Chapter Two
Company and Marketing Strategy:
Partnering to Build
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Roadmap:
Previewing the Concepts
1. Explain companywide strategic planning and its four steps.
2. Discuss how to design business portfolios and growth strategies.
3. Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.
4. Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.
Early Days
Characterized by “seat of
the pants” management.
Innovative sneaker tread
drove early success.
Technological product
superiority, big-name
endorsements and “Just Do It” ads revolutionized sport marketing.
1980s – 1990s: Nike
leverages brand strength
NIKE – Strategy: Then & Now
NIKE – Strategy: Then & Now
Case Study
Case Study
Late 1990s - Present
Changes in consumer
shoe preference, declining product innovation, and negative PR plague Nike.
Anti-establishment image
no longer works: brand backlash occurs.
Strategic planning is
embraced and Nike
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Strategic Planning
The process of developing and
maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing
Steps in Strategic Planning
1. Defining the company mission. 2. Setting company objectives and
goals.
3. Designing the business portfolio. 4. Planning marketing and other
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The Mission Statement
A statement of the organization’s
purpose.
– What it wants to accomplish in the larger environment.
Should be market oriented and defined
The Mission Statement
Questions the mission statement
should answer include:
– What is our business? – Who is our customer?
– What do consumers value?
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The Mission Statement:
Should be realistic. Should be specific.
Should fit the market environment. Should be based on distinctive
competencies.
Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the company.
The company must:
– analyze its current business portfolio or Strategic Business Units (SBUs),
– decide which SBUs should receive more, less, or no investment,
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Portfolio Analysis
An evaluation of the products and
business making up the company.
Resources are directed to more
Strategic Business Unit (SBU)
A unit of the company that has a
separate mission and objectives and that can be planned independently from other company businesses.
Can be a company division, a product
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BCG Growth-Share Matrix
Stars
– High share of low growth market.
– Build into cash cow via investment.
Cash Cows
– High share of low growth market.
– Maintain or harvest for cash to build STARS. Question Marks
– Low share of high growth market.
– Build into STAR via investment if warranted, or reallocate financing and let slip into DOG status. Dogs
Problems with Matrix Approaches
Can be difficult, time consuming, and costly
to implement.
Difficult to define SBUs and measure market
share and growth rate.
Focus is on current businesses; gives little
help with future planning.
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Product/Market Expansion Grid
Market Penetration
– Existing markets, existing products Market Development
– New markets, existing products Product Development
– Existing markets, new products Diversification
Planning Marketing
Marketing plays a key role in strategic
planning:
– Provides a guiding philosophy.
• The Marketing Concept
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Value Delivery Network
Components include: – Company’s value chain
• Each department is a link
– Distributors – Suppliers – Customers
Improved performance in delivery value
Market Segmentation
The process of dividing a market into
distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of
marketing programs.
A market segment consists of
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Target Marketing
Involves evaluating each market
segment’s attractiveness and selecting one or more segments to enter.
Target segments that can sustain
Market Positioning
Arranging for a product to occupy a
clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Begins with differentiating the
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The Marketing Mix
The set of controllable, tactical
marketing tools that the firm blends to produce the response it wants in the target market.
– Product – Price
The Marketing Mix
Product:
– Variety, quality, design, features, brand name,
packaging and services.
Promotion:
– Advertising, sales promotion, public relations and
Place:
– Channels, coverage, logistics, locations, transportation,
assortments and inventory.
Price:
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The 4 Ps & the 4 Cs
of the Marketing Mix
4 Ps –
– Customer Solution – Customer Cost
– Convenience
Managing the Marketing Effort
Four marketing management functions: – Marketing Analysis
• SWOT analysis is key.
– Marketing Planning
• Create brand marketing plan.
– Marketing Implementation
• Determine who, where, when, and how.
– Marketing Control
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SWOT Analysis
Strengths:
Internal capabilities that may help a company reach its objectives.
Weaknesses:
SWOT Analysis
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
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Brand / Product Marketing Plan
1. Executive summary
2. Current marketing situation
3. Analysis of threats and opportunities 4. Objectives for the brand
Marketing Department
Organization
Functional Organization:
Each marketing activity is headed by a functional specialist.
– Sales Manager
– Advertising Manager
– Director of Marketing Research – Customer Service Manager
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Marketing Department
Organization
Geographic Organization:
Sales and marketing people are
assigned to specific countries, regions, and districts.
Product Management Organization:
One person given responsibility for
Marketing Department
Organization
Market or Customer Organization:
Manager responsible for particular market or customer.
Combination Organization:
Use some combination of the previous four approaches.
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Marketing Control Process
Set Goals
Marketing Control Process
Operating Control
– Evaluates performance against the plan and takes corrective action.
Strategic control
– Evaluates whether strategies match opportunities.
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Return on Marketing
Assessed using one or more methods: – Standard marketing performance
measures
• Brand awareness, sales, market share
– Customer-centered measures
• Customer acquisition, customer
Rest Stop:
Reviewing the Concepts
1. Explain companywide strategic planning and its four steps.
2. Discuss how to design business portfolios and growth strategies.
3. Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.
4. Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.