Lecture Principles of Marketing - Chapter 2: Company and Marketing strategy

In this chapter: Explain companywide strategic planning and its four steps, discuss how to design business portfolios and growth strategies, discuss how to design business portfolios and growth strategies, 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.

Chapter Two Company and Marketing Strategy: Partnering to Build Customer Relationships Roadmap: 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 Copyright 2007, Prentice Hall, Inc 2-2 Case Study NIKE – Strategy: Then & Now Early Days Late 1990s - Present  Characterized by “seat of the pants” management  Innovative sneaker tread drove early success  Technological product superiority, big-name endorsements and “Just Do It” ads revolutionized sport marketing  1980s – 1990s: Nike leverages brand strength into new product areas  Changes in consumer shoe preference, declining product innovation, and negative PR plague Nike  Anti-establishment image no longer works: brand backlash occurs  Strategic planning is embraced and Nike focuses on innovation and exploring new market opportunities  Nike has global success Strategic Planning  The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities Steps in Strategic Planning Defining the company mission Setting company objectives and goals Designing the business portfolio Planning marketing and other functional strategies 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 The Mission Statement  Questions the mission statement should answer include: – What is our business? – Who is our customer? – What consumers value? – What should our business be? The Mission Statement: Should be realistic Should be specific Should fit the market environment Should be based on distinctive competencies  Should be motivating     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 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 Market Positioning  Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers  Begins with differentiating the company’s marketing offer so it gives consumers more value The Marketing Mix  The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market – Product – Price – Place (distribution) – Promotion The Marketing Mix  Product: – Variety, quality, design, features, brand name, packaging and services  Promotion: – Advertising, sales promotion, public relations and personal selling  Place: – Channels, coverage, logistics, locations, transportation, assortments and inventory  Price: – List price, discounts, allowances, payment period and credit terms The Ps & the Cs of the Marketing Mix  Ps – Seller’s View – Product – Price – Place – Promotion  Cs – Buyer’s View – Customer Solution – Customer Cost – Convenience – Communication Managing the Marketing Effort  Four marketing management functions: – Marketing Analysis • SWOT analysis is key – Marketing Planning • Create brand marketing plan – Marketing Implementation • Determine who, where, when, and how – Marketing Control • Evaluate results, take corrective action SWOT Analysis  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 SWOT Analysis  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 Brand / Product Marketing Plan Executive summary Current marketing situation Analysis of threats and opportunities Objectives for the brand Marketing strategy Action programs Marketing budget Controls 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 Marketing Department Organization  Geographic Organization: Sales and marketing people are assigned to specific countries, regions, and districts  Product Management Organization: One person given responsibility for complete strategy and marketing program for a single product 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) Marketing Control Process     Set Goals Measure Performance Evaluate Performance Take Corrective Action Marketing Control Process  Operating Control – Evaluates performance against the plan and takes corrective action  Strategic control – Evaluates whether strategies match opportunities • The marketing audit is major tool Return on Marketing  Assessed using one or more methods: – Standard marketing performance measures • Brand awareness, sales, market share – Customer-centered measures • Customer acquisition, customer retention, customer lifetime value Rest Stop: Reviewing 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 Copyright 2007, Prentice Hall, Inc 2-33 ... challenge the company? ??s performance Brand / Product Marketing Plan Executive summary Current marketing situation Analysis of threats and opportunities Objectives for the brand Marketing strategy. .. 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,... 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,