MTS 312
Principles of Marketing
Company and Marketing Strategy:
Partnering to Build Customer Relationships
Dr. Nattharika Rittippant
Strategic Planning
The process of:
Developing and
Maintaining a strategic fit
Between the
organizations goals and
capabilities and its
changing marketing
opportunities
Defining a Market-Oriented Mission
Mission statement:
The organizations purpose
What it wants to accomplish in the larger environment
Market-oriented mission statement:
Defines the business in terms of satisfying basic
customer needs
Setting Company Objectives & Goals
Business & marketing objectives
Business Portfolio:
The collection of businesses and products of the company
Steps in Business Portfolio Analysis
Analyzing the current portfolio:
The evaluation process of the products and businesses
making up the company
1. Identify key businesses of the company
Strategic Business Unit (SBU):
A unit of the company that has a separate mission
and objectives that can be planned separately
from other company businesses
2. Assess the attractiveness of its various SBUs
3. Decide how much support each SBU deserves
The Boston Group Approach
Growth share matrix:
A portfolio planning method
that evaluates a companys
SBUs in terms of their
market growth rate and
relative share
SBUs are classified as:
Stars
Cash Cows
Question marks
Dogs
The Boston Group Approach
Stars:
High-growth
High-share businesses or products
Require heavy investment to finance rapid growth
They will eventually turn into cash cows
Cash cows:
Low-growth
High-share businesses or products
Are established and successful SBUs
Require less investment to maintain market share
The Boston Group Approach
Question marks:
Low-share business units in high-growth markets
Require a lot of cash to hold their share
Dogs:
Low-growth
Low-share businesses and products
May generate enough cash to maintain themselves
but do not promise to be large sources of cash
Problems with Matrix Approaches
Difficulty in defining SBUs and measuring
market share and growth
Time consuming
Expensive
Focus on current businesses, not future
planning
Developing Strategies for
Growth and Downsizing
Product/market expansion grid: A tool for
identifying company growth opportunities
through market penetration, market
development, product development, or
diversification
Strategies
Market penetration
Market development
Product development
Diversification
Product/market Expansion Grid
Strategies
Market penetration:
a growth strategy
increasing sales to
current market
segments without
changing the product
Existing marketing mix
Existing customers
In what way is a sale a
market penetration
strategy?
Product/market Expansion Grid
Strategies
Market development:
A growth strategy that
identifies and develops
new market segments
for current products
Example:
Turkey
Dunkin Donuts
international expansion
Lebanon
Bali
Product/market Expansion Grid
Strategies
Product development:
A growth strategy that offers new or modified
products to existing market segments
Product/market Expansion Grid
Strategies
Diversification:
A growth strategy
through starting up or
acquiring businesses
outside the companys
current products and
markets
Product/market Expansion Grid
Strategies
Downsizing:
The reduction of the business portfolio by
eliminating products or business units that are not
profitable or that no longer fit the companys
overall strategy
Partner Relationship Management
Inside the Company:
Value chain:
A series of departments
that carry out valuecreating activities to
design, produce,
market, deliver, and
support a firms
products
Outside the Company:
Value delivery
network
Made up of the
company, suppliers,
distributors, and
ultimately customers
who partner with each
other to improve
performance of the
entire system
Marketing Strategy
The marketing logic by which the business
unit hopes to achieve its marketing objectives
Customer-Driven Marketing Strategy
Market segmentation
Market segment
Market targeting
Process of evaluating each market segments
attractiveness and selecting one or more segments to
enter
Market positioning
Arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in
minds of target consumers
Differentiate product or company from competitors
Disney:
Segmentation, Targeting, Positioning
Magic Kingdom
Families w/ younger kids
Pleasure Island
Singles and Couples
Epcot
Adults, families w/ older kids
Marketing Mix
The set of controllable
tactical marketing
toolsproduct, price,
place, and
promotionthat the
firm blends to
produce the response
it wants in the target
market
The Four Ps
Product:
Goods and services in combination that the company
offers to the target market
Price:
Amount of money customers have to pay to obtain the
product
Place:
Company activities that make the product available to
target customers
Promotion:
Activities that communicate the merits of the product
and persuade target customers to buy it
4 Ps vs. 4Cs
Product
Price
Place
Promotion
Customer solution
Customer cost
Convenience
Communication
Managing the Marketing Effort
Marketing Analysis
Market Planning
Marketing
Implementation
Marketing Control
Marketing Analysis
The complete analysis of the companys
situation in a SWOT analysis that
evaluates the companys:
Strengths (i.e., positive internal factors)
Weaknesses (i.e., negative internal factors)
Opportunities (i.e., positive external factors)
Threats (i.e., negative external factors)
Market Planning
Planning:
The development of strategic and marketing
plans to achieve company objectives
Marketing strategy:
Consists of the specific strategies for target
markets, positioning, the marketing mix, and
marketing expenditure levels
Marketing Plan
Executive summary
Current marketing situation
Threats and opportunities
Objective and issues
Action programs
Budgets
Controls
Marketing Implementation
Implementing: The process that turns
marketing plans into marketing actions to
accomplish strategic marketing objectives
Successful implementation depends on how well
the company blends its:
people,
organizational structure,
decision and reward system, and
company culture into a cohesive action plan that
supports its strategies
Marketing Department Organization
Functional Organization
The most common form of marketing
organization with different marketing functions
headed by a functional specialist (e.g., Sales,
Market Research, Customer Service)
Geographic Organization
Useful for companies that sell across the
country or internationally. Managers are
responsible for developing strategies and
plans for a specific region.
Marketing Department Organization
Product Organization
Useful for companies with different products
or brands
Market/customer Management
Organization
Useful for companies with one product line
sold to many different markets and
customers. Managers are responsible for
developing strategies and plans for their
specific markets or customers
Marketing Control
Controlling
Measuring and evaluating results and taking
corrective action as needed
Operating control
Checking ongoing performance against annual plan
Taking corrective action as needed
Strategic control
Looking at whether the companys basic strategies are well
matched to its opportunities
Marketing Audit
A comprehensive, independent, and periodic examination of
a companys environment, objectives, strategies, and
activities to determine problem areas and opportunities
Returns
Return on Marketing
Investment (ROI)
The net return from a
marketing investment
divided by the costs of
the marketing
investment.
Provides a
measurement of the
profits generated by
investments in
marketing activities
Customer-Centered
Measures:
Customer acquisition
Customer retention
Customer lifetime value
McDonalds: On a CustomerFocused Mission
Motto: QSCV
Quality
Service
Cleanliness
Value
One of the most
recognizable brand
Trouble times in the mid1990s and the early
2000s with changing food
preferences, new
competitors, and bad
image
Attempt to expand rapidly
Distracted from the most
important thing: hot, highquality food at a great
value at the speed and
convenience of
McDonalds
McDonalds Plan to Win
5Ps (= 4Ps + People)
Focus on customers: changing
mission from being the
worlds best quick-service
restaurant to being our
customers favorite place and
way to eat
Got back to the basic business
of taking care of customers
Goal: To get better, not just
bigger
Halted rapid expansion
Invested more in improving the
food, the service, the
atmosphere, and marketing the
existing restaurants
Redecorated its restaurants
with clean, simple, moremodern interiors and amenities
such as wireless internet
access and flat screen TVs
Expanded service hours to 24
hours a day and expanded
menus to include breakfast
and late dinner
