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CH 2Company and Marketing Strategy: Partnering

to Build Customer Relationships

Strategic Planning
Strategic planning involves adapting the firm to take
advantage of opportunities in its constantly changing
Helps firm maintain strategic fit b/n goals and capabilities and its
changing market opportunities
Steps in Strategic Planning
1. Define company mission statement
2. Setting company objectives and goals
3. Designing business portfolio
4. Planning marketing and other functional strategies

Mission Statement (1)

Statement of the organizations purpose (Accomplish in
larger environment)
Market oriented and defines in terms of satisfying basic customer
Emphasized the companys strengths
Focuses on customers and the customer experience the company
seeks to create
Setting Company Objectives and Goals (2)
Mission converted to supporting objectives at each level of
Business objectives
Marketing objectives
Business Portfolio (3)
Collection of businesses and products that make up the
Steps in business portfolio planning:
o Analyze firms current business portfolio
o Develop strategies for growth and downsizing to shape the
future portfolio

Portfolio Analysis (Strategic Business Units)

Evaluation of the products and businesses that make up the
company by management
Evaluate SBUs on 2 dimensions: Attractiveness and strength of
BCG Growth-Share Matrix (4 types of SBUs)
Evals companys SBUs in terms of market growth rate and
relative market share

StarsHigh growth and high share; turns into cash cow

Question MarkHigh growth and low share; requires a lot $$$ to
Cash cow Low growth and high share; produce a lot $$$
DogLow growth and low share
Invest to hold or build shares, harvest or divest (sell or phase
o Difficult, time consuming and costly
o Difficult to define SBUs and measure share and growth
o Focuses on classifying current business but provide little
advice for future planning

The Production/Market Expansion Grid

Reduces business portfolio by eliminating products or
business units that are not profitable or no longer fit the
companys overall strategy
Why downsize? Reasons:
1. Rapid growth of the company
2. Lack of experience in a market
3. Change in market environment
4. Decline of a particular product
Role of Marketing in Strategic Planning
Provides a guiding philosophy
o Marketing conceptCompany strategy should create
customer value and build profitable relationships with the key
Provides inputs to strategic planners
o Helps identify market opportunities and assess firms potential
to take advantage of them
Designs strategies for reaching the units objectives
Partnering with Other Company Departments
Value ChainSeries of internal departments that carry our
value-creating activities
Success depends on how well various departments coordinate their
Marketers should ensure all the departments are customer-focused
and develop smooth, functioning value chain.
Partnering with Others in the Marketing System
Companies should assess:
o Their internal value chains
o Value chains of their suppliers, distributors and their
Value Delivery NetworkMade up of the company, suppliers,
distributors and its customers who partner with each other
to improve performance of entire system
Marketing Strategy
Marketing logic by which the company hopes to create
customer value and achieve profitable customer
Marketing MixIntegration of product, price, place and promotion
Activities for best marketing strategy and mix involve:
o Market analysis
o Planning, implementation, and control

Segment, Target, and Position (STP)

Market segmentation
o Dividing market into distinct groups of buyers who have diff
needs, characteristics or behaviors
Market Segment
o Group of consumers who respond in a similar way to given set
of marketing efforts
Market Targeting
o Evaluating each market segments attractiveness and
selecting one or more segments to enter
Arranging for a product to occupy a clear, distinctive, and
desirable place relative to competing products in the mind of
target consumers
Begins with Differentiation
o Differentiating the market offering to create superior
customer value
Marketing program should support chosen positioning strategy
Four Ps of the Marketing Mix

Criticisms of Four Ps
Omit or underemphasize service products
Need to include packaging as a product decision
Does not cater to buyers perspective of the Four Cs: (Myopia?)
1. Customer solution
2. Customer cost
3. Convenience
4. Communication
Managing Marketing: Analysis, Planning, Implementation, and

SWOT Analysis

Market Implementation

Turning marketing strategies and plans into marketing

actions to accomplish strategic marketing objectives
Addresses the who, where, when and how of marketing activities
Marketing Control
Measuring and evaluating the results of marketing strategies
and plans
Operating control ensures that the company achieves the sales,
profits and other goals set in its annual plan
Strategic control involves looking at whether the companys basic
strategies are well matched to its opportunities
Marketing Return on Investment (ROI)
Net return from a marketing investment divided by the costs
of the marketing investment
o Math Formula
Assessed using:
o Standard marketing performance measures
o Customer-centered measures

Learning Objectives
Explain company-wide strategic planning and its 4 steps
Discuss how to design business portfolios and develop growth
Explain marketings role in strategic planning and how marketing
works with its partners to create and deliver customer value
Describe the elements of a customer0driven marketing strategy and
mix and the forces that influence it
List the marketing management functions, including the elements of
a marketing plan, and discuss the importance of measuring and
managing return on marketing investment