Chapter 2: Company and Marketing Strategy, Partnering to Build Customer Relationships

Strategic Planning
the process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities
three levels of marketing planning
business unit, product, and market levels
Mission Statement (first step in planning)
a statement of the organizations purpose- what it wants to accomplish in the larger environment
mission statements should be….
market oriented and defined in terms of satisfying basic customer needs
Setting Company Objectives and Goals (second step)
mission statement in detailed and supporting objectives for each level of management. Need to know requirements of reaching objectives.
Designing Business Portfolio (step three)
The collection of businesses and products that make up the company
The best business portofilio is one that…
best fits the company strengths and weaknesses to opportunities in the environment
2 steps of Business Portfolio Planning
analyze its current business portfolio/determine which businesses should receive more less or no investment. and must shape the future portfolio by developing strategies for growth and downsizing.
Analyzing the current Business Portfolio (step 3 pt2)
The process by which management evaluates the products and businesses that make up the company.
three steps of strategic planning (corporate level)
defining the company mission, setting company objectives and goals, designing the business portfolio
2 steps of analyzing current business portfolio
identify strategic business units (SBU’s) ,assess the attractiveness of its various SBUs and decide how much support each deserves.
Strategic Business Units
key businesses that make up the company. (can be a product line, company division, etc.)
Growth-share matrix
a portfolio-planning method that evaluates a company’s SBUs in terms of its market growth rate (attractiveness) and relative market share (strength)
Problems with Matrix Approach
difficult, time consuming, costly to implement. also focuses on classifying current businesses but provide little advice for future planing
Todays strategic planning
Decentralized. Companies are now placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close their markets.
Company growth must be to manage a…..
Profitable Growth
Product-market expansion grid (4 categories)
portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification.
Market Penetration (product-market grid)
making more sales without changing its original product through marketing mix improvements.
Market Development (product-market grid)
identifying and developing new markets for its current products.
Product Development (product-market grid)
offering modified or new products to current markets
Diversification
starting up or buying businesses beyond its current products and markets.
When a firm finds brands or businesses that are unprofitable it must carefully….
prune, harvest, or digest them.
Marketing Strategy
the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships
segmetation/targeting
customers company decides to serve
differentiation/positioning
how the company will serve their customers
marketing mix (4 p’s buyers view)
the set of tactical marketing tools- product, price, place, and promotion- that the firm blends to produce the response it wants in the target market.
Market Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs.
Market Segment
A group of consumers who respond in a similar way to a given set of marketing efforts
Market Targeting
Process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
in positioning its products the company first…
identifies possible customer value differences that provide competitive advantages on which to build the position
Product
goods and services combination the company offers to the target market
Price
amount of money customers must pay to obtain the target
place
company activities that make the product available to target consumers.
Promotion
activities that communicate the merits of the product and persuade target customers to buy it.
Service Products
banking, airline, retailing services.
4 p’s consumers view (4 c’s)
Customer solution, customer cost, convenience, communication
four marketing management functions
analysis, planning, implementation, control
marketing analysis (last)
provides information and evaluations needed for all the other marketing activities.
SWOT Analysis
Overall evaluation of the company’s strengths, weaknesses, opportunities, and threats.