Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva 2-1
Company and Marketing Strategy: Partnering to Build Customer Relationships
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Marketing : An IntroductionAn Asian Perspective
Armstrong, Kotler & da Silva
Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva 2-2
Explain companywide strategic planning and its four steps.
Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.
Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.
Important Concepts
Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva 2-3
Opening Case Study- Walt Disney Company
Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva
Disney LandKnown for films, animation, theme parks and customer orientation
Parks offer a variety of attractions as well as cleanliness, order, and warmth
Satisfying the customer is everyone’s job
Disney has grown via diversification
Disney’s strong presence will be enhanced in Asia with the opening of Hong Kong
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Strategic Planning
Strategic Planning is 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 PlanningFigure 2.1
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Outcomes of effective marketing strategies:
• Achieve clear competitive advantages over the firm’s rivals
• Create positive responses among its target customers
• Turn in positive contributions to its bottom-line
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Figure 2.3
Strategies Over Time-Singapore Airlines
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Questions a Mission Statement Should Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?
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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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Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
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Mission Statements : Examples
Amazon.com: We sell books, videos, CDs, Consumer electronics, hardware and other products.
Canon: We make copying machines, fax machines and scanners
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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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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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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.
Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva
Management’s first step is to identify the key businesses making up the company. These can be called Strategic Business Units (SBUs).
The next step in the business portfolio analysis calls for management to assess the attractiveness of various SBUs and decide how much support each deserves.
The best known portfolio planning method was developed by the Boston Consulting Group (BCG), a leading management consulting firm.
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Step I. Analyzing the Current Business Portfolio:
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Analyzing Current SBU’s:BCG Growth-Share Matrix
Question Marks
• Low share SBUs in high growth markets• Require cash to hold market share• Build into Stars or phase out
Stars
• High growth & share• May need heavy investment to grow• Eventually, growth will slow
Relative Market Share High Low
Mar
ket G
rowt
h Ra
te L
ow
H
igh
?
Cash Cows
• Low growth, high share• Established, successful SBU’s• Produce cash
Dogs
• Low growth & share • Generate cash to sustain self• Do not promise to be cash sources
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Figure 2.6
Strategies in Managing the SBUs in the Portfolio
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The BCG Growth-Share Matrix
Figure 2.4
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Comparison of Business Portfolios
Figure 2.5
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Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Can Place too Much Emphasis on Growth
Problems With Matrix Approaches
Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva
Step II. Developing strategies for growth and Downsizing
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Marketing has the main responsibility for achieving profitable growth for the company.
Marketing must identify, evaluate, and select market opportunities and lay down strategies for collecting them.
One useful device for identifying growth opportunities is the Product/Market Expansion Grid.
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Market Penetration
ProductDevelopment
Market Development
Existing NewP R O D U C T
NewM A
R K
E T
Diversification
Existing
Product/Market Expansion GridFigure 2.7
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Product/Market Expansion Grid Based on Starbucks
• Market Penetration: make more sales to current customers without changing products. – How? Add new stores in current market areas;
improve advertising, prices, menu, service.• Market Development: identify and develop
new markets for current products. – How? Review new demographic
(seniors/ethnic consumers) or geographic (Asian, European, Australian, & South American) markets.
Market Penetration
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Started the first shop in 2004
In 2009, the number of shops reached 41 including 8 University campuses
Market Development
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Product/Market Expansion Grid Based on Starbucks
• Product Development: offering modified or new products to current markets. – How? Add food offerings, sell coffee in
supermarkets, co-brand products.• Diversification: start up or buy businesses
outside current products and markets.– How? Making and selling CDs, testing
restaurant concepts, or branding casual clothing.
Product Development
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DiversificationDiversification is developing new products
for new markets
1/ 2010Surej P John30
Downsizing:
Reducing the business portfolio by eliminating the products or business units that are not profitable or that no longer fit the company’s overall strategy.
1/ 2011Surej P John31
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Managing Marketing Strategy and Marketing Mix
Figure 2.13
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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.
Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva
Market segmentation
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What is the target
market?
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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 (e.g. “in a perfect world everyone would drive a Mercedes Benz”)
• Process 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.
• Consists of the 4 P’s
1. Product2. Price3. Place4. Promotion
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The 4 P’s of the Marketing MixFigure 2.14
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Achieving Competitive Advantage, Integration and Positioning in the Marketing Mix
Figure 2.15 (a)
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Product strategies
Any kind of strategies that are related to make product improvements.
Product qualityProduct designProduct featuresBrand NamePackagingServices
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Price Strategies
Any kind of business decisions that directly related to the price of the product or service offered
List priceDiscountsAllowancesCredit terms etc.
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Place Strategies
Place includes the company activities that make the product available to target customers.
Place includes Channels, Coverage, Locations, Inventory, transportation, logistics etc.
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Promotion Strategies
Promotion means activities that communicate the merits of the products and persuade the target customers to buy it.
Advertising, Sales promotion, personal selling, public relations etc. are coming under the Promotion concept.
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SWOT ANALYSIS
An overall evaluation if the company’s strength (S), weakness (W), Opportunities (O), and Threats (T) is called SWOT analysis.
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StrengthsInternal abilities that help the company to achieve its objectives
Good brand nameLow cost of production
Cheap Labor
Enough budget for advertisement or promotions
Ability to introduce the new product into market
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WeaknessInternal limitations that may interfere or block the company’s ability to achieve its objectives
High CompetitionLack of enough moneyPoor QualityCheap Brand name
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Opportunities'External factors of the market that the company may be able to take advantage.
Large potential market
Lack of competitors
Moving into new market segment that offer more profits
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ThreatExternal factors that may challenge the company’s performance
A new competitor in your home market.Price wars with competitors.A competitor has a new, innovative product or service.Competitors have superior access to channels of distribution.