Principles of Marketing: Company and Marketing Strategy PDF

PRINCIPLES OF MARKETING Chapter 2 COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD CUSTOMER ENGAGEMENT, VALUE, AND RELATIONSHIPS LECTURER: FARAH HIDA BINTI SHARIN Objectives Outline List the...

PRINCIPLES OF MARKETING Chapter 2 COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD CUSTOMER ENGAGEMENT, VALUE, AND RELATIONSHIPS LECTURER: FARAH HIDA BINTI SHARIN Objectives Outline List the marketing Explain management Describe the marketing’s role functions, elements of a in strategic including the Explain Discuss how to customer value- planning and elements of a company-wide design business driven how marketing marketing plan, strategic portfolios and marketing works with its and discuss the planning and its develop growth strategy and partners to importance of four steps. strategies. mix and the create and measuring and forces that deliver managing influence it. customer value. marketing return on investment. Strategic Planning Game plan for long- run survival and growth Helps to maintain a strategic fit between its goals and capabilities and changing marketing opportunities. Steps in Strategic Planning  Step 01: Mission Statement Market oriented— Statement of the defined in terms of organization’s satisfying basic purpose customer needs Emphasize the Focus on customers company’s and the customer strengths experience  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 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 as it should be”: food that restaurants. tastes good; food that feels good; food that does good things for them and the world around them. Instagram We are a social networking app for We help people capture and share the world’s moments. posting photos and videos. Home Depot We sell tools and home repair and We empower consumers to achieve the homes of their improvement items. dreams. NPR We are a public radio network. We create a more informed public—one challenged and invigorated by a deeper understanding and appreciation of events, ideas, and cultures. Sephora We are a beauty products retailer. We sell lifestyle and self-expression by helping customers to unlock their beauty potential. Ritz-Carlton Hotels & We rent rooms. We create “The Ritz-Carlton experience”—a memorable Resorts stay that far exceeds guests’ already-high expectations. Walmart We run discount stores. We deliver low prices every day and give ordinary folks the chance to buy the same things as rich people. “Save Money. Live Better.”  Step 2: Setting Company Objectives and Goals  Detailed supporting objectives for each level of management  Setting a hierarchy of objectives ◦Business objectives ◦Marketing objectives  Step 3: Designing a Business Portfolio Collection of businesses and products that make up the company Steps in business portfolio planning: ◦Analyze the firm’s current business portfolio ◦Develop strategies to shape the future portfolio  Mars Inc. is not only the world’s number one candy maker but a world-leading pet nutrition and health- care company.  Portfolio Analysis  Management’s evaluation of the products and businesses that make up the company ◦Identify the strategic business units (SBUs) ◦Assess SBUs’ attractiveness and decide on the level of support SBU deserves  Direct resources toward more profitable businesses and phase down or drop its weaker ones The BCG Growth-Share Matrix  Growth-Share Matrix  Evaluates a company’s SBUs in terms of market growth rate and relative market share  Problems with Growth-Share Matrix ◦Difficult, time consuming, and costly ◦Difficult to define and measure ◦Provides little advice for future planning The Product/Market Expansion Grid  Developing Strategies for Growth In only three decades, Starbucks has grown at an astounding pace from a small Seattle coffee shop to an over $22 billion powerhouse with more than 27,000 retail stores in more than 75 countries.  Downsizing Products or business units that are unprofitable or no longer fit the company’s overall strategy Reasons to abandon products or markets ◦Rapid growth of the company ◦Lack of experience in a market ◦Change in market environment ◦Decline of a particular product  Step 4: Planning Marketing Partnering to Build Customer Relationships Provides a guiding philosophy ◦Marketing concept—company strategy should create customer value and build profitable relationships Provides inputs to strategic planners ◦Identify market opportunities and potential to take advantage of them Designs strategies for reaching the business unit’s objectives  Partnering with Other Company Departments  Company departments are links in the company’s internal value chain.  Firm’s success depends on how well the various departments coordinate their activities.  Marketers should ensure all the departments are customer- focused and develop a smooth functioning value chain. True Value’s Internal Value Chain.  Partnering with Others in the Marketing System Companies should assess value chains ◦Internal departments ◦External: suppliers, distributors and customers Value delivery network is composed of the company, its suppliers, its distributors, and its customers Managing Marketing Strategy and the Marketing Mix  Customer Value-Driven Marketing Strategy  Marketing logic by which the company creates customer value and achieves profitable customer relationships  Integrated marketing mix: product, price, place, and promotion  Activities for best marketing strategy and mix ◦Marketing analysis ◦Planning, implementation, and control  Market Segmentation and Market Targeting Market segmentation Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs Market targeting Evaluating each market segment’s attractiveness and selecting one or more segments to enter  Market Differentiation and Positioning Positioning the product to occupy a clear, distinctive, and desirable place relative to competing products Differentiating the market offering to create superior customer value The entire marketing program should support the chosen positioning strategy. Adidas positions itself with “Nothing is impossible.” This simple statement provides the backbone for its marketing strategy. The Four Ps of the Marketing Mix  Criticisms of the Four Ps  Omits or underemphasizes service products  Needs to include packaging as a product decision  Buyer’s perspective would emphasize the four A s: ◦Acceptability ◦Affordability ◦Accessibility ◦Awareness Managing Marketing: Analysis, Planning, Implementation, and Control  SWOT Analysis: Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T)  Contents of a Marketing Plan (1 of 2) Section Purpose Executive Brief summary of the main goals and summary recommendations Current Gives the market description and the product, marketing competition, and distribution review situation Threats and Helps management to anticipate important opportunities positive or negative developments analysis Objectives and States and discusses marketing objectives and issues key issues  Contents of a Marketing Plan (2 of 2) Section Purpose Marketing Outlines the broad marketing logic and the specifics of strategy target markets, positioning, marketing expenditure levels, and strategies for each marketing mix element Action programs Spells out how marketing strategies will be turned into specific action programs Budgets Details a supporting marketing budget that is a projected profit-and-loss statement Controls Outlines the controls that will be used to monitor progress, allow management to review implementation results, and spot products that are not meeting their goals  Market Implementation  Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives  Addresses the who, where, when, and how of the marketing activities  Marketing Department Organization  Functional organization  Geographic organization  Product management organization  Market or customer management organization  Combination organization  Marketing Control  Measuring and evaluating the results of marketing strategies and plans  Operating control ensures that the company achieves its sales, profits, and other goals.  Strategic control involves looking at whether the company’s basic strategies are well matched to its opportunities.  Measuring and Managing Marketing Return on Investment (ROI)  Net return from a marketing investment divided by the costs of the marketing investment  Assessment measures ◦Standard marketing performance measures ◦Customer-centered measures Marketing Return on Investment