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Learning Objectives
2.1 Explain company‐wide strategic planning and its four steps.
2.2 Discuss how to design business portfolios and develop growth
strategies.
2.3 Explain marketing’s role in strategic planning and how marketing
works with its partners to create and deliver customer value.
2.4 Describe the elements of a customer value‐driven marketing
strategy and mix and the forces that influence them.
2.5 List the marketing management functions, including the elements
of a marketing plan, and discuss the importance of measuring and
managing marketing return on investment.
Company and Marketing
strategy
Dr. Narjes Haj Salem, Assistant Professor
Email: nhajsalem@sharjah.ac.ae
0302170 ‐ Principles of Marketing
Fall 2022‐2023
Steps in Strategic Planning
What is Strategic Planning?
• Wisdom and luck are no longer
sufficient to shape the destinies of
organizations.
• Strategic planning is the process of
developing and maintaining a strategic
fit between the organization’s goals
and capabilities, and its changing
marketing opportunities
• Objectives and strategies established at
the top level provide context for
planning in each of the divisions and
departments.
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Dr. Narjes Haj Salem
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Mission statement
1. Defining a Market‐Oriented Mission
• A mission statement should:
• Organization exists to accomplish something
purpose should be clearly stated:
This
X
1. Not be myopic in product terms ( we make and sell furniture);
 but market oriented ( Discover and save creative ideas; Pinterest is the world’s catalog
–What is our business?
of ideas)
–Who is the customer?
2. Be meaningful and specific;
–What do consumers value?
3. Be motivating;
–What should our business be?
• The mission statement is the organization’s purpose;
what it wants to accomplish in the larger
environment.
4. Emphasize the company’s strengths;
Give people a window into the world’s information wherever it might be found
5. Contain specific workable guidelines;
6. Not be stated as making sales or profits; profits are only reward for creating value.
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Examples of mission statement
Product‐ versus Market‐Oriented Business Definitions
Company
Product‐Oriented Definition
Market‐Oriented Definition
Starbucks
We sell coffee and snacks.
We sell “The Starbucks
Experience,” one that enriches
people’s lives in one moment,
one human being, one
extraordinary cup of coffee at
a time.
Panera
We sell fast‐casual food in our
restaurants.
We give customers “Food as it
should be”: food that tastes
good; food that feels good;
food that does good things for
them and the world around
them.
• Almarai : To provide quality and nutritious food & beverages
that enrich consumers’ lives every day.
• Unilever : “to add vitality to life. We meet everyday needs for
nutrition, hygiene and personal care with brands that help
people feel good, look good and get more out of life.”
• Intel : Utilize the power of Moore's Law to bring smart,
connected devices to every person on earth
• Boeing: Connect, Protect, Explore and Inspire the World
through Aerospace Innovation
• Twitter: To give everyone the power to create and share
ideas and information instantly, without barriers.”
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Airbnb’s Mission
2. Setting Company Objectives and
Goals
Belong Anywhere–Don’t Stay There. Live There.
‐ Heinz’s owns a variety of
brands, with a same mission:
‐
“As the trusted leader in nutrition
and wellness, Heinz is dedicated
to the sustainable health of
people”
‐
Vision: “ To be the best food
company, growing a better
world”
H.J. Heinz Company
3. Designing the Business Portfolio
Setting Company Objectives and Goals
Business
objectives
 The business portfolio is the collection of
businesses and products that make up the
company.
Marketing
objectives
• Build profitable
customer
relationships “superior
in quality, taste, nutrition,
and convenience”
• Invest in research
• Improve profits
Dr. Narjes Haj Salem
• The best business portfolio is the one that best fits the
company’s strengths and weaknesses to opportunities in
the environment.
• Increase
market share
• Create local
partnerships
• Increase
promotion
• Example: GE business portfolio: GE Aviation, GE Capital, GE
Energy, GE Home & Business Solutions, GE Global Research,
GE Health Care, GE Technology Infrastructure.
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Practice
3. Designing the Business Portfolio
• Visit the website of these companies and find
their business portfolio:
• Business portfolio planning involves two steps.
1. The company must analyze its current business
portfolio and determine which businesses
should receive more, less, or no investment.
– Mars
– Agthia
– Unilever.com
2. It must shape the future portfolio by developing
strategies for growth and downsizing.
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Analyzing the Current Business Portfolio
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Analyzing the Current Business Portfolio
Growth‐share matrix is a portfolio‐planning
method that evaluates a company’s SBUs in
terms of market growth rate and relative
market share.
Identify strategic business units
(SBUs)
Assess the attractiveness of its
various SBUs
Decide how much support
each SBU deserves
SBU can be a: Company division, Product line within a division; Single product or brand
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Analyzing the Current Business
Portfolio
• Stars are high-growth, high-share businesses
or products requiring heavy investment to
finance rapid growth. They will eventually turn
into cash cows.
• Cash cows are low-growth, high-share
businesses or products that are established and
successful SBUs requiring less investment to
maintain market share.
• Question marks are low-share business units
in high-growth markets requiring a lot of cash
to hold their share.
• Dogs are low-growth, low-share businesses and
products that may generate enough cash to
maintain themselves but do not promise to be
large sources of cash.
Strategies
• Difficulty in defining SBUs and measuring market
share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning
The Boston
Consulting Group
Approach
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Developing
Downsizing
Problems with Matrix Approaches
for
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Growth
and
Market
penetration involves
making more
saleslooks
to current
customers
without
•Product
Product/market
expansion
grid
atproducts
newmarkets
products,
Market
development
involves
identifying
and developing
new
for
offering
modified
or new
to
current
Diversification
involves
starting
up or
buying
businesses
beyond
its current
products
changing
its
original
product
such
as
by
adding
new
stores
in
current
market
products,
new
markets,
and existing
its existing
current
products
(new segments
or
new geographic
markts.markets for
markets
such
as by moving
into new
product
categories.
andareas
markets.
to make it easier for customers to visit.
company growth opportunities.
Existing
products
Product/market expansion grid
• Market penetration: involves making more sales to current customers
without changing its original product.
– E.g., Adding new stores in current market areas to make it easier for
customers to visit.
• Market development involves identifying and developing new markets for
its current products.
New
products
– Managers could review new demographic markets and target them.
– Managers could consider new geographic.
Existing
markets
• Product development involves offering modified or new products to
current markets such as by moving into new product categories.
• Diversification involves starting up or buying businesses beyond its
current products and markets.
New
markets
– The company could acquire a company that operates in different market
segments with a different product mix.
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Developing Strategies for Growth and
Downsizing
Example: Starbucks
• Downsizing is when a company must prune, harvest, or
divest businesses that are unprofitable or that no longer
fit the strategy.
• Many reasons for downsizing:
– Company may have grown too fast or entered areas where it
lacks experience.
– The market environment might change, making some
products or markets less profitable.
– Some products or business units simply age and die.
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Steps in Strategic Planning
Examples ‐downsizing
• P&G : sold Folgers, Sunny Delight, Pringles.
• GM: pruned Oldsmobile, Pontiac, Hummer
and Saab.
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Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Other Company Departments
Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Other in the marketing system
• Marketing alone can’t create superior customer value. Under the
company‐wide strategic plan, marketers must work closely with
other departments to form an effective internal company value
chain.
• The firm needs to look beyond its own value chain and into the
value chains of its suppliers, distributors, and ultimately, customers.
• Value chain is a series of departments (marketing, finance,
accounting, HR, purchasing) that carry out value‐creating activities
to design, produce, market, deliver, and support a firm’s products.
• The firm’s success depends not only on how well each dep.
performs its works but also on how all the various department
coordinate their activities.
Marketing Strategy and the Marketing Mix
• More companies today are partnering with other members of the
supply chain to improve the performance of the customer value
delivery network.
• Increasingly, today’s competition no longer takes place between
individual competitors. Rather, it takes place between the entire
value‐delivery networks created by these competitors.
Customer Value‐Driven Marketing Strategy
• Market segmentation is the division of a market
into distinct groups of buyers who have different
needs, characteristics, or behaviors and who might
require separate products or marketing mixes.
• Market segment is a group of consumers who
respond in a similar way to a given set of
marketing efforts.
• Marketing strategy is the marketing logic by which the company hopes to
create customer value and achieve profitable customer relationships.
•
Which customers will we serve ? & How will we create value for them?
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Customer Value‐Driven Marketing
Strategy
• Market targeting is the process of evaluating each market
segment’s attractiveness and selecting one or more segments
to enter.
• A company might decide to serve:
• only one or a few special segments or market niches, segments
that major competitors overlook or ignore.
• E.g.: Ferrari; Etihad Airways (luxury air)
• several related segments—perhaps those with different kinds of
customers but with the same basic wants.
• E.g.: Gap Inc: Gap, Banana Republic, Old Navy, Intermix
• all market segments, offering a complete range of products.
• E.g.: Toyota : Yaris, Camry, Rav5, Fj Cruiser
Developing an Integrated Marketing Mix
Customer Value‐Driven Marketing Strategy
 Market positioning is the arranging for a product to
occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target
consumers.
–
–
–
–
–
Audi: “ Truth in Engineering”
Subaru: “ Confidence in motion”
Coke: “ Open happiness”
Pepsi: “live for now”
Adidas: “Noting is impossible”
 Differentiation (begins the positioning process):
differentiating the market offering to create superior
customer value.
The four Ps of the marketing mix
 Marketing mix is the set of controllable, tactical
marketing tools—product, price, place, and
promotion—that the firm blends to produce the
response it wants in the target market.
 The marketing mix consists of everything the firm can do
to influence the demand for its product.
Tesla grew quickly and
gained equity in a
competitive market by
focusing on a small
niche.
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Managing the Marketing Effort
Managing the Marketing Effort
Managing the marketing process requires the four marketing
management functions: Analysis, planning, implementation &
control
Marketing analysis provides information &
Marketing Analysis – SWOT Analysis
• Managing the marketing function begins with a complete analysis of the
company’s situation
evaluations needed for all the other marketing
activities
Internal
External
Positive
Negative
The goal is to match the company’s strengths to attractive opportunities in the environment,
while simultaneously eliminating or overcoming the weaknesses and minimizing the threats.
Managing the Marketing Effort
•
•
Marketing plan
Marketing Planning involves choosing marketing strategies that will help the
company attain its overall strategic objectives.
It addresses the what and why of marketing activates for each product or brand.
The major sections of a typical product or brand marketing plan.
Executive
summary
Current
marketing
situation
Threats and
opportunities
Objectives and
issues
Marketing
strategy
Action
programs
Budgets
1.
Executive summary: brief summary of the main goals & recommendations
2.
Current marketing situation: description of the target market and the
company’s position in it.
3.
Threats and opportunities: assessment of major threats and opportunities
4.
Objectives and issues: state of marketing objectives that the company
would like to attain during the plan’s term.
5.
Marketing strategy: Which customers will we serve ? How will we create
value for them?
6.
Action programs: what will be done? When it will be done? Who will do
it? How much will it costs?
7.
Budgets: projected profit‐and‐ loss statement.
8.
Controls: outlines the controls that will be used to monitor progress.
Controls
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Managing the Marketing Effort
Managing the Marketing Effort
Marketing Implementation
Marketing Control
• Turning marketing strategies and plans into marketing actions
to accomplish strategic marketing objectives
• Addresses who, where, when, and how.
• Successful marketing implementation depends on how well
the company blends its people, organizational structure,
decision and reward systems, and company culture into a
cohesive action program that supports its strategies.
• “doing things right” vs. “doing the right things”
• Evaluating the results of marketing strategies and plans and
taking corrective action to close the gaps between goals and
performance are the steps taken in the marketing control function.
• Operating control involves checking ongoing performance against
the annual plan and taking corrective action when necessary.
– Ensure that the company achieves the sales, profit, and other goals set out in its
annual plan.
• Strategic control involves looking at whether the company’s basic
strategies are well matched to its opportunities.
– Marketing strategies and programs can quickly become outdated, and each
company should periodically reassess its overall approach to the marketplace.
Measuring and Managing Return on
Marketing Investment (1 of 2)
Return on Marketing Investment (Marketing ROI)
• Net return from a marketing investment divided by the costs
of the marketing investment
• Measurement of the profits generated by investments in
marketing activities
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