Principles of Marketing, Arab World Edition PDF

Ch 2 -0 Copyright © 2011 Pearson Education 0  Principles of Marketing, Arab World Edition Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed...

Ch 2 -0 Copyright © 2011 Pearson Education 0  Principles of Marketing, Arab World Edition Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba Presentation prepared by Annelie Moukaddem Baalbaki CHAPTER TWO Company and Marketing Strategy: Partnering to Build Customer Relationships Lecturer: Insert your name here Ch 1 Ch 2 -1 -1 Copyright Copyright © 2011 © 2011 Pearson Pearson Education Education  Company and Marketing Strategy Topic Outline 2.1 g toCompanywide Strategic Planning: Defining Marketing’s Role 2.2 Designing the Business Portfolio 2.3 Planning Marketing: Partnerin Build Customer Relationships 2.4 Marketing Strategy and the Marketing Mix 2.5 Managing the Marketing Effort 2.6 Measuring and Managing Return on Marketing Investment Ch 2 -2 Copyright © 2011 Pearson Education  Companywide Strategic Planning 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. Ch 2 -3 Copyright © 2011 Pearson Education  Companywide Strategic Planning Ch 2 -4 Copyright © 2011 Pearson Education  Companywide Strategic Planning Defining a Market-Oriented Mission The mission statement is the organization’s purpose; what it wants to accomplish in the larger environment. A market-oriented mission statement defines the business in terms of satisfying basic customer needs. Ch 2 -5 Copyright © 2011 Pearson Education  Companywide Strategic Planning Ch 2 -6 Copyright © 2011 Pearson Education  Companywide Strategic Planning Setting Company Objectives and Goals The company needs to turn its mission statement into detailed supporting objectives for each level of management. Ch 2 -7 Copyright © 2011 Pearson Education  Designing the Business Portfolio 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. Ch 2 -8 Copyright © 2011 Pearson Education  Designing The Business Portfolio 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 Ch 2 -9 Copyright © 2011 Pearson Education  Companywide Strategic Planning Analyzing the Current Business Portfolio Ch 2 -10 Copyright © 2011 Pearson Education 4-11 Industry- a group of firms that produces a similar product or service Porter’s 5 forces: Threat of new entrants Rivalry among existing firms Threat of substitute products Bargaining power of buyers Bargaining power of suppliers Relative power of other stakeholders (added) 4-12 4-13 Threat of new entrants- new entrants to an industry bring new capacity, a desire to gain market share and substantial resources 4-14 Entry barrier- an obstruction that makes it difficult for a company to enter an industry Access to distribution Economies of scale channels Product differentiation Cost disadvantages due to Capital requirements size Switching costs Government policies 4-15 Rivalry Among Existing Firms- new entrants to an industry bring new capacity, a desire to gain market share and substantial resources Number of competitors Rate of industry growth Product or service characteristics Amount of fixed costs Capacity Height of exit barriers Diversity of rivals 4-16 Threat of Substitute Products or Services- products that appear different but can satisfy the same need as another product 4-17 Bargaining Power of Buyers- ability of buyers to force prices down, bargain for higher quality, play competitors against each other Large purchases Backward integration Alternative suppliers Low cost to change suppliers Product represents a high percentage of buyer’s cost Buyer earns low profits Product is unimportant to buyer 4-18 Bargaining Power of Suppliers- ability of suppliers to raise prices or reduce quality Industry is dominated by a few companies Unique product or service Substitutes are not readily available Ability to forward integrate Unimportance of product or service to the industry 4-19 Relative Power of Other Stakeholders Government Local communities Creditors Trade associations Special interest groups Unions Shareholders Complementors- products that work well with a firm’s product  Companywide Strategic Planning: The Boston Consulting Group Approach Ch 2 -11 Copyright © 2011 Pearson Education  Companywide Strategic Planning Problems with Matrix Approaches Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning Ch 2 -12 Copyright © 2011 Pearson Education  Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product/market expansion grid is a portfolio planning tool for identifying company growth opportunities through: market penetration market development product development diversification Ch 2 -13 Copyright © 2011 Pearson Education  Companywide Strategic Planning Developing Strategies for Growth and Downsizing Market penetration is a growth strategy increasing sales to current market segments without changing the product. Market development is a growth strategy identifying and developing new market segments for current products. Ch 2 -14 Copyright © 2011 Pearson Education  Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product development is a growth strategy through offering new or modified products to current market segments. Diversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and markets. Ch 2 -15 Copyright © 2011 Pearson Education  Companywide Strategic Planning Developing Strategies for Growth and Downsizing Downsizing is the reducing of the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy. Ch 2 -16 Copyright © 2011 Pearson Education  Planning Marketing: Partnering to Build Customer Relationships 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. Ch 2 -17 Copyright © 2011 Pearson Education  Planning Marketing Partnering with Others in the Marketing System Value delivery network is made up of the company, suppliers, distributors, and ultimately the customers who partner with each other to improve performance of the entire system. Ch 2 -18 Copyright © 2011 Pearson Education  Marketing Strategy and the Marketing Mix Ch 2 -19 Copyright © 2011 Pearson Education  Marketing Strategy and the Marketing Mix Customer-Driven Marketing Strategy 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. Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts. Ch 2 -20 Copyright © 2011 Pearson Education  Marketing Strategy and the Marketing Mix Customer-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 the target consumer. Ch 2 -21 Copyright © 2011 Pearson Education  Marketing Strategy and the Marketing Mix 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. Ch 2 -22 Copyright © 2011 Pearson Education  Marketing Strategy and the Marketing Mix Developing an Integrated Marketing Mix Ch 2 -23 Copyright © 2011 Pearson Education  Managing the Marketing Effort Ch 2 -24 Copyright © 2011 Pearson Education  Managing the Marketing Effort Ch 2 -25 Copyright © 2011 Pearson Education  Managing the Marketing Effort Market Planning Parts of a Marketing Plan Ch 2 -26 Copyright © 2011 Pearson Education  Managing the Marketing Effort Marketing Implementation Implementing is the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives. Successful implementation depends on how well the company blends its people, organizational structure, its decision and reward system, and company culture into a cohesive action plan that supports its strategies. Ch 2 -27 Copyright © 2011 Pearson Education  Managing the Marketing Effort Marketing Department Organization Ch 2 -28 Copyright © 2011 Pearson Education  Managing the Marketing Effort Marketing Control Marketing Control is the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved. Operating control Strategic control Ch 2 -29 Copyright © 2011 Pearson Education  Measuring and Managing Return on Marketing Investment Return on Marketing Investment (Marketing ROI) Return on marketing investment (Marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. Marketing ROI provides a measurement of the profits generated by investments in marketing activities. Ch 2 -30 Copyright © 2011 Pearson Education  This work is protected by local and international 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 this site 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. Ch 2 -31 Copyright © 2011 Pearson Education