BA320

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Marketing Strategy

• BA320
• Summer 2006

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Agenda for Today

• Explain companywide strategic planning and its
  four steps.
• Discuss how to design business portfolios and
  growth strategies.
• Explain marketings role in strategic planning
  and how marketing works with its partners to
  create and deliver customer value.
• Describe the elements of a customer-driven
  marketing strategy and mix, and the forces that
  influence it.
• List the marketing management functions,
  including the elements of a marketing plan.

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Strategic Planning

• The process of developing and maintaining a
  strategic fit between the organizations goals
  and capabilities and its changing marketing
  opportunities.

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Figure 2-1Steps in Strategic Planning
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The Mission Statement

• A statement of the organizations purpose.
• What it wants to accomplish in the larger
  environment.
• Should be market oriented and defined in terms of
  customer needs.

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The Mission Statement

• Questions the mission statement should answer
  include
• What is our business?
• Who is our customer?
• What do consumers value?
• What should our business be?

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The Mission Statement

• Should be realistic.
• Should be specific.
• Should fit the market environment.
• Should be based on distinctive competencies.
• Should be motivating.

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Lets Talk!
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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,
• develop growth strategies for growth or
  downsizing.

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Portfolio Analysis

• An evaluation of the products and business making
  up the company.
• Resources are directed to more profitable
  businesses and weaker ones are phased down or
  dropped.

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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 line within
  a division, or sometimes a single product or
  brand.

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Strategic Business Units
Marketing in Action

• The Symrise company creates ingredients used in
  flavors, fragrances, and cosmetics.
• The Flavors Division is structured into SBUs
  which are responsible for developing the product
  categories shown at left.

http//www.symrise.com
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Figure 2-2The BCG Growth-Share Matrix
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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
• Low share of low growth market. Maintain or
  divest.

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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.
• Can place too much emphasis on growth.
• Can lead to poorly planned diversification.

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Figure 2-3The Product/Market Expansion Grid
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Planning Marketing

• Marketing plays a key role in strategic planning
• Provides a guiding philosophy.
• The Marketing Concept
• Provides inputs to strategic planners.
• Designs strategies to reach objectives.

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Figure 2-4Managing Marketing Strategy and the
Marketing Mix
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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 consumers who
  respond in a similar way to a given set of
  marketing efforts.

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Target Marketing

• Involves evaluating each market segments
  attractiveness and selecting one or more segments
  to enter.
• Target segments that can sustain profitability.

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Target Marketing
Marketing in Action

• Jones Soda caters to its niche of 12- to
  24-year-olds who appreciate the brands wacky
  and irrelevant attitude.
• Loyal consumers help design product flavors,
  colors, labels, and brand names. Visit the Web
  site to learn more.

http//www.jonessoda.com
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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 companys
  marketing offer so it gives consumers more value.

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Marketing in Action
Positioning
Promoting attributes, benefits, usage situations,
or users can help to establish a products
position in the consumers mind.
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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
• Place (distribution)
• Promotion

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Figure 2-5The Four Ps of the Marketing Mix
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Discussion
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Figure 2-6Marketing Analysis, Implementation,
Planning, and Control
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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
• Evaluate results, take corrective action.

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SWOT Analysis

• StrengthsInternal capabilities that may help a
  company reach its objectives.
• WeaknessesInternal limitations that may
  interfere with a companys ability to achieve its
  objectives.

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SWOT Analysis

• OpportunitiesExternal factors that the company
  may be able to exploit to its advantage.
• ThreatsCurrent and emerging external factors
  that may challenge the companys performance.

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Discussion
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Brand / Product Marketing Plan

• Executive summary
• Current marketing situation
• Analysis of threats and opportunities
• Objectives for the brand
• Marketing strategy
• Action programs
• Marketing budget
• Controls

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Marketing Implementation - Department Organization

• Functional Organization Each marketing activity
  is headed by a functional specialist.
• Geographic Organization Sales and marketing
  people are assigned to specific countries,
  regions, and districts.

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Marketing Department Organization

• Product Management Organization One person given
  responsibility for complete strategy and
  marketing program for a single product.
• Market or Customer Organization Manager
  responsible for particular market or customer.

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Marketing Department Organization

• Combination Organization Use some combination
  of the previous four approaches.
• This is especially true in large companies (e.g.,
  Procter Gamble)

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Discussion
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Marketing Control Process

• Set Goals
• Measure Performance
• Evaluate Performance
• Take Corrective Action

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Figure 2-8Return on Marketing
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• Explain companywide strategic planning and its
  four steps.
• Discuss how to design business portfolios and
  growth strategies.
• Describe the elements of a customer-driven
  marketing strategy and mix, and the forces that
  influence it.
• List the marketing management functions,
  including the elements of a marketing plan.