Company and Marketing Strategy: Partnering To Build Customer Relationships

Chapter 2
Company and Marketing Strategy:

Partnering to Build Customer
Relationships
Company-Wide 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.
Changing
Marketing
Opportunities
Organizational
Capabilities
goals
Company-Wide Strategic Planning: Defining
Marketing’s Role
Like the marketing strategy, Business unit, product, and
broad company strategy
market level
must be customer focused. Corporate Level
Planning
Defining Setting Designing
marketing
the company the
and other
company objectives business
functional
mission and goals portfolio
strategies
Company-wide strategic planning guides Company-wide

strategic planning guides marketing strategy and planning.
marketing strategy and planning.
Figure: 2.1
Steps in Strategic Planning
Step-1: Defining a Market-Oriented Mission
Mission statement is a statement of the organization’s

purpose—what it wants to accomplish in the larger
environment.
Step-2: Setting Company Objectives and Goals
▪ The company needs to turn its mission into detailed

supporting objectives for each level of management.
▪ Profits can be improved by increasing sales or reducing

costs. Sales can be increased by improving the
company’s share of domestic and international
markets. These goals then become the company’s
current marketing objectives.
Step-3:Designing the Business Portfolio
Business portfolio is the collection of businesses and
products that make up the company.
It involves two steps:
1. The company must analyze its current business
portfolio and determine which businesses should
receive more, less, or no investment
2. It must shape the future portfolio by developing
strategies for growth and downsizing.
1. Analyzing the Current Business Portfolio
❑ Portfolio analysis is the

process by which
management evaluates the
products and businesses
that make up the company.
Strategic
Business Unit
(SBU)
BCG Matrix/ Growth/Share Matrix
The Boston Consulting Group Approach (BCG)
BCG
Matrix/Growth-Share
matrix is a
portfolio-planning method
that evaluates a company’s
SBUs in terms of its market
growth rate and relative
market share.
figure: 2.2
1. Stars are high-growth, high-share businesses or products.

They often need heavy investments to finance their rapid
growth. Eventually their growth will slow down, and they will
turn into cash cows. Their strategy is “ Build”
2. Cash cows are low-growth, high-share businesses or

products. These established and successful SBUs need less
investment to hold their market share. Thus, they produce a
lot of the cash that the company uses to pay its bills and
support other SBUs. Their strategy is “ Harvest”
3. Question Marks are low-share business units in

high-growth markets. They require a lot of cash to hold their
share, let alone increase it. Management has to think hard about
which question marks it should try to build into stars and which
should be phased out. Their strategy is “ Hold”
4. Dogs are low-growth, low-share businesses and products.

They may generate enough cash to maintain themselves but do
not promise to be large sources of cash.Their strategy is “ Divest”
2. Developing Strategies for Future Growth
and Downsizing
Product/Market Expansion Grid is a portfolio-planning
tool for identifying company growth opportunities through
market penetration, market development, product development,
or diversification.
Product Market Expansion Grid
The Product/Market Expansion Grid
Figure: 2.3
The Product/Market Expansion Grid
1. Market penetration: Company growth by increasing sales of
current products to current market segments without changing
the product.
2. Market development: Company growth by identifying and
developing new market segments for current company
products.
3. Product development: Company growth by offering
modified or new products to current market segments.
4. Diversification: Company growth through starting up or
acquiring businesses outside the company’s current products
and markets.
Marketing Strategies and Marketing Mix
Marketing strategy: is the marketing logic by

which the company hopes to create customer
value and achieve profitable customer
relationships.
Marketing Mix: is the set of controllable

marketing tools— product, price, place, and
promotion— that the firm blends to produce the
response it wants in the target market.
Customer-Driven
Marketing
Strategy
1. Segmentation
2. Targeting
3. Positioning
4. Differentiation
5. Product
6. Price
7. Place/ Distribution
8. Promotion
Figure: 2.4 Managing Marketing Strategies and

the Marketing Mix
Customer-Driven Marketing Strategy
1.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 programs.
Market segment: A group of consumers who respond in a similar

way to a given set of marketing efforts.
2. Market targeting: The process of evaluating each market

segment’s attractiveness and selecting one or more segments to
enter.
Target Market: A target market is a

group of customers at which a business
aims its marketing efforts and resources
3.Positioning: Arranging for a

product to occupy a clear,
distinctive, and desirable place
relative to competing products
in the minds of target
consumers.
•Mercedes = Luxury
•Volvo= Safety
•Toyota= Fuel Efficiency
•Ferrari= Speed
•Tata Nano= Low Price
4.Differentiation: Actually differentiating the market offering to

create superior customer value.
Marketing Mix
(4ps)
1. Product means the
goods-and-services
combination the
company offers to the
target market.
2. Price is the amount of
money customers must
pay to obtain the product.
Figure: 2.5 The Four Ps of the Marketing Mix
Marketing Mix
3. Place includes company

activities that make the
product available to target
consumers.
4. Promotion means activities
that communicate the merits
of the product and persuade
target customers to buy it.
Marketing Analysis
FIGURE | 2.6 Managing Marketing: Analysis, Planning, Implementation, and Control

SWOT analysis
A SWOT analysis is a
compilation of your company's
strengths, weaknesses,
opportunities and threats. The
primary objective of a SWOT
analysis is to help
organizations develop a full
awareness of all the factors
involved in making a business
decision
Figure: 2.7 SWOT Analysis: Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T)
Contents of Marketing Plan
• Executive summary
• Current marketing situation
• Threats and opportunities analysis
• Objectives and issues
• Marketing strategy
• Action programs
• Budgets
• Controls

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Chapter 2

Company and Marketing Strategy:

Strategic planning is the process of developing and

Company-wide strategic planning guides Company-wide

Mission statement is a statement of the organization’s

▪ The company needs to turn its mission into detailed

▪ Profits can be improved by increasing sales or reducing

❑ Portfolio analysis is the

The Boston Consulting Group Approach (BCG)

1. Stars are high-growth, high-share businesses or products.

2. Cash cows are low-growth, high-share businesses or

3. Question Marks are low-share business units in

4. Dogs are low-growth, low-share businesses and products.

The Product/Market Expansion Grid

Marketing strategy: is the marketing logic by

Marketing Mix: is the set of controllable

Figure: 2.4 Managing Marketing Strategies and

Market segment: A group of consumers who respond in a similar

2. Market targeting: The process of evaluating each market

Target Market: A target market is a

3.Positioning: Arranging for a

4.Differentiation: Actually differentiating the market offering to

3. Place includes company

FIGURE | 2.6 Managing Marketing: Analysis, Planning, Implementation, and Control

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