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Chapter 2- slide 1Copyright 2009 Pearson Education, Inc.Publishing as Prentice Hall

Chapter Two

Company and Marketing Strategy

Partnering to Build Customer

Relationships

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Companywide Strategic Planning

The process of developing and maintaining astrategic fit between the organizations goals and

capabilities and its changing marketing

opportunities

Strategic Planning:

Set of managerial decisions that determines the long

term performance of an organization by determining an

organizations primary objectives and then developingand adopting strategies to achieve those objectives.

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ExternalAudit

InternalAudit

Long-TermObjectives

Generate,Evaluate,

SelectStrategies

ImplementStrategies:Marketing,Fin/Acct,R&D, CIS,MGT

Measure &Evaluate

Performance

Vision&

Mission

Comprehensive Strategic-ManagementModel

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Steps in Strategic Planning

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The mission statement isthe organizations

purpose, what it wants toaccomplish in the largerenvironment

Market-oriented mission

statement defines thebusiness in terms ofsatisfying basic customerneeds

Defining a Market-Oriented Mission

We help you organize the worlds

information and make it

universally accessible and useful.

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Companywide Strategic PlanningCompany Product-Oriented

Definition

Market-Oriented

Definition

Amazon.com We sell books, videos,

CDs, toys, consumer

electronics and other

products online

We make the Internet

buying experience fast,

easy, and enjoyable

were the place where

you can find anddiscover anything you

want to buy online

Disney We run theme parks We create fantasies

a place where dreams

come true and America

still works the way its

supposed to

Nike We sell athletic shoes

and apparel

We bring inspiration

and innovation to every

athlete* in the world

(* if you have a body,

you are an athlete)

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Business

objectives Build profitable

customerrelationships

Invest inresearch

Improve profits

Marketing

objectives Increase

market share

Create local

partnerships Increase

promotion

Setting Company Objectives and Goals

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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 thatmake up the company

Designing the Business Portfolio

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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

Analyzing the Current Business Portfolio

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11

Role of Strategic Business Units

Figure 2.2

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Companywide Strategic Planning:

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Developing Strategies for Growth and DownsizingProduct/Market Expansion Grid Strategies

Marketpenetration

Marketdevelopment

Productdevelopment

Diversification

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Companywide Strategic PlanningDeveloping Strategies for Growth and Downsizing

Product/market expansion grid strategies

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Market penetration is a

growth strategy increasingsales to current marketsegments without changingthe product

Market development is agrowth strategy thatidentifies and develops newmarket segments for currentproducts

Developing Strategiesfor Growth and Downsizing

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Product development is a growth strategy

that offers new or modified products toexisting market segments

Diversification is a growth strategy through

starting up or acquiring businesses outsidethe companys current products and

markets


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Downsizing is the reduction of the businessportfolio by eliminating products or

business units that are not profitable or

that no longer fit the companys overall

strategy


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Planning Marketing

Partnering to Build Customer Relationships

Value chain is a series of

departments that carryout value-creating

activities to design,

produce, market,deliver, and support a

firms products

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Planning Marketing

Partnering to Build Customer Relationships

Value delivery network ismade up of the

company, suppliers,distributors, andultimately customerswho partner with each

other to improveperformance of theentire system

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Managing the Marketing Effort

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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, decision and rewardsystem, and company culture into a cohesive

action plan that supports its strategies

Marketing Implementation

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Functional organization

Geographic organization

Product management organization

Market or customer management

MarketingD

epartment Organization

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Controlling is the measurement and

evaluation of results and the taking of

corrective action as needed

Operating control

Strategic control

Marketing Control

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Measuring and ManagingReturn 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.

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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright Copyright 20102010 Pearson Education, Inc.Pearson Education, Inc.

Publishing as Prentice HallPublishing as Prentice Hall

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