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