Company and Marketing Strategy

Companywide Strategic Planning

Strategic Planning• The process of developing and maintaining a

strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

Steps in Strategic Planning

Defining the company mission

Setting company

objectives and goals

Designing the business portfolio

Planning marketing and

other functional strategies

Corporate levelBusiness unit, product, and

market level

1.Defining a Market-Oriented Mission

Mission Statement• A statement of the organization’s purpose—

what it wants to accomplish in the larger environment.

• It should be market oriented and defined in terms of satisfying basic customer needs.

• Its mission is not simply to sell ice cream.

• Its mission is to “make people happy around the world by selling the highest quality, most creative ice cream experience with passion, excellence, and innovation.”

• Its mission is not simply to hold online auctions and trading.

• It aims “to provide a global trading platform where practically anyone can trade practically anything”—with eBay, “shop victoriously!”

• It wants to be a unique Web community in which people can safely shop around, have fun, and get to know each other, for example, by chatting at eBay café.

Mission Statement

• Should be meaningful and specific yet motivating

• Should emphasize the company’s strengths in the marketplace

• Should not be stated as making more sales or profits

Market-Oriented Business DefinitionCompany Product-Oriented

DefinitionMarket-Oriented Definition

Amazon.com We sell books, videos, CDs, toys, consumer electronics, hardware, housewares, and other product online.

We make the internet buying experience fast, easy, and enjoyable—we’re the place where you can find and discover anything you want to buy online .

L’Oreal We make cosmetics. We sell lifestyle and self-expression; success and status, memories, hopes, and dreams.

Adidas We sell athletic shoes and apparel.

We strive to be the global leader in the sporting goods industry with sports brands built on a passion for sports and sporting lifestyle.

Tesco We run discount stores. We deliver low prices everyday and give ordinary folks the chance to buy the same things as rich people.

2. Setting Company Objectives and Goals

• Turn company’s mission into detailed supporting objectives for each level of management.

3. Designing the Business Portfolio

Business portfolio• The collection of businesses and products that

make up the company

• The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.

2 Steps in Business Portfolio Planning

1. Analyzing the current business portfolioPortfolio analysis• The process by which management evaluates the

products and businesses that make up the company

Growth-share matrix• A portfolio-planning method that evaluates a

company’s strategic business units in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs.

The BCG Growth Share Matrix

2 Steps in Business Portfolio Planning

2. Developing strategies for growth and downsizing

Market penetration Product development

Market development Diversification

Existing market

Existing products

New products

New market

4 Strategic Alternatives

• Market penetration: a marketing strategy that tries to increase market share among existing customers

• Market development: a marketing strategy that entails attracting new customers to existing products

• Product development: a marketing strategy that entails the creation of new products for current customers

• Diversification: a strategy of increasing sales by introducing new products into new markets

Ansoff’s Strategic Opportunity Matrix

Present Product New Product

Present Market Market penetration: McDonald’s sells more Happy Meals with Disney movie promotions

Product development:McDonald’s introduces premium salads and McWater

New Market Market development: McDonald’s opens restaurants in China

Diversification:McDonald’s introduces line of children’s clothing

Planning Marketing: Partnering to Build Customer Relationships

Value chain• The series of departments that carry out

value-creating activities to design, produce, market, deliver, and support a firm’s products.

Marketers help deliver value to customers:• Learn what customers need• Stock the stores’ shelves with the desired

products at the unbeatable low prices• Prepare advertising and merchandising

programs• assist shopper with customer service

Marketers need help from other departments to effectively deliver value to customers:

• Purchasing: skill in developing the needed suppliers and buying from them at low cost

• IT: provide fast and accurate info. About products are selling in each store

• Operations: provide effective low-cost merchandising handling

Partnering with Others in the Marketing System

Value delivery network• The network made up of the company,

suppliers, distributors, and ultimately, customer who partner with each other to improve the performance of the entire system

• Knows the importance of building close relationships with its suppliers

• Puts “achieve supplier satisfaction” as a part of its mission statement

What Toyota Do with Suppliers:

• Learns about their businesses• Conducts joint improvement activities• Helps train supplier employees• Gives daily performance feedback• Actively seeks out supplier concerns• Recognizes top performers with annual performance award

Those approaches to suppliers help Toyota:

• Increase the degree of trust, open, honest communication between them

• Improve its own quality• Reduce costs of production• Develop new product quickly

Marketing Strategy and the Marketing Mix

Marketing strategy• The marketing logic by which the business unit

hopes to create customer value and achieve profitable customer relationships

• It involves 2 key questions:– Which customers will we serve (segmentation and

targeting)?– How will we create value for them (differentiation and

positioning)?

Managing Marketing Strategies and the Marketing Mix

Then the company designs a marketing

program-the 4Ps-that delivers the

intended value to target consumers

At its core, marketing is all about creating customer value and profitable customer

relationships

Market Segmentation

• Market: people or organizations with needs or wants and the ability and willingness to buy

• Market Segment: a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Market Segmentation: the process of dividing a market into meaningful, relatively similar, and identifiable segments or groupsPurpose: to enable the marketer to tailor marketing mixes to meet the needs of one or more specific segments

Importance of Market Segmentation

Market Segmentation

More precise definition of

consumer needs and wants

More accurate marketing objectives

Improve resource

allocation

Better marketing result

Targeting

• Target Market: a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

Undifferentiated (mass) marketing

Differentiated (segmented)

marketing

Concentrated (niche) marketing

Micro (local or individual) marketing

Targeting broadly

Targeting narrowly

Positioning

• Positioning: developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general

• Position: the place of product, brand, or group of products occupies in consumers’ minds relative to competing offerings

• Product differentiation: a positioning strategy that some firms use to distinguish their product from those of competitors

Positioning of Procter & Gamble Detergents

Brand Positioning

Tide Tough, powerful cleaning

Cheer Tough cleaning and color protection

Bold Detergent plus fabric softener

Gain Sunshine scent and odor-removing formula

Era Stain treatment and stain removal

Dash Value brand

Oxide Bleach-boosted formula, whitening

Solo Detergent and fabric softener in liquid form

Dreft Outstanding cleaning for baby clothes, safe for tender skin

Ivory Snow Fabric and skin safety on baby clothes and fine washables

Ariel Tough cleaner, aimed at Hispanic market

Positioning Bases

• Attribute: feature or benefit of product– Kleenex® Anti-Viral* Tissue– Kleenex® Anti-Viral* tissues' specially treated middle layer kills cold and

flu viruses.

• Price & quality: price as the indication of value

• Use or application: • Kahlua liqueur • used advertising • to point out 228 ways to consume the product

Positioning Bases

• Product user: personality of type of user– Imac positions itself as the best PC for artworks

• Product class: product is positioned against others that provide the same class of benefits.

Positioning Bases

• Competitor: Avis rental car positioning as “no.2” compared to Hertz and 7up with “the uncola”

• Emotion: focus on how product makes customers feel

– “Just Do It” campaign didn’t tell consumers what “it” was, but most got emotional message of achievement & courage

Marketing Mix

• A unique blend of product, place, promotion, and pricing strategies (often referred to as the four Ps) designed to produce mutually satisfying exchanges with a target market

4Ps 4Cs

Product Customer Solution

Price Customer Cost

Place Convenience

Promotion Communication

Marketing Mix

• Product strategies: the product includes not only the physical unit but also its package, warranty, after-sale service, brand name, company image, value, and etc.

Product can be… Tangible goods: computersIdeas: consultant offeredServices: medical care

Products should also offer customer value

Marketing Mix

• Place strategies: are concerned with making product available when and where customers want them.

It is a physical distribution which involves all the business activities concerned with storing and transporting raw materials or finished products

The goal is to make sure products arrive in usable condition at designated places when needed

Marketing Mix

• Promotion strategies: includes advertising, public relations, sales promotion, and personal selling

Promotion’s role in the marketing mix is to bring about mutually satisfying exchanges with target markets by informing, educating, persuading, and reminding them of the benefits of an organization or a product

Good promotion strategy can dramatically increase sales, however, not all good strategies guarantee success

Marketing Mix

• Pricing strategies: price is what a buyer must give up to obtain a product

It is often the most flexible of the 4 marketing mix elements—the quickest element to change

Price is an important competitive weapon and is very important to the organization because price multiplied by the number of units sold equals to total revenue for the firm