Chapter 2 Marketing: Company and Marketing Strategy

strategic planning
process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities
process of strategic planning
1. define company mission
2. settling company objectives and goals
3. designing the business portfolio
4. planning marketing and other functional strategies
mission statement
statement of the organization’s purpose-what it wants to accomplish in the larger environment, should be market oriented and defined in terms of satisfying customer needs
business portfolio
collection of businesses and products that make up the company, involves 2 steps:
1. company must analyze its current business portfolio and determine which businesses should receive more, less or no investment
2. shape the future portfolio by developing strategies for growth and downsizing
portfolio analysis
process by which management evaluates the products and businesses that make up the company
strategic business unit
key businesses that make up a company, can be company division, product line or single product
Growth-share matrix
Boston Consulting Group idea, way of classifying all SBUs, vertical axis- market growth rate, horizontal axis- relative market share
4 types of SBU
1. stars
2.cash cows
3. question marks
4. dogs
stars
high growth, high share businesses or products, often need heavy investments to finance their rapid growth. eventually their growth will slow down, and they will turn into cash cows
cash cows
low-growth, high-share businesses or products, these established and successful SBUs need less investment to hold their market share.
question marks
low share business units in high growth markets. require a lot of cash to hold their share, let alone increase it. may be able to turn into stars
dogs
low growth, low share businesses and products. they may generate enough cash to maintain themselves but do not promise to be large sources of cash
product/market expansion grid
portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development or diversification
market penetration
company growth by increasing sales of current products to current market segments without changing the product
market development
company growth by identifying and developing new market segments for current company products
product development
company growth by offering modified or new products to current market segments
diversification
company growth through starting up or acquiring businesses outside the company’s current products and markets
value chain
series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products
value delivery network
network made up of the company, its suppliers, its distributors, and ultimately its customers who partner with each other to improve the performance of the entire system
marketing strategy
marketing logic by which the company hopes to create consumer value and achieve profitable customer relationships, decides which customers it will serve, and how
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
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, after company has defined its market segments
positioning
arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
differentiation
actually differentiating the market offering to create superior customer value
marketing mix
the set of tactical marketing tools-product, price, place and promotion- that the firm blends to produce the response it wants in the target markets
product
goods and services combination the company offers to the target market(variety, quality, design, features, brand name, packaging, services)
price
amount of money customers must pay to obtain the product(list price, discounts, allowances, payment period, credit terms)
place
includes the company activities that make the product available to target consumers(channels, coverage, locations, inventory, transportation, logistics)
promotion
refers to activities that communicate the merits of the product and persuade target customers to buy it(advertising, personal selling, sales promotion, public relations)
SWOT analysis
an overall evaluation of the company’s strengths, weaknesses, opportunities and threats
strengths
internal capabilities that may help a company reach its objectives
weaknesses
internal limitations that may interfere with a company’s ability to achieve its objectives
opportunities
external factors that the company may be able to exploit to its advantage
threats
current and emerging external factors that may challenge the company’s performance
marketing planning
involves choosing marketing strategies that will help the company attain its overall strategic objectives
marketing implementation
turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives
CMO
chief marketing officer, heads up the company’s entire marketing operation and represents marketing on the company’s top management team
marketing control
measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved
marketing return on investment
the net return from a marketing investment divided by the costs of the marketing investment
strategic planning steps(powerpoint)
1. define mission
– evaluate the internal and external environments
2. set organizational or SBU objectives
– establish business portfolio
3. develop growth plans
4. functional plans:
-marketing
-production
-finance
-human resources
the marketing plan
step 1: business mission and objectives
step 2: situation analysis and SWOT
step 3: identify opportunities- segmentation, targeting, positioning
step 4: implement marketing mix
step evaluate performance using marketing metrics
internal environment
controllable elements inside of an organization ex: financial stability, quality, strong brands, corporate reputation
external environment
uncontrollable elements outside of an organization that may affect its performance either positively or negatively