Chapter One Revision Marketing Definition Marketing offers- Products, Services, and Experiences Core Marketing Concept: Needs,

wants, and demands- Marketing offers( Products, Services, and Experience)- Value and satisfaction Exchange, transactions, and relationships Market Marketing Management: The Production concept The Product Concept The selling Concept The Marketing Concept

 The Societal Marketing Concept  Customer Relationship Management CRM  Marketing Challenges in the New Connected Millennium

Chapter Two

Company and Marketing Strategy

Partnering to Build Customer Relationships

Chapter Preview
Explain companywide strategic planning and its four steps Discuss how to design business portfolios and develop strategies for growth and downsizing Explain marketing's role in strategic planning and how marketers partner with others inside and outside the firm to build profitable customer relationships Describe the marketing process and the forces that influence it List the marketing management functions, including the elements of a marketing plan

Strategic Planning
The process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities. It defines a clear company mission, Setting supporting objectives, designing a sound business portfolio And coordinating functional strategies

The Strategic Planning

At the corporate level:

Company starts the strategic planning process by defining its overall purpose and mission Decides what portfolio of businesses and products is best for the company How much support to give each one

Marketing planning occurs at the business-unit ,product, and market level, supporting company strategic planning with more detail planning for specific marketing opportunities

Market-Oriented Mission
A mission statement asks.. What is our business? Who is the customer? What do consumers value? What should our business be? A mission statement should be: An invisible hand Neither too narrow nor too broad Fitting of market environment Based on distinctive competencies Motivating

Market-Oriented Mission Mission statement

A statement of an organizations purpose What it wants to accomplish in the larger environment Needs to be specific, realistic, and motivating; todays statements are market-oriented

IBMS Mission: From Mainframe to Customer Solutions if you'd asked top managers at IBM 15 years ago what business are you in?, they might well have answered, "We sell computer hardware and software."


Lou Gerstner, CEO brought a renewed focus on customer , who were demanding solutions to increasingly more difficult problems

Today, if you ask almost any IBM manager to define the business, they would tell you that, "We deliver solutions to customers' information technology problems."


Example:

Pfizer Pharmaceutical's Mission Statement: "We dedicate ourselves to humanity's quest for longer, healthier, happier lives through innovation in pharmaceutical, consumer and animal health products".
Purpose: quest for longer, healthier, happier lives Business: pharmaceutical, consumer and animal health products Values: innovation

Designing a Business Portfolio

The 3rd step in the strategic planning process is designing the business portfolio (a collection of businesses & products that make up the company)
The best portfolio is the one that best fits the companys strengths and weaknesses to opportunities in the environment

To design a portfolio, a business must:

Analyze its current portfolio and decide which business should receive more, less, or no investment Shape the future portfolio by developing strategies for growth and downsizing

Analyzing the Current Business Portfolio

Step 1 identify the key businesses (SBUs = strategic business ) Step 2 Assess attractiveness of its various SBUs and decide how much support each deserves

BCG Growth Share Matrix (Approach to Strategic Planning)

Stars: high growth, high-share businesses or products Heavily financed (loans; stocks; bonds)

Cash Cows: low-growth, high-share businesses or products Established and successful SBUs Less investment to hold market share thereby producing lots of cash Question Marks: low-share business units In high-growth markets Need lots of cash to hold share of market Managerial decisions need to be made on whether to drop or build up

Dogs: low-growth, low-share businesses and products May be self sustaining cash sources Not good bet on large cash sources

Beware of the problems involved with formal matrix methods

Developing Strategies for Growth and Downsizing

Product/Market Expansion Grid

It must identify, evaluate, & select market opportunities It must set strategies for capturing these opportunities - Identifies growth opportunities, such as: Market penetration increasing sales to current customers without changing products Market Development developing new markets for current products Product Development new or modified products to current markets Diversification expand beyond current Products or business units

Customer Relationship Management (CRM) & Partner Relationship Management (PRM)

CRM Develops the relationship between the company &

the customer

PRM

Develops the relationship between the company & it s suppliers & partners (supply chain) so that customer centricity becomes the total focus

Example: General Electrics highly regarded former CEO, tells his employees: Companies cant give job security. Only customer can! He emphasized that: All GE people, regardless of their department, have an impact on customer satisfaction and retention. His message: If you are not thinking customer, you are not thinking.

Marketing Process
The process of
(1) (2) (3) (4) analyzing marketing opportunities selecting target markets developing the marketing mix managing the marketing effort (goal is to build strong and profitable relationships with customers)

Customer is centric Segment the market consists of consumers who respond in a similar way to a given set of marketing efforts For exempla: Customer who want biggest and most comfortable car regardless of price, they should be in one market segment Customer who care mainly about price and operating make up another segment

Target Market : Evaluation of each segments attractiveness and selecting one or more segments to enter - a company with limit resources might decide to serve only one or few special segments - A large company might also decide to offer a complete range of products to serve all market segment - General Motor says that it makes a car for every person, purse, and personality

Market Positioning: where a product occupies a clear, distinctive, & desirable place relative to competing products in the minds of targeted customers.
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Ford Taurus is build to last Chevy Blazer is Like a rock Toyotas says Its not you. Its the car Mercedes says, In a perfect world, everyone would drive a Mercedes.

The Marketing Process

4 Ps of Marketing Mix

4Ps might be describe as the 4Cs 4Cs 4Ps Product Customers solutions Price Customer cost Place Convenience Promotion Communication

Marketing Management Functions

Analysis

Planning Develop strategic Plans

Implementation Carry out the plans

Control Measure results

Evaluate results
Develop marketing Plans

Take corrective action

Managing the Marketing Effort

Analysis Finding opportunities Avoiding threats Understanding strengths Analyzing weaknesses

Managing the Marketing Effort

Planning Marketing plans include:
Executive summary Analysis of current situation Objectives Targets and positioning Marketing mix Budget Controls

Managing the Marketing Effort

Implementation Process that turns strategies and plans into marketing actions that accomplish strategic marketing objectives Good implementation is a challenge Marketing department organization

Managing the Marketing Effort

Control Involves Evaluating the results of marketing strategies and plans and taking corrective action Checks for differences between goals and performance Operating control, strategic control, marketing audit