Chapter Two

Company and Marketing Strategy Partnering to Build Customer Relationships

1

Company and Marketing Strategy

Topic Outline

Companywide Strategic Planning: Defining Marketings Role Designing the Business Portfolio Planning Marketing: Partnering to Build Customer Relationships Marketing Strategy and the Marketing Mix Managing the Marketing Effort

The Olympics and Marketing

Companywide Strategic Planning

Strategic Planning

Strategic planning is the process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities

Companywide Strategic Planning

Steps in Strategic Planning

Companywide Strategic Planning

Defining a Market-Oriented Mission

The mission statement is the organizations purpose, what it wants to accomplish in the larger environment We strive to be the global leader in the sporting Market-oriented mission goods industry with statement defines the sports brands build on a passion for sports and a business in terms of sporting lifestyle! satisfying basic customer needs

Companywide Strategic Planning

Company Amazon.com Product-Oriented Definition We sell books, videos, CDs, toys, consumer electronics and other products online Market-Oriented Definition We make the Internet buying experience fast, easy, and enjoyable were the place where you can find and discover anything you want to buy online We create fantasiesa place where dreams come true and America still works the way its supposed to

Disney

We run theme parks

Google

We provide the worlds best online search engine

???

Companywide Strategic Planning

Defining a Market-Oriented Mission

We help you organize the worlds information and make it universally accessible and useful.

Companywide Strategic Planning

Setting Company Objectives and Goals

Business objectives

Marketing objectives

Build profitable customer relationships Invest in research Improve profits

Increase market share Create local partnerships Increase promotion

9

Companywide Strategic Planning

Designing the Business Portfolio

The business portfolio is the collection of businesses and products that make up the company
http://www.thecoca-colacompany.com/brands/brandlist.html

Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company

10

Companywide Strategic Planning: Boston Consulting Group Approachhttp://www.valuebasedmanagement.net/methods_bcgmatrix

.html

Relative Market Share Market Growth Rate

High High Stars
High growth & share Profit potential May need heavy investment to grow

Low Question Marks

High growth, low share Build into Stars or phase out Require cash to hold market share

Cash Cows
Low growth, high share Established, successful SBUs Produce cash

Dogs
Low growth & share Low profit potential

Low

11

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing

Product/market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

12

Marketing strategies of Starbucks

More store growth Enhanced experience New retail channel New products and store concepts International growth

13

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing Product/market expansion grid strategies

14

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing
Market penetration is a growth strategy increasing sales to current market segments without changing the product Market development is a growth strategy that identifies and develops new market segments for current products
15

Companywide Strategic Planning

Developing Strategies for Growth and Downsizing
Product development is a growth strategy that offers new or modified products to existing market segments Diversification is a growth strategy through starting up or acquiring businesses outside the companys current products and markets
16

Marketing Strategy and the Marketing Mix

17

Marketing Strategy and the Marketing Mix

Customer-Driven Marketing Strategy

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 Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts

18

Marketing Strategy and the Marketing Mix

Customer-Centered Marketing Strategy

Market targeting is the process of evaluating each market segments attractiveness and selecting one or more segments to enter

19

Marketing Strategy and the Marketing Mix

Customer-Centered Marketing Strategy

Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer.

20

Marketing Strategy and the Marketing Mix

Developing an Integrated Marketing Mix

Marketing mix is the set of controllable tactical marketing toolsproduct, price, place, and promotionthat the firm blends to produce the response it wants in the target market

21

Marketing Strategy and the Marketing Mix

Developing an Integrated Marketing Mix

22

Managing the Marketing Effort

23

Managing the marketing effort: SWOT analysis

SWOT Analysis Framework

Environmental Scan

/ Internal Analysis /\ Strengths Weaknesses

\ External Analysis /\ Opportunities Threats

| SWOT Matrix

Managing the marketing effort: SWOT analysis

Marketing Analysis SWOT Analysis

25

Managing the marketing effort: SWOT analysis

Strengths A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.

Examples of such strengths include: patents strong brand names good reputation among customers cost advantages exclusive access to high grade natural resources favorable access to distribution networks

Managing the marketing effort: SWOT analysis

Weaknesses The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses: lack of patent protection a weak brand name poor reputation among customers high cost structure lack of access to the best natural resources lack of access to key distribution channels

Managing the marketing effort: SWOT analysis

Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:

an unfulfilled customer need arrival of new technologies removal of international trade barriers

Managing the marketing effort: SWOT analysis

Threats Changes in the external environmental also may present threats to the firm. Some examples of such threats include:

shifts in consumer tastes away from the firm's products emergence of substitute products new regulations increased trade barriers

Managing the marketing effort: SWOT analysis

SWOT strategy matrix

Strengths Opportunities

Weaknesses

S-O strategies W-O strategies

Threats

S-T strategies W-T strategies

Managing the marketing effort: SWOT analysis

S-O strategies pursue opportunities that are a good fit to the company's strengths. W-O strategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.

Building Customer Relationships

Customer Relationship Management (CRM)

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

Building Customer Relationships

Relationship Building Blocks: Customer Value and Satisfaction
Customerperceived value Customer satisfaction

The difference between total customer value and total customer cost

The extent to which a products perceived performance matches a buyers expectations

Video case: Live Nation

Whats Live Nations mission? How does Live Nations strategy provide better value for customers?

34