, market, | | | | deliver, and support | | | | the firm's products. | | | | | | | | A company's value | | | | chain is only as | | | | strong as its weakest | | | | link. | | | | | | | | Success depends on | | | | how well each | | | | department performs | | | | its work of adding | | | | customer value and on | | | | how well the | | | | activities of various | | | | departments are | | | | coordinated. | | | | | | | | In practice, | | | | departmental | | | | relations are full of | | | | conflicts and | | | | misunderstandings. | | | | | | | | **Partnering with | | | | Others in the | | | | Marketing System** | | | | | | | | The firm needs to | | | | look beyond its own | | | | value chain and into | | | | the value chains of | | | | its suppliers, | | | | distributors, and, | | | | ultimately, its | | | | customers. | | | | | | | | More companies today | | | | are partnering with | | | | other members of the | | | | supply chain to | | | | improve the | | | | performance of the | | | | customer **value | | | | delivery network**. | | | | | | | | Increasingly, today's | | | | competition no longer | | | | takes place between | | | | individual | | | | competitors. Rather, | | | | it takes place | | | | between the entire | | | | value-delivery | | | | networks created by | | | | these competitors. | | | | | | | | **Review Learning | | | | Objective 3:** | | | | Explain marketing's | | | | role in strategic | | | | planning and how | | | | marketing works with | | | | its partners to | | | | create and deliver | | | | customer value. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | +-----------------------+-----------------------+-----------------------+ | p\. 48 | **Describe the | Learning Objective 4 | | | elements of a | | | PPT 2-24 | customer value-driven | p\. 48 | | | marketing strategy | | | PPT 2-25 | and mix and the | Figure 2.4: Managing | | | forces that influence | Marketing Strategies | | p\. 48 | them.** | and the Marketing Mix | | | | | | PPT 2-26 | **MARKETING STRATEGY | p\. 48 | | | AND THE MARKETING | | | PPT 2-27 | MIX** | Key Term: | | | | | | | Marketing's role and | Marketing strategy | | | activities are shown | | | | in Figure 2.4, which | p\. 49 | | | summarizes the major | | | | activities involved | Key Terms: Market | | | in managing marketing | segmentation, market | | | strategy and the | segment | | | marketing mix. | | | | | | | | **Marketing | | | | strategy** is the | | | | marketing logic by | | | | which the company | | | | hopes to achieve | | | | profitable customer | | | | relationships. | | | | | | | | Customer Value-Driven | | | | Marketing Strategy | | | | ===================== | | | | =================== | | | | | | | | Companies know that | | | | they cannot | | | | profitably serve all | | | | consumers in a given | | | | market---at least not | | | | all consumers in the | | | | same way. | | | | | | | | **Market | | | | Segmentation** | | | | | | | | The process of | | | | dividing a market | | | | into distinct groups | | | | of buyers with | | | | different needs, | | | | characteristics, or | | | | behaviors who might | | | | require separate | | | | products or marketing | | | | programs is called | | | | **market | | | | segmentation**. | | | | | | | | A **market segment** | | | | consists of consumers | | | | who respond in a | | | | similar way to a | | | | given set of | | | | marketing efforts. | | +-----------------------+-----------------------+-----------------------+ | | - **Troubleshooting | | | | Tip** | | +-----------------------+-----------------------+-----------------------+ | p\. 49 | **Market Targeting** | p\. 49 | | | | | | PPT 2-28 | **Market targeting** | Key Term: | | | involves evaluating | | | PPT 2-29 | each market segment's | Market targeting | | | attractiveness and | | | | selecting one or more | p\. 50 | | | segments to enter. | | | | | Key Term: Positioning | | | A company should | | | | target segments in | p\. 50 | | | which it can | | | | profitably generate | Photo: Lime | | | the greatest customer | | | | value and sustain it | p\. 50 | | | over time. | | | | | Key Term: | | | **Market | Differentiation | | | Differentiation and | | | | Positioning** | Marketing mix | | | | | | | Differentiation | | | | begins the | | | | positioning process. | | | | To gain competitive | | | | advantage, the | | | | company must offer | | | | value to target | | | | consumers. This is | | | | accomplished through | | | | product | | | | **differentiation**-- | | | | -actually | | | | differentiating the | | | | company's market | | | | offering so that it | | | | gives consumers more | | | | value. | | | | | | | | A product's position | | | | is the place the | | | | product occupies | | | | relative to | | | | competitors in | | | | consumers' minds. | | | | | | | | Marketers want to | | | | develop unique market | | | | positions for their | | | | products. | | | | | | | | **Positioning** is | | | | arranging for a | | | | product to occupy a | | | | clear, distinctive, | | | | and desirable place | | | | relative to competing | | | | products in the minds | | | | of target customers. | | +-----------------------+-----------------------+-----------------------+ | | - **Troubleshooting | | | | Tip** | | +-----------------------+-----------------------+-----------------------+ | p\. 50 | **Developing an | p\. 50 | | | Integrated Marketing | | | PPT 2-30 | Mix** | Key Term: Marketing | | | | mix | | PPT 2-31 | The **marketing mix** | | | | is the set of | p\. 51 | | | tactical marketing | | | | tools that the firm | Real Marketing 2.2 | | | blends to produce the | | | | response it wants in | Photo: Tesla | | | the target market. | | | | This is described in | p\. 53 | | | Figure 2.5. | | | | | Figure 2.5: The Four | | | *Product* refers to | P's of the Marketing | | | the | Mix | | | goods-and-services | | | | combination the | | | | company offers to the | | | | target market. | | | | | | | | *Price* is the amount | | | | of money customers | | | | must pay to obtain | | | | the product. | | | | | | | | *Place* includes | | | | company activities | | | | that make the product | | | | available to target | | | | consumers. | | | | | | | | *Promotion* refers to | | | | activities that | | | | communicate the | | | | merits of the product | | | | and persuade target | | | | customers to buy it. | | | | | | | | An effective | | | | marketing program | | | | blends all of the | | | | marketing mix | | | | elements into a | | | | coordinated program | | | | designed to achieve | | | | the company's | | | | marketing objectives | | | | by delivering value | | | | to consumers. | | | | | | | | Some critics feel | | | | that the four Ps may | | | | omit or | | | | under­emphasize | | | | certain important | | | | activities. | | | | | | | | From the buyer's | | | | viewpoint, in this | | | | age of customer | | | | relationships, the | | | | four Ps might be | | | | better described as | | | | the four As: | | | | | | | | - Acceptability | | | | | | | | - Affordability | | | | | | | | - Accessibility | | | | | | | | - Awareness | | | | | | | | **Review Learning | | | | Objective 4:** | | | | Describe the elements | | | | of a customer | | | | value-driven | | | | marketing strategy | | | | and mix and the | | | | forces that influence | | | | them. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | +-----------------------+-----------------------+-----------------------+ | p\. 53 | **List the marketing | Learning Objective 5 | | | management functions, | | | PPT 2-32 | including the | p\. 53 | | | elements of a | | | p\. 53 | marketing plan, and | Figure 2.6: Managing | | | discuss the | Marketing: Analysis, | | PPT 2-33 | importance of | Planning, | | | measuring and | Implementation, and | | PPT 2-34 | managing marketing | Control | | | return on | | | | investment** | p\. 54 | | | | | | | **MANAGING THE | Key Term: | | | MARKETING EFFORT AND | | | | MARKETING RETURN ON | SWOT analysis | | | INVESTMENT** | | | | | p\. 54 | | | Managing the | | | | marketing process | Figure 2.7: SWOT | | | requires the four | Analysis: Strengths | | | marketing management | (S), Weaknesses (W), | | | functions shown in | Opportunities (O), | | | Figure 2.6. | and Threats (T) | | | | | | | - Analysis | | | | | | | | - Planning | | | | | | | | - Implementation | | | | | | | | - Control | | | | | | | | **Marketing | | | | Analysis** | | | | | | | | Managing the | | | | marketing function | | | | begins with a | | | | complete analysis of | | | | the company's | | | | situation. | | | | | | | | The company must | | | | analyze its markets | | | | and marketing | | | | environment to find | | | | attractive | | | | opportunities and | | | | avoid environmental | | | | threats. | | | | | | | | The marketer should | | | | conduct a **SWOT | | | | analysis** by which | | | | it evaluates the | | | | company's overall | | | | strengths, | | | | weaknesses, | | | | opportunities, and | | | | threats. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | | | | | | | Use *Critical | | | | Thinking Exercise | | | | 2-7* here | | +-----------------------+-----------------------+-----------------------+ | p\. 54 | **Marketing | p\. 56 | | | Planning** | | | PPT 2-35 | | Table 2.2: Contents | | | Marketing planning | of a Marketing Plan | | | involves deciding on | | | | marketing strategies | | | | that will help the | | | | company attain its | | | | overall strategic | | | | objectives. | | | | | | | | A detailed marketing | | | | plan is needed for | | | | each business, | | | | product, or brand. | | | | | | | | Table 2.2 outlines | | | | the major sections of | | | | a typical product or | | | | brand plan. See | | | | Appendix 1 for a | | | | sample marketing | | | | plan. | | | | | | | | A **marketing | | | | strategy** consists | | | | of specific | | | | strategies: target | | | | markets, positioning, | | | | the marketing mix, | | | | and marketing | | | | expenditure levels. | | +-----------------------+-----------------------+-----------------------+ | p\. 55 | **Marketing | p\. 55 | | | Implementation** | | | PPT 2-36 | | Key Term: Marketing | | | **Marketing | implementation | | p\. 55 | implementation** is | | | | the process that | p\. 55 | | p\. 57 | turns marketing plans | | | | into marketing | Photo: Marketing | | p\. 57 | actions in order to | Planning and Control | | | accomplish strategic | | | p\. 57 | marketing objectives. | p\. 57 | | | | | | PPT 2-37 | Implementation | Key Term: Marketing | | | involves day-to-day, | control | | p\. 58 | month-to-month | | | | activities that | p\. 57 | | PPT 2-38 | effectively put the | | | | marketing plan to | Key Term: Marketing | | | work. | return on investment | | | | (marketing ROI) | | | Implementation | | | | addresses the *who, | p\. 58 | | | where, when*, and | | | | *how.* | Figure 2.8: Marketing | | | | Return on Investment | | | In an increasingly | | | | connected world, | | | | people at all levels | | | | of the marketing | | | | system must work | | | | together to implement | | | | marketing strategies | | | | and plans. | | | | | | | | Successful marketing | | | | implementation | | | | depends on how well | | | | the company blends | | | | its people, | | | | organizational | | | | structure, decision | | | | and reward systems, | | | | and company culture | | | | into a cohesive | | | | action program that | | | | supports its | | | | strategies. | | | | | | | | **Marketing | | | | Department | | | | Organization** | | | | | | | | The company must | | | | design a marketing | | | | organization that can | | | | carry out marketing | | | | strategies and plans. | | | | | | | | The most common form | | | | of marketing | | | | organization is the | | | | *functional | | | | organization.* Under | | | | this organization, | | | | functional | | | | specialists head the | | | | various marketing | | | | activities. | | | | | | | | A company that sells | | | | across the country or | | | | internationally often | | | | uses a *geographic | | | | organization.* | | | | | | | | Companies with many | | | | different products or | | | | brands often create a | | | | *product management | | | | organization.* A | | | | **product manager** | | | | develops and | | | | implements a complete | | | | strategy and | | | | marketing program for | | | | a specific product or | | | | brand. | | | | | | | | For companies that | | | | sell one product line | | | | to many different | | | | types of markets and | | | | customers that have | | | | different needs and | | | | preferences, a | | | | *market* or *customer | | | | management | | | | organization* might | | | | be best. | | | | | | | | A market management | | | | organization is | | | | similar to a product | | | | management | | | | organization. | | | | | | | | Marketing managers | | | | are responsible for | | | | developing marketing | | | | strategies and plans | | | | for their specific | | | | markets or customers. | | | | | | | | Large companies that | | | | produce many | | | | different products | | | | flowing into many | | | | different geographic | | | | and customer markets | | | | usually employ some | | | | combination of the | | | | functional, | | | | geographic, product, | | | | and market | | | | organization forms. | | | | | | | | Many companies are | | | | finding that today's | | | | marketing environment | | | | calls for less focus | | | | on products, brands, | | | | and territories and | | | | more attention on | | | | customers and | | | | customer | | | | relationships. | | | | | | | | More and more | | | | companies are | | | | shifting their brand | | | | management focus | | | | toward customer | | | | management. | | | | | | | | **Marketing Control** | | | | | | | | **Marketing control** | | | | involves evaluating | | | | the results of | | | | marketing strategies | | | | and plans and taking | | | | corrective action to | | | | ensure that | | | | objectives are | | | | attained. | | | | | | | | *Operating control* | | | | involves checking | | | | ongoing performance | | | | against the annual | | | | plan and taking | | | | corrective action | | | | when necessary. Its | | | | purpose is to ensure | | | | that the company | | | | achieves the sales, | | | | profits, and goals | | | | set out in its annual | | | | plan. | | | | | | | | *Strategic control* | | | | involves determining | | | | if the company's | | | | basic strategies are | | | | well matched to its | | | | opportunities. | | | | | | | | Marketing strategies | | | | and programs can | | | | quickly become | | | | outdated, and each | | | | company should | | | | periodically reassess | | | | its overall approach | | | | to the marketplace. | | | | | | | | **MEASURING AND | | | | MANAGING MARKETING | | | | RETURN ON | | | | INVESTMENT** | | | | | | | | Marketing managers | | | | must ensure that | | | | their marketing | | | | dollars are being | | | | well spent. | | | | | | | | In the past, many | | | | marketers spent | | | | freely on expensive | | | | programs, often | | | | without considering | | | | financial return on | | | | spending. In today's | | | | constrained economy, | | | | that is changing. | | | | | | | | In response, | | | | marketers are using | | | | marketing performance | | | | measures such as | | | | **marketing return on | | | | investment** | | | | **(marketing | | | | ROI)**---the net | | | | return from a | | | | marketing investment | | | | divided by the costs | | | | of the marketing | | | | investment. | | | | | | | | A company can assess | | | | return on marketing | | | | in terms of standard | | | | marketing performance | | | | measures, such as | | | | brand awareness, | | | | sales, or market | | | | share. | | | | | | | | Some companies are | | | | combining such | | | | measures into | | | | *marketing | | | | dashboards*---useful | | | | sets of marketing | | | | performance measures | | | | in a single display. | | | | | | | | Increasingly | | | | marketers are using | | | | customer-centered | | | | measures of marketing | | | | impact, such as | | | | customer acquisition, | | | | customer retention, | | | | customer lifetime | | | | value, and customer | | | | equity. | | | | | | | | **Review 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. | | +-----------------------+-----------------------+-----------------------+ | | - **Assignments, | | | | Resources** | | +-----------------------+-----------------------+-----------------------+ **END OF CHAPTER MATERIAL** **Discussion and Critical Thinking** **[Discussion Questions]** 1. Discuss the role marketing plays in the company-wide strategic planning process. (AASCB: Written and Oral Communication) *Answer:* 2. How does a firm evaluate and analyze its business portfolio? (AACSB: Written and Oral Communication; Reflective Thinking) *Answer:* 3. Explain the roles of market segmentation, market targeting, differentiation, and positioning in implementing an effective marketing strategy. (AACSB: Written and Oral Communication) 4. What is an integrated marketing mix, and why is it important for a firm's marketing strategy? How do the 4As relate to the 4Ps? (AACSB: Written and Oral Communication, Reflective Thinking) 5. Why do marketers need to practice constant marketing control? What steps are involved? (AACSB: Written and Oral Communication, Reflective Thinking) 6. What is marketing return on investment (ROI)? Why does it matter? (AACSB: Written and Oral Communication) **[Critical Thinking Exercises]** 7. Apply the product/market expansion grid, shown in Figure 2.3, to Lovepop greeting cards (lovepopcards.com). How can Lovepop apply this grid to manage profitable growth? (AACSB: Written and Oral Communication; Reflective Thinking) 8. Locate the mission statements for the following organizations: (a) USAA, (b) United Airlines, (c) South Carolina State University (SC State), and (d) IKEA. Evaluate each statement using the criteria for creating a sound mission statement. What could be done to improve each organization's mission statement? (AACSB: Written and Oral Communication; Reflective Thinking) *Answer:* 9. Create a mission statement for a nonprofit organization you would be interested in starting. Have another student evaluate your mission statement while you evaluate the other student's statement, suggesting areas for improvement. (AACSB: Written and Oral Communication; Reflective Thinking) **[Applications and Cases]** **[Online, Mobile, and Social Media Marketing: Lush UK Abandons Social Media]** Lush Fresh Handmade Cosmetics UK sells hand-made premium beauty products such as body washes, bath bombs, and face masks through 900 cosmetics shops around the globe. Until recently, it engaged customers with captivating Instagram posts, which contributed to its massive following of more than 570,000 people. Therefore, people were surprised when the company announced it was abandoning social media because it inhibited the firm's ability to engage with fans. The announcement mentioned difficulties associated with talking directly to customers and challenges with changing algorithms the firm had to fight to appear in customers' newsfeeds. "We want social to be more about passions and less about likes," says Lush. Social media platforms order posts by relevancy rather than chronology, which makes it harder for many brands to appear in consumers' social media feeds without paying to be there. 10. How will the market likely respond to Lush's abandoning its social media channels? (AACSB: Written and Oral Communication; Reflective Thinking) 11. As Lush UK implements the change, how can it measure the effects of leaving social media on the achievement of its marketing goals? (AACSB: Written and Oral Communication; Reflective Thinking) **[Marketing Ethics: Creating Value or Distracting Consumers?]** In early 2014, Chipotle Mexican Grill announced that it would stop using genetically modified ingredients (GMOs) in its restaurants. Many observers applauded this move. However, critics of the fast-food chain cited a lack of evidence to support its anti-GMO stance. They suspected that Chipotle's anti-GMO claim was simply a ploy to distract consumers from a larger issue: the company's risky sanitation practices. Chipotle's anti-GMO policies may have won the burrito chain some health-conscious customers, but at the same time customers were becoming sick after eating at some Chipotle locations, calling into question the firm's food handling and safety practices. Steve Ells, founder and co-CEO of Chipotle, said the GMO decision was "another step toward the visions we have of changing the way people think about and eat fast food. Just because food is served fast doesn't mean it has to be made with cheap raw ingredients, highly processed with preservatives and fillers and stabilizers and artificial colors and flavors." However, ridding Chipotle's supply chain of genetically altered components proved difficult. The chain discovered GMOs in basic ingredients such as baking powder, cornstarch, canola and soy oils, cornmeal, and sugar. And many non-GMO ingredients were in short supply. For example, at one point, Chipotle found that it could not supply all its locations with enough non-GMO pork to make carnitas. Given the supply chain challenges, Chipotle decided to use non-GMO products in its food preparation but to continue to serve some soft drinks with sweeteners derived from genetically engineered corn. 12. Has Chipotle's focus on eliminating GMOs created value for its customers? Defend this market strategy. (AACSB: Written and Oral Communication; Ethical Understanding and Reasoning) *Answer:* Students' responses will vary, but they should discuss ways Chipotle impacted its value delivery network, including suppliers, distributors, and customers. Chipotle is trying to deliver the healthiest product to health-conscious consumers. Avoiding GMOs is one strategy to meet customer needs and wants, thus creating value. Under a company-wide strategic plan, marketing must work closely with other departments to form an effective internal company value chain and with other companies in the marketing system to create an external value delivery network that jointly serves customers. Chipotle's decision to source non-GMO food products includes both internal and external value delivery partnerships. 13. From an ethics standpoint, discuss Chipotle's focus on sourcing non-GMO food products rather than attention to food safety. In recent years, the company's oversights in food safety have resulted in numerous customers becoming ill (E. coli, norovirus, and salmonella). Discuss the challenges Chipotle still faces in overcoming the negative image that resulted. (AACSB: Written and Oral Communication; Reflective Thinking; Ethical Understanding and Reasoning) *Answer:* **Marketing by the Numbers: Facebook vs. Google** Facebook and Google are both giants in the tech industry. However, if you compare sales and profits, you would think that Google is a far better marketer than Facebook: Google's sales last year were more than double Facebook's sales and its profits were 40 percent higher. Sales and profits provide information to compare the profitability of companies, but between these numbers is information regarding the efficiency of marketing efforts in creating those sales and profits. Appendix 2: Marketing by the Numbers, Marketing Performance Measures, discusses other marketing profitability measures beyond the return on marketing investment (marketing ROI) measure described in this chapter. Review the appendix to answer the questions using the following information from the two companies' incomes statements (all numbers are in thousands): **Facebook** **Google** --------------------- -------------- --------------- Sales \$55,838,000 \$136,819,000 Gross Profit \$46,483,000 \$77,270,000 Marketing Expenses \$8,472,750 \$18,344,250 Net Income (Profit) \$22,112,000 \$30,736,000 14. Calculate profit margin, net marketing contribution, marketing return on sales (or marketing ROS), and marketing return on investment (or marketing ROI) for each company.