Marketing Strategy

Prof. Jessica J. Kim

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 Marketing Strategy
Marketing strategy is the marketing logic by which
the company hopes to create customer value and
achieve profitable customer relationships
 Today’s Plan
• Mission statements
• Strategic planning
• Marketing planning
• Marketing strategy
• Marketing mix
 Strategic Planning
• Step 1: Define the company mission
• Step 2: Set company objectives and goals
• Step 3: Design the business portfolio
• Step 4: Plan marketing and other strategies
 Strategic Planning
• Step 1: Define the company mission
• Step 2: Set company objectives and goals
• Step 3: Design the business portfolio
• Step 4: Plan marketing and other strategies
 Company’s Mission
The mission is a statement about the organization’s
purpose; what it wants to accomplish in the larger
environment.
 Company’s Mission
A mission may address the following:
• Who are we?
• What is our business?
• Who are our customers?
• What do customers value? Market-oriented
understanding?
• Realistically, what is (will) our company (be) about?
• Fits the environment?
• Based on company competencies?
• Motivating for employees?
Mission statements
• Should be market oriented and defined in terms of
satisfying basic customer needs.
• Should be meaningful and specific, yet motivating.
• Should highlight the company’s unique strengths
and tell how it intends to win the marketplace.
Mission statements

An online place to post pictures.

We sell coffee and snacks.

Are these good mission statements?

Mission statements

We provide people a social media platform for

collecting, organizing, and sharing things they
love.

We sell the “Starbucks Experience” that

enriches people’s lives one moment, one human
being, one extraordinary cup of coffee at a time.
 Mission 1
“Bring the world closer together.”
 Mission 2
“Apple designs Macs, the best personal computers in
the world, along with OS X, iLife, iWork and
professional software. Apple leads the digital music
revolution with its iPods and iTunes online store.
Apple has reinvented the mobile phone with its
revolutionary iPhone and App store, and is defining
the future of mobile media and computing devices
with iPad.”
 Mission 3
“Be earth's most customer-centric company; to build
a place where people can come to find and discover
anything they might want to buy online.”
Exercise
• Find the mission statements for the following
organizations: IKEA, Easyjet, and Fresh. Evaluate
each statement using the criteria we learned. What
is good and what could be improved?
• Create a mission statement for a nonprofit
organization you would be interested in starting.
 Strategic Planning
• Step 1: Define the company mission
• Step 2: Set company objectives and goals
• Step 3: Design the business portfolio
• Step 4: Plan marketing and other strategies
 Setting Objectives
Business Objectives Marketing Objectives
• Increase profits • Improve products or
• Be customer-centric develop new products
• Sustainability • Increase loyalty
• Create local partnerships
• Increase promotion, retail
inventory, decrease prices
 Objective 1
• Shell’s overall objective is to deliver sustainable
excellence in business performance by benefitting
its shareholders, realizing the potential of its
people, meeting customer requirements, and
maximizing refinery margins.
 Objective 2
• “Our deepest purpose as an organization is helping
support the health, well-being, and healing of both
people — customers, Team Members, and business
organizations in general — and the planet.”
 Strategic Planning
• Step 1: Define the company mission
• Step 2: Set company objectives and goals
• Step 3: Design the business portfolio
• Step 4: Plan marketing and other strategies
 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.
“Doing business for the
betterment of all.”
 Business Portfolio Analysis
Strategic business unit (SBU): a subgroup of a single
business or collection of related businesses within
the larger organization. SBUs can be a:
• Company division (e.g., Coca-Cola HBC Italy)
• Product line within a division (e.g., Coca-Cola)
• Single product or brand (e.g., Diet Coke)
 Business Portfolio Analysis
Each SBU has:
• A distinct mission for itself (derived from and
feeding the mission of the larger organization)
• A specific target market
• Its own competitors
• Control of its own resources
• Plans independent of other SBUs
 Evaluating the Business Portfolio

Identify strategic business units

(SBUs)

Assess the attractiveness of its

various SBUs

Decide how much support each

SBU deserves
BCG Growth-Share Matrix
BCG Matrix: Coca-Cola

Relative market share

High Low

Question
High
Stars
Relative market

marks
growth rate

Cash
Low

Dogs
cows
 Innovation/Investment Matrix
(GE/McKinsey)
Cautiously Invest Invest/Grow Invest/Grow
Market attractiveness

Harvest/Divest Cautiously Invest Invest/Grow

Harvest/Divest Harvest/Divest Cautiously Invest

Business Position
 Innovation/Investment Matrix
(GE/McKinsey)
High Mid Low
Invest/Grow Invest/Grow Cautiously
Invest High
Market attractiveness

Invest/Grow Cautiously Invest Harvest/Divest

Mid

Cautiously Invest Harvest/Divest Harvest/Divest

Low

Business Position
Identifying Growth Opportunities
(Ansoff)

markets Existing products New products

Existing

Market Product
Penetration Development
markets

Market
New

Diversification
Development

31
 Ansoff: Google

markets Existing products New products

Existing

Market Product
Penetration Development
markets

Market
New

Diversification
Development

32
Sometimes you need to shrink to
grow

225 brands  65 brands

“We focused on categories that were

daily use. We returned to the core, to
the things that we’re really good at.”
Jon Moeller, P&G CEO
 Evaluating the Business Portfolio
Do your research:
• What is your business position?
• What is the life stage of the market?
• What do customers want?
• What do competitors offer?

Allocate most resources to profitable or potentially

profitable BU
 Evaluating the Business Portfolio
Problems with Matrix Approaches:
• Difficulty in defining SBUs and measuring market
share, growth, and future prospects
• Time consuming
• Costly
• Restrictive (categories vs. continuums)
 Strategic Planning
• Step 1: Define the company mission
• Step 2: Set company objectives and goals
• Step 3: Design the business portfolio
• Step 4: Plan marketing and other strategies
 Marketing Planning
• How to improve business position?
• How to increase market attractiveness?
• Which customers?
• How to reach the customers?
• Derive from mission, achieve with marketing mix
 Basics of Marketing Strategy
Segmentation Targeting
“Identifying groups of “The process of evaluating
consumers who respond in each market segment’s
a similar way to a given set attractiveness and selecting
of marketing efforts.” one or more segments to
enter.”

Positioning Differentiation
“Arranging for a product to “Actually differentiating the
occupy a clear, distinctive, market offering to create
and desirable place relative superior customer value.”
to competing products in
the minds of target
consumers.”
 Four P / Four C Model of Strategy
Place Product
• Retail channel • Functionality/quality
• Coverage/locations Product • Design
• Supply chain/logistics • Brand/image
• Shipping/delivery • Variety/add-ons
• Inventory • Packaging
• Warranty/services
Place Price
“Convenience” “Customer solution”

“Communication” “Customer Cost”

Promotion Price
• Advertising • List price
• Personal selling Promotion • Discounts (not
• Sales promotion/displays promotional)
• Public relations • Allowances
• Trade shows • Payment period
• Credit terms
Chicken or the Egg?
 Today’s Recap
• Mission statements
• Strategic planning
• Marketing planning
• Marketing strategy
• Marketing mix
Group Exercises
Group Exercise 1: BCG
Group Exercise 2: Ansoff

markets Existing products New products

Existing

Market Product
Penetration Development
markets

Market
New

Diversification
Development

45