Principles of Marketing
Chapter 2:
Company and
Marketing Strategy
Partnering to Build
Customer Engagement,
Value, and Relationships
2-1
Company-Wide 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.
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Company-Wide Strategic Planning
Steps in Strategic Planning
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Company-Wide Strategic Planning
Defining a Market-Oriented Mission
• The mission statement is the
organization’s purpose; what
it wants to accomplish in the
larger environment.
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2-3
Mission
Mission Statements
Statements
2-3
Market
Market
Oriented
Oriented
Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies
Fit
Fit Market
Market
Environment
Environment
© Copyright 1998 Prentice Hall
Company-Wide Strategic Planning
Setting Company Objectives and Goals
Business objectives
• Build profitable customer relationships
• Invest in research
• Improve profits
Marketing objectives
• Increase market share
• Create local partnerships
• Increase promotion
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Company-Wide Strategic Planning
Setting Company Objectives and Goals
Heinz’s overall objective is
to build profitable customer
relationships by developing
foods “superior in quality,
taste, nutrition, and
convenience” that embrace
its nutrition and wellness
mission.
H.J. Heinz Company
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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.
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Designing the Business Portfolio
Strategic business units can be a
•Company division
•Product line within a division
•Single product or brand
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Designing the Business Portfolio
Analyzing the Current Business Portfolio
Identify strategic business units
(SBUs)
Assess the attractiveness of its
various SBUs
Decide how much support
each SBU deserves
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Designing the Business Portfolio
Analyzing the Current Business Portfolio
Growth-share matrix is a portfolio-planning
method that evaluates a company’s SBUs in
terms of market growth rate and relative
market share.
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Designing the Business Portfolio
Analyzing the Current Business Portfolio
The Boston
Consulting
Group
Approach
FIGURE 2.2 The BCG Growth-Share Matrix
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Designing the Business Portfolio
Problems with Matrix Approaches
• Difficulty in defining SBUs and measuring market
share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning
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Designing the Business Portfolio
Developing Strategies for Growth and Downsizing
Product/market expansion grid looks at new products,
existing products, new markets, and existing markets
for company growth opportunities.
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Designing the Business Portfolio
Developing Strategies for Growth and Downsizing
Existing New
products products
Existing
markets
New
markets
FIGURE 2.3 The Product/Market Expansion Grid
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Designing the Business Portfolio
Developing Strategies for Growth and Downsizing
2-16
Designing the Business Portfolio
Developing Strategies for Growth and Downsizing
Downsizing is when a company must prune,
harvest, or divest businesses that are unprofitable
or that no longer fit the strategy.
• Example: Bangladeshi tech startup Shohoz has
reportedly decided to close its ride-sharing and
food delivery services wing as the company
continues to struggle to make profits
Uber Eats, an on-demand food delivery service
which is a sister concern of Uber, has discontinued
their service in Bangladesh.
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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.
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Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Other Company Departments
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Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Others in the Marketing System
Value delivery network is made up of the
company, suppliers, distributors, and ultimately
customers who partner with each other to
improve performance of the entire system.
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Marketing Strategy and the Marketing Mix
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Marketing Strategy and the Marketing Mix
Customer Value-Driven Marketing Strategy
Marketing strategy is the marketing logic by which
the company hopes to create customer value
and achieve profitable customer relationships.
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Marketing Strategy and the Marketing Mix
Customer Value-Driven Marketing Strategy
Market segmentation is the division of a market into
distinct groups of buyers who have different needs,
characteristics, or behaviors 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.
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Marketing Strategy and the Marketing Mix
Customer Value-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
target consumers.
Differentiation begins the positioning process.
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Marketing Strategy and the Marketing Mix
Customer Value-Driven Marketing Strategy
Positioning: The 100-year-old
Del Monte brand positions
itself as “Bursting with Life:
Made in America. Picked and
packed at the peak of ripeness.
Same essential ingredients as
fresh.”
- Del Monte Corporation
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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.
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Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
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Managing the Marketing Effort
Marketing Analysis
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Managing the Marketing Effort
Marketing Analysis – SWOT Analysis
Internal
External
Positive Negative
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Managing the Marketing Effort
Market Planning—Parts of a Marketing Plan
Executive Marketing Threats and
summary situation opportunities
Objectives and Marketing
issues Action programs
strategy
Budgets Controls
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Managing the Marketing Effort
Marketing Implementation
•Turning marketing strategies and plans into
marketing actions to accomplish strategic
marketing objectives
• Addresses who, where, when, and how
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Managing the Marketing Effort
Marketing Department Organization
Functional
Geographic
Product management
Market
Customer management
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Managing the Marketing Effort
Marketing Control
•Evaluating results
•Taking corrective action
•Operating control
•Strategic control
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Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
• Net return from a marketing investment divided by
the costs of the marketing investment
• Measurement of the profits generated by investments
in marketing activities
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Measuring and Managing
Return on Marketing Investment
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