Company Oriented Marketing Strategy Professor Joel Huber Marketing

Company Oriented Marketing Strategy Professor Joel Huber Marketing 360 Marketing Management Fuqua School of Business Marketing Strategy– 1

Agenda • Strategic Planning – BCG Matrix – GE Matrix • Marketing Planning – Core Competencies: SWOT analysis Marketing Strategy– 2

Marketing Strategy • “More than half the polled executives at 250 corporations ranked Marketing as the most important element of strategy” – (Yankelovitch, Skelly & White Survey 1995) Marketing Strategy– 3

Strategic Planning and Marketing Planning Strategic Planning * Situation Assessment * Organizational Mission * Org. Objectives * Org. Strategies Marketing Planning * Marketing Objectives * Marketing Strategies Target Marketing Mix * Marketing Plans Portfolio Analysis Implementation Control Marketing Strategy– 4

Corporate Strategic Planning Define Corporate Mission Identify Strategic Business Units (SBU’s) Analyze, Evaluate Current Business Portfolio Identify New Business Arenas to Enter Marketing Strategy– 5

1. Define Corporate Mission • What is our business? • Who is the customer? • What is the value to the customer? • What will our business be? • What should our business be? -Peter Drucker Marketing Strategy– 6

2. Identify SBUs • Single business standing alone from rest of company • Having own competitors and customers • Has own manager who is responsible for strategic planning and profit Marketing Strategy– 7

3. Evaluate the Current Business Portfolio • The Boston Consulting Group (BCG) Matrix • The General Electric (GE) Approach Marketing Strategy– 8

Portfolio Analysis: The BCG Matrix High >10% ow Reinvest Based on the principle of balancing cash flows PROBLEM CHILD Fl No Invest Ca sh Growth & Cash Required Invest STAR ? ? ? Low <10% Divest Cash Flow CASH COW 10 DOG 1 0 Relative Market Share wrt Biggest Competitor Marketing Strategy– 9

Portfolio Analysis: The BCG Matrix Marketing Strategy– 10

Portfolio Analysis: The BCG Matrix Marketing Strategy– 11

Why BCG was so successful • Barnyard metaphor • Two dimensions: Growth and Share • Was an engine for change – Balanced cash flows and focused executive attention on high growth areas – Helped management make difficult decisions Marketing Strategy– 12

How BCG became obsolete • Cash flow became less of an issue with more efficient capital markets and lower interest rates • Process could be manipulated by defining the market narrowly or broadly • Multiple companies could not jointly pursue a strategy to be #1, but they tried…with disastrous consequences Marketing Strategy– 13

High 5 Medium 3. 33 1. 67 Low MARKET ATTRACTIVENESS The General Electric Model 0 5 Strong 3. 33 Medium 1. 67 Weak 0 BUSINESS STRENGTH Marketing Strategy– 14

Evaluating Market Attractiveness and Business Strength Marketing Strategy– 15

5 High Protect Position Invest to Build Selectively 3. 33 Medium Selectivity/ Limited Build Manage for Expansion Selectively Earnings or Harvest 1. 67 Low MARKET ATTRACTIVENESS Management Strategies 0 Protect and Manage for Refocus Earnings 5 Strong Divest 3. 33 Medium 1. 67 Weak 0 BUSINESS STRENGTH Marketing Strategy– 16

Problems with portfolio models • Subjective inputs lead to selfconfirming strategies • Lack of independence of SBU – Cannibalization – Synergy • Works best with companies at the edges Marketing Strategy– 17

The Marketing Plan - Integrating the 3 C’s and the 4 P’s Current marketing situation (3 C’s) Background data on sales, costs, profits, market, competitors, distribution, and environment. Opportunity and issue analysis (3 C’s) Identifies the main opportunities/threats, strengths/weaknesses. Objectives Defines plan’s financial and marketing goals in terms of sales volume, market share, and profit. Marketing strategy (4 P’s) Presents the broad marketing approach that will be used to achieve the plan’s objectives. Action programs (4 P’s) Presents the special marketing programs designed to achieve the business objectives. Project profit-andloss statement Forecasts the plan’s expected financial outcomes. Adapted From: Philip Kotler, Marketing Management, pg. 89. Marketing Strategy– 18

SWOT: Strengths and Weaknesses Marketing Strategy– 19

SWOT: Opportunities and Threats High Low 1 2 3 4 Opportunities - e. g. , Technology 1. __________ 2. __________ 3. __________ 4. __________ Probability of Occurrence Seriousness Attractiveness Success Probability High Low 1 2 3 4 Threats - e. g. , competitor 1. __________ 2. __________ 3. __________ 4. __________ Marketing Strategy– 20

Agenda: Key Take Aways • Strategic Planning – BCG Matrix – GE Matrix • Marketing Planning – SWOT analysis Marketing Strategy– 21