Company and Marketing Strategy Topic Outline:
- 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
Question:
- What is Marketing?
- What are the differences between marketing in hospitality industry and marketing is Secondary (manufacturing) Industry?
MARKETING
What does a bridge over a river do? It links one side to the other side. Similarly, marketing is a bridge which links the consumer side to the producer/supplier side.
4 Industries in Business
- Primary industry involves getting raw materials e.g. mining, farming and fishing.
- Secondary industry involves manufacturing e.g. making cars and steel.
- Tertiary industries provide a service e.g. teaching and nursing.
- Quaternary industry involves research and development industries e.g. IT.
Companywide Strategic Planning
Strategic Planning
Creating a strategic plan is a key component of planning for growth. It will help prepare a realistic vision for the future of your business and in doing so that can maximize your potential for growth.
A strategic plan should not be confused with a business plan.
The purpose of strategic planning is to set overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.
Strategic planning in terms of marketing is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities
The three key elements of strategic planning:
- Where is your business now? This involves understanding as much about your business as possible, including how it operates internally, what drives its profitability, and how it compares with competitors. Be realistic, detached and critical.
- Where do you want to take it? Here you need to set out your top-level objectives. Work out your vision, mission, objectives, values, techniques and goals. Where do you see your business in five or ten years? What do you want to be the focus of your business and your source of competitive advantage over your rivals in the marketplace?
- What do you need to do to get there? What changes will you need to make to deliver on your strategic objectives? What is the best way of implementing those changes? What changes to the structure and financing of your business will be required and what goals and deadlines will you need to set for yourself and others in the business?
Defining a Market-Oriented Mission
- The mission statement is the organization’s purpose, what it wants to accomplish in the larger environment
- Market-oriented mission statement defines the business in terms of satisfying basic customer needs
Setting Company Objectives and Goals
Business objectives
- Build profitable customer relationships
- Invest in research
- Improve profits
Marketing objectives
- Increase market share
- Create local partnerships
- Increase promotion
Designing the Business Portfolio
- The business portfolio is the collection of businesses and products that make up the company
- Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company
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
- Company division
- Product line within a division
- Single product or brand
For example, LG as a company makes consumer durables. It makes refrigerators, washing machines, air-conditioners as well as televisions.
Analyzing the Current Business Portfolio
Developing Strategies for Growth and Downsizing
- Product / market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
- Product / Market Expansion Grid Strategies
Developing Strategies for Growth and Downsizing
- Developing Strategies for Growth and Downsizing
- Market penetration is a growth strategy increasing sales to current market segments without changing the product
- For example, if there are 300 million people in a country and 65 million of them own cell phones, the market penetration of cell phones would be approximately 22%. In theory, there are still 235 million more potential customers for cell phones, or 78% of the population remains untapped.
- Market development is a growth strategy that identifies and develops new market segments for current products
- For Example, leading footwear firms like Adidas, Nike and Reebok, which have entered international markets for expansion. These companies continue to expand their brands across new global markets. That’s the perfect example of market development.
- Product development is a growth strategy that offers new or modified products to existing market segments
- For example, Packing cooking oil in retail pouches for household consumption. Converting land line phones into wireless handsets for easy portability and full-time access to communication
- Diversification is a growth strategy for starting up or acquiring businesses outside the company’s current products and markets
- For example, an orange juice brand releases a new “smooth” orange juice drink alongside it’s hero product, the orange juice “with bits”.
- 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
- For example, a company may follow downsizing to weed out employees with obsolete skills that may not be useful in its future direction.
Planning Marketing
- Partnering to Build Customer Relationships
- Value chain is a series of departments that carry out value creating activities to design, produce, market, deliver, and support a firm’s products
For example, McDonald’s mission is to provide customers with low-priced food items. The analysis helps McDonald’s identify areas for improvement and activities that add value to their products and services. - 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.
- The purpose is to enhance the performance of the entire system in delivering the customer value.
- Companies like Fiat have improved its position in North America by partnering with Chrysler to improve its delivery network. This has helped Fiat gain vital market share in highly competitive market with very low
investment.
Marketing Strategy and the Marketing Mix
Customer – Driven Marketing Strategy
- Market segmentation is the division of a market into distinct groups of buyers who have distinct needs, characteristics, or behaviour, and who might require separate products or marketing mixes
Example: Consider a company that is marketing health and beauty products to men and women. Typically, these products, such as razors or skin care, are more expensive for women than they are for men. Meanwhile, the product packaging also differs, with products targeted to women having pinks and floral accents that align with gender stereotypes. On the other hand, the company’s male-targeted products are characterized with more rugged blacks and greys. - Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts
One example of market segmentation in action is Victoria’s Secret and their teenage-targeting brand PINK. Victoria’s Secret primarily targets women, while their brand PINK is targeted more toward teenage girls and women.
Customer – Centered Marketing Strategy
- Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
Small businesses often target customers by gender or age. For example, a women’s clothing retailer directs its promotional efforts at women. Conversely, a large and tall men’s shop focuses its marketing efforts on tall and heavier men. Similarly, some small companies market to specific age groups. - 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
- A handbag maker may position itself as a luxury status symbol.
- A TV maker may position its TV as the most innovative and cutting-edge.
- A fast-food restaurant chain may position itself as the provider of cheap meals.
- Coca-Cola. When it is about product positioning example then Coca-Cola is a pioneer.
- Dove. The Dove brand is well-positioned among its competitors.
- Apple. If it is exclusivity, luxury and elegance then this is Apple for you.
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
he 7 Ps of services marketing
Product is your core offering. This is “the thing” that will full the needs of your customer. If your product is faulty, every thing else fails. The attributes of the product, vis-a-vis the attributes offered by competing products and substitutes, are important in estimating the competitive scenario for the marketing strategy formulation.
Price has a lot of impact on the service buyer’s satisfaction level. Often, paying a higher price makes a customer more satisfied. Price is often considered a proxy for quality and vice-versa. What is important to note that services being all the more intangible, the price becomes an important factor for the actual service consumption to happen, after
service awareness and service acknowledgement.
Place often offers a different side of value (utility) to the customer. Who would want to travel 10 miles to have a regular dinner, even if that is priced very competitively and has a super quality? Services are often chosen for their place utility. Closer to the customer means higher probability of purchase. Place utility is important to evaluate, for strategizing on the other 6 Ps.
Promotion plays a role in the perception the possible target audience may have about your service. There has to be a fit between the promotion and the positioning. Promotion leads to service (brand) recognition and further establishes a proxy to evaluate quality of services based by potential customers.
Many different promotional tools are often used like internet advertisement, special events, endorsements which happen out of the store or in-store merchandising like branded boxes from Custom Boxes Now, plastic dump bins and digital signage.
People are crucial in service delivery. The best food may not seem equally palatable if the waitress is in a sour mood. A smile always helps. Intensive training for your human resources on how to handle customers and how to deal with contingencies, is crucial for your success.
Processes are important to deliver a quality service. Services being intangible, processes become all the more crucial to ensure standards are met with. Process mapping ensures that your service is perceived as being dependable by your target segment.
Physical evidence affects the customer’s satisfaction. Often, services being intangible, customers depend on other cues to judge the offering. This is where physical evidence plays a part. Would you like eating at a joint where the table is greasy or the waitresses and cooks look untidy and wear a stained apron? Surely you would evaluate the quality of your experience through proxies such as these.
Another P which has grown in significance in Services Marketing is the 8th P, namely Productivity and Quality
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
Marketing Department Organization
Marketing Control
- Controlling is the measurement and evaluation of results and the taking of corrective action as needed
- Operating control
- Strategic control
Measuring and Managing Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
Return on marketing investment (marketing ROI) is 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.
McDonald’s Corporation’s advertising costs from 2014 to 2020
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