2. company & marketing strategy

7/30/2019 2. Company & Marketing Strategy

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Company & MarketingStrategy

Chapter - 2


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A marketing department in an

organization does not work in isolation

The marketing department has to:

keep in mind the overall organizations

goals

Work simultaneously with the other

departments


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How does the Marketing departments

role fit in the overall company?


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Defining the Companys Mission

Setting the Company Objectives

Designing the Business Portfolio

Planning the Marketing and other

functional strategies

CorporateLevel

Business Unit,Product, &Market Level


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Defining a Market-OrientedMission

Definition: Mission Statement

A statement which defines the purpose of the

organization

What is the business of the firm?

Who are their customers?

What does the firm want to become?


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A mission statement should NOT be:

Product basedThey become outdated

Stated in terms of profits or salesProfitsare rewards for creating value for customers

Instead, it should be market-oriented

Based on satisfying customer needs

As the basic needs may last forever


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Example

Product-Oriented Market-Oriented

To sell athletic

goods

To bring inspiration

and innovation to

every athlete in the

world.


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Example

Product-Oriented Market-Oriented

To provide the

world's best online

search engine

To help you

organize the worlds

information and

make it accessibleand useful


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Setting Company Objectives

Definition: Objectives

Desired outcomes, goals or targets

The goals are based on the companys

mission statement


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The mission statement leads to a

hierarchy of goals

Set for each level of management

Upper level

Middle level

Lower level

Set for each functional department

Finance Marketing

Production etc.


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Designing the Business Portfolio

Definition: Business Portfolio The collection of products and services provided by a

company

Definition: Strategic Business Unit (SBU)

A company division, a product line within a division, ora single product/brand

A profit making area that requires its own marketing

plan, competitor analysis, and marketing campaign


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Baby foods

Bottled water

Cereals

Chocolate

Drinks

Coffee


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Engro Fertilizer Limited

Engro Foods Limited Engro Polymer & Chemicals Limited

Engro Powergen Limited

Engro Vopak Terminal Limited

Engro EXIMP Private Limited


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Pantene

Head & Shoulders

Wella Hair Color

Safeguard

Ariel

Pampers

Always


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Prepaid

Postpaid

Uth Package

Ladys Package

Kissan Package


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Companies have limited budget

They want to put more resources in their

most profitable businesses or products Close down unprofitable businesses or

products

What is the purpose of business

portfolio analysis?

Definition: Business Portfolio Analysis

Evaluation of the products and businessesthat make up the company


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Business portfolio planning involves

two steps:

Analyzing the current business portfolio to

decide which businesses should receive

how much investment

Plan for future portfolio by developing

strategies for growth and downsizing


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Boston Consulting Group

Approach Company classifies all its SBUs

according to the growth-sharematrix

Analyzing

Current

BusinessP

ortfolio


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Growth-Share Matrix

Vertical axisMarket growth rate

A measure of market attractiveness

Horizontal axisRelative market share

A measure of company strength in the market


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There are four types of SBUs:

StarsNeed heavy investment to increase share

Cash CowsLess investment and produce a lot ofcash

Question MarksNeed heavy investment tomaintain share. Either turn into Star or Divest

DogsGenerate enough cash to maintain themselvesand eventually phase out


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There are four strategies which can be

used:

BuildMake further investments (for example, tomaintain Star status, or to turn a Question Mark into a Star)

HoldMaintain the status quo (do nothing). HarvestReduce the investment (enjoy positive cash

flow and maximize profits from a Cash Cow)

DivestTo sell or phase out and use the resources

elsewhere


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CashUsage

Cash Generation


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- Lipton

- Surf Excel

- Close up

- Blue Band

- Fair n Lovely

- Sunsilk

- Walls

- Clear

Shampoo

- Comfort

- Lifebouy

Shampoo

- Wheel

- Rin


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- Pepsi

- Slice

- Lays

- Aquafina

- Mountain

Dew

- Diet Pepsi

- TropicanaTwister


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Companies need growth if theywant to compete effectively

So they need to find businesses orproducts they should consider to

include in their portfolio in thefuture

Develo

pingSt

rategiesfor

Grow

th&Downsizing

Objective:

To manage profitable growth


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Marketing has the main responsibility

for achieving profitable growth

One useful device for identifyinggrowth opportunities is the

Product/market Expansion Grid


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Product/market Expansion Grid:


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Market Penetration

Increase market share by:

Adjusting the marketing mix elements

Gaining competitors' customers Convincing current clients to use more of

your product/service

by advertising

by introducing loyalty schemes


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Market Development

Increase sales by: Entering new geographical areas

Attracting institutional customers

Entering new demographic segments

Age

Family size

Gender

Income

Education level

Religion

Language

Employment status

Nationality


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New Markets


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Institutional Customers

Aviations and Marine

Retail Fuel

Companies

Individuals


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New Demographics


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Difference between Market Penetration

and Market Development

The key difference is the definition of

the target market must change Market penetration Market size is fixed

Market developmentMarket potential

must increase


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Non-Buyers Non-Users

Difference between:

Individuals whouse the type of

product or

service you sell,

but buy adifferent brand

Individuals whodo not use the

type of product

or service you

sell


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Product Development

New product introduced to existing

market


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Sunsilk

Shampoo

Sunsilk

Conditioner


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GilletteRazor

GilletteShaving

Cream


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Facewash Toner


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Pepsi Lays


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Diversification

New product introduced in new market


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Olpers Milk OmoreIce-cream


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For Females For Kids


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For Middle

Class

For Upper

Class


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Clothes Meat


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Planning Marketing

Marketers alone cannot produce superior

value for customers

Marketers should collaborate with

Other functions

External partners


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Marketing Strategy

Definition: Marketing strategy Planning how to create customer value and achieve

profitable customer relationships

The marketer does:

Segmentation Targeting

Positioning


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Marketing Mix

Once the strategy is made, the marketer

plans the details of the marketing mix

ProductCombination of goods & services offeredto consumers

PriceAmount of money paid by the customer

PlaceAreas where the product is available

PromotionActivities done to communicate withcustomers


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Managing the Marketing Effort

Just being good at marketing is not

enough

Analyzed

Planned

Implemented

Controlled

Marketers need to make sure that the

marketing process is properly:


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Analyze the companys overall

situation with the help ofSWOT

Analysis

Marketing

Analysis

S Strengths

W Weaknesses

O Opportunities

T Threats

Internal

External


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Strengths

- Company image

- Competent HR

- Strong marketing- Large customer base

- Patents

- Cost advantages

- Strong distribution

Weaknesses

- Lack of patent

- Weak brand name

- Poor reputation- High cost

- Weak distribution

- Weak financial position


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Opportunities

- Unfulfilled customer need- Arrival of new technologies

- Loosening of government regulations

- Removal of international trade barriers

Threats

- Shifts in consumer taste

- Emergence of substitute products

- New regulations

- Increased trade barriers


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Strategic planningWhat each

business unit should do

Marketing

Plannin

g

Marketing budgetHow much will you

spend on each activity

Marketing planningAnswers the

whatand whyof marketing


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A brilliant marketing strategy

counts for little if the company fails

to implement it properly

MarketingImp

lementation

Definition: Marketing Implementation

The process that turns marketingplans into marketing actions in order

to accomplish marketing objectives

It answers the questions Who

Where

- When

- How


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Measure performance with the

marketing goals decided in the

beginning

Corrective actions, if any deviations

Marketing

Contro

l

Definition: Marketing Control

Evaluating the results of marketing

strategies and plans and takingcorrective action to ensure that

objectives are attained


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Types of Control

OperatingControl

Checking ongoing

performance against

the annual plan

Whether companyis achieving its

sales and profits

StrategicControl

Whether companys

basic strategies are

well matched with

its opportunities?

2. company & marketing strategy

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