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Company and Marketing

Strategy: Partnering to Build

Customer Relationships

2

Marketing : An Introduction

An Asian Perspective

Armstrong, Kotler

& da Silva

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Explain companywide strategic planning andits four steps.

Explain marketings role in strategic planningand how marketing works with its partners tocreate and deliver customer value.

Describe the elements of a customer-drivenmarketing strategy and mix, and the forcesthat influence it.

Important Concepts

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Opening Case Study- Walt Disney

Company

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Disney Land

Known for films, animation, theme parks and customer

orientation

Parks offer a variety of attractions as well as cleanliness, order,and warmth

Satisfying the customer is everyones job

Disney has grown via diversification

Disneys strong presence will be enhanced in Asia with theopening of Hong Kong

2-4

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Strategic Planning

Strategic Planningis the Process of

Developing and Maintaining a

Strategic Fit Between theOrganizations Goals and

Capabilities and Its Changing

Marketing Opportunities.

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Steps in Strategic Planning

Figure 2.1

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Outcomes of effective marketing

strategies:

Achieve clear competitive advantages

over the firms rivals

Create positive responses among its

target customers

Turn in positive contributions to its bottom-

line

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Figure 2.3

Strategies Over Time-Singapore

Airlines

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Questions a Mission Statement Should

Answer

What is our Business?

Who is the Customer?

What do Consumers Value?

What Should our Business Be?

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The Mission Statement

A statement of the organizations purpose

What it wants to accomplish in the larger

environment

Should be market oriented and defined in

terms of customer needs.

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Mission Statements Should:

Be Realistic

Be Specific

Fit the Market Environment

Be Based on Distinctive Competencies

Be Motivating

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Mission Statements : Examples

Amazon.com: We sell books, videos,CDs, Consumer electronics,

hardware and other products.

Canon: We make copying machines,fax machines and scanners

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Designing the Business Portfolio

The business portfolio is the collection ofbusinesses and products that make up the

company.

The company must:

analyze its currentbusiness portfolio or

Strategic Business Units (SBUs),

decide which SBUs should receive more, less,

or no investment,

develop growth strategies for growth or

downsizing.

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Strategic Business Unit (SBU)

A unit of the company that has a separate

mission and objectives and that can be

planned independently from other

company businesses.

Can be a company division, a product line

within a division, or sometimes a singleproduct or brand.

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Portfolio Analysis

An evaluation of the products and

business making up the company.

Resources are directed to more profitable

businesses and weaker ones are phased

down or dropped.

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Marketing : An Introduction

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Analyzing Current SBUs:

BCG Growth-Share Matrix

Question Marks

Low share SBUs in high growthmarkets

Require cash to holdmarket share

Build into Stars or phase out

Stars

High growth & shareMay need heavy

investment to growEventually, growth will slow

Relative Market Share

High Low

Marke

tGrowthRa

te

Low

H

igh

?

Cash Cows

Low growth, high shareEstablished, successfulSBUs

Produce cash

Dogs

Low growth & shareGenerate cash to sustain selfDo not promise to be cash

sources

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Figure 2.6

Strategies in Managing the SBUs in the Portfolio

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The BCG Growth-Share Matrix

Figure 2.4

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Can be Difficult, Time Consuming, Costly to Implement

Difficult to Define SBUs & Measure Market Share/Growth

Focus on Current Businesses, Not Future Planning

Can Place too Much Emphasis on Growth

Problems With Matrix Approaches

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Step II. Developing strategies for

growth and Downsizing

2-23

Marketing has the main responsibility for achieving

profitable growth for the company.

Marketing must identify, evaluate, and select market

opportunities and lay down strategies for collecting

them.

One useful device for identifying growth

opportunities is the Product/Market Expansion

Grid.

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MarketPenetration

ProductDevelopment

MarketDevelopment

Existing New

P R O D U C T

NewMA

R

K

ET

Diversification

Existing

Product/Market Expansion Grid

Figure 2.7

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Product/Market Expansion Grid

Based on Starbucks

Market Penetration: make more sales tocurrent customers without changingproducts.

How? Add new stores in current market areas;improve advertising, prices, menu, service.

Market Development: identify and developnew markets for current products.

How? Review new demographic(seniors/ethnic consumers) or geographic(Asian, European, Australian, & South

American) markets.

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Market Penetration

1/ 2011Surej P John26

Started the first shop in

2004

In 2009, the number of

shops reached 41including 8 University

campuses

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Market Development

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Product/Market Expansion GridBased on Starbucks

Product Development: offering modified ornew products to current markets.

How? Add food offerings, sell coffee insupermarkets, co-brand products.

Diversification: start up or buy businessesoutside current products and markets.

How? Making and selling CDs, testingrestaurant concepts, or branding casualclothing.

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Product

Development

1/ 2011Surej P John29

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Diversification Diversification is developing new products for new

markets

1/ 2010Surej P John30

i i

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Downsizing: Reducing the business portfolio by eliminating the

products or business units that are not profitable or

that no longer fit the companys overall strategy.

1/ 2011Surej P John31

M i M k ti St t d

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Managing Marketing Strategy and

Marketing Mix

Figure 2.13

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Market Segmentation

The process of dividing a market intodistinct groups of buyers with different

needs, characteristics, or behavior who

might require separate products ofmarketing programs.

A market segment consists of consumerswho respond in a similar way to a given

set of marketing efforts.

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Market segmentation

2-34

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What is the

targetmarket?

2-35

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Target Marketing

Involvesevaluating each

market segments

attractiveness and

selecting one ormore segments to

enter.

Target segments

that can sustain

profitability.

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Market Positioning

Arranging for a product to occupy a clear,distinctive, and desirable place relative to

competing products in the minds of target

consumers (e.g. in a perfect worldeveryone would drive a Mercedes Benz)

Process begins with differentiating thecompanys marketing offer so it gives

consumers more value.

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The Marketing Mix

The set ofcontrollable,

tactical marketing

tools that the firmblends to

produce the

response it wantsin the target

market.

Consists of the

4 Ps

1. Product2. Price

3. Place

4. Promotion

Th 4 P f th M k ti Mi

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The 4 Ps of the Marketing MixFigure 2.14

A hi i C titi Ad t I t ti

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Achieving Competitive Advantage, Integration

and Positioning in the Marketing Mix

Figure 2.15 (a)

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Product strategies

Any kind of strategies that

are related to make

product improvements.

Product quality

Product design

Product features

Brand Name

PackagingServices

P i St t i

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Price Strategies

Any kind of business

decisions that directly related

to the price of the product or

service offered

List price

DiscountsAllowances

Credit terms etc.

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Promotion Strategies

Promotion means activities that communicate the merits of

the products and persuade the target customers to buy it.

Advertising, Sales promotion, personal selling, public relations

etc. are coming under the Promotion concept.

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SWOT ANALYSIS

An overall evaluation if the companys

strength (S), weakness (W), Opportunities(O), and Threats (T) is called SWOT analysis.

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StrengthsInternal abilities that help the company to achieve its objectives

Good brand name

Low cost of

production

Cheap Labor

Enough budget for

advertisement or

promotions

Ability to introduce

the new product

into market

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WeaknessInternal limitations that may interfere or block

the companys ability to achieve its objectives

High Competition

Lack of enough

money

Poor Quality

Cheap Brand

name

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Opportunities'

External factors of the market that the company maybe able to take advantage.

Large potential marketLack of competitors

Moving into new market segment that offer more profits

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Threat

External factors that may challenge the companys

performance

A new competitor in your

home market.

Price wars with competitors.

A competitor has a new,

innovative product or

service.

Competitors have superior

access to channels of

distribution.