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Marketing: An Introduction Armstrong, Kotler

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1 Marketing: An Introduction Armstrong, Kotler
Chapter Two Strategic Planning and the Marketing Process

2 Looking Ahead Explain companywide strategic planning and its four steps. Discuss business portfolio design and strategies. Explain marketing’s role in strategic planning and the importance of value chains and networks. Describe the elements of a customer-driven marketing strategy and mix. List the marketing management functions and elements of a marketing plan.

3 What Is 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.

4 Steps in Strategic Planning
We look first at the organization’s overall strategic planning, then we discuss how marketers guided by the strategic plan, work closely inside and outside the company to serve customers, finally we examine marketing strategy and planning. Corporate level Define the company mission. Set company objectives and goals. Design the business portfolio. Figure 1 Business unit, product and market levels. Plan marketing and other functional strategies.

5 Figure 1 Steps in Strategic Planning Defining the Company mission
Setting company Objectives & goals Designing the Business portfolio Planning marketing And other functional strategies

6 Corporate level 1- Defining a clear company mission: “Purpose”
Mission Statement of marketing unit ; should be realistic, specific, motivated, and should fit the market environment. Examples; Company Product-oriented definition Market-oriented definition Disney We run theme Parks We create fantasies- a place where is America still works the way it’s supposed to. Mercedes We build cars With a leadership position in the industry comes a responsibility to give back

7 Corporate level 2- Setting company objectives and goals
The company’s mission needs to be turned into detailed supporting objectives for each level of management. Mission leads to business objectives and marketing objectives. Example; if the business over all objective is to “increase the company market share”. marketing strategic plan might increase products availability and promotion, and that may require more sales people and more budget. Figure 2

8 Figure 2 Marketing

9 Market level 4- Developing strategies for growth and downsizing;
3- Designing the Business portfolio The business portfolio is the collection of businesses and products that make up the company. The company must: Analyze its current business portfolio or Strategic Business Units (SBUs). Decide which SBUs should receive more, less or no investment.. Figure 3 4- Developing strategies for growth and downsizing; Example; product/ market expansion grid. Figure 4

10 The objective is which question marks can be turned to Starts, and
Analyzing the current business portfolio Using; growth share matrix developed by Boston consulting Group ( BCG) The objective is which question marks can be turned to Starts, and Which starts can be turned into cash flows, and clear decisions about dogs Stars High growth market & high share Profit potential “May require heavy investment to grow” Question Marks High growth, low market share “Require a lot of cash to hold market share” ? Cash Cows Low growth market, high share we have to establish, successful SBU’s “ Less investment, but a lot Of cash” Dogs Low growth market & share Low profit potential “ low cash flow may be generated”

11 Potential Matrix Problems
Can be time consuming and costly. Difficult to define SBUs and measure market share and growth. Focus on the current business, not future planning. Can place too much emphasis on growth. Can lead to poorly planned diversification.

12 Market level 4- Developing strategies for growth and downsizing;
Example; product/ market expansion grid. Figure 4 Strategies for growth business Market penetration; making more sales to current customers without changing its products. By improving services, re prices, menu selection. Market development; opening new market for the existing products. New market target, international market. Product development; new product for current market. Add a breakfast special, buy one get one free…. Diversification; Buy businesses of outside of its current products and markets. Starbuck coffee sells music CDs.

13 Analyze Opportunities by Tim Horton’s
Product-Market Expansion Grid identifies four potential growth areas. Figure 4 Market Penetration Product Development Diversification Existing Products New Markets

14 Marketing strategy and the marketing mix
Marketing strategy; marketing logic to by which the company hopes to achieve a profitable life-long relationship with customers. It involves deciding which customers to serve (segmentation and targeting) and with what value proposition ( differentiation and positioning),Figure 5

15 Figure 5 Intermediaries Competitors Marketing analysis product
planning segmentation Target market place Customer price positioning Marketing control promotion Marketing implementation Suppliers Publics

16 Factors Influencing Company Marketing
The Four P’s

17 Market segmentation; dividing the market into different groups of buyers who have different needs, and who might require separate products or marketing mix. Target marketing; the process of evaluation each market segment’s attractiveness and selecting one ore more segments to enter. Market positioning; placing a product to occupy a clear and desirable place relative to competitors in consumer’s minds. Blazer “ Like a rock”. Lexus ” The passionate pursuit of excellence’. Marketing Mix; set of controllable tactical marketing tools (Product, price, place, promotion) to influence the demand for its product in the market.

18 Create Marketing Mix Product – offers the right product, service or experience. Price – controls perceived value and satisfaction. Place – allows customers easy access to product and support. Promotion – communicates the offer and the value proposition. Figure 6

19 Developing Marketing Mix
Figure 6 Product Varity Quality Design Features Brand name Packaging services Price List price Discounts Allowances Payment period Credit terms Target customers Intended Positioning Place Channels Coverage Assortments Locations Inventory Transportation Logistics Promotion Advertising Personal selling Sales promotion Public relation

20 The Four Ps and the Four Cs

21 Manage Marketing Effort
Build strong operational marketing plan. Carry out the plan. Organize marketing department. Leverage value chain and value network. Exercise control. Set goals. Measure and evaluation performance. Take corrective action. Figure 7

22 Marketing analysis; It’s the process of planning, implementing, and control Analysis Planning Develop strategic plans Develop marketing Implementation Carry out the plan Control Measure results Evaluate results Take corrective Action

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