1. 2
Company and Marketing Strategy: Partnering to Build Customer Relationships

2. ROAD MAP: Previewing the Concepts
Explain companywide strategic planning and its four steps.
Discuss how to design business portfolios and growth strategies.
Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.
Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.
List the marketing management functions, including the elements of a marketing plan.

3. 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

5. Questions a Mission Statement Should Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?

6. The Mission Statement A statement of the organization’s purpose
What it wants to accomplish in the larger environment
Should be market oriented and defined in terms of customer needs.

7. The Mission of the Girl Scouts

8. Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
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9. 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,
develop growth strategies for growth or downsizing.

10. Portfolio Analysis
An evaluation of the products and business making up the company.
Resources are directed to more profitable businesses and weaker ones are phased down or dropped.

11. Strategic Business Unit (SBU)
A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.
Can be a company division, a product line within a division, or sometimes a single product or brand.

12. Analyzing Current SBU’s: BCG Growth-Share Matrix
Relative Market Share
High Low
Stars
High growth & share
May need heavy
investment to grow
Eventually, growth will slow
Question Marks
Low share SBUs in high growth
markets
Require cash to hold
market share
Build into Stars or phase out ?
Market Growth Rate
Low High
Cash Cows
Low growth, high share
Established, successful
SBU’s
Produce cash
Dogs
Low growth & share
Generate cash to sustain self
Do not promise to be cash
sources

13. Problems With Matrix Approaches
Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Problems With Matrix Approaches
Can Place too Much Emphasis on Growth
Can Lead to Poorly Planned Diversification

14. Product/Market Expansion Grid
Existing
New
Market Penetration
Product Development
Existing
M A R K E T
Market Development
New
Diversification
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15. Growth at Starbucks
To maintain its phenomenal growth in an increasingly over-caffeinated marketplace, Starbucks has brewed up an ambitious, multi-pronged growth strategy.

16. Product/Market Expansion Grid Based on Starbucks
Market Penetration: make more sales to current customers without changing products.
How? Add new stores in current market areas; improve advertising, prices, menu, service.
Market Development: identify and develop new markets for current products.
How? Review new demographic (seniors/ethnic consumers) or geographic (Asian, European, Australian, & South American) markets.

17. Product/Market Expansion Grid Based on Starbucks
Product Development: offering modified or new products to current markets.
How? Add food offerings, sell coffee in supermarkets, co-brand products.
Diversification: start up or buy businesses outside current products and markets.
How? Making and selling CDs, testing restaurant concepts, or branding casual clothing.

18. Marketing’s Role in Strategic Planning
Provide a Guiding Philosophy
Provide Inputs to Strategic Planners
Design Strategies to Reach Objectives

19. Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers

20. The Value Chain
Wal-Mart’s ability to offer the right products at low prices depends on the contributions from people in all of the company’s departments—marketing, purchasing, information systems, and operations.

21. Managing Marketing Strategy and Marketing Mix

22. Market Segmentation
The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.
A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.

23. Click the picture above to play video
Market Segmentation
Marriott offers business travelers lodging designed to meet their particular needs.
Click the picture above to play video

24. Target Marketing
Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Target segments that can sustain profitability.
Example:
Arm & Hammer’s baking soda.
Click to See Arm & Hammer's Website

25. Market Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (e.g., Chevy Blazer: “Like a rock”)
Process begins with differentiating the company’s marketing offer so it gives consumers more value.

26. Positioning
Toyota’s hybrid Prius is “a revelation brilliantly disguised as a car.”
The Hummer is “Like nothing else—Sport utility? Define Sport!”

27. Product Price Place Promotion The Marketing Mix
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.
Consists of the 4 P’s
Product
Price
Place
Promotion

28. The 4 P’s of the Marketing Mix

29. The 4 P’s & 4 C’s of the Marketing Mix
4 P’s - Seller’s View
Product
Price
Place
Promotion
4 C’s - Buyer’s View
Customer Solution
Customer Cost
Convenience
Communication

30. Managing the Marketing Effort

31. Major Sections of Product/Brand Plan
Executive Summary
Current Marketing Situation
Analysis of Threats and Opportunities
Objectives for the Brand
Marketing Strategy
Action Programs
Marketing Budget
Controls

32. Marketing Department Organization
Functional
Organization
Market or Customer
Organization
Geographic
Organization
Product Management
Organization
Combination of Two or More

33. Marketing Department Organization
Functional Organization: Each marketing activity is headed by a functional specialist.
Sales Manager
Advertising Manager
Director of Marketing Research
Customer Service Manager
New Product Manager

34. DEMOGRAPHICS Population Female % Male % Average Age Education
Average Income

35. Marketing Department Organization
Geographic Organization: Sales and marketing people are assigned to specific countries, regions, and districts.
Coca-Cola staff assigned to the South American market
Product Management Organization: One person given responsibility for complete strategy and marketing program for a single product.

36. Marketing Department Organization
Market or Customer Organization: Manager responsible for particular market or customer.
Combination Organization: Use some combination of the previous four approaches.
This is especially true in large companies (e.g., Procter & Gamble)
Click to Visit P&G's Website

37. Marketing Control Process

38. Rest Stop: Reviewing the Concepts
Explain companywide strategic planning and its four steps.
Discuss how to design business portfolios and develop strategies growth and downsizing.
Assess marketing’s role in strategic planning and explain how marketers partner with others inside and outside the firm to build profitable customer relationships.
Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.
List the marketing management functions, including the elements of a marketing plan.

39. Q: Marketing planning takes place at the:
1. business unit level.
2. product level.
3. market level.
4. all of the above.
AK, 7e – Chapter 2

40. Q: Strategic planning consists of the four steps below
Q: Strategic planning consists of the four steps below. What is the correct sequence of these steps? 1. Define company mission 2. Design business portfolio 3. Plan functional strategies 4.Set company goals and objectives
AK, 7e – Chapter 2

41. Q: A mission statement should be:
product oriented.
2. market oriented.
3. sales oriented.
4. production oriented.
AK, 7e – Chapter 2

42. Q: Which of the following mission statements is market oriented?
1. Revlon: We sell cosmetics.
2. Disney: We run theme parks.
3. Wal-Mart: We deliver value through low prices.
4. Xerox: We make copying, fax, and other office machines.
AK, 7e – Chapter 2

43. Q: A strategic business unit:
1. is a unit of a company that focuses on a single product.
2. is a unit of a company that focuses on a line of products.
3. is a unit of a company that can be planned independently.
4. is a unit of a company with authority over all other units.
AK, 7e – Chapter 2

44. Q: Acme Bicycle Company wants to grow by diversification
Q: Acme Bicycle Company wants to grow by diversification. To accomplish this, Acme will:
1. introduce new bicycle models.
2. introduce modifications to its existing bicycle products.
3. identify new market segments for its current products.
4. start up or acquire businesses outside of its current products and markets.
AK, 7e – Chapter 2

45. Q: A company that is seeking to make more sales to its current customers without changing its products is pursuing a ________ strategy.
1. market penetration
2. market development
3. product development
4. diversification
AK, 7e – Chapter 2

46. Q: Mega-corporations can become so powerful that they can easily displace small competitors from the marketplace. Do you think such mergers are good for the overall economy and the consumer?
1. Yes
2. No
AK, 7e – Chapter 2

47. Q: "Value delivery network" refers to:
1. a company's ability to ship products on time and at low cost.
2. relationships among the marketing department and other departments within a company.
3. partnerships among different companies to enhance customer value.
4. the marketing of communication services.
AK, 7e – Chapter 2

48. Q: Acme Marketing has divided the shampoo market into five groups based on age. This is an example of:
1. market segmentation. 
2. market positioning. 
3. market targeting. 
4. marketing mix.
AK, 7e – Chapter 2

49. Q: Acme Marketing decides to focus exclusively on the kids market (ages 2-12) for selling its shampoos. This is an example of:
1. market segmentation. 
2. market positioning. 
3. market targeting. 
4. marketing mix.
AK, 7e – Chapter 2

50. Q: To attract kids, Acme positions its shampoo as the only premium-priced, "no-tears" shampoo that's packed in bottles shaped like Disney characters. This is an example of:
1. market segmentation. 
2. market positioning. 
3. market targeting. 
4. marketing mix.
AK, 7e – Chapter 2

51. Q: By focusing on the kids market, Acme is able to avoid all large competitors because they tend to overlook this specialized, small market. This is an example of:
1. market leader strategy. 
2. market challenger strategy. 
3. market follower strategy. 
4. market nicher strategy.
AK, 7e – Chapter 2

52. Q: A marketing audit includes an examination of a:
1. company’s environment. 
2. company’s objectives and strategies. 
3. company’s activities and strategies. 
4. all of the above.
AK, 7e – Chapter 2

53. Q: While __________ addresses the what and why of marketing activities, _________ addresses the who, where, when, and how.
1.marketing mix, marketing planning 
2.marketing segmentation, marketing implementation 
3.marketing planning, marketing implementation 
4.marketing implementation, marketing positioning
AK, 7e – Chapter 2

54. Q: Companies that sell one product line to many different types of markets should have:
a.functional organization. 
b.geographic organization. 
c.product management organization. 
d.market management organization.
AK, 7e – Chapter 2