Principles of Marketing
Chapter 2
Company and Marketing Strategy:
Partnering to Build Customer
Relationships
2-1
Company and Marketing Strategy
Learning Objectives
• Objective 1: Explain company-wide strategic planning
and its four steps.
• Objective 2: Discuss how to design business portfolios
and develop growth strategies.
• Objective 3: Explain marketing’s role in strategic
planning and how marketing works with its partners to
create and deliver customer value.
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Company and Marketing Strategy
Learning Objectives
• Objective 4: Describe the elements of a
customer value-driven marketing strategy and
mix, and the forces that influence it.
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Company and Marketing Strategy
Learning Objective 1
• Explain company-wide strategic planning and its
four steps.
Company-Wide Strategic Planning: Defining
Marketing’s Role
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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
• Forging a sound mission begins with the following questions:
• What is our business?
• Who is the customer?
• What do consumers value?
• What should our business be?
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Defining Mission Statement
A statement of organization’s purpose, what it wants
to accomplish in the larger environment.
• A mission statement should:
1. Not be myopic in product terms
2. Be meaningful and specific
3. Be motivating
4. Emphasize the company’s strengths
[Link] be stated as making sales or profits
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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Company and Marketing Strategy
Learning Objective 2
• Discuss how to design business portfolios and develop
growth strategies.
Designing the Business Portfolio
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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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Business portfolio planning involves two steps;
• First, the company must analyze its current
business portfolio
• Second, it must shape the future portfolio
Designing the Business Portfolio
Strategic business units can be a
• Company division
• Product line within a division
• Single product or brand
2-14
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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
Downsizing is reducing the business portfolio
by eliminating products of business units
that are not profitable or that no longer fits
the company’s strategy.
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Company and Marketing Strategy
Learning Objective 3
• Explain marketing’s role in strategic planning and
how marketing works with its partners to create
and deliver customer value.
Planning Marketing: Partnering to Build
Customer Relationships
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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 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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Company and Marketing Strategy
Learning Objective 4
• Describe the elements of a customer value-driven
marketing strategy and mix, and the forces that
influence it
Marketing Strategy and the Marketing Mix
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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.
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Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
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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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