CHAP 2 COMPANY AND

MARKETING STRATEGY
Components of the Strategic Planning Process

 Strategic planning is a process that helps an

organization allocate its resources to capitalize on
opportunities in the marketplace.
 Typically, it is a long-term process.
 The strategic planning process includes conducting
a situation analysis and developing the
organization’s mission statement, objectives, value
proposition, and strategies.
Strategic Planning Process
Strategic Planning Process
Mission Statement
 The Mission Statement The firm’s mission
statement states the purpose of the organization and
why it exists. Both profit and nonprofit
organizations have mission statements, which they
often publicize
Examples of Mission Statements
Example
 PepsiCo’s Mission Statement
“Our mission is to be the world’s premier consumer
products company focused on convenient foods
and beverages. We seek to produce financial
rewards to investors as we provide opportunities
for growth and enrichment to our employees, our
business partners and the communities in which we
operate. And in everything we do, we strive for
honesty, fairness and integrity
Setting Companies Objectives
 The company needs to turn its mission into detailed
supporting objectives for each level of
management.
 Each manager should have objectives and be
responsible for reaching them.
 The broad mission leads to a hierarchy of
objectives, including business objectives and
marketing objectives.
 Example Kohler’s mission is to build profitable customer
relationships by developing efficient yet beautiful products that
embrace the “essence of gracious living”. (Mission)
It does this by investing heavily in research and design. Research is
expensive and must be funded through improved profit, so
improving profits becomes another major objective for Kohler.
Profits can be improved by increasing sales or reducing costs.
Sales can be increased by improving the company’s share of
domestic and international markets.
These goals then become the company’s current marketing
objectives
 Marketing strategies and programs must be developed to support these
marketing objectives.
 To increase its market share, Kohler might increase its products’

availability and promotion in existing markets and expand into new

markets. For example, Kohler is boosting production capacity in India
and China to better serve the Asian market.
These are Kohler’s broad marketing strategies.
Each broad marketing strategy must then be defined in greater detail. For
example, increasing the product’s promotion may require more
salespeople, advertising, and public relations efforts; if so, both
requirements will need to be spelled out.
In this way, the firm’s mission is translated into a set of objectives for the
current period.
Designing the Business Portfolio
 Guided by the company’s mission statement and objectives,
management now must plan its business portfolio—the collection
of businesses and products that make up the company.
 The best business portfolio is the one that best fits the company’s
strengths and weaknesses to opportunities in the environment.
 Business portfolio planning involves two steps. First, the company
must analyze its current business portfolio and determine which
businesses should receive more, less, or no investment.
 Second, it must shape the future portfolio by developing strategies
for growth and downsizing.
BCG Matrix (Handout Attached)
 The BCG Matrix is a well-known management model for analyzing a
company's product portfolio.
 The BCG matix contains the following four components:
 Stars
 Cash cows
 Dogs
 Question marks (also known as Problem Childs)
The Product/Market Expansion Grid

 Market penetration
 Market development
 Product development
 Diversification