STRATEGY Ch 2 Strategy Planning Internal Organization s goals and capabilities External Strategy Marketing Opportunities A matching process Steps in the Strategy Process 1 Defining the company mission 2 Setting company objectives and goals 3 Designing the business portfolio 4 Planning marketing and other functional strategies Defining the company mission Mission Statement A statement of the organizations purpose Take into account What is our business Who is the customer What do they value What are our core abilities What should our business be Good mission statements are Market oriented Realistic Specific Motivating Illustrative Mission Statement examples To bring inspiration and innovation to every athlete in the world If you have a body you are an athlete Nike We deliver low prices every day and give ordinary folks the chance the buy the same things as rich people Walmart To drive sales profitability while delivery a Target brand shopping experience Target Company Objectives Goals Mission statement leads to Detailed supporting objectives for each level of management Must be measurable Business Portfolio Combination of businesses that has the potential of reaching objectives Which business to enter Which to exit How much to invest Businesses may be called strategic business units divisons markets product lines etc The best business portfolio is the one that best fits the company strengths and weaknesses to opportunities in the environment BCG Growth Share Matrix 2x2 grid Low Growth rate but high relative market share is a cash cow High Growth rate and high relative market share is a star Low growth rate and low relative market share is a dog High growth rate but low relative market share is a question mark Criticisms of the BCG Matrix Limited number of variables used Ignored interrelationships between businesses E g disney movies are dogs The placement of a business in the matrix is highly dependent on definition of a market Product Market Expansion Grid 2x2 Used to identify growth opportunities Market Penetration being sold Market Development Used to increase sales to current customers without changing the products Market Penetration can be achieved by A massive expansion of Starbucks adding more stores in current areas Offer free wifi promotions Identify and develop new markets geographic or demographic for current products Mcdonalds expanding to international countries Product development Offering modified or new products to current markets Pumpkin spice latte Starbuck Pink drink starbucks ready to drink beverages sold in grocery stores Diversification Adding new product services to an existing product line or expanding into Volkswagen acquiring Audi and other car brands Kellogs cereal hoodies new markets and pants Strategy Start up or buy businesses outside of current products and markets Strategy formulation steps Definition Process of developing a plan to achieve a business goals and objectives What do we know What do we want to accomplish How will we do it Portfolio Analysis make up the company Planning The process by which management evaluates the products and businesses that Marketing plan Outlines intended for marketing advertising activities for a specific period Executive summary Current Marketing situation Segmentation targeting and Positioning STP The 4 Ps of the Marketing Mix SWOT analysis above Objectives Marketing Strategy Action Programs Budgets Controls 4 P s of Marketing Product Price Promotion Place Marketing Implementation Putting marketing strategy into action by creating specific tasks The execution of a plan is usually the hardest part Successful implementation depends upon Company culture Employee s shared beliefs and values Organizational culture Reward systems Implementation often ends up being more about personal relationships and or luck than plans took into account Marketing Control Evaluate the results of marketing strategies and plans Set marketing goals Measure actual vs expected performance on goals Take corrective action to close goals between goals and performance STP Ch 6 Steps in STP segmentation targeting positioning Segmentation Dividing a market into smaller groups that Have distinct needs characteristics or behaviors Respond similarly to marketing efforts and therefore might require their own products and marketing 4 Ps Geographic Segmentation city size Dividing a market into different geographic units ex country country region Mcdonalds changing their menu items in China to fit their eating habits Large retailers such as Target opening smaller stores to fit the needs of smaller markers not suited to their typical large stores Demographic Segmentation Dividing a market based on demographic variables age gender income Easier to measure than most other types of variables Examples Star wars and frozen themed toothpaste for young kids Gender segmentation Rise in general neutral clothing apparel to remove gender labels Examples Secret deodorant designed for women women and men brands have started to make products for both genders Income segmentation Dollar store focuses on the lower income families Rolex watches focuses on the wealthier people Psychographic Segmentation Dividing a market based on Social Class Lifestyle Personality Behavior Segmentation Based on behaviors such as Benefits sought Dividing the market into segments according to the different benefits that consumers seek from the product Ex People buying bikes are looking for numerous benefits competitive to fitness to transportation Usage occasion Dividing the market into segments according to occasions when buyers get the idea to buy actually make their purchase or use the purchased item Campbell s soup advertises more in the winter months Nyquil DayQuil advertises more during the cold and flu season Starbucks seasonal beverages such as the pumpkin spice latte only available during the fall season Ex pampers makes sure they are the most used diapers in US hospitals so it can promote them as the 1 choice of hospitals User status Usage rate Loyalty status Customers may only buy an apple phone Somewhat loyal customers are loyal to 2 3 brands rather than favoring just one Ex chicago bulls have created a community of NBA superfans that will stick through one team through good and bad times Intermarket Segmentation Segments of consumers who have similar needs and buying behavior even though they are located in different countries Never chose intermarket segmentation and geographic