Company and Marketing Strategy:

Partnering to Build Customer Relationships

Strategic Planning
The process of developing and maintaining a strategic fit between the
organization's goal and capabilities and its changing marketing
opportunities

Steps in Strategic Planning

Business unit, product
Corporate Level
and market level

Defining the Setting Designing

company Planning marketing
company the
objectives and other functional
mission business
and goals strategies
portfolio
Defining a Market-Oriented Mission
Forging a sound mission begins with the following questions
What is our business ?
Who is the customer?
What do consumers value?
What should our business be?

Mission statement
A statement of the organizations purpose-what in wants to accomplish in the
larger environment

Invisible Hand- that guides people in the organization.

Firms with well-crafted mission statement have better

organizational and financial performance.
 We make and sell furniture Some companies
define their mission
We are a chemical-processing firm myopically in product
or technology terms

Mission statements should be market oriented and define in terms of

satisfying basic customer needs.

Nokia Sell mobile phones Connect people

Mission statement should be meaningful and specific yet motivating. They

should emphasize the companys strengthens in the marketplace

GremeenPhone We are here to help

HSBC Worlds Local Bank

 Setting Company Objectives and Goals
The company needs to turn its mission into detailed supporting objectives for
each level of management. Each manager should have objectives and be
responsible for reaching them

This mission leads to a hierarchy of objectives, including business objectives

and marketing objectives.

Company Product-Oriented Definition Market-Oriented Definition

Google We provide the worlds We help you organize the
best online search engine. worlds information and make it
universally accessible and
useful.

Nike We sell athletic shoes We bring inspiration and

and apparel innovation to every athlete in
the world

Revlon We make cosmetics We sell lifestyle and self-

expression; success and status;
memories, hopes, and dreams
Designing the Business Portfolio
Business Portfolio:
The collection of business and product that make up the company.
Business portfolio planning involves two steps
First. The company must first analyzing its current business portfolio
and decide which business should receive more, less, or no investment

Second, it must shape the future portfolio by developing strategies for

growth and downsizing.

Analyzing the Current Business Portfolio

Portfolio analysis
The process by which management evaluates the products and
business that make up the company

The company will want to put strong resources into its more profitable
business and phase down or drop its weaker ones.
 Current Business Portfolio analysis involves two steps

First step is to identify the key business that make up the company,
called strategic business unit (SBUs)
SBUs A company division
A product line within a division
Single product or brand

Second step is to assess the attractiveness of its various SBUs and

decides how mush support each deserves.

The purpose of strategic planning is to find ways in which the

company can best use its strength to take advantage of attractiveness
opportunities in the environment .
Evaluate SBUs on two important dimensions

The attractiveness of the SBUs market or industry

The strength of the SBUs position in that market or industry

 BOSTON CONSULTING GROUP (BCG) MATRIX

is developed by BRUCE HENDERSON of the BOSTON

CONSULTING GROUP IN THE EARLY 1970s.

According to this technique, businesses or products

are classified as low or high performers depending
upon their market growth rate and relative market
share.
MARKET SHARE
Market share is the percentage of the total market that is
being serviced by your company, measured either in
revenue terms or unit volume terms.

RELATIVE MARKET SHARE

RMS = Business unit sales this year

Leading rival sales this year

The higher your market share, the higher proportion of the

market you control.
 MARKET GROWTH RATE

Market growth is used as a measure of a markets

attractiveness.

MGR = Individual sales - individual sales

this year last year
Individual sales last year

Markets experiencing high growth are ones where the total

market share available is expanding, and theres plenty of
opportunity for everyone to make money.
 THE BCG GROWTH-SHARE MATRIX

It is a portfolio planning model which is based on the

observation that a companys business units can be classified
in to four categories:

Stars
Question marks
Cash cows
Dogs

It is based on the combination of market growth and market

share relative to the next best competitor.
STARS
High growth, High market share

Stars are leaders in business.

They also require heavy investment, to maintain its
large market share.
It leads to large amount of cash consumption and
cash generation.
Attempts should be made to hold the market share
otherwise the star will become a CASH COW.
CASH COWS
Low growth , High market share

They are foundation of the company and often the

stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as
possible
They are located in an industry that is mature, not
growing or declining.
DOGS
Low growth, Low market share

Dogs are the cash traps.

Dogs do not have potential to bring in much cash.
Number of dogs in the company should be
minimized.
Business is situated at a declining stage.
QUESTION MARKS
High growth , Low market share

Most businesses start of as question marks.

They will absorb great amounts of cash if the market
share remains unchanged, (low).
Why question marks?
Question marks have potential to become star and
eventually cash cow but can also become a dog.
Investments should be high for question marks.
WHY BCG MATRIX ?

To assess :
Profiles of products/businesses
The cash demands of products
The development cycles of products
Resource allocation and divestment
decisions
MAIN STEPS OF BCG MATRIX

Identifying and dividing a company into SBU.

Assessing and comparing the prospects of each
SBU according to two criteria :
1. SBUS relative market share.
2. Growth rate OF SBUS industry.
Classifying the SBUS on the basis of BCG matrix.
Developing strategic objectives for each SBU.
BCG MATRIX WITH CASH FLOW
BENEFITS

BCG MATRIX is simple and easy to understand.

It helps you to quickly and simply screen the

opportunities open to you, and helps you think about
how you can make the most of them.

It is used to identify how corporate cash resources can

best be used to maximize a companys future growth and
profitability.
LIMITATIONS

BCG MATRIX uses only two dimensions, Relative

market share and market growth rate.

Problems of getting data on market share and

market growth.

High market share does not mean profits all the time.

Business with low market share can be profitable

too.
Growth Strategies

Intensive Growth: Intensive growth strategies are appropriate

when current products and current markets show the potential for
sales increase. There are three main strategic options that seem to
be appropriate to accomplish intensive growth:

1. Market Penetration.
2. Market development.
3. Product development. PRODUCT

Current New

Current
Market
penetration Product
development
MARKET
Diversification
Market
New

development
Diversification Growth
This strategy involves developing new products to be sold in
new markets.

Markets

Present Markets New Markets

Unrelated
Horizontal Conglomerate
New Products

to Current diversification diversification

Products

Related to
Current Integrated Concentric
diversification diversification
Products

Diversification Strategies
Planning Marketing: Partnering to Build Customer Relationships

Partnering With The Other Company Departments

Value chain
The series of departments that carry out value-creating activities to design,
produce, market, deliver, and support a firms products.

Partnering With Others in the Marketing System

Value delivery network
The network made up of the company, supplies, distributors, and, ultimately,
customers who partner with each other to improve the performance of the
entire system.

Toyota Includes the phrase in its mission statement:

achieve suppliers satisfaction
 Marketing
Competitors
intermediaries

Product

Place Customer
maarand
value
relationship

Promotion

Suppliers
Publics
Marketing Strategy and the Marketing Mix

Marketing Strategy
The marketing logic by which the business unit hopes to create customer value
and achieve profitable customer relationships

Customer Driven Marketing Strategy

This process involves :- Market Segmentation
Market Targeting
Differentiation
Positioning

Market Segmentation
Dividing a market into distinct groups of buyers who have different needs,
characteristics, or behaviors, and who might require separate products or
marketing program

Market Segment
A group of customers who respond in a similar way to a given set of marketing
efforts
Market Targeting
The process of evaluating each market segments attractiveness and selecting
one or more segments to enter.

Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative
to competing products in the minds to target customer.

GMG Airlines First Class All the Way

Differentiation
Actually differentiating the market offering to create superior customer value.

GrameenPhone
Djuice For teenagers

Village Phone For village women

Akota For small entrepreneur

Developing an Integrated Marketing Mix
Marketing Mix
The set of controllable tactical marketing tools- products, price, place and
promotion- that the firms blends to produce the response it wants in the target
market
Product
It means the goods-and-services combination the company offers to the
target market.

Price
It is the amount of money customer must pay to obtain the product.

Place
It includes company activities that make the product available to target
consumers

Promotion
It means activities that communicate the merits of the product and persuade
target customers to buy it.
 Product Price
Variety List price
Quality Discount
Design Allowances
Features Payment period
Brand Name Credit Terms
Packaging
Services Target
customers

Integrated
positioning
Promotion Place
Advertising Channels
Personal selling Coverage
Sales promotion Assortment
Public relations Locations
Inventory
Transportation
logistics
The 4Ps might be better described as the four Cs

4 Ps 4Cs

Product Customer solution

Price Customer cost

Place Convenience

Promotion Communication
Managing Marketing :
Analysis, Planning, Implementation, and Control

Analysis

Planning Implementation Control

Develop Strategic Carry out the Measure
Plan plans Results

Evaluate
result

Develop marketing Take

plan Corrective
Action
 Marketing Analysis:

SWOT Analysis An overall evaluation of the companys

strengths(S), weakness(W), opportunities
(O), threats (T)

Strengths Weakness
Internal Internal capabilities that Internal limitations that
may help a company may interfere with a
reach its objectives achieve its objectives
Opportunities Threats
External factors that Current and emerging
External the company may be external factors that
able to exploit to its may challenge the
advantage companys performance

Positive Negative
 Marketing Planning
Contents of a Marketing Plan

Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
Marketing Implementation

The process that turns marketing strategies and plans

into marketing actions in order to accomplish strategic
marketing objectives

Marketing Department Organization

Marketing Control

The process of measuring and evaluating the results of

marketing strategies and plans and taking corrective
action to ensure that objectives are achieved.
 Measuring and Managing Return on
Marketing Investment

Return on marketing investment (or marketing ROI)

The net return from a marketing investment divided by the

costs of the marketing investment.
 Marketing Investments

Marketing Returns
Improved customer value and satisfaction

Increased Customer Increased Customer Cost of

Attraction Retention Marketing
Investment

Increased Customer Lifetime Values And

Customer Equity

Return on Marketing Investment