COMPANY AND
MARKETING STRATEGY
Chapter 2
Chapter Outline
Company-Wide Strategic Planning
 Steps in Strategic Planning
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A.
B.
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1. Defining a Market Oriented Mission
2. Setting the Company’s Objectives and Goals
3. Designing the Business Portfolio
Analyze the Current Business Portfolio
Shape the future portfolio by developing strategies for growth and downsizing
Partnering with Other Company Departments
Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix
The 4 Ps (Seller’s Viewpoint)
The 4 Cs (Buyer’s viewpoint)
Managing the Marketing Effort
Company-Wide Strategic Planning
Strategic planning is 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 in the firm.

Company-Wide Strategic Planning

Steps in Strategic Planning
The Strategic Planning Process
1. Defining a Market Oriented Mission
The mission statement is the organization’s
purpose, what it wants to accomplish in the larger
environment.
 The mission statement addresses the following
questions:
 What is our business?
 Who is the customer?
 What do consumers value?
 What should our business be?

Mission statement: To connect the world’s
professionals to make them more productive and
successful.
Defining a Market Oriented Mission
Mission could change to respond to new
opportunity
 Good mission statements should:
 Be a clear guide to people in the
organization
 Be market-oriented and defined in term of
satisfying basic customer needs
 Highlight the company’s strengths and
explain how the company will win the
marketplace
 Be meaningful and motivating
 Focus on customers and the customer
experience that the company wants to
create

to inspire and
nurture the
human spirit –
1 person
1 cup,
1 neighborhood
at a time.
Market-Oriented VS Product Oriented
Business Definitions
Product-Oriented
Business Definitions
 Facebook: We are an
online social network.
 Ritz-Carlton Hotels &
Resorts: We rent rooms.

Market-Oriented Business
Definitions
 Facebook: We connect
people around the world
and help them share
important moments in their
lives.
 Ritz-Carlton Hotels &
Resorts: We create the
Ritz-Carlton experience- a
memorable stay that far
exceeds guests already
high expectations.

2. Setting the Company’s Objectives and Goals
Business objectives
• Build profitable
customer relationships
• Invest in research
• Improve profits
Marketing objectives
• Increase market share
• Create local
partnerships
• Increase promotion
3. Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the company.
 The best business portfolio is the one the best fits
the firm’s strengths and weaknesses to opportunities
in the environment.

Designing the Business Portfolio
Business portfolio planning includes two steps:
A.
Analyze the Current Business Portfolio
B.
Shape the future portfolio by developing
strategies for growth and downsizing

(A). Analyzing the Current Business Portfolio
Portfolio analysis is a major activity in strategic
planning whereby management evaluates the
products and businesses that make up the company.
 Companies will put strong resources into its more
profitable businesses and phase down or drop its
weaker ones.

Analyzing the Current Business Portfolio

Identify the key businesses that make up the
company which are called strategic business units
(SBUs) and decide how much support each SBU
deserves.
Analyzing the Current Business Portfolio

Strategic business units (SBUs) can be a
•
Company division
•
Product line within a division
•
Single product or brand
Analyzing the Current Business Portfolio
SBUs are evaluated on two dimensions:
1.
The attractiveness of the SBU’s market or industry
2.
The strengths of the SBU’s in the market or
industry

The Boston Consulting Group
Approach
The Boston Consulting Group Approach
(BCG)
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 highgrowth 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.

New Approach to Strategic Planning

Today's companies are decentralizing
strategic planning and placing the
responsibility for strategic planning in the
hands of cross-functional teams that are
made up of divisional managers
(B). Developing Strategies for Growth and Downsizing
Companies also need to find businesses and
products that could be part of the future of their
companies.
 Product/market expansion grid is a tool for
identifying company growth opportunities through
market penetration, market development, product
development, or diversification.

Product/Market expansion grid
Developing Strategies for Growth
Market penetration is a growth strategy increasing
sales to current market segments without changing
the product.
Market development is a growth strategy that
identifies and develops new market segments for
current products.
Developing Strategies for Growth
Product development is a growth strategy that offers
new or modified products to existing market
segments.
Diversification is a growth strategy through starting
up or acquiring businesses outside the company’s
current products and markets.
Until Here
Developing Strategies for Downsizing
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Companies must also develop strategies for
downsizing their businesses.
Downsizing is the reduction of the business
portfolio by eliminating products or business units
that are not profitable or that no longer fit the
company’s overall strategy.
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.
 The company’s success depends on how well the
various departments work together.
 Other departments must understand marketing and
their role in creating customer value.

Partnering with Others in the Marketing
System
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.
 More companies are partnering with other members
of the supply chain.
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Marketing Strategy and the Marketing Mix
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Marketing strategy: The marketing logic by which the
company hopes to create customer value and achieve
profitable customer relationships.
A market segment is made up of consumers who
respond in a similar way to a given marketing effort.
Target marketing: Involves evaluating each market
segment’s attractiveness and selecting one or more
segments to enter.
Marketing Strategy and the Marketing Mix
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Positioning is arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing
products in the minds of target consumers.
Differentiation: Actually differentiating the market offering
to create superior value.

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A company can offer greater value by either charging
lower prices or offering more benefits to justify higher
prices.
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Developing an Integrated 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 4 Ps (Seller’s Viewpoint)
Product: The goods and services combination the
company offers to the target market.
 Price: Is the amount of money customer pay to
obtain the product.
 Place: Includes company activities that make the
product available to the target consumers.
 Promotion: Are the activities that communicate the
advantages of the product to try to convince
customers to buy.
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The 4 Cs (Buyer’s viewpoint)
Customer solution: Customers buy value or
solutions to their problems.
 Customer cost: The total cost of obtaining, using,
and disposing of a product.
 Convenience: Customers want products and services
to be as conveniently available as possible.
 Communication: Customers want two-way
communications.

Managing the Marketing Effort
1. Market Analysis-SWOT Analysis
SWOT-Driven Strategic Planning
1. Market Analysis-SWOT Analysis
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Internal
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Strengths: Internal abilities that may help a company reach its objectives.
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Weaknesses: Internal limitation that may interfere with a company’s ability
to achieve its objectives.
External
Opportunities: External 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.
2. Marketing Planning
Marketing planning involves choosing strategies that
will help the company attain its overall strategic
objectives.
 A detailed marketing plan is needed for each
business, product, or brand.
 A marketing plan is the central instrument for
directing and coordinating the marketing effort.

The Marketing Plan
Executive Summary-Summary of main goals and
recommendations of the plan.
 Current Marketing Position- Describes the target
market and the company’s position in it, plus
information about the market, product performance,
competition, and distribution.
 Threats and opportunities analysis- Examines the
threats and opportunities that a product might face.

The Marketing Plan
Objectives and issues: States the objectives that
the company would like to achieve.
 Marketing strategy: How the company will create
value for customers and capture value in return.
 Action programs: How to turn strategies into
specific action programs.

The Marketing Plan
Budgets: A projected profit-and-loss statement.
 Controls: Outlines the control that will be used to
monitor progress, and allow management to review
implementation results.
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3. Marketing Implementation
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Implementing is the process that turns marketing
plans into marketing actions to accomplish strategic
marketing objectives.
4. Marketing Control

Controlling is the measurement and evaluation of
results and the taking of corrective action as
needed to ensure the objectives are achieved.
Reference

Kotler, Philip and Gary Armstrong, Principles of
Marketing