Company and marketing strategy: partnering to build customer relationship

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Company and marketing strategy: partnering to

build customer relationship

Chapter 2

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Objectives Explain strategic planning Describe business portfolios and growth

strategies Detail marketing’s role in strategic

planning Describe elements of customer-driven

marketing strategy List the marketing management

functions

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Marketing ProcessUnderstanding the market place

and customer

needs and

wants

Design a

customer-

driven marke

ting strate

gy

Construct

marketing

program that deliver superi

or value

Build profita

ble relationship and

create customer

delight

Capture

value from the

customers

to create profits

Research customer and

the market place

Managing marketing

information and customer

data

Select customer to

serve: market segmentation and targeting

Decide on value

proposition: differentiation

and positioning

Product and service design:

building a strong brand

Price Create real value

Distributionmanage

demand and supply chain

Promotion Communicating

the value

Customer relationship

management: build strong relationship with chosen customers

Partner relationship

management : build a strong relationship

with marketing partners

Create satisfied loyal customer

Capture customer life time value

Increase share of market and

share of customer

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Company Wide Strategy Planning: Defining Marketing’s Role Strategic Planning Defined:

The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities

Strategic planning sets the stage for the rest of the planning of the firm.

Defining the company mission

Setting company objectives and goals

Designing the business portfolio

Planning marketing and other functional strategy

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1- Market Oriented-Mission A mission statement is:“ A statement of the organization purpose –

what it want to accomplish in a larger environment.”

A mission statement asks..What is our business?Who is the customer?What do consumers value?What should our business be?

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1- Market Oriented-Mission A mission statement should be:

serve as a guide for what the organization wants to accomplish.

be “market-oriented” rather than “product-oriented”.

(Example: eBay’s mission statement isn’t simply to hold online trading. Instead, it connect individual buyers to sellers in “the world’s online marketplace”

be neither too narrow, nor too broad.fit with the market environment.be motivating.

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2- Setting Company Objectives and Goals The company’s mission needs to be turned

into detailed supporting objectives for each level of management.

The mission leads to a hierarchy of objectives, including business objectives and marketing objectives.

Marketing strategies and programs must be developed to support these objectives.

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Setting Company Objectives and Goals Monsanto operates in the agriculture

biotechnology business. Its mission statement is “improving the future of farming… improving the

future of food… abundantly and safely” The overall objectives is: building profitable customer

relationship by developing better agriculture products and getting them to the market faster at lower costs. That by ○ Researching products that safely help corps products more

nutritious.○ Reducing chemical spraying ○ Improving profits to meet the high R&D expensive○ Increasing sales or reducing costs.○ Increase the company’s share of U.S. market and entering

new markets

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3- Designing The Business Portfolio The business portfolio is:The collection of businesses and products that

make up the company.

Business portfolio planning involves two steps:1. Analyzing the current business portfolio &

Determine what role each SBU (Strategic Business Unite) will play in the future

2. designing strategies for growth and downsizing.

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Designing The Business Portfolio Step 1:

A. Analyze the current business portfolio○ Identify strategic business units (SBUs)○ Assess each SBU:

The BCG growth-share matrix classifies SBUs into one of four categories using the:- Market growth rate - SBU’s relative market share within the market.

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Designing The Business Portfolio

BCG Growth – Share Matrix

High Market Growth

Low Market Growth

High RelativeMarket Share

Low RelativeMarket Share

Stars

Cash Cows

Question Marks

Dogs

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Designing The Business PortfolioB. Determine the future role of each SBU and choose the

appropriate resource allocation strategy:Build

○ Increase market share○ Works well for question marks

Hold○ Preserve market share○ Good for cash cow

Harvest○ Increases short-term cash flow○ Good for weak cash cows, question marks and dogs

Divest○ Sell or liquidate○ Good for dogs and question marks

SBUs change positions over time

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Designing The Business Portfolio Step 2:Designing strategies for growth and downsizing. Developing strategies for growth by identifying,

evaluating, and selecting promising new market opportunities.

○ Product/market expansion grid

Developing strategies for downsizing the business portfolio.

“ Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy”

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Designing The Business Portfolio Product/Market Expansion Grid

(The Ansoff Matrix)Existing Products New Products

Existing Markets

New Markets

Market PenetrationA strategy for company

growth by increasing sales of current products to

current market segment without changing the

product

Product DevelopmentA strategy for company

growth by offering modified or new product to current

market segments

Market DevelopmentA strategy for company

growth by identifying and developing new market segments for current

company product

DiversificationA strategy for company

growth through starting up or acquiring businesses outside the company’s current products and

markets

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4- Marketing’s Role in Strategic Planning Marketing plays a key role in the

strategic planning process.Provide a guiding philosophy (the marketing

concept)Identify attractive opportunitiesDesign effective strategies for reaching

unit’s objectives. Build strong value chainsForm superior value delivery networks

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Marketing Strategy and The Marketing Mix

Profitable customer relationship- Market Segmentation- Target Marketing- Market Positioning

4 Ps- Product - Price - Promotion- Place

- Marketing Analysis- Marketing Planning- Marketing Implementation- Marketing Control

Marketing Intermediary Competitors

suppliers Public

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Marketing Strategy Strategy

1. Market segmentation

2. Target marketing 3. Market

positioning

The segmentation process divides the total market into market segments.

Market segment is a groups of consumers who respond in similar ways to marketing efforts.

Customers grouped by: Geographic Demographic Psychographic Behavioral

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2. Target marketing 3. Market positioning

valuation of each segment’s attractiveness

Selection of segments with greatest long-term profitability

A company can choose one or several segments to target

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2. Target marketing 3. Market positioning

The place the product occupies in the consumer’s mind

Products are positioned relative to competing products

Marketers look for clear, distinctive and desirable place in positioning

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Marketing Mix The marketing mix includes controllable

and tactical marketing tools knows as the 4P’s

The 4P’s includeProduct PricePromotion place

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Marketing Mix

Target customer

Intended positioning

Promotion Advertising

Personal selling Sales promotion

Public relation

ProductVarity

Quality Design

Features Brand name

Service

Packaging

PriceList price Discount

AllowancesPayment period

Credit terms

Place Channels Coverage Assortment Location

Transportationlogistics

Inventory

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Marketing Mix The marketing mix from buyer’s

viewpoint

Four Ps Four CsProduct Customer solution

Price Customer cost

Place Convenience

Promotion Communication

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Managing The Marketing Effort Managing the marketing process require

four marketing management functionAnalysis

Planning Develop a strategic plane

Develop Marketing

Plane

Implementation Carry out the plans

Control Measure result

Evaluate Result

Take corrective actions

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Market Analysis

Strength Internal capabilities

that may help a company reach its

objectives

WeaknessesInternal limitation that may interfere

with the company’s ability to achieve its

objectives

OpportunitiesExternal Factors that the company

may be able to exploit to its advantage

Threats Current and

emerging external factors that may

challenge the company’s

performance

Internal

External

Positive Negative

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Finding opportunities

Avoiding threatsUnderstanding

strengthsAnalyzing

weaknesses

• Analysis• Planning• Implementation• Control

Managing the Marketing EffortMarketing Functions

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Marketing plans include: ○ Executive summary○ Analysis of current

situation○ Objectives○ Targets and positioning○ Marketing mix○ Budget○ Controls



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Plans are turned into action with day-to-day activities

Good implementation is a challenge



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Evaluation of the results of marketing strategies

Checks for differences between goals and performance



Documents

Company and marketing strategy: partnering to build customer relationship