Marketing Chapter 2

Discuss how to design business portfolios and develop growth strategies

Strategic planning sets the stage for the rest of the company's planning. Marketing contributes to strategic planning, and the overall plan defines marketing's role in the company. Strategic planning involves developing a strategy for longrun survival and growth. It consists of four steps: (1) defining the company's mission, (2) setting objectives and goals, (3) designing a business portfolio, and (4) developing functional plans. The company's mission should be market oriented, realistic, specific, motivating, and consistent with the market environment. The mission is then transformed into detailed supporting goals and objectives, which in turn guide decisions about the business portfolio. Then each business and product unit must develop detailed marketing plans in line with the company-wide plan.

Explain company-wide strategic planning and its four steps

Strategic planning sets the stage for the rest of the company's planning. Marketing contributes to strategic planning, and the overall plan defines marketing's role in the company. Strategic planning involves developing a strategy for longrun survival and growth. It consists of four steps: (1) defining the company's mission, (2) setting objectives and goals, (3) designing a business portfolio, and (4) developing functional plans. The company's mission should be market oriented, realistic, specific, motivating, and consistent with the market environment. The mission is then transformed into detailed supporting goals and objectives, which in turn guide decisions about the business portfolio. Then each business and product unit must develop detailed marketing plans in line with the company-wide plan.

Explain marketing's role in strategic planning and how marketing works with its partners to create and deliver customer value

Under the strategic plan, the major functional departments— marketing, finance, accounting, purchasing, operations, information systems, human resources, and others—must work reVieWing anD extenDing the concePts objectives review together to accomplish strategic objectives. Marketing plays a key role in the company's strategic planning by providing a marketing concept philosophy and inputs regarding attractive market opportunities. Within individual business units, marketing designs strategies for reaching the unit's objectives and helps to carry them out profitably. Marketers alone cannot produce superior value for customers. Marketers must practice partner relationship management, working closely with partners in other departments to form an effective value chain that serves the customer. And they must also partner effectively with other companies in the marketing system to form a competitively superior value delivery network.

Market segment

a group of consumers who respond in a similar way to a given set of marketing efforts

Mission statement

a statement of the organization's purpose-- what it wants to accomplish in the larger environment

Differentiation

actually differentiating the market offering to create superior customer value

Positioning

arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

To find the best strategy and mix and to put them into action, the company engages in marketing analysis, planning, implementation, and control. The main components of a marketing plan are the executive summary, the current marketing situation, threats and opportunities, objectives and issues, marketing strategies, action programs, budgets, and controls. Planning good strategies is often easier than carrying them out. To be successful, companies must also be effective at implementation—turning marketing strategies into marketing actions. Marketing departments can be organized in one way or a combination of ways

functional marketing organization, geographic organization, product management organization, or market management organization. In this age of customer relationships, more and more companies are now changing their organizational focus from product or territory management to customer relationship management. Marketing organizations carry out marketing control, both operating control and strategic control. More than ever, marketing accountability is the top marketing concern. Marketing managers must ensure that their marketing dollars are being well spent. In a tighter economy, today's marketers face growing pressures to show that they are adding value in line with their costs. In response, marketers are developing better measures of marketing return on investment. Increasingly, they are using customer-centered measures of marketing impact as a key input into their strategic decision making.

Strategic planning

the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities

Market targeting

the process of evaluating each market segment's attractiveness and selecting one or more segments to enter

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

Growth-share matrix

a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share

product/market expansion grid

a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

Market development

company growth by identifying and developing new market segments for current company products

Market penetration

company growth by increasing sales of current products to current market segments without changing the product

Product development

company growth by offering modified or new products to current market segments

Diversification

company growth through starting up or acquiring businesses outside the company's current products and markets

Marketing segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes

Marketing control

measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved

Business portfolio

the collection of businesses and products that make up the company

Marketing strategy

the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

Marketing return on investment (ROI)

the net return from a marketing investment divided by the costs of the marketing investment

Portfolio analysis

the process by which management evaluates the products and businesses that make up the company

Marketing mix

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

Marketing implementation

turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives

Describe the elements of a customer value-driven marketing strategy and mix and the forces that influence it

Customer engagement, value, and relationships are at the center of marketing strategy and programs. Through market segmentation, targeting, differentiation, and positioning, the company divides the total market into smaller segments, selects segments it can best serve, and decides how it wants to bring value to target consumers in the selected segments. It then designs an integrated marketing mix to produce the response it wants in the target market. The marketing mix consists of product, price, place, and promotion decisions (the four Ps).