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Company and Marketing Strategy

Principles of Marketing
Lecture 2

Company and Marketing Strategy

This lecture and its associated materials have been produced by Miss Ajjaree Limpamont (MSc International Marketing,
Thammasat) of iAcademy for the purposes of lecturing on the above described subject and the material should be
viewed in this context. The work does not constitute professional advice and no warranties are made regarding the
information presented. The Author and iAcademy do not accept any liability for the consequences of any action taken
as a result of the work or any recommendations made or inferred. Permission to use any of these materials must be
first granted by iAcademy.
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Agenda
• Review of Week 1
Week 2 Lecture Coverage
• 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
• Measuring and Managing Return on Marketing
Investment
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Quick Review of Lecture 1

• What is Marketing Definition?
• What are all component in Marketing Process?
• The Changing Marketing Landscape

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Any Questions?

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Let’s go to Lecture 2

Company & Marketing Strategy

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Companywide Strategic Planning

Strategic Planning
Strategic planning
– The process of developing and maintaining a strategic fit
between the organization’s goals and capabilities and its
marketing opportunities.
– An organization's process of defining its strategy or direction,
and making decision on available resources.
– It sets the stage for the rest of the planning in the firm.

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Companywide Strategic Planning

Strategic Planning

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Strategic planning
Companywide Strategic Planning
• Strategic Planning
– Corporate level
• Defining its overall purpose and mission.
• Setting Company Goal and Objective to complete the
mission.
– Business Level
• Designing Business portfolio.
• Marketing planning occurs at the business unit,
market and product level.
• Play Video and discuss the key point of how Live
identify themselves towards their mission
– Kotler_POM13e_PPT_02_video_LiveNation
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4 Step Strategic planning Process

1 2 3 4

Key Assumption: We are using the marketing concept

Market Oriented Business -> Portfolio Marketing

Company Marketing analysis and Partnerships and
Mission Objectives design Implementation

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Companywide Strategic Planning

Defining a Market-Oriented Mission
• Vision and Mission are not the same and might
sometimes be confusing. Here is how to tell the
difference. Play Video.
– What's the Difference Between Mission and Vision_

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Companywide Strategic Planning

Defining a Market-Oriented Mission
• The mission statement is the organization’s
purpose, what it wants to accomplish in the long
term plan.

• Market-oriented mission statement defines the

business in terms of satisfying basic customer
needs.

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Companywide Strategic Planning

Defining a Market-Oriented Mission

Mission statement should:

• Not be myopic in product terms
• Meaningful and specific
• Motivating
• Emphasize the company’s strengths
• Contain specific workable guidelines
• Not be stated as making sales or profits

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Companywide Strategic Planning

Defining a Market-Oriented Mission
• Mission Statement
– Motivating
“We work hard every day to make American
Express the world’s most respected service
brand”

The Operating Principles of American Express

are:
• Offer superior value propositions to all of our
customers
• Operate with best-in-class economics
• Support the American Express brand.

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Companywide Strategic Planning

Defining a Market-Oriented Mission
• Mission Statement
– Meaningful and Specific
“The mission of The Walt Disney Company is to
be one of the world's leading producers and
providers of entertainment and information.

Using our portfolio of brands to differentiate our

content, services and consumer products, we
seek to develop the most creative, innovative
and profitable entertainment experiences and
related products in the world.”

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Companywide Strategic Planning

Defining a Market-Oriented Mission
• Mission Statement
– A reminder to employees of why the company
exists. (meaningful and motivated)

• To refresh the world.

• To inspire moments of
optimism and happiness.

• To create value and make a

difference.
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Companywide Strategic Planning

Company Product-Oriented Market-Oriented
Definition Definition
Amazon.com We sell books, videos, We make the Internet
CDs, toys, consumer buying experience fast,
electronics and other easy, and enjoyable—
products online we’re the place where
you can find and
discover anything you
want to buy online
Disney We run theme parks We create fantasies—
a place where dreams
come true and America
still works the way it’s
supposed to
Nike We sell athletic shoes We bring inspiration
and apparel and innovation to every
athlete* in the world (*
if you have a body, you
are an athlete)

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Companywide Strategic Planning

Setting Company Objectives and Goals
• At the corporate level, company defines its mission.
Then the broad mission turns into a hierarchy of
objectives including business and marketing objectives.
• Each marketing and business units must come up with
various details marketing strategy to complete
company’s current objectives.
• Therefore, the firm’s mission is translated into a groups
of objectives which will be implemented by detailed
marketing strategy.

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Companywide Strategic Planning

Setting Company Objectives and Goals
Kohler’s Mission Statement : Contributing to a higher level of gracious living for
those who are touched by our Product and services.
Company Goal: Excellence Product & Design (require heavy R&D with high
investment, high investment derived from high profit (high income & low cost)
Business Objective:
• To build profitable customer relationships by developing efficiency yet beautiful
product that embrace the “essence of gracious living”
• Invest in R&D
• Improving Profit
Marketing Objectives:
• Improving Company’s sale and expand market share for domestic and
international market to reach more customer
• Increasing Promotions and PR campaign to gain more purchase

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Companywide Strategic Planning

Setting Company Objectives and Goals

Business Marketing
objectives objectives
• Build profitable • Increase market
customer share
relationships • Create local
• Invest in partnerships
research • Increase
• Improve profits promotion

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Setting Company Objectives & Goals

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Setting Company Objectives & Goals

Our vision and business idea

At IKEA our vision is to create a Mission Statement
better everyday life for the many Greenpeace is the leading independent
people. Our business idea supports campaigning organization that uses peaceful
this vision by offering a wide range protest and creative communication to expose
of well-designed, functional home global environmental problems and to
furnishing products at prices so low promote solutions that are essential to a green
that as many people as possible and peaceful future.
will be able to afford them.

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Setting Company Objectives & Goals

Recap :

Strategic Planning set the stage for the

rest if the company’s planning.
Marketing contributes to strategic
planning, and the overall plan defines marketing’s
role in the company.

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Designing the Business Portfolio

The business portfolio is the collection of

businesses and products that make up the
company profile.
Portfolio analysis is a major activity in strategic
planning whereby management evaluates the
products and businesses in a company profile

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Designing the Business Portfolio

Analyzing the Current Business Portfolio

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
Example
• Company division
• Product line within a division
• Single product or brand
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Example of Company with portfolio

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Example of Company with portfolio

Show in class http://www.virgin.com/company
Explain these key points
• How they provide examples of market development,
product development and diversification.
• List of all their products in various industries including
tourism, leisure, shopping, media, finance, and
healthcare.

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Example of family product for each company

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Designing the Business Portfolio

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

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Designing the Business Portfolio

• A popular chart to help
businesses visualize and
analyze the current
performance of their range
of products or business
units. Play Video.
– Portfolio Analysis Explained -
The BCG Matrix

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Designing the Business Portfolio

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BCG Growth Share Matrix

• 1. Stars (Invest)
– Uses a lot of cash and generates large sales
– Rapid Growing and maintaining market share -> cash cow
• 2. Cash Cows (Maintain)
– Generates large profits but because of low growth,
investments needed should be low
• 3. Dogs (Divest)
– Avoid and minimize the number of dogs in a company
– Low share in the market
– Beware of expensive ‘turn around plans’
• 4. Question Marks (Invest or Divest)
– Uses a lot of cash but does not generates large sales
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Designing the Business Portfolio

Problems with Matrix Approaches

• Difficulty in defining SBUs and measuring market

share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning
The matrix does not always work in all situations.
Marketer must apply and solve the problem based
on fact under current circumstances.

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Designing the Business Portfolio

• Ansoff’s Matrix (Product/market expansion grid)
allows businesses to identify company growth
opportunities through market penetration,
market development, product development, or
diversification.
• The matrix considers the growth of a business
through:
– New or existing products.
– New or existing markets.

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Designing the Business Portfolio

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Designing the Business Portfolio

• Market penetration is about increasing sales to
current market segments without changing the
product such as sales promotions.
– It involves selling more of the same products in the
same markets. This strategy is low risk.
– Examples of Market penetration include:
• New uses for the product
• Brand repositioning
• Promotion
• Loyalty schemes
• Dropping prices
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Designing the Business Portfolio

• Example of Market penetration

– If you already own a pair of Crocs, the company
wants you to buy more, in different colors and for
different occasions and purposes, by selling you
more of their existing products.
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Designing the Business Portfolio

• Market development is concerned with selling
existing products in new markets.
– It increases sales by selling existing products to new
users or creating a new method of consumption for
existing products.
– This strategy carries medium risk as organisations
may not have much knowledge of the new markets
they wish to break into.

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Designing the Business Portfolio

• Examples of Market development include:
– Exploring foreign markets
– Using e-commerce
• Heinz vinegar show more usages other than
cooking ingredient such as cleaning the
household item and etc.
– Open Video Vinegar: The eco friendly video
• The Volkswagen Beetle is increasing its market
potential by making its newest version more
masculine.
– Open video : The rebranding of Lucozade
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Designing the Business Portfolio

• Product development is about selling new
products to existing markets.
– This strategy may take advantage of spare
production capacity and technological
advancements. It carries medium risk.
– Products developed may be:
• Completely new
• Products related to existing ones
• Modifications of existing products

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Designing the Business Portfolio

• Diversification involves selling new products in
new markets.
– This is the most risky of Ansoff’s four strategies.
– Diversification might occur through:
• Integration with other businesses to gain new products
and enter new markets
• Developing new products to targeting attractive new
markets

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Designing the Business Portfolio

When a product is losing money, competitors are
strong, and the future looks bad…
It is sometimes better to get out now than to be
forced out later.
• Downsizing is 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
– Example: Unilever decided to drop “Dial Soap” from
the Thai Market due to significant loss in sales
volume.
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Partnering to Build Customer Relationships

Planning Marketing: Partnering Internally with other
company department
Each department carries out value-creating activities to design, produce,
market, deliver and support the firm’s product.
Value chain is a series of departments that carry out value-creating
activities to design, produce, market, deliver, and support a firm’s
products Porter’s Value Chain

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Partnering to Build Customer Relationships

Planning Marketing: Partnering Externally with others
in Marketing System
Value delivery network is made up of the company,
suppliers, distributors, and ultimately customers who partner
with each other to improve performance of the entire
system.

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Any Questions?

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Marketing Strategy and the Marketing Mix

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Marketing Strategy and the Marketing Mix

Market segmentation is the division of a market

into different groups of buyers who have different
needs, characteristics, or behavior and who might
require separate products or marketing mixes.

Market segment is a group of consumers who

respond in a similar way to a given set of
marketing efforts.

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Marketing Strategy and the Marketing Mix

Market targeting is the process of evaluating each
market segment’s attractiveness and selecting
one or more segments to enter.
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.
– Differentiation create superior customer value with
competitive advantage

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Marketing Strategy and the Marketing Mix

Example : Chocolate Snack Positioning Map

Lindt Chocolate has

choose to be in High Price &
High Quality Section.
Meanwhile M&M has
positioned themselves to be
in the opposite section of Low
Price & Low Quality.

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Marketing Strategy and the Marketing Mix

• Example: www.nike.com

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Marketing Strategy and the Marketing Mix

• Example:
Show in class www.nike.com
• Explore the different segments including gender Nike Women,
psychographics (sports centric including football), and age.
• Explain and show in class
1. How does Nike segment their market?
2. What appears to be their most important segments?
3. How does Nike position their products in the marketplace?

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Marketing Strategy and the Marketing Mix

Developing an Integrated Marketing Mix

Marketing mix is the set of controllable
tactical marketing tools—product, price,
place, and promotion—that the firm blends
to produce the response it wants in the
target market.

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Marketing Strategy and the Marketing Mix

Developing an Integrated Marketing Mix

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Managing the Marketing Effort

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Managing the Marketing Effort

Marketing Analysis – SWOT Analysis

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Managing the Marketing Effort

Market Planning—Parts of a Marketing Plan

Executive Marketing Threats and

summary situation opportunities

Objective Marketing Action

and issues strategy programs

Budgets Controls

Refer to: Table 2.2 in Marketing plan in Principles of Marketing, pg 79

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Managing the Marketing Effort

Marketing Implementation
Implementing is the process that turns marketing
plans into marketing actions to accomplish strategic
marketing objectives
• Successful implementation depends on how well
the company blends its people, organizational
structure, decision and reward system, and
company culture into a cohesive action plan that
supports its strategies.

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Managing the Marketing Effort

Marketing Department Organization

Functional organization

Geographic organization

Product management organization

Market or customer management

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Managing the Marketing Effort

Marketing Department Organization
• Functional organization: The most common form of marketing organization with
different marketing functions headed by a functional specialist.
• Geographic organization: Useful for nationwide companies .Managers are
responsible for developing strategies and plans for a specific region.
• Product management: Useful for companies with various products & brands.
Managers are responsible for developing strategies and plans for a specific
product or brand.
• Market or customer management organization: Useful for companies with one
product line sold to many different markets and customers. Managers are
responsible for developing strategies and plans for their specific markets or
customers.
• Customer management involves a customer focus and not a product focus for
managing customer profitability and customer equity.

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Managing the Marketing Effort

Marketing Control
• Controlling :the measurement and evaluation of results
and the taking of corrective action as needed
• Operating control: checking ongoing performance
against an annual plan and taking corrective action as
needed.
• Strategic control: looking at whether the company’s
basic strategies are well matched to its opportunities.

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Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
• The net return from a marketing investment divided by the
costs of the marketing investment. Marketing ROI provides a
measurement of the profits generated by investments in
marketing activities.
– E.g. $1 in market =>$4 in sales

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Summary Week 2
• 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
• Measuring and Managing Return on Marketing
Investment

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What to Expect: Week 2 Tutorial

• Students will analyse and discuss case studies to
reinforce their knowledge and concepts of this
lecture.
– Enterprise rent-a-car
• Students will watch a documentary on how
marketing works.

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