Chapter 2 Principles of Marketing

Strategic Planning

process of developing and maintaining a strategic fit between the organization’s goals and capabilities, and its changing marketing opportunities.

Patagonia Mission Statement

Patagonia is in business to save our home planet

business portfolio

collection of businesses and products that make up the company.

Portfolio analysis

major activity in strategic planning whereby management evaluates the products and businesses that make up the company

Downsizing

when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy

Value chain

a series of departments that carry out value creating activities to design, produce, market, deliver, and support a firm’s products.

Value delivery network

made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system.

Marketing strategy

marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

Market segmentation

the division of the market into distinct groups of buyers who have different needs, characteristics or behaviours and who might require separate products or marketing mixes

Market Segment

Group of customers who respond in a similar way to a given set of marketing efforts

Market Targeting

the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter

Market Positioning

The arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Marketing mix

set of controllable, tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target marketn

Marketing Implementation

Turns marketing strategies and plans into marketing actions to accomplish strategic marketing objectives, addresses who, where, when and how.

Marketing ROI

Net return for a marketing investment ➗ by the costs of the marketing investment = measurement of the profits generated by investments in marketing activities

Steps in Strategic Planning

1. Defining the company mission

2. setting company objectives and goals

3. designing the business portfolio

4. Planning marketing and other functional strategies

Mission statement

the organisations purpose, what it want to accomplish in the larger environment

Relative market share

= Revenue/ revenue of main competitor

Market Planning; parts of plan

• executive summary

• marketing situation

• threats and opportunities

• objectives and issues

• marketing strategy

• action programmes

• budget

• controls

BCG approach

boston consulting group - puts SBUs into 4 categories of growth-share matrix

starts

funding rapid growth is expensive- eventually become cash cows

cash cows

need little investments and produce large amounts of profit- can fund other SBUs

question marks

cost a lot to grow- some should be funded to become stars others divested

poor dogs

may be able to support themselves but not more