Marketing
Company and marketing strategy - WEEK 1
27-1 Explain company-wide strategic planning and its four steps.
Each company must find the game plan for long-run survival and growth that makes the most
sense given its specific situation, opportunities, objectives, and resources.
At the corporate level, the company starts the strategic planning process by defining its overall
mission.
Strategic planning = The process of developing and maintaining a profitable strategic fit
between the organization’s goals and capabilities and its changing marketing opportunities.
Mission statement = A statement of the organization’s purpose—what it wants to accomplish in
the larger environment. Mission statements should be market oriented and defined in terms of
satisfying customer and societal needs. Customers want clear and genuine values that resonate
with their own. and Employees want a sense of purpose too
Setting Company Objectives and Goals
The company needs to turn its broad mission into detailed supporting objectives for each level
of management. Each manager should have objectives and be responsible for reaching them.
Business portfolio = The collection of businesses and products that make up the company.
Portfolio analysis = The process by which management evaluates and plans for the future of
the products and businesses that make up the company.
Management’s first step is to identify the key strategic business units (SBUs)—the businesses
that make up the company.
Growth-share matrix = A portfolio-planning method that evaluates a company’s strategic
business units (SBUs) in terms of market growth rate and relative market share.
1. Stars. Stars are high-growth, high-share businesses or products. They often need
heavy investments to finance their rapid growth. Eventually their growth will slow down,
and they will turn into cash cows.
2. Cash cows. Cash cows are low-growth, high-share businesses or products. These
established and successful SBUs need less investment to hold their share. Thus, they
produce a lot of the cash that the company uses to pay its bills, support other SBUs that
need investment, add to cash reserves, or return to shareholders.
3. Question marks. Question marks are low-share business units in high-growth
markets. They require a lot of cash to hold their share, let alone increase it.
Management has to think hard about which question marks it should try to build into
stars and which should be phased out.
4. Dogs. Dogs are low-growth, low-share businesses and products. They may
generate enough cash to just maintain themselves but do not promise to be large
sources of cash. Even if they break even financially, dogs can represent significant
opportunity costs by absorbing managerial energy and attention that could be used more
profitably elsewhere.
,Developing strategies for growth and downsizing
Product/market expansion grid = A portfolio-planning tool for identifying company growth
opportunities through market penetration, market development, product development, or
diversification.
1. Market penetration = Company growth by increasing sales of current products to
current market segments without changing the product.
2. Market development = Company growth by identifying and developing new market
segments for current company products.
3. Product development = Company growth by offering modified or new products to
current market segments.
4. Diversification = Company growth through starting up or acquiring businesses outside
the company’s current products and markets.
Objective 27-3 Explain marketing’s role in strategic planning and how marketing works
with its partners to create and deliver customer value.
Marketing plays many key roles in the company’s strategic planning.
1) Marketing provides a guiding philosophy—the marketing concept—that focuses the company
strategy on creating customer value and building profitable relationships with key customer
segments.
2) Marketing provides critical insights to strategic planners and helps them shape high-level
corporate strategy by assessing market conditions, identifying attractive market opportunities,
and evaluating the company’s ability to take advantage of them.
3) Marketing facilitates the design and execution of market-focused strategies at the unit level to
profitably achieve those objectives.
Value chain = The set of internal departments that carry out value-creating activities to design,
produce, market, deliver, and support a firm’s products.
Value delivery network = A network composed of the company, suppliers, distributors, and,
ultimately, even customers who partner with each other to improve the performance of the entire
system in delivering customer value.
, Objective 27-5 Explore the marketing management functions, including the elements of a
marketing plan, and discuss the importance of measuring and managing marketing return on
investment.
Managing the marketing process requires the five marketing management functions:
1) Marketing analysis of the company’s situation. The marketer should conduct a SWOT
analysis = An overall evaluation of the company’s Strengths (S > internal capabilities,
resources, and positive situational factors that may help the company serve its customers and
achieve its objectives),
Weaknesses (W internal limitations and negative situational factors that may interfere with the
company’s performance.),
Opportunities (O favorable factors or trends in the external environment that the company may
be able to exploit to its advantage.), and
Threats (T unfavorable external factors or trends that may present challenges to performance.
2) Marketing Planning = choosing marketing strategies that will help the company attain its
overall strategic objectives.A marketing strategy consists of specific decisions regarding target
markets, positioning, the marketing mix (Product, Price, Place, Promotion), and
marketing expenditure levels.
3) Marketing implementation = the process that turns marketing plans into marketing actions
to accomplish strategic marketing objectives.
Does the:
- Threats and opportunities analysis (SWOT) helping management to anticipate
important positive or negative developments that might have an impact on the firm and
its strategies.
- Objectives and issues = the marketing objectives that the company would like to attain
during the plan’s term and discusses key issues that will affect their attainment.
- Marketing strategy = Outlines the broad marketing logic by which the business unit
hopes to engage customers, create customer value, and build customer relationships,
plus the specifics of target markets, positioning, and marketing expenditure levels.
- Execution plans = Spells out how marketing strategies will be turned into specific action
programs that answer the following questions: What will be done? When will it be done?
Who will do it? How much will it cost?
- Budgets = It shows expected revenues and expected costs of production, distribution,
and marketing. The difference is the projected profit. The budget becomes the basis for
materials buying, production scheduling, personnel planning, and marketing operations.
- Controls = Outlines the controls and metrics that will be used to monitor progress, allow
management to review implementation results, and spot products that are not meeting
their goals. It includes measures of return on marketing investment.
-
4) Marketing control = Measuring and evaluating the results of marketing strategies and plans
and taking corrective action to ensure that the objectives are achieved.
Marketing ROI (marketing return on investment ) =
the net return from a marketing investment : the costs of the marketing investment
Company and marketing strategy - WEEK 1
27-1 Explain company-wide strategic planning and its four steps.
Each company must find the game plan for long-run survival and growth that makes the most
sense given its specific situation, opportunities, objectives, and resources.
At the corporate level, the company starts the strategic planning process by defining its overall
mission.
Strategic planning = The process of developing and maintaining a profitable strategic fit
between the organization’s goals and capabilities and its changing marketing opportunities.
Mission statement = A statement of the organization’s purpose—what it wants to accomplish in
the larger environment. Mission statements should be market oriented and defined in terms of
satisfying customer and societal needs. Customers want clear and genuine values that resonate
with their own. and Employees want a sense of purpose too
Setting Company Objectives and Goals
The company needs to turn its broad mission into detailed supporting objectives for each level
of management. Each manager should have objectives and be responsible for reaching them.
Business portfolio = The collection of businesses and products that make up the company.
Portfolio analysis = The process by which management evaluates and plans for the future of
the products and businesses that make up the company.
Management’s first step is to identify the key strategic business units (SBUs)—the businesses
that make up the company.
Growth-share matrix = A portfolio-planning method that evaluates a company’s strategic
business units (SBUs) in terms of market growth rate and relative market share.
1. Stars. Stars are high-growth, high-share businesses or products. They often need
heavy investments to finance their rapid growth. Eventually their growth will slow down,
and they will turn into cash cows.
2. Cash cows. Cash cows are low-growth, high-share businesses or products. These
established and successful SBUs need less investment to hold their share. Thus, they
produce a lot of the cash that the company uses to pay its bills, support other SBUs that
need investment, add to cash reserves, or return to shareholders.
3. Question marks. Question marks are low-share business units in high-growth
markets. They require a lot of cash to hold their share, let alone increase it.
Management has to think hard about which question marks it should try to build into
stars and which should be phased out.
4. Dogs. Dogs are low-growth, low-share businesses and products. They may
generate enough cash to just maintain themselves but do not promise to be large
sources of cash. Even if they break even financially, dogs can represent significant
opportunity costs by absorbing managerial energy and attention that could be used more
profitably elsewhere.
,Developing strategies for growth and downsizing
Product/market expansion grid = A portfolio-planning tool for identifying company growth
opportunities through market penetration, market development, product development, or
diversification.
1. Market penetration = Company growth by increasing sales of current products to
current market segments without changing the product.
2. Market development = Company growth by identifying and developing new market
segments for current company products.
3. Product development = Company growth by offering modified or new products to
current market segments.
4. Diversification = Company growth through starting up or acquiring businesses outside
the company’s current products and markets.
Objective 27-3 Explain marketing’s role in strategic planning and how marketing works
with its partners to create and deliver customer value.
Marketing plays many key roles in the company’s strategic planning.
1) Marketing provides a guiding philosophy—the marketing concept—that focuses the company
strategy on creating customer value and building profitable relationships with key customer
segments.
2) Marketing provides critical insights to strategic planners and helps them shape high-level
corporate strategy by assessing market conditions, identifying attractive market opportunities,
and evaluating the company’s ability to take advantage of them.
3) Marketing facilitates the design and execution of market-focused strategies at the unit level to
profitably achieve those objectives.
Value chain = The set of internal departments that carry out value-creating activities to design,
produce, market, deliver, and support a firm’s products.
Value delivery network = A network composed of the company, suppliers, distributors, and,
ultimately, even customers who partner with each other to improve the performance of the entire
system in delivering customer value.
, Objective 27-5 Explore the marketing management functions, including the elements of a
marketing plan, and discuss the importance of measuring and managing marketing return on
investment.
Managing the marketing process requires the five marketing management functions:
1) Marketing analysis of the company’s situation. The marketer should conduct a SWOT
analysis = An overall evaluation of the company’s Strengths (S > internal capabilities,
resources, and positive situational factors that may help the company serve its customers and
achieve its objectives),
Weaknesses (W internal limitations and negative situational factors that may interfere with the
company’s performance.),
Opportunities (O favorable factors or trends in the external environment that the company may
be able to exploit to its advantage.), and
Threats (T unfavorable external factors or trends that may present challenges to performance.
2) Marketing Planning = choosing marketing strategies that will help the company attain its
overall strategic objectives.A marketing strategy consists of specific decisions regarding target
markets, positioning, the marketing mix (Product, Price, Place, Promotion), and
marketing expenditure levels.
3) Marketing implementation = the process that turns marketing plans into marketing actions
to accomplish strategic marketing objectives.
Does the:
- Threats and opportunities analysis (SWOT) helping management to anticipate
important positive or negative developments that might have an impact on the firm and
its strategies.
- Objectives and issues = the marketing objectives that the company would like to attain
during the plan’s term and discusses key issues that will affect their attainment.
- Marketing strategy = Outlines the broad marketing logic by which the business unit
hopes to engage customers, create customer value, and build customer relationships,
plus the specifics of target markets, positioning, and marketing expenditure levels.
- Execution plans = Spells out how marketing strategies will be turned into specific action
programs that answer the following questions: What will be done? When will it be done?
Who will do it? How much will it cost?
- Budgets = It shows expected revenues and expected costs of production, distribution,
and marketing. The difference is the projected profit. The budget becomes the basis for
materials buying, production scheduling, personnel planning, and marketing operations.
- Controls = Outlines the controls and metrics that will be used to monitor progress, allow
management to review implementation results, and spot products that are not meeting
their goals. It includes measures of return on marketing investment.
-
4) Marketing control = Measuring and evaluating the results of marketing strategies and plans
and taking corrective action to ensure that the objectives are achieved.
Marketing ROI (marketing return on investment ) =
the net return from a marketing investment : the costs of the marketing investment
