Strategic Planning for Marketing Success

1. Chapter Two Company and Marketing Strategy Partnering to Build Customer Relationships

2. Company and Marketing Strategy Companywide Strategic Planning: Defining Marketing’s Role Designing the Business Portfolio Planning Marketing: Partnering to Build Customer Relationships Marketing Strategy and the Marketing Mix Managing the Marketing Effort Topic Outline

3. Companywide Strategic Planning Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities Strategic Planning

4. Steps in Strategic Planning

5. Companywide Strategic Planning The mission statement is the organization’s purpose, what it wants to accomplish in the larger environment Market-oriented mission statement defines the business in terms of satisfying basic customer needs Defining a Market-Oriented Mission

6. Companywide Strategic Planning Setting Company Objectives and Goals

7. Companywide Strategic Planning The business portfolio is the collection of businesses and products that make up the company. Business portfolio planning involves two steps, First, the company must analyze its current business portfolio and Second decide which businesses should receive more, less, or no investment. Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company Designing the Business Portfolio

8. Companywide Strategic Planning Strategic business unit (SBU) is a unit of the company that has a separate mission and objectives that can be planned separately from other company businesses Company division Product line within a division Single product or brand Analyzing the Current Business Portfolio

9. Companywide Strategic Planning Analyzing the Current Business Portfolio

10. Companywide Strategic Planning: Defining Marketing’s Role Analyzing the Current Business Portfolio The Boston Group Approach • Growth share matrix is a portfolio planning method that evaluates a company’s strategic business units in terms of their market growth rate and relative share. • Strategic business units are classified as: • Stars • Cash Cows • Question marks • Dogs

11. The BCG Growth-Share Matrix

12. Stars: Stares are high growth, high share business or products. They often need heavy investment to finance their rapid growth. Eventually (sooner or later) their growth will slow down. And they will turn into cash cows and becomes major cash generating supporting other SBU. Cash cows: cash cows are low growth, high share businesses or products. These established and successful SBUs need less investment to hold their market share. Question Mark: Question Marks are low share – businesses units in high growth markets. They required a lot of cash to hold their share. Dogs: Dogs are 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.

13. Companywide Strategic Planning Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning Problems with Matrix Approaches

14. Companywide Strategic Planning Product/market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification Penetration: অনুপ্রবেশ Developing Strategies for Growth and Downsizing

15. Companywide Strategic Planning Developing Strategies for Growth and Downsizing Product/Market Expansion Grid Strategies

16. Companywide Strategic Planning Market penetration is a growth strategy increasing sales to current market segments without changing the product. Ex: it might add new stores in current market areas to make it easier for more customers to visit. Market development is a growth strategy that identifies and develops new market segments for current products. For instance, managers could review new demographic markets. Perhaps new groups Developing Strategies for Growth and Downsizing

17. Companywide Strategic Planning Product development is a growth strategy that offers new or modified products to existing market segments Diversification is a growth strategy for starting up or acquiring businesses outside the company’s current products and markets Developing Strategies for Growth and Downsizing

18. Companywide Strategic Planning Downsizing is the reduction of the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy Developing Strategies for Growth and Downsizing

19. Planning Marketing: Partnering to build customer relationships -Customer value and satisfaction are important ingredients in the marketer’s formula for success. -However, marketers alone cannot produce superior value for customers. Although it plays a leading role, marketing can be only a partner in attracting, keeping and growing customers. - In addition to customer relationship management, marketers must also practice partner relationship management.

20. Partner relationship management: working closely with partners in other company departments and outside the company to jointly bring greater value to customers. For creating PRM we have to look at the concepts of a company value chain and value delivery network.

21. Planning Marketing Value chain is a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products. Success depends on how well each department performs its work of adding value for customers and on how well the activities of various department takes the consumer’s point of view. Partnering to Build Customer Relationships

22. Planning Marketing Value delivery network is made up of the company, suppliers, distributors, and, ultimately, customers who “partner” with each other to improve performance of the entire system. Partnering to Build Customer Relationships

23. Marketing Strategy and the Marketing Mix Consumers stand in the center. The goal is to build strong and profitable relationships with customers. As a first step, through market segmentation, targeting and positioning, the company decides which customers it will serve and how. Next the company designs a marketing mix. Customer-Driven Marketing Strategy

25. Marketing Strategy and the Marketing Mix Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behavior, and who might require separate products or marketing mixes. Based on: geographic, demographic etc. Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts Customer-Driven Marketing Strategy

26. Marketing Strategy and the Marketing Mix Target Market is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter Customer-Centered Marketing Strategy

27. Marketing Strategy and the Marketing Mix Market positioning is the arranging for a product to occsupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer Example: Mecedes says, In a Perfect world, everyone would Drive a Mercedes”. Customer-Centered Marketing Strategy

28. Marketing Strategy and the Marketing Mix Marketing mix is the set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market Developing an Integrated Marketing Mix

29. Developing an Integrated Marketing Mix The four Ps Product Price Place Promotion Marketing Strategy and the Marketing Mix

30. Marketing Mix Product means the goods and services combination the company offers to the target market. Price is the amount of money customers have to pay to obtain the product. Place includes company activities that make the product available to target consumers. Promotions means activities that communicate the merits of the product and persuade target customers to buy it. The four Ps concept takes the seller’s view of the market, not the buyer’s view. From the buyer’s viewpoint, in this age of customer relationships, the four Ps might be better described as the four Cs. Four Ps Four Cs Product Customer solution Price Customer cost Place Convenience Promotion Communication

31. Managing the Marketing Effort The company wants to design and put into action the marketing mix that will best achieve its objectives in its target markets. Relationship between the four marketing management functions are: analysis Planning Develop strategic plans Develop marketing plans Implementation carry out the plans Control Measure results Evaluate results Take corrective action

32. Managing the Marketing Effort Market Planning—Parts of a Marketing Plan

33. Executive summary: presents a brief summary of the main goals and recommendations of the plan for management review, helping top management to find the plans major points quickly. Current marketing situation: a market description a product review a review of competition a review of distribution Threats and opportunity analysis: assesses major threats and opportunities that the product might face, helping management to anticipate important positive or negative developments that have impact

34. Objectives and issues: Example: if the goal is to achieve a 15 percent market share, this section looks at how this goal might be achieved. Marketing strategy: specifics or target markets, positioning and marketing expenditure levels. Action programs: what will be done? When will be done? Who is responsible for doing it? Budgets: it shows expected revenues (forecasted number of units sold and the average net price) and expected costs Controls: outline the control that will be used to monitor progress and allow higher management to review implementation results

35. Managing the Marketing Effort Implementing is the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives Successful implementation depends on how well the company blends its people, organizational structure, decision and reward system, and company culture into a cohesive (solid) action plan that supports its strategies Marketing Implementation

36. Managing the Marketing Effort Marketing Department Organization

37. Managing the Marketing Effort Controlling is the measurement and evaluation of results and the taking of corrective action as needed • Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. • Strategic control involves looking at whether the company’s basic strategies are well matched to its opportunities. Marketing Control

38. Measuring and Managing Return on Marketing Investment Return on marketing investment (marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. Marketing ROI provides a measurement of the profits generated by investments in marketing activities. Return on Marketing Investment (Marketing ROI)