Company and marketing strategy: partnering to build customer relationship

Chapter 2 Company and marketing strategy: partnering to build customer relationship

Objectives • Explain strategic planning • Describe business portfolios and growth strategies • Detail marketing’s role in strategic planning • Describe elements of customer-driven marketing strategy • List the marketing management functions

Marketing Process • Research customer and the market place Select customer to serve: market segmentation and targeting Product and service design: building a strong brand Customer relationship management: build strong relationship with chosen customers Create satisfied loyal customer Capture customer life time value • Managing marketing information and customer data Price Create real value Decide on value proposition: differentiation and positioning Partner relationship management : build a strong relationship with marketing partners Increase share of market and share of customer Distribution manage demand and supply chain Promotion Communicating the value

Company Wide Strategy Planning: Defining Marketing’s Role • Strategic Planning Defined: The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities • Strategic planning sets the stage for the rest of the planning of the firm.

1- Market Oriented-Mission • A mission statement is: “ A statement of the organization purpose – what it want to accomplish in a larger environment.” • A mission statement asks.. • What is our business? • Who is the customer? • What do consumers value? • What should our business be?

1- Market Oriented-Mission • A mission statement should be: • serve as a guide for what the organization wants to accomplish. • be “market-oriented” rather than “product-oriented”. (Example: eBay’s mission statement isn’t simply to hold online trading. Instead, it connect individual buyers to sellers in “the world’s online marketplace” • be neither too narrow, nor too broad. • fit with the market environment. • be motivating.

2- Setting Company Objectives and Goals • The company’s mission needs to be turned into detailed supporting objectives for each level of management. • The mission leads to a hierarchy of objectives, including business objectives and marketing objectives. • Marketing strategies and programs must be developed to support these objectives.

Setting Company Objectives and Goals • Monsanto operates in the agriculture biotechnology business. Its mission statement is “improving the future of farming… improving the future of food… abundantly and safely” • The overall objectives is: building profitable customer relationship by developing better agriculture products and getting them to the market faster at lower costs. That by • Researching products that safely help corps products more nutritious. • Reducing chemical spraying • Improving profits to meet the high R&D expensive • Increasing sales or reducing costs. • Increase the company’s share of U.S. market and entering new markets

3- Designing The Business Portfolio • The business portfolio is: The collection of businesses and products that make up the company. • Business portfolio planning involves two steps: • Analyzing the current business portfolio & Determine what role each SBU (Strategic Business Unite) will play in the future • designing strategies for growth and downsizing.

Designing The Business Portfolio • Step 1: • Analyze the current business portfolio • Identify strategic business units (SBUs) • Assess each SBU: • The BCG growth-share matrix classifies SBUs into one of four categories using the: • Market growth rate • SBU’s relative market share within the market.

Designing The Business Portfolio BCG Growth – Share Matrix Stars Question Marks High Market Growth Cash Cows Dogs Low Market Growth High RelativeMarket Share Low RelativeMarket Share

Designing The Business Portfolio B. Determine the future role of each SBU and choose the appropriate resource allocation strategy: • Build • Increase market share • Works well for question marks • Hold • Preserve market share • Good for cash cow • Harvest • Increases short-term cash flow • Good for weak cash cows, question marks and dogs • Divest • Sell or liquidate • Good for dogs and question marks • SBUs change positions over time

Designing The Business Portfolio • Step 2: Designing strategies for growth and downsizing. • Developing strategies for growth by identifying, evaluating, and selecting promising new market opportunities. • Product/market expansion grid • Developing strategies for downsizing the business portfolio. “ Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy”

Designing The Business Portfolio Product/Market Expansion Grid (The Ansoff Matrix) Existing Products New Products Market Penetration A strategy for company growth by increasing sales of current products to current market segment without changing the product Product Development A strategy for company growth by offering modified or new product to current market segments Existing Markets Market Development A strategy for company growth by identifying and developing new market segments for current company product Diversification A strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets New Markets

4- Marketing’s Role in Strategic Planning • Marketing plays a key role in the strategic planning process. • Provide a guiding philosophy (the marketing concept) • Identify attractive opportunities • Design effective strategies for reaching unit’s objectives. • Build strong value chains • Form superior value delivery networks

Marketing Strategy and The Marketing Mix Marketing Intermediary Competitors suppliers Public

Marketing Strategy • Strategy • Market segmentation • Target marketing • Market positioning • The segmentation process divides the total market into market segments. • Market segment is a groups of consumers who respond in similar ways to marketing efforts. • Customers grouped by: • Geographic • Demographic • Psychographic • Behavioral

Marketing Strategy • Strategy • Market segmentation • Target marketing • Market positioning • valuation of each segment’s attractiveness • Selection of segments with greatest long-term profitability • A company can choose one or several segments to target

Marketing Strategy • Strategy • Market segmentation • Target marketing • Market positioning • The place the product occupies in the consumer’s mind • Products are positioned relative to competing products • Marketers look for clear, distinctive and desirable place in positioning

Marketing Mix • The marketing mix includes controllable and tactical marketing tools knows as the 4P’s • The 4P’s include • Product • Price • Promotion • place

Marketing Mix

Marketing Mix • The marketing mix from buyer’s viewpoint

Managing The Marketing Effort • Managing the marketing process require four marketing management function Analysis Planning Develop a strategic plane Implementation Carry out the plans Control Measure result Evaluate Result Develop Marketing Plane Take corrective actions

Market Analysis Internal External Positive Negative

Finding opportunities Avoiding threats Understanding strengths Analyzing weaknesses Managing the Marketing Effort Marketing Functions • Analysis • Planning • Implementation • Control

Marketing plans include: Executive summary Analysis of current situation Objectives Targets and positioning Marketing mix Budget Controls Managing the Marketing Effort Marketing Functions • Analysis • Planning • Implementation • Control

Plans are turned into action with day-to-day activities Good implementation is a challenge Managing the Marketing Effort Marketing Functions • Analysis • Planning • Implementation • Control

Evaluation of the results of marketing strategies Checks for differences between goals and performance Managing the Marketing Effort Marketing Functions • Analysis • Planning • Implementation • Control

Company and marketing strategy: partnering to build customer relationship