MM 2711

Introduction to Marketing
Lecture 02

Dr Li, Xiaolin
Learning Objectives
• Company-wide Strategic planning
• Managing the marketing effort
• Measuring and managing return on marketing investment
Company-wide Strategic Planning
• Strategic planning: the process of developing and maintaining a
strategic fit between the organization’s goals and capabilities and its
changing marketing opportunities
• Strategic plan involves adapting the firm to take advantage of opportunities in
its constantly changing environment
Strategic Planning

• At corporate level, • Mission is turned • Headquarters • Each business and

define overall into detailed decides what product develops
purpose and supporting portfolio of detailed marketing
mission objectives that businesses and and other
guide the entire products is best for department plans
company. the company and that support the
how much support company-wide
to give each one. plan.
1. Define the company mission
• Mission statement: a statement of the organization’s purpose – what it
wants to accomplish in the larger environment
1. Define the company mission
• Good mission statement should be:
• Market-oriented
• Fit the market environment
• Based on distinctive competencies
• Inspiring and Motivating
2. Set company objectives and goals
• Turn its mission into detailed supporting objectives for each level of
management
• E.g.,
• Build profitable customer relationships
• Invest in research
• Improve profits
• Increase market share
2. Set company objectives and goals
Mission “To create a world where anyone can belong anywhere.”

Business Objectives Increase revenue: “Grow revenue by 20% year-over-year through expanding the user base and
increasing bookings.”

Marketing Objectives Grow social media engagement: “Increase social media followers by 25% and engagement by
15% across all platforms over the next six months.”

Marketing Strategies Content marketing: Develop and distribute high-quality content that highlights unique travel
experiences and local hosts, e.g., blog posts, video series, user-generated content.

Influencer partnership: Partner with travel influencers and content creators to showcase Airbnb
listings and experiences to a broader audience, particularly targeting millennials and Gen Z
travelers.
3. Design business portfolio
• Business portfolio: the collect of businesses and products that make up
the company
LVMH

Fashion &
Leather Wine & Perfumes & Watches & Selective Other
Goods Spirits Cosmetics Jewellery Retailing Activities

Louis Vuitton Mo𝑒tሷ & Chandon Parfums Christian Dior TAG Heuer Sephora Cheval Blanc
Christian Dior Hennessy Guerlain Bulgari DFS Group Belmond
Fendi Dom P𝑒rignon
ƴ Parfums Givenchy Chaumet Le Bon March𝑒ƴ Cova Monteapoleone
Celine Veuve Clicquot Kenzo Parfums Hublot La Samaritaine
Givenchy Krug Benefit Cosmetics Zenith
Marc Jacobs Mercier Make Up For Ever Fred
Loewe 𝑎teau d’Yquem
Chො Acqua di Parma Tiffany & Co.
Kenzo Glenmorangie
Berluti Ardbeg
Loro Piana Belvedere
Rimowa
3. Design business portfolio

Corporate Level: CEO, Board

of Directors, and other senior
Head
executives
Office

Business Level: Unit Strategic business units

managers and other staff SBU A SBU B SBU C (SBUs): key businesses
that make up the company

Functional Level: Functional

managers and workers Business Business Business
Operations Operations Operations

Market Market Market

 3. Design business portfolio
• Portfolio analysis: Analyze
current portfolio
Head
Office
• Identify the SBUs
• Assess the attractiveness of
SBU A SBU B SBU C
various SBUs
• Decides how much support each
deserves
Business Business Business • Add and support products and
Operations Operations Operations businesses that fit closely with
the firm’s core philosophy and
competencies
Market Market Market
 3. Design business portfolio

Portfolio Analysis Method:

BCG Growth-Share Matrix (The

Boston Consulting Group Approach)

Attention: Market Share is the

“relative” market share compared to
its biggest competitor
 3. Design business portfolio
BCG Growth-Share Matrix (The Boston Consulting
Group Approach)

• Stars
• High growth and high-share
business/product
• Need heavy investment to
finance their growth
• Growth will slow down and turn
into cash cows
 3. Design business portfolio
BCG Growth-Share Matrix (The Boston Consulting
Group Approach)

• Cash cows
• Low growth and high-share
business or product
• Need less investment to hold
market share
• Support other SBUs that need
investment
 3. Design business portfolio
BCG Growth-Share Matrix (The Boston Consulting
Group Approach)

• Dogs
• Low growth and low share
business/product
• Difficult to make a profit
 3. Design business portfolio
BCG Growth-Share Matrix (The Boston Consulting
Group Approach)

• Question marks
• Low-share business/product in
high growth market
• Need cash to hold share
• Phase out/build into stars
 3. Design business portfolio
BCG Growth-Share Matrix (The Boston Consulting
Group Approach)

• Strategies to Pursue
• Build: Invest more in the
business to build its share
• Hold: Invest just enough to hold
the SBU’s share at the current
moment
• Harvest: Milk short-term cash
flow regardless of long-term
effect
• Divest: Divest SBU by selling it
or phasing it out and using the
resources elsewhere
 3. Design business portfolio
• Strategies for growth
• Product/ Market Expansion Grid (a portfolio-planning tool for identifying company
growth opportunities through market penetration, market development, product
development, or diversification)
 3. Design business portfolio
• Strategies for growth: Example of Starbucks
• Market penetration: increase sales of current products to current market segments
without changing the product
 3. Design business portfolio
• Strategies for growth: Example of Starbucks
• Market development: identifying and developing new market segments for current
company products
 3. Design business portfolio
• Strategies for growth: Example of Starbucks
• Product development: offering modified or new products to current market segments
 3. Design business portfolio
• Strategies for growth: Example of Starbucks
• Diversification: most risky strategy, involving the introduction of new products into
new markets. Often through starting up or acquiring business outside the company’s
current products and market.
 3. Design business portfolio
• Downsizing
• Reducing the business portfolio by eliminating the
products or business units that are not profitable or that
no longer fit in the company’s overall strategy

• Reasons of abandon products/markets:

• Grown too fast or entered areas where it lacks experience
• Changes in market environment
• Less profitable than in the past
• Products or business units age and die
4. Plan marketing and other functional strategies

• Marketing Strategy
• The marketing logic by which the company hopes to create customer value and
achieve profitable customer relationship
• Segmentation, targeting, positioning, differentiation

• Marketing mix
• 4Ps: product, price, place, and promotion
Managing The Marketing Effort
Managing the marketing process requires the four marketing management functions–
analysis, planning, implementation, and control
 Managing The Marketing Effort:
1. Marketing analysis
• SWOT analysis: an overall evaluation of the company’s
• Strengths
• Weaknesses
• Opportunities
• Threats
Managing The Marketing Effort:
2. Marketing planning
• A Marketing Plan:

• Executive summary
• Marketing situation
• Threats and
opportunities
• Objectives and issues
• Marketing strategy
• Action programs
• Budgets
• Controls
 Managing The Marketing Effort:
3. Marketing implementation
• Strategy= “doing the right thing”
• Implementation = “doing things right”

• Turning marketing strategies and plans into marketing actions to accomplish strategic
marketing objectives

• Addresses who, where, when, and how

• Firms can gain advantages through effective implementation

 Managing The Marketing Effort:
4. Marketing control
• Measuring and evaluating the results of marketing strategies and plans and
taking corrective action to ensure that the objectives are achieved

Evaluate the causes

Measure of any differences Take corrective
Set specific goals performance in between expected action
marketplace and actual
performance
Learning Objectives
• Company-wide strategic planning
• Designing the business portfolio
• Marketing strategy and the marketing mix
• Managing the marketing effort
• Measuring and managing return on marketing investment
Measuring and Managing Return on
Marketing Investment
• Standard marketing performance measures:
• brand awareness, sales, or market share
• Customer-centered measures of marketing impact:
• customer acquisition, customer retention, customer lifetime value, and
customer equity

• Marketing ROI: net return from a marketing investment divided by

the costs of the marketing investment