Chapter 2: Partnering to Build Customer Engagement, Value, and Relationships

Transcription

1 Chapter 2: Partnering to Build Customer Engagement, Value, and Relationships 1

2 2 Learning Objectives After completing this chapter, students will be able to: Explain company-wide strategic planning and its four steps. Discuss how to design business portfolios and develop growth strategies. Explain marketing s role in strategic planning and how marketing works with its partners to create and deliver customer value. Describe the elements of a customer value-driven marketing strategy and mix, and the forces that influence it. List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing marketing return on investment.

3 3 Strategic planning sets the stage for the rest of planning in the firm! Company-Wide Strategic Planning Strategic planning is the process of developing and maintaining a strategic fit between the organization s goals and capabilities, and its changing marketing opportunities.

4 4 Company-Wide Strategic Planning At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission!

5 At Xiaomi, we strive to create the highest quality products in lowest possible prices in order to provide people access to the necessary tools and services that connect them to the world, and ultimately, to their dreams! 5 Company-Wide Strategic Planning The mission statement is the organization s purpose; what it wants to accomplish in the larger environment. Xiaomi overall Mission Statement: Making quality technology accessible to everyone Its marketing strategies and programs must support this mission!

6 At Xiaomi, we strive to create the highest quality products in lowest possible prices in order to provide people access to the necessary tools and services that connect them to the world, and ultimately, to their dreams! 6 Company-Wide Strategic Planning Forging a sound mission begins with the following questions: What is our business? Who is the customer? What do consumers value? What should our business be? These simple-sounding questions are among the most difficult the company will ever have to answer. Successful companies continuously raise these questions and answer them carefully and completely!

7 At Xiaomi, we strive to create the highest quality products in lowest possible prices in order to provide people access to the necessary tools and services that connect them to the world, and ultimately, to their dreams! 7 Company-Wide Strategic Planning A mission statement should: Not be myopic in product terms Be meaningful and specific Be motivating Emphasize the company s strengths Contain specific workable guidelines Not be stated as making sales or profits

8 8 Company-Wide Strategic Planning This mission is then turned into detailed supporting objectives that guide the entire company!

9 9 Company-Wide Strategic Planning Next, headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one. In turn, each business and product develops detailed marketing and other departmental plans that support the company-wide plan.

10 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! 10 Company-Wide Strategic Planning Setting Company Objectives and Goals

11 11 Designing The Business Portfolio The business portfolio is the collection of businesses and products that make up the company. Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company.

12 12 Strategic business unit (SBU): the single independent businesses of an organization that formulate their own competitive strategies! Designing The Business Portfolio Strategic business units (SBU) can be a Company division Mercedes Benz Truck Division Product line within a division Single product or brand Apple TV

13 13 When designing a business portfolio, it is a good idea to add and support products and businesses that fit closely with the firm s core philosophy and competencies. Designing The Business Portfolio Analyzing the Current Business Portfolio & strength of the SBU s position in that market or industry

14 14 The best-known portfolio-planning method is the Boston Consulting Group (BCG) approach: The BCG Matrix ( 波士顿矩阵 ) BCG matrix: 波士顿咨询公司 A means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market. Stars 明星 Cash Cows 现金牛 Question marks 问题 Dogs 瘦狗

15 15 Designing The Business Portfolio Analyzing the Current Business Portfolio 波士顿矩阵 Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows.

16 16 Designing The Business Portfolio Analyzing the Current Business Portfolio 波士顿矩阵 Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.

17 17 Designing The Business Portfolio Analyzing the Current Business Portfolio 波士顿矩阵 Question marks are low-share business units in highgrowth markets requiring a lot of cash to hold their share.

18 18 Designing The Business Portfolio Analyzing the Current Business Portfolio 波士顿矩阵 Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash.

19 19 Designing The Business Portfolio Problems with Matrix Approaches: Difficulty in defining SBUs and measuring market share and growth Time consuming Expensive Focus on current businesses, not future planning Many companies have dropped formal matrix methods in favor of more customized approaches that better suit their specific situations! Companies are placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close to their markets.

20 20 Designing The Business Portfolio Marketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them. One useful device for identifying growth opportunities is the product/market expansion grid: Market penetration - making more sales to current customers without changing its original product such as by adding new stores in current market areas to make it easier for customers to visit!

21 21 Designing The Business Portfolio Marketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them. One useful device for identifying growth opportunities is the product/market expansion grid: Market development identifying and developing new markets for its current products. Example: new demographic markets - perhaps new groups such as seniors could be encouraged! or managers could consider new geographic markets.

22 22 Designing The Business Portfolio Marketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them. One useful device for identifying growth opportunities is the product/market expansion grid: Product development offering modified or new products to current markets such as by moving into new product categories.

23 23 Designing The Business Portfolio Marketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them. One useful device for identifying growth opportunities is the product/market expansion grid: Diversification starting up or buying businesses beyond its current products and markets. Example: the company could acquire a company that operates in different market segments with a different product mix.

24 24 The Diversification Strategy Unrelated Diversification: Operating several businesses under one ownership that are not related to one another. Example: Hunan Jinjian Cereals 湖南金健米业股份有限公司 China s first cereal producer to list on the Shanghai Stock Exchange. Entered seven additional lines of business after its initial public offering pharmaceutical products, real estate, dairy production, electric power generation

25 25 The Diversification Strategy Related Diversification: An organisation under one ownership operates separate businesses that are related to one another. 博柏利

26 26 Designing The Business Portfolio Growth strategy: a corporate strategy that is used when an organisation wants to expand the number of markets served or products offered, either through its current business(es) or through new business(es)

27 27 Designing The Business Portfolio Downsizing strategy: Downsizing is when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy. A firm might want to abandon products or markets for a number of reasons: The firm may have grown too fast or entered areas where it lacks experience. The market environment might change, making some products or markets less profitable. Some products or business units simply age and die.

28 28 Departments: Human Resources, Research and Development, Sales & Marketing, Production, Finance & Purchase, Accounting, IT Planning Marketing: Partnering to Build Customer Relationships Partnering with Other Company Departments The marketing department alone cannot create superior customer value! Under the company-wide strategic plan, marketers must work closely with other departments to form an effective internal company value chain. Value chain is a series of departments that carry out value creating activities to design, produce, market, deliver, and support a firm s products.

29 29 Planning Marketing: Partnering to Build Customer Relationships Partnering with Others in the Marketing System More companies today are partnering with other members to improve the performance of the customer value delivery network: Value delivery network is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system.

30 30 Marketing Strategy and the Marketing Mix 1.

31 31 Marketing Strategy and the Marketing Mix 2.

32 32 Marketing Strategy and the Marketing Mix 3.

33 33 Marketing Strategy and the Marketing Mix To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment!

34 34 Marketing Strategy and the Marketing Mix Customer Value-Driven Marketing Strategy Marketing strategy is the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.

35 35 Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioral factors. Marketing Strategy and the Marketing Mix Customer Value-Driven Marketing Strategy The market consists of many types of customers, products, and needs. The marketer must determine which segments offer the best opportunities: Market segmentation is the division of a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or marketing mixes. Market segment is a group of consumers who respond in a similar way to a given set of marketing efforts.

36 36 Marketing Strategy and the Marketing Mix Customer Value-Driven Marketing Strategy A company should target segments in which it can profitably generate the greatest customer value and sustain it over time: Market targeting is the process of evaluating each market segment s attractiveness and selecting one or more segments to enter. Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Differentiation begins the positioning process.

37 37 Marketing Strategy and the Marketing Mix Customer Value-Driven Marketing Strategy Positioning: The L Oréal group serves major segments of the beauty market, and within each segment it caters to many subsegments. L Oréal targets the larger segments through its major divisions; further within these major divisions, L Oréal markets various brands that cater to customers of different ages, incomes, and lifestyles.

38 38 Marketing Strategy and the Marketing Mix After determining its overall marketing strategy, the company is ready to begin planning the details of the marketing mix: Developing an Integrated Marketing Mix Marketing mix is the set of controllable, tactical marketing tools product, price, place, and promotion that the firm blends to produce the response it wants in the target market (generate demand for the products!).

39 39 The 4Ps can be redefined to the 4Cs to make them more customer centric! Marketing Strategy and the Marketing Mix Customer solution Customer cost Communication Convenience

40 40 The company first develops company-wide strategic plans and then translates them into marketing and other plans for each division, product, and brand. Managing the Marketing Effort Managing the marketing process requires the four marketing management functions analysis, planning, implementation, and control.

41 41 Through implementation, the company turns the plans into actions. Managing the Marketing Effort Managing the marketing process requires the four marketing management functions analysis, planning, implementation, and control.

42 42 Control consists of measuring and evaluating the results of marketing activities and taking corrective action where needed. Managing the Marketing Effort Managing the marketing process requires the four marketing management functions analysis, planning, implementation, and control.

43 43 Finally, marketing analysis provides information and evaluations needed for all the other marketing activities. Managing the Marketing Effort Managing the marketing process requires the four marketing management functions analysis, planning, implementation, and control.

44 44 Managing the Marketing Effort Company should analyze its markets and marketing environment to find attractive opportunities and identify environmental threats. It should analyze company strengths and weaknesses as well as current and possible marketing actions to determine which opportunities it can best pursue. Goal: Match the company s strengths to attractive opportunities in the environment, while eliminating weaknesses and minimizing the threats!

45 Marketing planning involves choosing marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan is needed for each business, product, or brand! 45 Managing the Marketing Effort Market Planning Parts of a Marketing Plan

46 46 A brilliant marketing strategy counts for little if the company fails to implement it properly! Managing the Marketing Effort Marketing Implementation Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives Addresses who, where, when, and how!

47 47 Measuring and Managing Return on Marketing Investment Return on Marketing Investment (Marketing ROI) Net return from a marketing investment divided by the costs of the marketing investment Measurement of the profits generated by investments in marketing activities!

48 Measuring and Managing Return on Marketing Investment 48

49 49 Homework --- Chapter 2 Review questions: 1. State two possible strengths and two possible weaknesses of Haier. 2. Explain how Haier might tackle one of those weaknesses! 3. Distinguish between a cash cow and a rising star in the Boston Matrix. Please read Chapter 3 (pp )!