Lecturer: Lulu Saud Altweem Principles of Marketing, Arab World Edition Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba Presentation prepared by Annelie Moukaddem Baalbaki CHAPTER TWO Company and Marketing Strategy: Partnering to Build Customer Relationships Lecturer: Lulu Saud Altweem Ch 1 -0 Ch 2 -0 Copyright © 2011 Pearson Education Copyright © 2011 Pearson Education

Company and Marketing Strategy Topic Outline 2.1 Companywide Strategic Planning: Defining Marketing’s Role. Explain company-wide strategic planning and its four steps. 2.2 Designing the Business Portfolio. Discuss how to design business portfolios and develop growth strategies. 2.3 Planning Marketing: Partnering to Build Customer Relationships. Explain Marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value. Ch 2 -1 Copyright © 2011 Pearson Education

Company and Marketing Strategy Topic Outline 2.4 Marketing Strategy and the Marketing Mix. Describe the elements of a customer-driven marketing strategy and mix and the forces that influence it. 2.5 Managing the Marketing Effort 2.6 Measuring and Managing Return on Marketing Investment List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment. Ch 2 -2 Copyright © 2011 Pearson Education

Companywide 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. Companies usually prepare annual plans, long-range plans, and strategic plans. The annual and long-range plans deal with the company’s current businesses and how to keep them going. In contrast, the strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment Ch 2 -3 Copyright © 2011 Pearson Education

Companywide Strategic Planning Like the marketing strategy, the broader company strategy must be customer focused. Company-wide strategic planning guides marketing strategy and planning. Ch 2 -4 Copyright © 2011 Pearson Education

Companywide Strategic Planning Defining a Market-Oriented Mission The mission statement is the organization’s purpose; what it wants to accomplish in the larger environment. A market-oriented mission statement defines the business in terms of satisfying basic customer needs. Ch 2 -5 Copyright © 2011 Pearson Education

Companywide Strategic Planning Ch 2 -6 Copyright © 2011 Pearson Education

Companywide Strategic Planning Setting Company Objectives and Goals The company needs to turn its mission statement into detailed supporting objectives for each level of management. Ch 2 -7 Copyright © 2011 Pearson Education

Designing the Business Portfolio The business portfolio is the collection of businesses and products that make up the company. Business portfolio planning involves two steps: the company must analyze its current business portfolio and determine the investment shape the future portfolio by developing strategies for growth and downsizing Ch 2 -8 Copyright © 2011 Pearson Education

Designing The Business Portfolio Analyzing the Current Business Portfolio 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 Ch 2 -9 Copyright © 2011 Pearson Education

Companywide Strategic Planning Analyzing the Current Business Portfolio Ch 2 -10 Copyright © 2011 Pearson Education

Companywide Strategic Planning: The Boston Consulting Group Approach A company classifies all its SBUs according to the growth-share matrix. The growth-share matrix defines four types of SBU’s: (read book pg. no 41-42) Ch 2 -11 Copyright © 2011 Pearson Education

Companywide Strategic Planning Problems with Matrix Approaches It have some limitations: Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning Methods to improve: Dropped formal matrix methods in favor of more customized approaches that better suit their specific situations Today’s strategic planning has been decentralized Ch 2 -12 Copyright © 2011 Pearson Education

Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product/market expansion grid is a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification. Ch 2 -13 Copyright © 2011 Pearson Education

Companywide Strategic Planning Developing Strategies for Growth and Downsizing Market penetration is a growth strategy increasing sales to current market segments without changing the product. Market development is a growth strategy identifying and developing new market segments for current products. Ch 2 -14 Copyright © 2011 Pearson Education

Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product development is a growth strategy through offering new or modified products to current market segments. Diversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and markets. Downsizing is the reducing of the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy. Ch 2 -15 Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education Planning Marketing: Partnering to Build Customer Relationships Marketing plays a key role in the company’s strategic planning in several ways: First, marketing provides a guiding philosophy—the marketing concept—that suggests the company strategy should revolve around building profitable relationships with important consumer groups. Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and assessing the firm’s potential to take advantage of them. Finally, within individual business units, marketing designs strategies for reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to help carry them out profitably. Ch 2 -16 Copyright © 2011 Pearson Education

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. That is, each department carries out value-creating activities to design, produce, market, deliver, and support the firm’s products. Ch 2 -17 Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education Planning Marketing Partnering with Others in the Marketing System Value delivery network is made up of the company, suppliers, distributors, and ultimately the customers who partner with each other to improve performance of the entire system. Toyota’s performance against Ford depends on the quality of Toyota’s overall value delivery network versus Ford’s Ch 2 -18 Copyright © 2011 Pearson Education

Marketing Strategy and the Marketing Mix Ch 2 -19 Copyright © 2011 Pearson Education

Marketing Strategy and the Marketing Mix Customer-Driven Marketing Strategy Most companies are in a position to serve some segments better than others. Thus, each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments. This process involves: Marketing segmentation Market targeting Positioning Ch 2 -20 Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education Market Segmentation The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs, is called market segmentation. Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts. Ch 2 -21 Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education Marketing Targeting Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. A company with limited resources might decide to serve only one or a few special segments or market niches. Most companies enter a new market by serving a single segment; if this proves successful, they add more segments. Ch 2 -22 Copyright © 2011 Pearson Education

Marketing Differentiation and Positioning Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer. Thus, effective positioning begins with differentiation— actually differentiating the company’s market offering so that it gives consumers more value. Ch 2 -22 Copyright © 2011 Pearson Education

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. Ch 2 -23 Copyright © 2011 Pearson Education

Developing an Integrated Marketing Mix It holds that the four Ps concept takes the seller’s view of the market, not the buyer’s view. From the buyer’s viewpoint, in this age of customer value and relationships, the four Ps might be better described as the four Cs: 4Ps Product Price Place Promotion 4Cs Customer solution Customer cost Convenience Communication Ch 2 -23 Copyright © 2011 Pearson Education

Managing the Marketing Effort Managing the marketing process requires the four marketing management functions: Ch 2 -24 Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education Marketing Analysis The marketer should conduct a SWOT analysis ,by which it evaluates the company’s overall strengths (S), weaknesses (W), opportunities (O), and threats (T). Ch 2 -25 Copyright © 2011 Pearson Education

Market Planning from book pg. no 55, table 2.2) Through strategic planning, the company decides what it wants to do with each business unit. Marketing planning involves choosing marketing strategies that will help the company attain its overall strategic objectives. Positioning Market mix Marketing expenditure level Target markets Marketing Strategy: It outlines how the company intends to create value for target customers in order to capture value in return. Ch 2 -26 Copyright © 2011 Pearson Education

Marketing Implementation Marketing implementation is the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives. Whereas marketing planning addresses: what why who where when how Ch 2 -28 Copyright © 2011 Pearson Education

Marketing Control Marketing Control is the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved. Operating control Strategic control Management first sets specific marketing goals. Measures its performance in the market place Evaluates the causes of any differences between expected and actual performance Management takes corrective action to close the gaps between goals and performance Four steps of marketing control: Ch 2 -29 Copyright © 2011 Pearson Education

Measuring and Managing Return 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. Ch 2 -30 Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education From Book Read reveiwing objectives and key terms (pg. 60 and 61) Read all 'Key Terms' (pg. 61) Company case- Bahrain Bay (pg. 63). Ch 2 -31 Copyright © 2011 Pearson Education