Priciples of Marketing by Philip Kotler and Gary Armstrong
Priciples of Marketing by Philip Kotler and Gary Armstrong
Priciples of Marketing by Philip Kotler and Gary Armstrong
Chapter 2
Company and Marketing Strategy
Partnering to Build Customer
Relationships
PEARSON
Objective Outline
Companywide Strategic Planning: Defining
Marketing’s Role
1 Explain company-wide strategic planning and its four
steps.
Business Marketing
objectives objectives
• Build profitable • Increase market
customer share
relationships • Create local
• Invest in partnerships
research • Increase
• Improve profits promotion
Designing the Business Portfolio
The business portfolio is the collection of busine
sses and products that make up the company.
Business portfolio planning involves two steps:
Single product
or brand
Analyzing the Current Business Portfoli
o
Build : Hold:
It can invest more in the It can just enough to
business unit. share at the current
level.
Harvest : Divest :
It can harvest the SBU, It can divest the SBU by
milking its short-term selling it or phasing it
cash. out and using the
resources elsewhere.
Problems with Matrix Approaches
It have some limitations:
• Difficulty in defining SBUs and measuring market share and
growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning
Methods to improve:
• Dropped formal matrix methods in favor of more customized
approaches that better suit their specific situations
• Today’s strategic planning has been decentralized
Developing Strategies for Growth and Dow
nsizing
• Market development ─ Companies can grow by developing new markets
for existing products. For example, Starbucks is expanding rapidly in
China, which by 2015 will be its second-largest market, behind only the
United
Product/market
States. expansion grid is a portfolio-pl
anning tool for identifying company growth oppo
• Diversification ─ Through diversification, companies can grow by
rtunities
starting through
or buying market
businesses penetration,
outside their currentmarket deve For
product/markets.
lopment,
example, product
Starbucks development,
is entering the “health or
anddiversification.
wellness” market with
stores called Evolution By Starbucks.
Developing Strategies for Growth a
nd Downsizing
Marketing
segmentation Positioning
Market
targeting
Market Segmentation
The process of dividing a market into distinct groups of b
uyers who have different needs, characteristics, or behavi
ors, and who might require separate products or marketin
g programs, is called market segmentation.
Market segment is a group of consumers who respond in
a similar way to a given set of marketing efforts.
Marketing Targeting
Market targeting is the process of evaluating each mark
et segment’s attractiveness and selecting one or more seg
ments to enter.
A company with limited resources might decide to serve
only one or a few special segments or market niches.
Most companies enter a new market by serving a single s
egment; if this proves successful, they add more segment
s.
Marketing Differentiation and Positioning
Positioning is arranging for a product to occupy a clear, d
istinctive, and desirable place relative to competing produ
cts in the minds of the target consumer.
Thus, effective positioning begins with differentiation—
actually differentiating the company’s market offering so
that it gives consumers more value.
Product means the
Price is the amount
Developing an Integrated Marketing Mix
goods-and-services
combination the
of money customers
The
marketing
must pay to obtain
company offers to the
the product. mix ─ or
Marketing mix is the set
target market. of controllable tactical the four Ps
marketing tools—product, price, place, and prom ─ consists
of tactical
otion—that
Promotion the firm
refers to blends to produce the respon marketing
An effective marketing program blends the
se it wants
activitiesinthat
the target market. Place includestools
marketing the
communicate mixmerits
elements into an integrated blended
company activities
of marketing
the product program
and designed to achieve the
that make the
into an
company’s
persuade targetmarketing
customers objectives byproduct
delivering integrated
value to consumers. The marketing mix available
constitutes to
marketing
to buy it. target consumers.
the company’s tactical tool kit for establishing program
strong positioning in target incentives. that
actually
delivers the
intended
value to
target
customers.
Developing an Integrated Marketing Mix
It holds that the four Ps concept takes the seller’s view of
the market, not the buyer’s view. From the buyer’s viewp
oint, in this age of customer value and relationships, the f
our Ps might be better described as the four Cs:
4Ps 4Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
Managing the Marketing Effort
Managing the marketing process requires the four marketing m
anagement functions:
Marketing Analysis
The marketer should conduct a SWOT analysis ,by which it e
valuates the company’s overall strengths (S), weaknesses (W),
opportunities (O), and threats (T).
Marketing Planning
Through strategic planning, the company decides what it wants
to do with each business unit. Marketing planning involves cho
osing marketing strategies that will help the company attain its
overall strategic objectives.
Positioning
Marketing Strategy:
It outlines how the Marketi
Marketi
Target ng
ng
company intends to markets
markets
Market mix
strategy
strategy
create value for target
customers in order to
capture value in return.
Marketing
Marketing
expenditure
expenditure
level
level
Marketing Implementation
Marketing implementation is the process that turns mar
keting plans into marketing actions to accomplish strategi
c marketing objectives.
Whereas marketing planning addresses:
what
Many managers think thatwhy“doing things right” (implementation)
is as important as, or even more important than, “dong the right
who
things”(strategy).
where
when
how
Marketing Department Organization
•• This
This is
is the
the most
most common
common form
form of
of marketing
marketing
Functional organization
organization with
with different
different marketing
marketing functions
functions
organization headed
headed byby aa functional
functional specialist.
specialist.
•• Useful
Useful for
for companies
companies that
that sell
sell across
across the
the country
country or
or
Geographic internationally.
internationally. Managers
Managers are are responsible
responsible forfor
organization developing
developing strategies
region.
region.
strategies and
and plans
plans for
for aa specific
specific
•• Useful
Useful for
for companies
companies with
with different
different products
products or
or
brands.
brands. Managers
Managers are
are responsible
responsible for
for developing
developing
Product management strategies
strategies and
and plans
plans for
for aa specific
specific product
product or
or brand.
brand.
Four steps of
marketing
control:
Management takes Evaluates the causes of
corrective action to any differences
close the gaps between between expected and
goals and performance actual performance
Measuring and Managing Return on Mark
eting Investment
Return on marketing investment (or marketing ROI) i
s the net return from a marketing investment divided by t
he costs of the marketing investment.
It measures the profits generated by investments in marke
ting activities.
Many companies are assembling such measures into mar
keting dashboards ─ meaningful sets of marketing perfor
mance measures in a single display used to monitor strate
gic marketing performance.
Measuring and Managing Return on Mark
eting Investment
The End