Marketing : An Introduction

An Asian Perspective Armstrong, Kotler & da Silva

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Company and Marketing
Strategy: Partnering to Build
Customer Relationships
2
Marketing : An Introduction
An Asian Perspective
Armstrong, Kotler
& da Silva
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
2-2
Explain companywide strategic planning and
its four steps.
Explain marketings role in strategic planning
and how marketing works with its partners to
create and deliver customer value.
Describe the elements of a customer-driven
marketing strategy and mix, and the forces
that influence it.
Important Concepts
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Opening Case Study- Walt Disney
Company
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
Disney Land
Known for films, animation, theme parks and customer
orientation
Parks offer a variety of attractions as well as cleanliness, order,
and warmth
Satisfying the customer is everyones job
Disney has grown via diversification
Disneys strong presence will be enhanced in Asia with the
opening of Hong Kong
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Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Strategic Planning
Strategic Planning is the Process of
Developing and Maintaining a
Strategic Fit Between the
Organizations Goals and
Capabilities and Its Changing
Marketing Opportunities.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Steps in Strategic Planning
Figure 2.1
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Outcomes of effective marketing
strategies:
Achieve clear competitive advantages
over the firms rivals
Create positive responses among its
target customers
Turn in positive contributions to its bottom-
line
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Figure 2.3
Strategies Over Time-Singapore
Airlines
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Questions a Mission Statement Should
Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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The Mission Statement
A statement of the organizations purpose
What it wants to accomplish in the larger
environment

Should be market oriented and defined in
terms of customer needs.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Mission Statements : Examples
Amazon.com: We sell books, videos,
CDs, Consumer electronics,
hardware and other products.
Canon: We make copying machines,
fax machines and scanners
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the
company.
The company must:
analyze its current business portfolio or
Strategic Business Units (SBUs),
decide which SBUs should receive more, less,
or no investment,
develop growth strategies for growth or
downsizing.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Strategic Business Unit (SBU)
A unit of the company that has a separate
mission and objectives and that can be
planned independently from other
company businesses.

Can be a company division, a product line
within a division, or sometimes a single
product or brand.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Portfolio Analysis
An evaluation of the products and
business making up the company.

Resources are directed to more profitable
businesses and weaker ones are phased
down or dropped.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
Managements first step is to identify the key
businesses making up the company. These can be
called Strategic Business Units (SBUs).
The next step in the business portfolio analysis calls for
management to assess the attractiveness of various
SBUs and decide how much support each deserves.
The best known portfolio planning method was
developed by the Boston Consulting Group (BCG), a
leading management consulting firm.
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Step I. Analyzing the Current Business Portfolio:
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Analyzing Current SBUs:
BCG Growth-Share Matrix






















Question Marks

Low share SBUs in high growth
markets
Require cash to hold
market share
Build into Stars or phase out
Stars

High growth & share
May need heavy
investment to grow
Eventually, growth will slow
Relative Market Share
High Low
M
a
r
k
e
t

G
r
o
w
t
h

R
a
t
e


L
o
w




















H
i
g
h

?
Cash Cows


Low growth, high share
Established, successful
SBUs
Produce cash


Dogs

Low growth & share
Generate cash to sustain self
Do not promise to be cash
sources
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Figure 2.6
Strategies in Managing the SBUs in the Portfolio
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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The BCG Growth-Share Matrix
Figure 2.4
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Comparison of Business Portfolios
Figure 2.5
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Can Place too Much Emphasis on Growth

Problems With Matrix Approaches
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
Step II. Developing strategies for
growth and Downsizing

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Marketing has the main responsibility for achieving
profitable growth for the company.
Marketing must identify, evaluate, and select market
opportunities and lay down strategies for collecting
them.
One useful device for identifying growth
opportunities is the Product/Market Expansion
Grid.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Market
Penetration
Product
Development
Market
Development
Existing New
P R O D U C T
New
M

A

R

K

E

T

Diversification
Existing
Product/Market Expansion Grid
Figure 2.7
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Product/Market Expansion Grid
Based on Starbucks
Market Penetration: make more sales to
current customers without changing
products.
How? Add new stores in current market areas;
improve advertising, prices, menu, service.
Market Development: identify and develop
new markets for current products.
How? Review new demographic
(seniors/ethnic consumers) or geographic
(Asian, European, Australian, & South
American) markets.
Market Penetration
1/ 2011
Surej P John
26
Started the first shop in
2004

In 2009, the number of
shops reached 41
including 8 University
campuses
Market Development
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Product/Market Expansion Grid
Based on Starbucks
Product Development: offering modified or
new products to current markets.
How? Add food offerings, sell coffee in
supermarkets, co-brand products.
Diversification: start up or buy businesses
outside current products and markets.
How? Making and selling CDs, testing
restaurant concepts, or branding casual
clothing.
Product
Development
1/ 2011
Surej P John
29
Diversification
Diversification is developing new products for new
markets
1/ 2010
Surej P John
30
Downsizing:

Reducing the business portfolio by eliminating the
products or business units that are not profitable or
that no longer fit the companys overall strategy.

1/ 2011
Surej P John
31
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Managing Marketing Strategy and
Marketing Mix
Figure 2.13
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Market Segmentation
The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.

A market segment consists of consumers
who respond in a similar way to a given
set of marketing efforts.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
Market segmentation
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Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
What is the
target
market?
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Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Target Marketing
Involves
evaluating each
market segments
attractiveness and
selecting one or
more segments to
enter.
Target segments
that can sustain
profitability.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Market Positioning
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers (e.g. in a perfect world
everyone would drive a Mercedes Benz)

Process begins with differentiating the
companys marketing offer so it gives
consumers more value.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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The Marketing Mix
The set of
controllable,
tactical marketing
tools that the firm
blends to
produce the
response it wants
in the target
market.
Consists of the
4 Ps
1. Product
2. Price
3. Place
4. Promotion
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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The 4 Ps of the Marketing Mix
Figure 2.14
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Achieving Competitive Advantage, Integration
and Positioning in the Marketing Mix
Figure 2.15 (a)
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Product strategies
Any kind of strategies that
are related to make
product improvements.

Product quality
Product design
Product features
Brand Name
Packaging
Services
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Price Strategies
Any kind of business
decisions that directly related
to the price of the product or
service offered

List price
Discounts
Allowances
Credit terms etc.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Place Strategies
Place includes the
company activities that
make the product
available to target
customers.

Place includes Channels,
Coverage, Locations,
Inventory, transportation,
logistics etc.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Promotion Strategies
Promotion means activities that communicate the merits of
the products and persuade the target customers to buy it.

Advertising, Sales promotion, personal selling, public relations
etc. are coming under the Promotion concept.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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SWOT ANALYSIS
An overall evaluation if the companys
strength (S), weakness (W), Opportunities
(O), and Threats (T) is called SWOT analysis.
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Strengths
Internal abilities that help the company to achieve its objectives
Good brand name
Low cost of
production

Cheap Labor

Enough budget for
advertisement or
promotions

Ability to introduce
the new product
into market
Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Weakness
Internal limitations that may interfere or block
the companys ability to achieve its objectives
High Competition
Lack of enough
money
Poor Quality
Cheap Brand
name


Marketing : An Introduction
An Asian Perspective Armstrong, Kotler & da Silva
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Opportunities'
External factors of the market that the company may
be able to take advantage.


Large potential market
Lack of competitors
Moving into new market segment that offer more profits
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An Asian Perspective Armstrong, Kotler & da Silva
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Threat
External factors that may challenge the companys
performance
A new competitor in your
home market.
Price wars with competitors.
A competitor has a new,
innovative product or
service.
Competitors have superior
access to channels of
distribution.