Marketing: An Introduction

Fourteenth Edition

Chapter 02
Company and Marketing
Strategy: Partnering to Build
Customer Engagement,
Value, and Relationships

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Learning Objectives
2.1 Explain company-wide strategic planning and its four steps.
2.2 Discuss how to design business portfolios and develop
growth strategies.
2.3 Explain marketing’s role in strategic planning and how
marketing works with its partners to create and deliver
customer value.
2.4 Describe the elements of a customer value-driven marketing
strategy and mix and the forces that influence it.
2.5 List the marketing management functions, including the
elements of a marketing plan, and discuss the importance of
measuring and managing marketing return on investment.

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 First Stop: Starbucks’s Customer
Value-Driven Marketing Strategy

More than just coffee,

Starbucks sells the Starbucks
Experience,
“enriches people’s lives one moment,
one human being,
one extraordinary
In only three decades, Starbucks cup of has coffee grownat a at an
astounding pace from a small time.” Seattle coffee shop to an
over $22 billion powerhouse with more than 27,000 retail
stores in more than 75 countries.
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2.1 Strategic Planning
• Game plan for long-run survival and growth
• Helps to maintain a strategic fit between its goals
and capabilities and changing marketing
opportunities.

Figure 2.1 Steps in Strategic Planning

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 Mission Statement
• Statement of the organization’s purpose
• Market oriented—defined in terms of satisfying basic customer needs
• Emphasize the company’s strengths
• Focus on customers and the customer experience
Company Product-Oriented Definition Market-Oriented Definition
Starbucks We sell coffee and snacks. We sell “The Starbucks Experience,” one that enriches people’s
lives one moment, one human being, one extraordinary cup of
coffee at a time.
Panera We sell fast-casual food in our We give customers “Food as it should be”: food that tastes
restaurants. good; food that feels good; food that does good things for them
and the world around them.
Instagram We are a social networking app for We help people capture and share the world’s moments.
posting photos and videos.
Home Depot We sell tools and home repair and We empower consumers to achieve the homes of their dreams.
improvement items.
NPR We are a public radio network. We create a more informed public—one challenged and
invigorated by a deeper understanding and appreciation of
events, ideas, and cultures.
Sephora We are a beauty products retailer. We sell lifestyle and self-expression by helping customers to
unlock their beauty potential.
Ritz-Carlton Hotels & We rent rooms. We create “The Ritz-Carlton experience”—a memorable stay
Resorts that far exceeds guests’ already-high expectations.
Walmart We run discount stores. We deliver low prices every day and give ordinary folks the
chance to buy the same things as rich people. “Save Money.
Live Better.”
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Table 2.1 Product- versus Market-Oriented Business Definitions
Setting Company Objectives & Goals
• Detailed supporting objectives for each level of
management
• Setting a hierarchy of objectives
– Business objectives
– Marketing objectives

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Summary
• Strategic planning
– Defining the company’s mission
– Setting objectives and goals
– Designing a business portfolio
– Developing functional plans
• Company mission statement
– Market-oriented, realistic, specific
– Motivating, consistent with market environment

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2.2 Business Portfolio
SBUs is a collection of businesses and products that make up
the company

Steps in business portfolio

planning:
i. Analyze the firm’s current
business portfolio
 Identify the strategic business
units (SBUs)
 Assess SBUs’ attractiveness and
decide on the level of support
SBU deserves

Develop strategies to shape the

future portfolio
Mars
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Education, theAllworld’s #1 candy
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maker, nutrition & health-care company.
Growth-Share Matrix
• Evaluates a company’s SBUs in terms of market growth
rate and relative market share
• Problems with Growth-Share Matrix
– Difficult, time consuming, and costly
– Difficult to define and measure
– Provides little advice for future planning

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Figure 2.3 The Product/Market Expansion Grid
Downsizing
• Products or business units that are unprofitable or no
longer fit the company’s overall strategy
• Reasons to abandon products or markets
– Rapid growth of the company
– Lack of experience in a market
– Change in market environment
– Decline of a particular product

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Objective Outline 2-3
• Explain marketing’s role in strategic planning and how
marketing works with its partners to create and deliver
customer value.

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2.3 Marketing Plan
• Provides a guiding philosophy – strategy should create
customer value and build profitable relationships
• Provides inputs to strategic planners – identify market
opportunities and potential
• Companies should assess its internal value chains
(departments) & external value delivery network (suppliers,
distributors and customers)

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2.4 Customer Value-Driven Marketing Strategy
• Marketing logic by which the company creates customer
value and achieves profitable customer relationships
• Integrated marketing mix: product, price, place, and
promotion
• Activities for best marketing strategy and mix
– Marketing analysis
– Planning, implementation, and control

Managing Marketing Strategy

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and the Marketing Mix
Market Segmentation, Targeting & Positioning
Market segmentation
• Dividing a market into distinct groups of
buyers who have different needs, Car sharing
characteristics, behaviors, and require service Uber
separate products or marketing programs positions itself as
“Everyone’s
Market targeting private driver.”
This simple
• Evaluating each market segment’s
statement
attractiveness and selecting one or more provides the
segments to enter backbone for its
marketing
Market positioning strategy.
• Positioning the product to occupy a
clear, distinctive, and desirable place
relative to competing products
• Differentiating the market offering to
create superior customer value.
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Figure 2.5 The Four Ps of the
Marketing Mix

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2.5 Managing Marketing: Analysis, Planning,
Implementation, and Control

Marketing Process

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SWOT Analysis
Contents of a Marketing Plan
Section Purpose
Executive summary Brief summary of the main goals and recommendations
Current marketing Gives the market description and the product,
situation competition, and distribution review
Threats and Helps management to anticipate important positive or
opportunities analysis negative developments
Objectives and issues States & discusses marketing objectives & key issues
Marketing strategy Outlines the broad marketing logic and the specifics of
target markets, positioning, marketing expenditure levels,
and strategies for each marketing mix element
Action programs Spells out how marketing strategies will be turned into
specific action programs
Budgets Details a supporting marketing budget that is a projected
profit-and-loss statement
Controls Outlines the controls that will be used to monitor
progress, review implementation results, and spot
products that are not meeting their goals

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Market Implementation
• Turning marketing strategies and plans into marketing
actions to accomplish strategic marketing objectives
• Addresses the who, where, when, and how of the
marketing activities

Marketing Department Organization

• Functional organization
• Geographic organization
• Product management organization
• Market or customer management organization
• Combination organization

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Marketing Control
• Measuring and evaluating the results of marketing
strategies and plans
• Operating control ensures that the company achieves its
sales, profits, and other goals.
• Strategic control involves looking at whether the
company’s basic strategies are well matched to its
opportunities.

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Measuring and Managing Marketing
Return on Investment (ROI)
• Net return from a marketing investment divided by the
costs of the marketing investment
• Assessment measures
– Standard marketing performance measures
– Customer-centered measures

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