Principles of Marketing

Priciples of Marketing 10e; Kotler, Armstrong

Unit 2, Chapter 2

Chapter 2: Company and Marketing Strategy: Partnering to Build Customer Relations

1. Strategic Planing
   Strategic planning is the process of developing and maintaining a strategic fit between the organization's goals and capabilites and its changing marketing opertunities. It starts with defining the overal purpose and mission of a company which are then made into specific objectives. Lastly steps are detailed to decide what needs to be done to meet objectives.
   1. Defining a Market Oriented Mission
      The mission of an organization is clear when it first gets created, but time allows it to become fuzzy. For that reason, Mission statements, or a statement of the organization's purpose, get created to get them back on track. Mission statements should be marketing focused as technologies change. Marketing focused means 'what can I do to satisfy basic customer needs.' It should not be too broad and should be specific. They should match the market enviornment and motivating.
   2. Setting Company Objectives and Goals
      The mission statement then needs to be translated to objectives or goals that managers should meet. In some cases, one department may have to meet goals in orfer to support another department. Steps must be defined to figure out how to meet those goals (hire more people, create more brochures, etc.).
   3. Designing the Business Portfolio
      A business portfollo is the collection of businesses and products that make up the company. A business needs to analyze its current portfolio and then decide what it wants to do with what it has.
      Analyzing the Current Business Portfolio
      A Portfolio Analysis will need to be done to identify and evaluate all the businesses that make up the company. This is done by determing Strategic Business Units (SBU) or units of the company that have their own mission and plan individualy from the rest of the company. Next the company has to decide how much support each one of these units needs. Generally the units are tied together in one type (company might own several different fast food companies) but sometimes the unit can be varried and totally different from each other (GE is the example that the book uses). This analysis can be done one of several ways. We will look at a few.
      Boston Consulting Group Approach - The BCG groups the SBUs according to the following table

      High Growth rate/High Market Share Star	High growth rate/low market share Question Mark
      Low growth rate/high market share Cash Cow	Low grwoth rate/low market share Dog

      
      Stars require heavy investment. Eventualy they will slow down and turn to cash cows.
      Cash Cows need little investment to keep going. Produce income for company and for the other SBUs in company
      Question Marks require a lot of support to keep them going not to mention increase share. Could go to star or dog. Management needs to look at closely.
      Dogs generate enough cash to hold there own, no promise of cash growth.
      Each group needs to be put into the table where it belongs with an indication of how much money it brings in. This will be the determining factor in how the company does things. You will need strong Cash Cows, with some stars. Question Marks and dogs should be evaluated as to how much growth they can have over the long run and sold or disbursed if they can not bring in enough to keep company strong.
      The problem with this approach is the growth and market share can sometimes be hard to determine. It also focuses on the here and now not what could be in the future. Many companies are droping this aproach in favor of customized approach.
      Developing Stratergies for Growth and Downsizing - Similar to the table above is the product market expansion grid. It helps companies decide what stratergies to take for growth opertunities that will be profitable.

      Exsisting Market/Exsisting product Market Penetration	Exsisting Market/New Products Product Development
      New Markets/Exsisting Products Product Development	New Markets/New Products Diversification

      
      Market Penetration - Stratergy for company growth by increasing sales of current products to current market segment without changing the product.
      Market Development - stratergy for company growth by identifying and developing new market segments for current company products.
      Product Development - stratergy for company growth by offering modified or new products to current market segments.
      Diversification - stratergy for company growth through startup or aquiring businesses outside the company's current products and markets.
      
      Downsizing - Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company's overall stratergy.
   4. Strategic Planning and Small Business
      Small business can benefit from doing these studies, not just the large corporations.
2. Planing Marketing: Partnering to Build Customer Relationships
   Partner Relationship Management - Working closely with partners in other departments and outside the company to jointly bring greater value to customers.
   1. Partnering with Others in the Company
      Value chain - The serie of departments that carry out value-creating activities to design, produce, market, deliver and support a firm's products. A company's chain is only as strong as its weakest link. Marketing tends to think from consumer's point of view, and that can upset the other departments Therefore marketing management must work with other departments to get a harmony.
   2. Partnering with Others in Marketing System
      Often a company will have to look to what it can do for its suppliers to help them provide the products that the company needs. This creates a value-delivery nettwork.
3. The Marketing Process
   The Marketing process is the process of: 1) analyzing marketing opportunities, 2) selecting target markets, 3) developing the marketing mix and 4) managing the marketing effort.
   1. Relationships with Consumers
      Companies must be customer centered, delivering what the customer needs and wants. This involves several things:
      Market segmentation - Dividing a market into distinct groups of buyers who have distinct needs, charectersitics, or behavior and who might require seperate products or marketing mixes. A Market segment is consumers who respond in similar ways to marketing efforts.
      Target Marketing - Process of evaluating each market segment's attractiveness and slecting one or more segments to enter. Decide who you want to go after
      Marketing Position - Arranging for a product to occupy a clear, distinctive, and desireable place relative to competing products in the minds of comsumers. Decide how you want the customer to see your product.
   2. Marketing Strategies for Competitive Advantage
      One has do do a better job than their competiors of identifying target consumers if one is to succeed. SO to develope good marketing strategies you begin with comptative analysis. Who are our competitors? What are their objectives and strategies? What are their strength and weaknesses? How will they react to strategies that we might use?
   3. Developing in the Marketing Mix
      Marketeing Mix - set of controlable tactical marketing tools that the firm blends to produce the response it wants in the target merket. It is best to think of the 4 Ps.
      Product the goods and services the company offers to the target market.
      Price the amount of money customers have to pay to obtain goods.
      Place activities that make the product available to consumer
      Promotion activities that communicate the mertis of product and persuade target customers to buy it.
      There is concern that the four P's focus on seller's point of view. Instead the sugestion is the four C's for the consumer point of view. Consumer solution, customer cost, convenience, and communications.
4. Managing the Marketing Effort
   1. Marketing Analysis
      A company begins this process by analsis of its situation. Find the opertunities and avoid the threats.
   2. Marketing Planning
      Planning has the company develope each business unit. From this a marketing stratergy, , the logic by which the business unithopes to achive its marketing objectives, will be developed.
   3. Marketing Implementation
      All the good statergies do no good if you do not have the marketing implementation, the process that turns marketing stratergies into marketing actions, in place. All in the company have to be in tune with and floow the implementation. Of course, the implemtation should fit in with the companies culture.
   4. Marketing Department Organization
      Company needs to design an operation to do the marketing for the organization. One person could do it in small organization, but larger companies need multiple people or even departments. The functional units can be broken down many ways, regions of the company, products that the company sells, etc.
   5. Marketing Control
      marketing Control is the process of measuring and evaluating the results of marketing stratergies and plans for taking corrective action to ensure the objectives are archived. They are broken up int to operating controls (ones that kick in when necessary for corrections) and strategic controls (ones that makes sure that stratergies are matched to opertunites).
      
   6. The Marketing Environment