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Roadmap: Previewing the Concepts
1. Explain companywide strategic planning and
its four steps. 2.
Discuss how to design business portfolios and growth strategies.
3. Explain marketing’s role in strategic planning
and how marketing works with its partners to create and deliver customer value.
4. Describe the elements of a customer-driven
marketing strategy and mix, and the forces that influence it.
5. List the marketing management functions,
including the elements of a marketing plan.
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Early Days
Characterized by “seat of
the pants” management.
Innovative sneaker tread drove early success.
Technological product
superiority, big-name endorsements and “Just
Do It” ads revolutionized sport marketing.
1980s – 1990s: Nike
leverages brand strength into new product areas.
NIKE – Strategy: Then Now NIKE – Strategy: Then Now
Case Study Case Study
Late 1990s - Present
Changes in consumer
shoe preference, declining product innovation, and
negative PR plague Nike.
Anti-establishment image no longer works: brand
backlash occurs.
Strategic planning is embraced and Nike
focuses on innovation and exploring new market
opportunities.
Nike has global success.
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Strategic Planning
The process of developing and
maintaining a strategic fit between the organization’s goals and capabilities
and its changing marketing opportunities.
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Steps in Strategic Planning
1. Defining the company mission.
2. Setting company objectives and
goals.
3. Designing the business portfolio.
4. Planning marketing and other
functional strategies.
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The Mission Statement
A statement of the organization’s
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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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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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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ProductMarket Expansion Grid
Market Penetration
– Existing markets, existing products
Market Development
– New markets, existing products
Product Development
– Existing markets, new products
Diversification
– New products, new markets
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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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Value Delivery Network
Components include:
– Company’s value chain
• Each department is a link
– Distributors – Suppliers
– Customers
Improved performance in delivery value
to customers is the goal.
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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
segment’s attractiveness and selecting one or more segments to enter.
Target segments that can sustain profitability.
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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
company’s marketing offer so it gives consumers more value.
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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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The Marketing Mix
Product:
– Variety, quality, design, features,
brand name, packaging and
services.
Promotion:
– Advertising, sales promotion, public
relations and personal selling.
Place:
– Channels, coverage, logistics, locations,
transportation, assortments and
inventory.
Price:
– List price, discounts, allowances, payment
period and credit terms.
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4 Ps –
Seller’s View
– Product – Price
– Place – Promotion
4 Cs –
Buyer’s View
– Customer Solution – Customer Cost
– Convenience – Communication
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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
Strengths:
Internal capabilities that may help a company reach its objectives.
Weaknesses:
Internal limitations that may interfere with a company’s ability to achieve its
objectives.
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SWOT Analysis
Opportunities:
External factors that the company may be able to exploit to its advantage.
Threats:
Current and emerging external factors that may challenge the company’s
performance.
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Brand Product Marketing Plan
1. Executive summary