STRATEGIC MARKETING PROCESS
Questions
Henry Ford's philosophy was to perfect the Model T so that
its cost could be reduced further for increased consumer
affordability. This reflects the ________ concept.
A) product
B) production
C) selling
D) marketing
E) societal marketing
8/30/2023
BINGHAMTON UNIVERSITY 2
Questions
ABC Inc. operates in many industries, including
pharmaceuticals and food products. The company's goal is
to create "abundant and affordable food for all and a
healthy environment." This represents ABC's ________.
A) marketing plan
B) Vision statement
C) business portfolio
D) marketing mix
E) mission statement
8/30/2023
BINGHAMTON UNIVERSITY 3
Questions
Which one of the following is not an key area involved in
5C analysis?
A) Customer
B) Climate
C) Cost
D) Company
E) Context
8/30/2023
BINGHAMTON UNIVERSITY 4
Company-Wide Strategic Planning
BINGHAMTON UNIVERSITY 5
Designing The Business Portfolio
The business portfolio is the collection
of businesses and products that make
up the company.
Portfolio analysis is a major activity in strategic planning
whereby management evaluates the products and
businesses that make up the company.
8/30/2023
BINGHAMTON UNIVERSITY 6
Designing The Business Portfolio
The Coca Cola Portfolio
https://www.coca-colacompany.com/brands
https://www.coca-colacompany.com/news/coca-cola-2022brand-updates
8/30/2023
BINGHAMTON UNIVERSITY 7
Designing The Business Portfolio
Strategic business units can be a
Company division
Product line within a division
Single product or brand
8/30/2023
BINGHAMTON UNIVERSITY 8
Designing The Business Portfolio
Analyzing The Current Business Portfolio
Identify strategic business units (SBUs)
Assess the attractiveness of its various
SBUs
Decide how much support each SBU
deserves
8/30/2023
BINGHAMTON UNIVERSITY 9
The BCG Growth-Share Matrix
HIGH
Relative market share
LOW
Market growth rate
HIGH
LOW
https://www.bcg.com/about/our-history/growth-share-matrix.aspx
P&G Website
The BCG Growth-Share Matrix
Market share – does the product being sold have a low or
high market share?
Market growth – are the numbers of potential customers
in the market growing or not?
8/30/2023
BINGHAMTON UNIVERSITY 11
The BCG Growth-Share Matrix
Stars are:
High growth products competing in markets where they
are strong compared with the competition
•
Often need heavy investment to sustain growth
•
Eventually growth will slow and, assuming they keep their
market share, Stars will become Cash Cows
•
8/30/2023
BINGHAMTON UNIVERSITY 12
The BCG Growth-Share Matrix
Cash cows:
Low-growth products with a high market share.
•
Mature and successful products with relatively little need
for investment.
•
They need to be managed for continued profit - so that
they continue to generate the strong cash flows that the
company needs for its Stars.
•
8/30/2023
BINGHAMTON UNIVERSITY 13
The BCG Growth-Share Matrix
Question marks:
Products with low market share operating in high growth
markets.
•
Have potential, but may need substantial investment to
grow market share at the expense of larger competitors.
•
Management have to think hard about “Question Marks" which ones should they invest in? Which ones should they
allow to fail or shrink?
•
8/30/2023
BINGHAMTON UNIVERSITY 14
The BCG Growth-Share Matrix
Dogs:
Products that have a low market share in unattractive,
low-growth markets.
•
Dogs may generate enough cash to break-even, but they
are rarely, if ever, worth investing in.
•
Dogs are usually sold or closed.
•
8/30/2023
BINGHAMTON UNIVERSITY 15
Market growth rate
The BCG Growth-Share Matrix
8/30/2023
Relative market share
16
Designing The Business Portfolio
Problems with Matrix Approaches
•
Difficulty in defining SBUs and measuring market share
and growth
•
Time consuming
•
Expensive
•
Focus on current businesses, not future planning
8/30/2023
BINGHAMTON UNIVERSITY 17
Example Question
The pharmaceuticals division of Omni Healthcare holds
low market share in a high-growth market. According to the
BCG matrix, the pharmaceuticals division of Omni can be
classified as a ________.
A) star
B) bear
C) question mark
D) cash cow
E) dog
8/30/2023
BINGHAMTON UNIVERSITY 18
Designing The Business Portfolio
The Product/Market Expansion Grid
Growth Strategies
PRODUCTS AND SERVICES
New
Market
Penetration
Product
Development
Market
Development
Diversification
New
MARKETS
Current/
Existing
Current/Existing
The Product/Market Expansion Grid
Growth Strategies
Market Penetration Strategy: Existing Products +
Existing Markets = Low Risk
Increasing or growing the market share of current
products with pricing strategies, promotions, advertising
and an increase in sales efforts
◼
Driving competitors out of a mature market with
aggressive pricing and promotional campaigns
◼
Increasing usage of a product by existing customers
through special offers and loyalty schemes
◼
8/30/2023
BINGHAMTON UNIVERSITY 21
Growth Strategies
Market Development Strategy: Existing Products +
New Markets = Some Risk
Focus can be turned to new and untapped geographical
areas
◼
New pricing procedures can be used to attract new target
audiences
◼
New distribution channels can be created to offer
products in new ways and to new customers
◼
8/30/2023
BINGHAMTON UNIVERSITY 22
Growth Strategies
Product Development Strategy: New Products +
Existing Markets = Some Risk
◼
Adding new features to existing products
Innovative and new technologies can be added to
products or used to improve products
◼
8/30/2023
BINGHAMTON UNIVERSITY 23
Growth Strategies
Diversification Strategy: New Products + New Markets
= High Risk
Concentric Diversification – leveraging a company’s core
technical know-how to diversify its current products into
new markets
Horizontal Diversification – the introduction of products that
are unrelated to a company’s core products to a market
Conglomerate Diversification – the purchasing of another
company in order to diversify
8/30/2023
BINGHAMTON UNIVERSITY 24
Example Question
Lark Inc., an American electronics company, is currently
reviewing new geographical markets to sell its highly
popular televisions. By 2020, it plans to open new stores
across all the major South Asian cities. Lark is most likely
following a ________ strategy.
A) local marketing
B) market development
C) diversification
D) product adaptation
E) product development
8/30/2023
BINGHAMTON UNIVERSITY 25
Example Question
Ron and Gail plan to lower Fun-Spot's prices in an effort to
encourage customers to stay longer, visit more often, and
spend more money during each visit. What type of strategy
are Ron and Gail planning?
A) market penetration
B) market development
C) product development
D) product adaptation
E) diversification
8/30/2023
BINGHAMTON UNIVERSITY 26
Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Other Company Departments
Value chain is a series of departments that carry out value
creating activities to design, produce, market, deliver, and
support a firm’s products.
8/30/2023
BINGHAMTON UNIVERSITY 27
Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Other Parties
Value delivery network is made up of the company,
suppliers, distributors, and ultimately customers who
partner with each other to improve performance of the
entire system
8/30/2023
BINGHAMTON UNIVERSITY 28
Marketing Strategy and the Marketing Mix
Sustainable Competitive Advantage
Customer
excellence
Locational
excellence
Customer
value
Product
excellence
Operational
excellence
Managing the Marketing Effort
Market Planning—Parts of a Marketing Plan
Executive summary
Marketing situation
Threats and
opportunities
Objectives and
issues
Marketing strategy
Action programs
Budgets
8/30/2023
Controls
BINGHAMTON UNIVERSITY 31
Managing the Marketing Effort
Figure 2.6 Analysis, Planning, Implementation, and Control
8/30/2023
BINGHAMTON UNIVERSITY 32
Measuring and Managing Return on
Marketing Investment
Return on Marketing Investment (Marketing ROI)
Marketing ROI=Net return from a marketing
investment/costs of the marketing investment
•
Marketing ROI is a measurement of the profits
generated by investments in marketing activities.
•
Such as brand awareness, sales, market share, etc..
•
Customer-centered measure of marketing impact.
•
8/30/2023
BINGHAMTON UNIVERSITY 33
Measuring and Managing Return on
Marketing Investment
8/30/2023
BINGHAMTON UNIVERSITY 34
8/30/2023
BINGHAMTON UNIVERSITY 35