6/18/2022

Principles of Marketing

Dr. Do Khac Xuan Diem

Email: diem.dkx@ou.edu.vn

Chapter 2

Company and marketing strategy:

Partnering to build customer
engagement, value and relationships.

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Learning objectives

• Objective 1: Explain company-wide strategic planning and its four steps.

• Objective 2: Discuss how to design business portfolios and develop
growth strategies.
• Objective 3: Explain marketing’s role in strategic planning and how
marketing works with its partners to create and deliver customer value.
• Objective 4: Describe the elements of a customer value-driven marketing
strategy and mix, and the forces that influence it
• Objective 5: List the marketing management functions and describe the
elements of a marketing plan.

Learning objective 1:

Explain company-wide strategic planning

and its four steps.

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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.
Business unit,
Corporate level product, and
market level

Planning
Setting
Defining the Designing the marketing
company
company business and other
objectives
mission portfolio functional
and goals
strategies

Defining a market-oriented mission

Mission statement
A statement of the organization’s purpose - what it wants to accomplish in the larger
environment.
• What is our business?
• Who is the customer?
• What do customer value?
• What should our business be?

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Defining a market-oriented mission

Starbucks We sell coffee and snacks. We sell ‘The Starbucks Experience’, one
that enriches people’s lives one moment,
one human being, one extraordinary cup of coffee
at a time.
Instagram We help people capture and share the We are a social networking app for posting photos
world’s moments. and videos.

Ikea We offer a wide range of well-designed We help people create a better everyday life at
functional home furnishing products at home.
prices so low, that as many people as
possible will be able to afford them.
Pinterest We give people a social media platform We offer an online place to post pictures.
for collecting, organizing, and sharing
things they love.

Defining a market-oriented mission

A mission statement should:

1. Not be myopic in product terms

2. Be meaningful and specific
3. Be motivating
4. Emphasize the company’s strengths
5. Contain specific workable guidelines
6. Not be stated as making sales or profits

Mission statement should be market-oriented and defined in terms of

satisfying basic customer needs.
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Setting company objectives and goals

Mission

Marketing
Business Marketing
strategies
objectives objectives
programs
To build To deliver Investing in R&D
profitable superior value to Creating
customer customers. customer
relationship To gain customer experiences
engagement. Improving
To increase products,
market share. services quality
Developing new
products. 9

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Learning objective 2:

Discuss how to design business portfolios

and develop growth strategies.

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Designing the business portfolio

Business portfolio
The collection of businesses and products that make up the company.
Business portfolio of Unilever
Food Personal care Family care
Knorr Clear Comfort
Lipton Sunsilk Omo
Wall’s Lux Viso
Dove Surf
Lifebuoy Sunlight
Close up Vim
P/S
Vaseline
Pond’s 11

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Designing the business portfolio

Strategic business units (SBU) can be a

• Company division
• Product line within a division
• Single product or brand

Business portfolio planning

• Analyse current business portfolio to decide which businesses should
receive more, less or no investment.
• Shape the future portfolio by developing strategies for growth and
downsizing.
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Analysing the current business portfolio

Portfolio analysis
The process by which management evaluates the products and businesses that
make up the company.

Identify strategic business units

(SBUs)

Assess the attractiveness of its

various SBUs

Decide how much support

each SBU deserves
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The Boston Consulting Group

Growth-share matrix is a portfolio-planning method that evaluates a company’s
SBUs in terms of market growth rate and relative market share. SBUs are classified
as stars, cash cows, question marks and dogs.

Build Build or
its divest
share

Hold its Divest

share or or hold
Harvest

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Developing strategies for growth and downsizing

Product/market expansion grid
A portfolio planning tool for identifying company growth opportunities through
market penetration, market development, product development, or diversification.
Existing New
products products

Existing
markets

New
markets

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Developing strategies for growth and downsizing

Market penetration
Company growth by increasing sales of current products to
current market segments.
Market development
Company growth by identifying and developing new market
segments for current products.

Product development
Company growth by offering modified or new products to current
market segments.

Diversification
Company growth through starting up or acquiring businesses
outside the company’s current products and markets.
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Developing strategies for growth and downsizing

Downsizing is when a company must prune, harvest, or divest businesses that are
unprofitable or that no longer fit the overall strategy.

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Learning objective 3:

Explain marketing’s role in strategic planning

and how marketing works with its partners to
create and deliver customer value.

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Partnering with other company departments

Value chain is a series of internal departments that carry out value-creating
activities to design, produce, market, deliver, and support a firm’s products.

Human
resources
Accounting department
and Finance
department Purchasing
Marketing department
department
Operations
department Information
systems
department

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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.

Suppliers Company Distributors Customers

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Learning objective 4:

Describe the elements of a customer value-driven

marketing strategy and mix, and the forces that
influence it

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Marketing strategy and the marketing mix

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Customer value-driven marketing strategy

Marketing strategy is the marketing logic by which the company hopes to create
customer value and achieve profitable customer relationships.
Market segmentation is the division of a market into distinct groups of buyers who
have different needs, characteristics, or behaviors and who might require tailored
products or marketing programs.
Market segment is a group of consumers who respond in a similar way to a given set
of marketing efforts.

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Customer value-driven marketing strategy

Market targeting is the process of evaluating each market segment’s attractiveness

and selecting one or more segments to serve.
Market positioning is the arranging for a product to occupy a clear, distinctive, and
desirable place in the minds of target consumers relative to competing products.
Differentiation is differentiating the company’s market offering from that offered by
competitors to create superior customer value.

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Develop an integrated marketing mix

Marketing mix
The set of controllable tactical marketing tools—product, price, place,
promotion, people, process and physical evidence—that the firm
blends to produce the response it wants in the target market.
• Product means the goods-and-services combination the company offers to the
target market.
• Price is the amount of money customers must pay to obtain the product.
• Place includes company activities that make the product available to target
consumers.
• Promotion refers to activities that communicate the merits of the product and
persuade target customers to buy it.
• People implies interactions between service employees and customers.
• Process refers to procedures employed to deliver services to customers.
• Physical evidence includes tools, techniques used to prove high quality
services. 25

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Preparing an integrated marketing plan and program

Product: Goods, Services Price People
and Experiences List price ‘People interacting with
Discount people’ is how many
Variety Packaging
Allowances service experiences might
Quality Sizes
Settlement and be described.
Design Add-ons
credit terms Relationships are
Features Warranties
important in marketing.
Brand name Returns
Target customers
Amstrong et al., 2020
Intended positioning

Placement Process
Promotion In case of high- Physical evidence
Demand chain
Advertising contact services, Services are mostly
management intangible. The meaning of
Personal selling customers are
Logistics often involved in other tools and techniques
Direct marketing
management process of creating used in measures of
Online marketing
Channel and enjoying satisfaction is important.
management experiences. 26

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Learning objective 5:
List the marketing management functions and describe
the elements of a marketing plan.

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Managing the marketing effort

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Marketing analysis
SWOT analysis
An overall evaluation of the company’s strengths (S), weaknesses (W),
opportunities (O) and threats (T).

Internal

External

Positive Negative
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Marketing planning
Page 80 – 81; Appendix 1
Executive summary

Current marketing situation

Threats and opportunities analysis

Objectives and issues

Marketing strategy

Action programs

Budgets

Controls
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Marketing implementation

Marketing implementation
The process that turns marketing strategies and plans into marketing actions in
order to accomplish strategic marketing objectives.
• What will be done?
• Who will do it?
• When will it be done? Do things right
• Where will it be done?
• How much will it cost?

Do right things

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Marketing department organisation

Functional organisation

Geographic organisation

Product management organisation

Market organisation

Customer management organisation

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Marketing control

Marketing control
Measuring and evaluating the results of marketing strategies and plans and
taking corrective action to ensure that objectives are achieved.
Marketing control involves four steps:
- Set specific marketing goals
- Measure performance in the marketplace
- Evaluate the causes of any differences between expected and actual
performance
- Take corrective actions

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References

Kotler, P., & Amstrong, G., & Opresnik, M.O., (2017). Principles of marketing.
Global edition UK: Pearson Education limited.
Perreault William D., Cannon Joseph P., McCarthy - Essentials of Marketing -
McGraw-Hill 2012.
Amstrong et al. (2020). Principles of Marketing Ebook, Pearson Education
Australia.

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Video

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