Principles of Marketing
Chapter 2
Company and Marketing Strategy:
Partnering to Build Customer
Relationships
MKT 201
Course Instructor: Zakia Binte Jamal
What Is 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 (Kotler &
Armstrong, 2004).
Steps in Strategic Planning
▪ Corporate level
Define the company mission.
Set company objectives and goals.
Design the business portfolio.
▪ Business unit, product and market levels.
Planning, marketing and other
functional strategies.
Corporate level (cont…)
▪ Defining a Market-Oriented Mission
What is our business?
Who is the customer?
What do consumers value?
What should our business be?
◼A good mission statement should be:
Specific, Realistic, Fit in market environment &
Motivating
Corporate level (cont…)
▪ Setting company objectives and goals
The company’s mission needs to be turned into
detailed supporting objectives for each level of
management. Mission leads to business
objectives and marketing objectives.
Mission leads to Hierarchy of
Objectives
Marketing
Corporate level (cont…)
▪ Designing the Business portfolio
The business portfolio is the collection of
businesses and products that make up the
company.
◼ 2 steps of business portfolio planning
Analyze company’s current business portfolio
& decide which businesses should receive
more, less or no investment.
Company must shape the future portfolio by
developing strategies for growth and
downsizing.
Unilever Business Portfolio
Analyzing Current SBU’s:
BCG Growth-Share Matrix
Stars Question Marks
• High growth & share • Low share SBUs in high growth
?
• May need heavy markets
investment to grow • Require cash to hold
• Eventually, growth will slow market share
• Build into Stars or phase out
Cash Cows Dogs
• Low growth & share
• Low growth, high share • Generate cash to sustain self
• Established, successful • Do not promise to be cash
SBU’s sources
• Produce cash
Potential Problems with BCG
growth-share matrix
◼ Can be time consuming and costly.
◼ Difficult to define SBUs and measure
market share and growth.
◼ Focus on the current business, not future
planning.
◼ Can place too much emphasis on growth.
◼ Can lead to poorly planned
diversification.
The Product/Market Expansion Grid
(Developing strategies for growth &
downsizing)/ Ansoff Matrix
Existing New
Products Products
Existing Market Product
Markets Penetration Development
New Market
Markets
Diversification
Development
Product/Market Expansion Grid
◼ Market Penetration: make more sales to
current customers without changing products.
▪ How? Add new stores in current market areas;
improve advertising, prices, menu, service.
◼ Market Development: identify and develop
new markets for current products.
▪ How? Review new demographic (seniors/ethnic
consumers) or geographic (Asian, European,
Australian, & South American) markets.
Product/Market Expansion Grid
Based on Starbucks
◼ Product Development: offering modified or
new products to current markets.
▪ How? Add offerings, sell in supermarkets,
co-brand products.
◼ Diversification: start up or buy businesses
outside current products and markets.
The Marketing Process
▪ It is the process of analyzing marketing
opportunities, selecting target markets,
developing the marketing mix and
managing the marketing effort.
▪ To serve consumers profitably, a company
must go through 3 steps
Market segmentation
Target marketing
Market positioning
▪ Market segmentation: Dividing the market into
different groups of buyers who have different
needs, and who might require separate products
or marketing mix.
◼ Target marketing: The process of
evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
◼ Market positioning: Placing a product to
occupy a clear and desirable place relative
to competitors in consumer’s minds.
Intermediar et in Competitor
a rk M
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i pla et
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Ta
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Custo t
on
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positioni
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Ma
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ing t promo r k e nt
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ntr tion M ple n
ol im atio
Suppliers
Publics
Create Marketing Mix
◼ Marketing Mix: Set of controllable tactical
marketing tools (Product, price, place, promotion)
to influence the demand for its product in the
market.
◼ Product – offers the right product, service or
experience.
◼ Price – controls perceived value and satisfaction.
◼ Place – allows customers easy access to product
and support.
◼ Promotion – communicates the offer and the value
proposition.
The 4 Ps of Marketing Mix
Product Price
•Varity •List price
•Quality •Discounts
•Design •Allowances
•Features •Payment period
•Brand name •Credit terms
•Packaging
•services Target
customers
Promotion Intended Place
•Advertising Positioning •Channels
•Personal selling •Coverage
•Sales promotion •Assortments
•Public relation •Locations
•Inventory
•Transportation
•Logistics
The Four Ps and the Four Cs
◼ PRODUCT provides CUSTOME SOLUTION
◼ PRICE represents CUSTOMER COST
◼ PLACE provides CONVENIENCE
◼ PROMOTION is 2-way COMMUNICATION
Managing Marketing Effort
◼ Build strong operational marketing plan.
◼ Carry out the plan.
▪ Organize marketing department.
▪ Leverage value chain and value
network.
◼ Exercise control.
▪ Set goals.
▪ Measure and evaluation performance.
◼ Take corrective action.
The Relationship between Analysis,
Planning, Implementation and Control
Analysis
Planning
Develop strategic Implementation Control
plans Carry out the plan Measure results
Evaluate results
Develop Take corrective
marketing Action
plans
SWOT Analysis
Positive Negative
Internal
External
Marketing Implementation and
Control
◼ Marketing Implementation: The process
that turns marketing strategies and plans
into marketing actions in order to
accomplish strategic marketing objectives.
◼ Marketing Control: The process of
measuring and evaluating the results of
marketing strategies and plans and taking
corrective actions to ensure that
objectives are achieved.
