0. Company and Marketing Strategy
Chapter 2

1. Discussion: How Can Disney Recover?
Walt Disney
Known for films, animation, theme parks and customer orientation
Parks offer a variety of attractions as well as cleanliness, order, and warmth
Satisfying the customer is everyone’s job
Disney has grown via diversification
Sales and net income have fallen
Discussion: How Can Disney Recover?

2. Objectives
Understand companywide strategic planning and its four steps.
Learn how to design business portfolios and develop strategies for growth and downsizing. .

3. Objectives
Be able to describe the marketing process and the forces that influence it.
Understand the marketing management functions, including the elements of the marketing plan.

4. Strategic Planning* Strategic planning is defined as:
“The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.”

5. Steps in the Strategic Planning Process
Figure 2-1:
Steps in the Strategic Planning Process

6. Fit Market Environment Distinctive Competencies
Defining the Company’s Business and Mission
A Mission Statement is a Statement of the Organization’s Purpose.
Characteristics of a Good Mission Statement:
Market Oriented
Realistic
Fit Market Environment
Distinctive Competencies
Motivating
Specific

7. Strategic Planning
Mission statements guide the development of objectives and goals.
Objectives are developed at each level in the organization hierarchy.
Strategies are developed to accomplish these objectives.

8. Example: Monsanto Company
Mission: Helping to feed the world population and sustain the environment.
Overall objective: To create environmentally better products and get them to market faster at lower cost.
Objective of agricultural division: To increase agricultural productivity and reduce chemical pollution.
General Electric
Boundaryless…Speed…Stretch

9. Strategic Planning
Business portfolio: “the collection of businesses and products that make up the company.”
Designing the business portfolio is a key step in the strategic planning process.

10. Strategic Planning Portfolio Design
Identify strategic business units (SBUs)
Assess each SBU:
The BCG growth-share matrix classifies SBUs into one of four categories using:
Market growth rate
The SBU’s relative market share within the market.
Portfolio Design
Step 1: Analyze the current business portfolio
Step 2: Shape the future business portfolio

11. Portfolio Analysis: On Your Firm’s Strength
What share of the market ?
what does market share mean?

12. Portfolio Analysis: On Market Attractiveness
Is the market growing?

13. Analyzing Current SBU’s: Boston Consulting Group Approach
Relative Market Share
High Low
Stars
High growth & share
Profit potential
May need heavy
investment to grow
Question Marks
High growth, low share
Build into Stars or phase out
Require cash to hold
market share ?
Market Growth Rate
Low High
Cash Cows
Low growth, high share
Established, successful
SBU’s
Produce cash
Dogs
Low growth & share
Low profit potential

14. Analyzing Current SBU’s: GE’s Strategic Business-Planning Grid
Business Strength
Strong
Average
Weak C
High A
Medium
Industry Attractiveness D B
Low

15. General Electric Approach
how attractive is the industry?
Market size
Industry profit margin
Competitive intensity
Industry cost structure
what is the business strength?
Quality and price competitiveness
Customer knowledge
Geographic advantage

16. Strategic Planning Portfolio Design
Determine the future role of each SBU and choose the appropriate resource allocation strategy:
Build
Hold
Harvest
Divest
SBUs change positions over time
Portfolio Design
Step 1: Analyze the current business portfolio
Step 2: Shape the future business portfolio

17. Problems With Matrix Approaches
Can be Difficult, Time-Consuming, & Costly to Implement
Difficult to Define SBU’s & Measure Market Share/ Growth
Problems With Matrix Approaches
Focus on Current Businesses, But Not future Planning
Can Lead to Unwise Expansion or Diversification

18. Strategic Planning Designing the business portfolio also involves:
Developing strategies for growth by identifying, evaluating, and selecting promising new market opportunities.
Developing strategies for downsizing the business portfolio.

19. Strategies for Growth
Products
Markets

20. Product / Market Expansion Grid*
Figure 2-3:
Product / Market Expansion Grid*

21. Product/ Market Expansion Grid
Market Penetration: making more sales to current customers without changing its products.
How? Add new stores in current market areas, improve advertising, prices, service or store design.
Market Development: develop new
markets for its current products.
How? Identify new demographic or geographic markets.

22. Product/ Market Expansion Grid
Product Development: offering modified or new products to current markets.
How? New styles, flavors, colors, or modified products.
Diversification: new products for new markets.
How? Start up or buy new businesses.

23. The Marketing Process*
The strategic planning and business portfolio analysis processes help to identify and evaluate marketing opportunities.
The purpose of the marketing process is to help the firm plan how to capitalize on these opportunities.
Key Elements
Analyzing marketing opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort

24. The Marketing Process Key Elements
The segmentation process divides the total market into market segments.
Target marketing chooses which segment(s) are pursued.
Market positioning for the product is then determined.
Key Elements
Analyzing marketing opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort

25. Connecting With Customers
Market Positioning: arranging for a product to
occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers. i.e. Chevy Blazer is “like a rock.”

26. The Marketing Process Key Elements Analyzing marketing opportunities
Competitor analysis guides competitive marketing strategy development.
Strategy leads to tactics via the marketing mix:
The “Four Ps” – product, price, place, promotion (seller viewpoint)
The “Four Cs” – customer solution, cost, convenience, and communication (customer viewpoint)
Key Elements
Analyzing marketing opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort

27. Figure 2-5:
The Marketing Mix

28. Developing the Marketing Mix
Quality
Design
Features
Packaging
Sizes
Services
Price
Place
Promotion
Product
Goods and services offered to consumer

29. Developing the Marketing Mix
Price
Place
Promotion
Product
Advertising
Personal selling
Sales Promotion
Publicity
Activities that communicate merits of product

30. Developing the Marketing Mix
Price
Place
Promotion
Product
Channels
Locations
Assortments
Inventory
Transportation
Activities that make products available

31. Developing the Marketing Mix
list price
discounts
credit terms
payment period
allowances
Price
Place
Promotion
Product
Money paid to obtain product

32. The Marketing Process Key Elements Analyzing marketing opportunities
Marketing analysis
Provides information helpful in planning, implementation, and control
Marketing planning
Strategies and tactics
Marketing implementation
Turns plans into action
Marketing control
Operating control
Strategic control
Key Elements
Analyzing marketing opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort

33. Managing the Marketing Effort
Figure 2-6:
Managing the Marketing Effort

34. Marketing Control Process (Fig. 2.8)
Measure Performance
Evaluate Performance
Take Corrective Action
Set Goals

35. Marketing Plan
Where you want to go
BA 499
write a marketing plan

36. Contents of a Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls