1

CHAPTER TWO

MARKETING MANAGEMENT: STRATEGY

2

Marketing Management

• The process of:1. planning, 2. executing, and3. controlling marketing activities to attain the marketing goals and objectives effectively and efficiently.

• Change is constant and therefore the process is a continuous process.

3

What is a marketing strategy?

• A plan identifying what marketing goals and objectives will be pursued and how they will be achieved in the time available.

4

Planning: A Framework for the Future

Establishing goals and objectives

Envisioning the Future

Designing strategies to beimplemented in the future

5

Top Management: Mission Statement

A mission statement is:• A broad statement of the company’s

purpose• Explains the purpose of the organization• Provides direction for the entire company

Walt Disney’s Mission“The Walt Disney Company is committed to balance environmental stewardship with our corporate goals throughout the world”

http://corporate.disney.go.com/environmentality/mission_history.html

6

Top Management:Mission statement

Three Guiding Principles:1. Success depends on customer satisfaction2. Consumer oriented perspective3. Avoid short-sighted, narrow-minded thinking

Consumer wants?

7

What’s Happening?

• http://www.stumbleupon.com/su/30Vd1d/creativecriminals.com/ambient/creative-bus-stop-advertisements/

8

Strategic business units (SBU)

• Operates as a “company within a company”• A SBU is organized around some common element

such as….

SBU

Industry Technology

TargetMarket

Customerneed

9

Boston consulting groups growth-share matrix

• Commonly referred to as the BCG Matrix• Develop to evaluate SBU’s performance based

industry growth (vertical axis) versus relative market share (horizontal axis)

• Assists management to determine resource allocation

• Four categories: Stars, Cash cows, Dogs, Question Marks (see exhibit 2-3, page 34)

10

Boston consulting groups growth-share matrix

STAR QUESTIONMARK

CASHCOW

DOG

MARKET SHARE(Cash Generation)

LOWHIGH

HIGH

LOW

GR

OW

TH

RATE

(Cash

Use)

11

Marketing Strategies at the SBU LEVEL

• Marketing managers focus on two key aspects of SBU strategies:

1. Establish a competitive advantage– Superior to or favourably different from

competitors– Examples include: price leadership,

differentiation strategy2. Plan growth strategies

– (Visit Exhibit 2-5, page 37)

12

Planning business-unit growth strategies

The Market/Product Matrix (Exhibit 2-5)

Market Penetration

MarketDevelopment

ProductDevelopment

Diversification

New

Existing

Existing

New

Markets

Pro

du

ct

s

13

The six stages of the Strategic marketing Process

Planning stages1. Identifying and evaluating opportunities2. Analyzing market segments and selecting target markets3. Planning a market position and developing a marketing

mix strategy4. Preparing a formal marketing plan

6. Controlling efforts and evaluating the results

5. Executing the plan

14

Stage One: Identifying and Evaluating Opportunities

Situation Analysis: two major components:1. Environmental scanning & monitoring

– External forces and trends are identified as opportunities and threats

– Forces include: sociocultural, demographic, economic, etc.

2. Internal analysis– Internal strengths and weakness are identified– Key topics include: customers, suppliers

15

Stage One: Identifying and Evaluating Opportunities

Bringing the internal and external analysis together:

Strengths(build on)

Weaknesses(deal with)

Opportunities(take advantage)

Threats(avoid)

Internal Micro-environment

External Macro-environment

S.W.O.T

16

Stage Two: Analyzing Market Segments &

Selecting Target Markets

• Consumer Market (B2C) vs. Organizational Markets (B2B) (Visit exhibit 2-8, page 42)

• Market segment– Portion of a larger market (i.e. French Canadians)

• Market segmentation– Dividing the mass market into smaller groups with similar

characteristics that are likely to become the target market

• Target market– The specific group(s) the organization directs its marketing mix

towards

17

Stage Three: Market Positioning and Marketing Mix strategy

• Market position:– How consumers perceive a brand relative to its

competition• Developing marketing mix (4P’s):

– Product– Price– Place (distribution)– Promotion

Recall from

Chapter 1?

18

Stage 4: preparing a Formal Marketing Plan

The yearly marketing plan is a written report that includes:– Marketing objectives (S.M.A.R.T)– Marketing strategies– Marketing mix– Responsibility allocation – Implementation timeline

19

Stage 5: Executing the marketing plan

Putting the plan into action!Management best practices:• Ensure resources are

properly allocated• Clearly understand and

communicate goals and expectations

• Create reasonable expectations and deadlines

20

Stage 6: controlling efforts and evaluation results

Marketing Audits: Ensure that planned activities are executed properly

• Benchmark: establish performance standards• Supervision: investigate to ensure tasks have been

completed “checking up”• Adjustments: evaluate to determine if goals have

been achieved – Yes? Continue with the plan– No? Make adjustments and monitor

21

Ethics and Responsibility

• Worldwide consumerism and environmentalism movements exert pressure for greater responsibility

• Notion of “caring capitalism” tied to the marketing concept.– Seeking ways to make a profit by serving the best

long-run interests of customers and communities.

22

Next Class,….

• Case Analysis in BSAD 231, please visit the course website for all the material, and bring them to class (case and case analysis guidelines).