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Chapter 2

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MARK 201
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Marketing Management I COMM 223Winter 2013Chapter 2 Company and Marketing Strategy Partnering to Build Customer Relationships1Companywide strategic planning defining marketings roleaStrategic planning the process of developing and maintaining a strategic fit between the organizations goals and capabilities and is changing marketing opportunitiesbSteps in strategic planningiCorporate Level1Defining company mission2Setting company objectivesgoals3Designing the business portfolioiiBusiness unit product and market level1Planning marketing and other functional strategiescMission statement a statement of the organizations purposewhat it wants to accomplish in the larger environmentdMission statement should be market orientediShould be stated as making more value for customers2Designing the business portfolioaBusiness portfolio the collection of businesses and products that make up the companybTwo stepsiThe company must analyze its current business portfolio and decide which businesses should receive more less or no investmentiiIt must shape the future portfolio by developing strategies for growth and downsizingcPortfolio analysis the process by which management invite with the products and businesses that make up the company the key business make up the strategic business unit SBUdMust implement business practices that correspond to the companys valueseStandard portfolio analysis methods evaluate SBU on two important dimensionsiThe attractiveness of the SBUs market or industryiiThe strength of the SBUs position Internet marketer industryfGrowthshare matrix a portfolioplanning method that evaluates a companys strategic business units in terms of its market growth rate and relative market share SBUs are classified as stars cash cows question marks or dogs SEE PAGE 44iStars highgrowth highshare businesses We often need heavy investments to finance the rapid growth Eventually their growth will slow down and turn into cash cowsiiCash cows Lowgrowth highshare businesses These established SBUs need less investment to hold their market share Thus They produce a lot of cash that the company uses to pay its bills and to support other SBUs that need investmentiiiQuestion marks Lowshare in highgrowth markets They require a lot of cash to hold their share let alone increase it Management must decide which question marks to change into stars and which to phase outivDogs lowgrowth lowshare businesses It may generate enough cash to maintain themselves but do not promise to be large sources of cashgManagement can decide what to do with question marksiBuild its shareiiHold its share at its current leveliiiHarvest the SBU milking its shirtterm cash flow regardless of longterm effectivDivest the SBU by selling it or phasing it out and using the resources elsewherehProblem with matrix approaches these approaches focus on classifying currents businesses but provide little advice for future planningiDeveloping Strategies for Growth and DownsizingiProductmarket expansion grid in portfolio planning tool for identifying company growth opportunities to market penetration market development product development or diversification
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