Chapter 2: Company and Marketing Strategy.

Strategic Planning
The process of developing and maintaining a strategic fit between the organisation’s goals and its marketing opportunities.

Ex. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio and coordinating functional strategies.

Mission Statement
A statement of the organisation’s purpose – what it wants to accomplish in the larger environment.

FOCUS. Studies have shown that companies with well crafted ” ” have better organisational and financial performances.

Business Portfolio
The collection of businesses and products that make up the company.

Ex. A professional overview of the company.

Portfolio Analysis
The process by which management evaluates the products and businesses making up the company.
Growth – Share Matrix
A portfolio planning method that evaluates a company’s strategic business units in terms of their market growth rate and relative market share.

Ex. SBUs are classified as stars, cash cows, question marks or dogs.

Market Penetration
A strategy for company growth by increasing sales of current products to current market segments without changing the product. – This is done by changing the price to make it desirable on the market.

Ex. Apple setting its price really high for people who need the product and then lowering it after a while for consumer who “want” it.

Market Development
A strategy for company growth by identifying and developing new market segments for current company products.

Ex. New target markets, international level?

Product Development
A strategy for company growth by offering modified or new products to current market segments.

FOCUS. – This may bring the product into a new competitor field. – Improved running shoes being compared to Nike and Adidas.

Diversification
A strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets.

Ex. The tutoring company Alakando starting a Nany company, Nanny Popins, on the side.

Downsizing
Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy.

FOCUS: This may occur when companies enter to many foreign fields without proper research.

Value Chain
The series of departments that carry out value-creating activities to design, produce, market, deliver and support a firm’s products.
Value – Delivery Network
The network made up of the company, suppliers, distributors and ultimately customers who ‘partner’ with each other to improve the performance of the entire system.

Ex. L’Oreal knows the importance of building close relationships with its networks of suppliers. From spray cans to packaging.

Marketing Stratergy
The marketing logic by which the business unit hopes to achieve its marketing objectives.

FOCUS: To find the best marketing strategy the company engages in marketing analysis, planning and control.

Market Segmentation
Dividing a market into distinct groups with distinct needs, characteristics or behaviours who might require separate products or marketing mixes.

Ex. Levi’s targeting different categories (segments), price shoppers, trendy casual, mainstream and traditionalists.

Market Segment
A group of consumers who respond in a similar way to a given set of marketing efforts.
Target Marketing
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Market Postioning
Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.
The Marketing Mix
The set of marketing tools – product, price, place and promotion – that the firm blends to produce the response it wants in the target market.

Ex. The marketing mix consists of everything the firm can do to influence the demand for its product.

SWOT Analysis
An overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O) and threats (T).

Ex. A part of the preparation required in drawing up a marketing plan.

Marketing Implementation
The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.

Ex. The marketing implementation addresses the who, when, where and how.

Marketing Control
The process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that objectives are achieved.
Marketing Audit
A systematic examination of a company’s environment, objectives, strategies and activities to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing performance.
Return on Marketing (ROI)
The net return from a marketing investment divided by the costs of the marketing investment.

Often difficult to measure with any degree of accuracy.

Product Market Expansion Grid
A portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development or diversification.

FOCUS: This is a useful device for identifying growth opportunities.