2. Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships Flashcards
Strategic planning
(goals + capabilities + opportunities)
(1. Corporate level: mission -> objectives -> portfolio
2. Business unit, product and market level: marketing and other functional strategies)
The process of developing and maintaining a strategic fit between:
+ organization’s goals
+ capabilities
+ its changing marketing opportunities.
Strategic planning involves
1. Corporate level:
defining a clear company “mission”
-> setting supporting “objectives”
-> designing a sound “business portfolio”
2. Business unit, product and market level:
-> planning “marketing and other functional strategies”
Mission statement
want to accomplish in the larger environment
A statement of the organization’s purpose—what it wants to accomplish in the larger environment
Business portfolio (businesses + products = com.)
the collection of businesses and products that make up the company
The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.
Business portfolio planning involves two steps.
- analyze its current business portfolio and determine which businesses should receive more, less, or no investment.
- it must shape the future portfolio by developing strategies for growth and downsizing.
Portfolio analysis (evaluate -> identify strategic business units (SBUs))
The process by which management evaluates the products and businesses making up the company
Management’s first step is to identify the key businesses that make up the company, called strategic business units (SBUs):
- a company division,
- a product line within a division,
- a single product or brand.
most standard portfolio analysis methods evaluate SBUs on two important dimensions:
- the attractiveness of the SBU’s market or industry
- the strength of the SBU’s position in that market or industry
growth-share matrix
growth -> attractive, share -> strength
A portfolio-planning method that evaluates a company’s SBUs in terms of
- market growth rate (attractiveness)/(cash usage)
- relative market share (strength)/(cash generation)
SBUs: stars, cash cows, question marks, or dogs.
Stars (phone, TV)
- high-growth
- high-share
heavy investments to finance their rapid growth
growth will slow down -> cash cows.
Cash cows (washing machine)
- low-growth (cash usage)
- high-share (cash generation)
less investment to hold their market share
=> produce a lot of the cash -> pay bills and support other SBUs
Question marks (printer)
- low-share (cash generation)
- high-growth (cash usage)
require a lot of cash to hold their share, let alone increase it
Management has to think hard about which question marks -> stars/be phased out.
Dogs
- low-growth
- low-share
generate enough cash to maintain themselves but do not promise to be large sources of cash
Problems with Matrix Approaches
- Difficulty in defining SBUs and measuring market share and growth
- Time consuming
- Expensive
- Focus on current businesses, not future planning
product/market expansion grid
A portfolio-planning tool for identifying company growth opportunities through market penetration (sự xâm nhập), market development, product development, or diversification.
Market penetration (without changing the product) (new branch of restaurant, same menu)
Company growth by increasing sales of “current” products to current market segments “without changing the product”.
(new branch of restaurant, same menu)
Market development (new segments) (build in another country, same menu)
A strategy for company growth by identifying and developing “new market segments” for “current company products”
(build in another country, same menu)
Product development (modified or new products) (old restaurant, new menu)
A strategy for company growth by offering “modified or new products to current market segments”
(old restaurant, new menu)
Diversification (outside both current products and markets)
another country, new menu
A strategy for company growth through starting up or acquiring businesses “outside the company’s current products and markets”
(another country, new menu)
Value chain
The “series of internal departments” that carry out “value-creating activities” to design, produce, market, deliver, and support a firm’s products.
Value delivery network
A “network” composed of the company, suppliers, distributors, and, ultimately, customers who “partner” with each other to improve the performance of the entire system in delivering customer value.
Marketing strategy
The “marketing logic” by which the company hopes to “create customer value and achieve profitable customer relationships”.
Downsizing
Reducing the business portfolio by “eliminating” products or business units that are “not profitable” or that no longer fill the company’s overall strategy
Market segmentation
divide
Dividing a market into “distinct groups” of buyers who have “different” needs, characteristics, or behaviors and who might require separate marketing strategies or mixes.
Market segment
A group of consumers who respond in a “similar way” to a given set of marketing efforts.
Market targeting (evaluate and select)
“Evaluating” each market segment’s attractiveness and “selecting” one or more segments to serve.
positioning
arrange
Arranging for a product to occupy “a clear, distinctive, and desirable place relative” to competing products in the minds of target consumers.
Differentiation
Actually differentiating the market offering to create “superior customer value”.
Marketing mix (4Ps)
The set of tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.
4Ps
- 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.
SWOT analysis
An overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T).
Marketing implementation
strategies and plans -> actions
Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives.
Marketing control
measure -> evaluate -> corrective actions
- Measuring
- evaluating the results of marketing strategies and plans
- taking corrective action to ensure that the objectives are achieved
Marketing return on investment (marketing ROi)
The net return from a marketing investment divided by the costs of the marketing investment.
