Principles of Marketing

Kotler and Armstrong

Chapter 2:
Company and
Marketing Strategy
designing customer-driven
marketing strategies
and
constructing marketing
programs.

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 Company-Wide Strategic Planning
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.
Companies usually prepare: annual plans, long-
range plans and strategic plans (current
businesses & how to keep them going).
In contrast,
Strategic plans, involves adopting the firm to take
advantage opportunities in its constantly
changing environment!!

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Company-Wide Strategic Planning

Steps in Strategic Planning

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 Company-Wide Strategic Planning
Defining a Market-Oriented Mission
• The mission statement is the organization’s purpose; what it wants to accomplish in the
larger environment.
• A clear mission like Invisible hand that guides people in organizations.
• Myopically statements:
➢We make and sell furniture,
➢We are chemical processing firm,
➢We are an online social network
• Mission statement should be market oriented “customer needs”
Should be specific, motivating and emphasizing strengths :
➢Facebook mission is ‘To connect people around the world and help them share important
moments in their lives”
➢Google mission is not to be the world’s best search engine, it is mission is” to give people
a window into the world’s information, wherever it might be found”
Should not be stated as making more sales and profits
➢Macdonald’s mission isn’t to be the world’s best and most profitable fast food firm,
instead,
it is to provide customers with their favorite fast-dining experience.

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 Company-Wide Strategic Planning
Setting Company Objectives and Goals

Heinz’s overall objective is to

build profitable customer
relationships by developing
foods “superior in quality, taste,
nutrition, and convenience” that
embrace
its nutrition and wellness
mission.

H.J. Heinz Company

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 Company-Wide Strategic Planning
Setting Company Objectives and Goals

• Business objectives:
➢ profitable relationship.
➢ Investing heavily in research “expensive”??
➢ High profits
➢ Broadening product lines
• Marketing objectives:
➢ Increased sales
➢ Increasing market share
➢ Promotion
Marketing strategies and programs must support
marketing objectives:
➢ Increase product availability
➢ Promotion in existing markets.
H.J. Heinz Company

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 Designing the Business Portfolio
The business portfolio is the collection of businesses and
products that make up the company.
The best business portfolio is the one that fits the company’s
strengths & weaknesses to opportunities in the market.
For example, the Disney portfolio includes:
Disney theme parks & resorts
Disney studio entertainment (production firms such as; Walt
Disney Pictures, Pixar, and Touchstone Pictures)
Disney consumer products (from apparel & toys to interactive
games)
Disney Internet Media Businesses (including ESPN and the
ABC Television Network)

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 Designing the Business Portfolio
Business portfolio Planning
Involves:
• Analyze the current business portfolio “where to invest”
• Shape the future portfolio “develop strategies for growth & Downsizing”
Portfolio analysis is a major activity in strategic planning whereby management
evaluates the products and businesses that make up the company.
“the firm want to put strong resources into its more profitable businesses & phase
down or drop its weaker ones”
• Identify the key businesses that make up the company called (Strategic Business
Units) “SBUs
An SBU can be a division, a product line within a division or a single product or brand.
• Assess the attractiveness of various SBUs
• Decide how much support each deserves.
When designing business portfolio it is good idea to add & support products and
businesses that fit the firm’s core philosophy and competencies
• Two important dimensions must be taken into account:
Attractiveness of the SBU’s in and the strength of the SBU’s position in the market
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