Slide_R_A_A2 slide #7 full by R_A

1. Chapter 2
Company and marketing strategy:
partnering to build customer relationships

2.  Companies need growth is they are to compete
more effectively, satisfy their stakeholders and
attract top talent.
 The company’s objective must be ‘profitable
growth’.
 Marketing is mainly responsible for profitable
growth. Must identify, evaluate and select market
opportunities and plan strategies to capture them.
 Product/market expansion grid is a useful tool for

3.  A portfolio-planning tool for identifying company
growth opportunities through market penetration,
market development, product development or
diversification.
 Lets look at Starbucks as an example:
Howard Schultz thought of bringing a European
style coffee house to America. He believed people
needed to slow down. They needed to smell the
coffee and enjoy life a little more. Starbucks does
not just sell coffee it sells the ‘Starbuck’s
experience’.

4.  A strategy for company growth by increasing sales
of current products to current market segments
without changing the product.
 E.g. Starbucks might add more stores in current
market areas for customers to visit easily.
 Improved advertising, prices, services, menu
selection, store design (encourages customers to
stay longe).
 Add drive through windows.
 Starbuck cards allows to prepay for coffee and
snacks or gift Starbucks to friends and families.

5.  A strategy for company growth by identifying and
developing new market segments for current
company products.
 E.g. Managers can review new demographic
markets.
 Cater to new groups such as seniors or ethnic that
can be encouraged to visit Starbucks for the first
time.
 Could also be new geographical locations e.g.
Starbucks expanding in new U.S. Markets
especially smaller cities and also rapidly

6.  A strategy for company growth by offering
modified or new products to current market
segments.
 E.g. Starbucks has introduced new reduced calorie
options.
 Introduced chocolate beverages for non-coffee
drinkers.
 To capture consumers who brew their coffees at
home, Starbucks has entered a co-branding deal
with Kraft. Starbucks roasts and packages the
coffee beans whereas Kraft markets and distributes

7.  A strategy for company growth through starting up
or acquiring businesses outside the company’s
current products and markets.
Downsizing:
Reducing the business portfolio by eliminating products
of business units that are not profitable or that no
longer fit the company’s overall strategy.
Why? Maybe the market environment has changed,
needs have changed, firm has entered a new
market without proper research, or new products
that do not deliver superior value to consumers.

8.  There are too many kinds of consumers with
different kind of needs.
 Most companies are in the position to serve some
segments better than others.
 Hence the marketing strategy consists of the
following steps that we will look in details:
1. Market segmentation
2. Target marketing
3. Differentiation
4. Market positioning

9.  Dividing a market into distinct groups of buyers
who have distinct needs, characteristics or
behaviour and who might require separate products
or marketing programs.
 Marketers have to determine which segments offer
the best opportunities. Consumers can be grouped
based on geographic, demographic and
behavioural factors.
 A market segment consists of a group of
consumers who respond in a similar way to a given
set of marketing efforts.

10.  The process of evaluating each market segment’s
attractiveness and selecting one or more segments to
enter.
 Target segments in which a firm can profitably
generate the greatest customer value and sustain it over
time.
 Companies with limited resources will target a few
segments. Or serve several related segments, with
several different consumers with same basic want e.g.
Clothing.
 Large companies on the other hand eventually seek full
market coverage. E.g GM says they make a car for

11.  Once a company has decided which market
segments to enter it must decide how it will
differentiate its market offerings for each segments
and what positions it wants to occupy in those
segments.
 Marketers want to develop unique market
positions for their products. If the product is
perceived to be exactly the same as others in the
market, consumers will have no reason to but it.
 Examples PTO

12.  E.g. BMW makes the ‘ultimate driving machine’.
 Ford is ‘built for the road ahead’
 Kia promises ‘the power to surprise’
 Master card gives you ‘priceless experience’.
 Positioning:
Arranging for a product to occupy a clear,
distinctive and desirable place relative to
competing products in the minds of target
consumers.
 Differentiation:
Actually differentiating the market offering to create
superior customer value.

13.  In positioning itself the firm first identifies
possible customer value differences that can
provide a competitive advantage upon which to
build position.
 Firms can either offer lower prices or more
benefits at higher prices to deliver more value.
 Once the company promises greater value it then
must also deliver that value.
 Company must take strong steps to deliver and
communicate that position to target consumers.

14.  Marketing mix:
After deciding the over all marketing strategy the
company is ready to plan its marketing mix
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.
 It consists of everything a firm can do to influence
the demand of its products.

15.  Product:
The goods and services combination the company
offers to the target market.
 Price:
The amount of money customers have to pay to
obtain the product
 Place:
Company activities that make the product available to
target consumers.

16.  Promotion:
Activities that communicate the merits of the product
and persuade target customers to buy it.
An effective marketing program blends all of the
marketing mix elements into an integrated program
designed to achieve the company’s marketing
objectives by delivering value to consumers. The
marketing mix helps establish strong position of the
product in the target markets.

17. Product Price Promotion place
Variety List price Advertising Channels
Quality Discounts Personal selling Coverage
Design Allowances Sales
promotion
Assortments
Features Payment period Public relations Locations
Brand name Credit terms Inventory
Packaging Transportation
services Logistics

18.  There is a concern however that the four P’s
concept only takes the sellers point of view and not
the buyer’s view. Hence from the buyer’s point of
view the four P’s can be described as the four C’s.
1. Customer solution- Product
2. Customer cost- Price
3. Convenience- Place
4. Communication- promotion