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Lecture 2

MKT 300 Lecture 2: MKT 300 Chapter 2 Notes

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MKT 300
Susan Fant

Marketing 300 Chapter 2 Notes First Stop: Nike’s Customer-Driven Marketing • To build image and market share, Nike ➢ Outspent competitors on big endorsements ➢ Conducted splashy promotional events ➢ Started big-budget ads • Nike sales slipped in the later 1990s • Turnaround – new product innovation and a focus on customer relationships ➢ Mastered social networking, creating deep engagement and community among customers Strategic Planning • Strategic planning involves adapting the firm to take advantage of opportunities in its constantly changing environment • Strategic planning helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities Steps in Strategic Planning • Defining the company mission • Setting company objectives and goals • Designing he business portfolio • Planning marketing and other functional strategies Mission Statement • Statement of the organization’s purpose ➢ What it wants to accomplish in the larger environment • Market oriented and defined in terms of satisfying basic customer needs • Emphasizes the company’s strengths • Focuses on customers and the customer experience the company seeks to create Setting Company Objectives and Goals • The mission should be converted to supporting objectives at each level of management • The mission leads to setting a hierarchy of objectives ➢ Business objectives ➢ Marketing objectives Business Portfolio • Collection of businesses and products that make up the company • Steps in business portfolio planning ➢ Analyze the firm’s current business portfolio ➢ Develop strategies for growth and downsizing to shape the future portfolio Portfolio Analysis • Evaluation of the products and businesses that make up the company by the management • Steps: ➢ Identifying the strategic business units (SBUs) ➢ Assessing the attractiveness of its various SBUs and deciding the support each SBU deserves • The purpose is to direct resources toward more profitable businesses while phasing out or dropping weaker ones Growth-Share Matrix • Evaluates a company’s SBUs in terms of market growth rate and relative market share • Problems ➢ Difficult, time consuming, and costly to implement ➢ Difficult to define SBUs and measure market share and growth ➢ Focuses on classifying current businesses but provide little advice for future planning Downsizing • Reduces the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy • Reasons for downsizing: ➢ Rapid growth of the company ➢ Lack of experience in the market ➢ Change in market environment ➢ Decline of a particular product Role of Marketing in Strategic Planning • Provides a guiding philosophy ➢ Marketing concept – company strategy should create customer value and build profitable relationships with key customers • Provides inputs to strategic planners ➢ Helps identify market opportunities and assess the firm’s potential to take advantage of them • Designs strategies for reaching the unit’s objectives Partnering with Other Company Departments • Value chain: series of internal departments that carry out value-creating activities • Firm’s success depends on how well the various departments coordinate their activities • Marketers should ensure all the departments are customer-focused and develop a smooth functioning value chain Partnering with Others in the Marketing System • Companies should assess: ➢ Their internal value chains ➢ The value chains of their suppliers, distributors, and their customers • Value delivery network: made up of the company, its suppliers, its distributors, and its customers who partner with each other ➢ To improve the performance of the entire system Marketing Strategy • Marketing logic by which the company hopes to create customer value and achieve profitable customer relationships • Marketing mix: integration of product, price, place, and promotion • Activities for best marketing strategy and mix involve: ➢ Marketing analysis ➢ Planning, implementation, and control Market Segmentation and Market Targeting • Market segmentation ➢ Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs • Market segment ➢ Group of consumer who respond in a similar way to a given set of marketing efforts • Market targeting ➢ Evaluating each market segment’s attractiveness and selecting one or more segments to enter Positioning • Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers • Begins with differentiation ➢ Differentiation: differentiating the market offering to create superior customer value • The entire marketing program should support the chosen positioning strategy The Four Ps of the Marketing Mix • Product: ➢ Variety, quality, design, features, brand name, packaging, services • Price: ➢ List price, discounts, allowances, payment period, credit terms • Promotion: ➢ Advertising, personal selling, sales promotion, public relations • Place: ➢ Channels, coverage, locations, inventory, transportation, logistics Criticisms of the Four Ps • Omit or underemphasize service products • Need to include packaging as a product decision • Does not cater to the buyer’s perspective of the four Cs: ➢ Customer s
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