| Lecture 2 | Maira Junejo

Chapter 2

Company and Marketing Strategy:

Strategic Planning and the Marketing Process
Learning Objectives

• Companywide Strategic Planning: Defining Marketing’s Role

• Designing the Business Portfolio
• Planning Marketing: Partnering to Build Customer Relationships
• Marketing Strategy and the Marketing Mix
• Managing the Marketing Effort
• Managing and Measuring Return on Marketing Investment
• Pointers to develop a marketing strategy
• 4 Cs model
 Strategic planning is the process
of developing and maintaining a
Companywide strategic fit between the
Strategy organization’s goals and
capabilities and its changing
Planning marketing opportunities
 Steps in strategic
planning
Corporate Strategy Mission, Vision, Goals

Business Strategy The business portfolio

Marketing strategies

Brand A Brand A Brand C

 • The mission statement is the organization’s purpose,
what it wants to accomplish in the larger
Defining a environment

Market- • Market-oriented mission statement defines the

business in terms of satisfying basic customer needs
Oriented • A clear mission statement acts like an invisible hand,
guiding people in the organization
Mission • Mission statements should be meaningful, yet simple
and motivating
Examples of Mission Statement

• Nokia, whose mission statement isn’t simple to sell mobile phones,

it is to “connect people”
• Oreo mission statement: “Every day, we are inspired to go the
extra mile to lead the future of snacking around the world. We do
this by offering the right snack, for the right moment, made the
right way.”
 Setting Company Objectives and Goals

Business objectives Marketing objectives

• Build profitable customer • Increase market share

relationships • Create local partnerships
• Invest in research • Increase promotion
• Improve profits
Business Strategy - Designing Business
Portfolio
The business portfolio is the collection of businesses and products that
make up the company
Strategic business unit (SBU) is a unit of the company that has a separate
mission and objectives that can be planned separately from other
company businesses
• Company division
• Product line within a division
• Single product or brand
ENGRO • Engro Fertilizers Limited (Urea and NPK Fertilizer)

Engro Corporation’s •
•
Engro Foods Limited (Milk and Ice Cream)
Engro Polymer & Chemicals Limited
portfolio consists of seven • Engro Powergen Limited

business Units (SBU) •

•
Engro EXIMP Private Limited (Fertilizer Trading)
Engro Vopak Terminal Limited (Chemical warehouse)
• Elengy Terminal Pakistan Limited (LNG Handelling)
 Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses
that make up the company
Analyzing
current
business
portfolio
As part of the activity, the company must:
First, analyze its current business
Second, it must shape the future
portfolio, and decide which
portfolio by developing strategies
businesses should receive more,
for growth and downsizing
less or no investment
Analyzing the Current Business Portfolio

Identify key businesses (strategic business units, or SBUs) that

make up the company

Assess the attractiveness of its various SBUs

Decide how much support each SBU deserves

Business portfolio (product wise)
Stars: High growth rate and high market share
Question mark: High growth rate and Low market share
Cash Cows: Low growth rate and high market share
Dogs: Low growth rate and low market share
 For Example: Nestle
Question mark: High growth rate and Low market share

Stars: High growth rate and high market share

Dogs: Low growth rate and low market share

Cash Cows: Low growth rate and high market share

Problems with Matrix Approaches

Difficulty in defining SBUs

and measuring market Time consuming
share and growth

Focus on current
Expensive businesses, not future
planning
 Developing Strategies for Growth and Downsizing

Product/market expansion grid is

a tool for identifying company
growth opportunities through
market penetration, market
development, product
development, or diversification
Further explanation
• Market penetration is a growth strategy which involves increasing sales to current
market segments without changing the product.
Example: Change your Blade Gillette
• Market development is a growth strategy that identifies and develops new market
segments for current products.
• Example: Starbucks retail stores develop new markets
• Product development is a growth strategy that offers new or modified products to
existing market segment
• Example: Harpic Toilet cleaner / Bathroom cleaner
• Diversification is a growth strategy for starting up or acquiring businesses outside the
company’s current products and markets
• Example: Engro Fertilizers to Engro Foods
 Tying it all up…
Is it easier to expand a customer base than to offer a new product to the same
customer base?
 Downsizing

The reduction of the business

portfolio by eliminating products
or business units that are not
profitable or that no longer fit the
company’s overall strategy

Question: Why do companies downsize their business?

Partnering to Build Customer Relationships

• Value chain is a series of departments

that carry out value-creating activities
to design, produce, market, deliver,
and support a firm’s products
• Value Exploration – How the firm
identifies new value opportunities. Value Value
Value
Exploration
Creation
Delivery
(Creation
(Identification
of more
of New
promising
Value new
Opportunities)
value offerings)
• Value Creation – How efficiently a (Use of capabilities and infrastructure to deliver the new
company creates more promising new value offerings)
value offerings
• Value Delivery – How a company uses
its capabilities and infrastructure to
deliver the new value offering more
efficiently.
Marketing Strategy,
the Marketing Mix
and the Services Mix
Marketing Strategy and the Marketing Mix
Marketing Strategy and the Marketing Mix
Customer-Driven Marketing Strategy

1. Market segmentation is the division of a market into distinct groups of buyers who have
distinct needs, characteristics, or behavior, and who might require separate products or
marketing mixes
2. Market segment is a group of consumers who respond in a similar way to a given set of
marketing efforts
3. Market targeting is the process of evaluating each market segment’s attractiveness and
selecting one or more segments to enter
 Market
Positioning
 Market positioning is the arranging for a
product to occupy a clear, distinctive, and
desirable place relative to competing products
in the minds of the target consumer

Market
Positioning
Marketers plan positions that distinguish their
products from competing brands and give
them the greatest advantage in their target
markets
Position and own the
category benefit

• Walt Disney Company: Magical

 Position the
product and the consumer
• Pepsi Generation
Position how the company does
business
Burger King: Have it your way
Position against the
competition

Apple: Think different

 CLASS ACTIVITY

Choose any 5 Google their Highlight the

brands in the positioning weakest
same category. strategy. brand.
 Starbucks
Positioning statement: “Authentic Coffee, Great Experience, and Quicker
Delivery”
Why this works: It focuses on customer pain points
Starbucks founders—Baldwin, Siegel, and Bowker discovered that coffee
lovers were not happy with the existing inferior quality coffee. People
wanted authentic coffee beans, which were unavailable. Being coffee lovers,
they opened a shop to sell authentic beans to a small niche market. People
loved their coffee and spread the word to others.
While their former positioning statement was “authentic coffee”, Starbucks
evolved with customers’ needs and attitudes.
Howard, who joined Starbucks later on, initiated research that found out
that coffee takers liked to have a particular “experience” when taking coffee.
He watched Italian coffee lovers who preferred to take their coffee in
espresso bars where they enjoyed exceptional customer service, personal
interactions, and soothing music. That is where the idea of Starbucks stores
where people could converge and have “an experience” came to life.
Contents of a
MARKETIN
G
STRATEGY
Contents of a Marketing Plan
1. Executive summary Presents a brief summary of the main goals and recommendations of the plan for management
review, helping top management find the plan’s major points quickly.

2. Current marketing situation Describes the target market and the company’s position in it, including information about the
market, product performance, competition, and distribution. This section includes the following:
• A market description that defines the market and major segments and then reviews customer
needs and factors in the marketing environment that may affect customer purchasing.
• A product review that shows sales, prices, and gross margins of the major products in the
product line.
• A review of competition that identifies major competitors and assesses their market positions
and strategies for product quality, pricing, distribution, and promotion.
• A review of distribution that evaluates recent sales trends and other developments in major
distribution channels.
3. Threats and opportunities
analysis
Assesses major threats and opportunities that the product might face, helping management to
anticipate important positive or negative developments that might have an impact on the firm and
its strategies.

4. Objectives and issues States the marketing objectives that the company would like to attain during the plan’s term and
discusses key issues that will affect their attainment.
Contents of a Marketing Plan (cont.)

5. Marketing strategy Outlines the broad marketing logic by which the business unit hopes to engage customers, create
customer value, and build customer relationships, plus the specifics of target markets, position-
ing, and marketing expenditure levels. How will the company create value for customers in order
to capture value from customers in return? This section also outlines specific strategies for each
marketing mix element and explains how each responds to the threats, opportunities, and critical
issues spelled out earlier in the plan.

6. Action programs Spells out how marketing strategies will be turned into specific action programs that answer the
following questions: What will be done? When will it be done? Who will do it? How much will it
cost?

7. Budgets Details a supporting marketing budget that is essentially a projected profit-and-loss statement.
It shows expected revenues and expected costs of production, distribution, and marketing. The
difference is the projected profit. The budget becomes the basis for materials buying, production
scheduling, personnel planning, and marketing operations.

8. Controls Outlines the controls that will be used to monitor progress, allow management to review
implementation results, and spot products that are not meeting their goals. It includes measures
of return on marketing investment.
Marketing Return on Investment
The end