Chapter 2: Company and Marketing Strategy [Partnering to Build Customer Engagement, Value, and Relationships]

Objective 2-1 Explain company-wide strategic planning and its four steps. Objective 2-2 Discuss how to design business portfolios and develop growth strategies. Objective 2-3 Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value. Objective 2-4 Describe the elements of a customer value–driven marketing strategy and mix and the forces that influence them. Objective 2-5 Explore the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment.

Strategic Planning

the process of developing and maintaining a profitable strategic fit between the organization’s goals and capabilities and its changing marketing opportunities [2.1.1]

Mission Statement

a statement of the organization’s purpose – what it wants to accomplish in the larger environment [2.1.1]

Business Portfolio

the collection of businesses and products that make up the company [2.2.1]

Portfolio Analysis

the process by which management evaluates and plans for the future of the products and businesses that make up the company. [2.2.1]

Growth-Share Matrix

a portfolio-planning method that evaluates a company’s strategic business units (SBUs) in terms of market growth rate and relative market share [2.2.1]

Product/Market Expansion Grid

a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification [2.2.2]

Market Penetration

company growth by increasing sales of current products to current market segments without changing the product [2.2.2]

Market Development

company growth by identifying and developing new market segments for current company products [2.2.2]

Product Development

company growth by offering modified or new products to current market segments [2.2.2]

Diversification

company growth through starting up or acquiring businesses outside the company’s current products and markets [2.2.2]

Value Chain

the set of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products [2.3.1]

Value Delivery Network

A network composed of the company, suppliers, distributors, and, ultimately, even customers – all of whom partner together to improve the entire system's performance in delivering customer value and driving profits [2.3.2]

Marketing Strategy

the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships [2.4.1]

Market Segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes [2.4.1]

Market Segment

a group of consumers who are expected to respond in a similar way to a given set of marketing efforts [2.4.1]

Market Targeting

(targeting) evaluating each market segment’s attractiveness and selecting one or more segments to serve [2.4.1]

Positioning

arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers [2.4.1]

Differentiation

actually differentiating the market offering to create superior customer value relative to the competition [2.4.1]

Marketing Mix

the set of marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market [2.4.2]

Product

captures the offering from the company to the target market. it can include physical or digital products, services, solutions, or even experiences [2.4.2]

Price

the amount of money customers must pay to obtain the product [2.4.2]

Place

includes company activities that make the product available to target consumers [2.4.2]

Promotion

refers to activities that communicate the benefits of the product and persuade target customers to buy it [2.4.2]

Acceptability

the extent to which the product exceeds customer expectations [2.4.2]

Affordability

the extent to which customers are willing and able to pay the product’s price [2.4.2]

Accessibility

the extent to which customers can readily acquire the product [2.4.2]

Awareness

the extent to which customers are informed about the product’s features, persuaded to try it, and reminded to repurchase [2.4.2]

S.W.O.T Analysis

An overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T) [2.5.1]

Strengths

Internal capabilities that may help a company reach its objectives [2.5.1]

Weaknesses

Internal limitations that may interfere with a company's ability to achieve its objectives [2.5.1]

Opportunities

External factors that the company may be able to exploit to its advantage [2.5.1]

Threats

Current and emerging external factors that may challenge the company’s performance [2.5.1]

Marketing implementation

the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives [2.5.1]

Marketing Control

measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are attained [2.5.1]

Marketing Return on Investment (or Marketing ROI)

the net return from a marketing investment divided by the costs of the marketing investment [2.5.2]