MARKETING STRATEGY

PREPARED BY:
Mrs. IMA ILYANI BT DATO’ HJ IBRAHIM
Faculty of Business and Management
UiTM ARAU, PERLIS

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 2.1 The Steps in Strategic Planning

2.2 BCG Matrix

Marketing
Strategy
2.3 Product/Market Expansion Grid

2.4 Marketing strategy and marketing mix

WHAT IS STRATEGIC
PLANNING ?

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 Process of developing and
maintaining a strategic fit
between the organization’s
goals and capabilities and its
changing marketing
opportunities

Organization’s goals + organization’s capabilities + marketing

opportunities > Strategic Planning

Marketing opportunities = Newly identified need, want, or

demand trend that a firm can exploit because it is not being
addressed by the competitors. 4
 Steps in Strategic Planning

1 2 3 4
 1 Defining the company mission
• The mission statement is the
organization’s purpose, what it wants
to accomplish in the larger
environment.
• Market-oriented mission statement
defines the business in terms of
satisfying basic customer needs.

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 1 Continue…
• Mission of UiTM
“To enhance the knowledge and expertise of
Bumiputeras in all fields of study through
professional programmes, research work and
community service based on moral values and
professional ethics.”

Which sentences/words identify basic

customer needs???
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2 Setting Company Objectives
and Goals

Business Marketing
objectives objectives
• Build profitable • Increase
customer market share
relationships • Create local
• Invest in partnerships
research • Increase
• Improve profits promotion
 3 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
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Example of Nestle Business Portfolio

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Example of Nestle Business Portfolio

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Example of Nestle Business Portfolio

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Example of Nestle Business Portfolio

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 Analyzing the Current
Business Portfolio

Identify key businesses (strategic business units,

or SBUs) that make up the company. An SBU can
be a company division, a product line within a
division, or sometimes a single product or brand.

Assess the attractiveness of its various SBUs

Decide how much support each SBU deserves

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 Boston Consulting Group Approach (BCG)/ SBU
Market growth rate is annual increase
in product sales or population within
a given market

Relative market share is comparing market share

of a company with that of its next
biggest competitor.

Represents SBU’s dollar sales

 Question Marks:
• These parts of a business have
Stars:
high growth prospects but a low
• The business units or products
market share.
that have the best market share
• They consume a lot of cash but
and generate the most cash.
bring little in return.
• Monopolies and first-to-
• In the end, question marks, also
market products
known as problem children, lose
• However, because of their high
money.
growth rate, stars consume large
• However, since these business
amounts of cash.
units are growing rapidly, they
• Stars can eventually become
have the potential to turn into
cash cows if they sustain their
stars.
success.

Cash Cows:
• Cash cows are the leaders
in the marketplace and
generate more cash
• The business units or
products that have a high Dogs:
market share but low growth • Dogs referred to, are units or products
prospects. that have both a low market share and
a low growth rate.
• Dogs are generally considered cash
traps.
• Stars: The business units or products that have the best market share and generate the most
cash are considered stars. Monopolies and first-to-market products are frequently termed
stars. However, because of their high growth rate, stars consume large amounts of cash. This
generally results in the same amount of money coming in that is going out. Stars can eventually
become cash cows if they sustain their success until a time when the market growth rate
declines. Companies are advised to invest in stars.
• Cash Cows: Cash cows are the leaders in the marketplace and generate more cash than they
consume. These are business units or products that have a high market share but low growth
prospects. Cash cows provide the cash required to turn question marks into market leaders,
cover the administrative costs of the company, fund research and development, service the
corporate debt, and pay dividends to shareholders. Companies are advised to invest in cash
cows to maintain the current level of productivity, or to "milk" the gains passively.
• Question Marks: These parts of a business have high growth prospects but a low market share.
They consume a lot of cash but bring little in return. In the end, question marks, also known as
problem children, lose money. However, since these business units are growing rapidly, they
have the potential to turn into stars. Companies are advised to invest in question marks if the
product has the potential for growth, or to sell if it does not
• Dogs: Dogs, or pets as they are sometimes referred to, are units or products that have both a
low market share and a low growth rate. They frequently break even, neither earning nor
consuming a great deal of cash. Dogs are generally considered cash traps because businesses
have money tied up in them, even though they are bringing back basically nothing in return.
These business units are prime candidates for divestiture.
BCG Matrix / SBU
Which product
should be
categories
under Star,
Cash Cow,
Question Mark
& Dog?
BCG Matrix / SBU
 Companywide Strategic Planning:
Boston Consulting Group Approach (BCG)
Stars are high-
growth, high-share Question marks are low-
businesses or share business units in
products requiring high-growth markets
heavy investment to requiring a lot of cash to
finance rapid growth. hold their share.
They will eventually
turn into cash cows.

Dogs are low-growth, low-

Cash cows are low- share businesses and
growth, high-share products that may
businesses or products generate enough cash to
that are established and maintain themselves but
successful SBUs do not promise to be large
requiring less investment sources of cash.
to maintain market share.
 Companywide Strategic Planning:
Boston Consulting Group Approach (BCG)

Company will starts

their investment from
successful products &
businesses (CASH
COW) to support
promising products &
businesses in faster-
growing markets (STAR
& QUESTION MARKS)
hoping to turn them
Company must decide for each SBU whether to:
into future cash cow.
1. Build
2. Hold
3. Harvest
4. Divest
 Problems with
Matrix
Approaches
• Difficulty in defining SBUs and measuring
market share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future
planning

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 Developing Strategies for Growth and
Downsizing
Is a tool for identifying company growth opportunities
through market penetration, market development, product
development, or diversification
Expansion Grid
Product/market
expansion grid
a.k.a Ansoff

Market Market
penetration development

Product
Diversification
development

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 Product/m ark et expansion grid a.k.a
Ansoff Exp ansion Grid
Is a growth strategy
increasing sales to Is a growth strategy
current market that identifies and
segments without develops new market
changing the product segments for current
(e.g.: Dell’s laptop products. (e.g.: baby
with different colors) Market Market lotion)
penetration development

Product Is a growth strategy

Diversification
development for starting up or
Is a growth strategy acquiring
that offers new or businesses outside
modified products to the company’s
existing market current products
segments and markets (e.g.:
(e.g.: i-phone, Printer > camera)
samsung) 24
 Downsizing

Downsizing is the reduction of the

business portfolio by eliminating
products or business units
that are not profitable or that no
longer fit the company’s overall
strategy
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 4 Planning Marketing
& Other Functional
Strategies
• Strategic business unit (SBU) is a unit of the
company that has a separate mission and
objectives that can be planned separately from
other company businesses:
– Company division
– Product line within a division
– Single product or brand
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 Partnering to Build Customer
Relationships

• Value chain = A series of departments that carry

out value-creating activities to design, produce,
market, deliver, and support a firm’s products. (R&D
~ Product ~ Production ~ Marketing)

• Value delivery network = made up of the

company, suppliers, distributors, and, ultimately,
customers who partner with each other to improve
performance of the entire system
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Marketing Strategy and the Marketing Mix
 Consumers stand in the center. The goal is to create value
for customers and build profitable customer relationships.
 Next comes marketing strategy—the marketing logic by
which the company hopes to create this customer value and
achieve these profitable relationships.
 The company decides which customers it will serve
(segmentation and targeting) and how (differentiation and
positioning).
 It identifies the total market, then divides it into smaller
segments, selects the most promising segments, and
focuses on serving and satisfying the customers in these
segments.
 Guided by marketing strategy, the company designs an
integrated marketing mix made up of factors under its
control—product, price, place, and promotion (the four Ps).
 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.
 Customer-Driven
Marketing Strategy
Market segmentation is the division of a market into distinct
groups of buyers who have distinct needs, characteristics, or
behavior, 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

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 Customer-Driven
Marketing Strategy

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 the target consumer.

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 Marketing Mix

Is the set of controllable tactical marketing

tools:
• Product
that the firm blends to
• Price produce the response it
wants in the target market
• Place
• Promotion
 Marketing Strategy and the
Marketing Mix

Developing an Integrated Marketing Mix

Managing the Marketing Effort
Managing the Marketing Effort

Marketing Analysis – SWOT Analysis

 SWOT ANALYSIS

STRENGTHS
List your WEAKNESSES
+ advantages List your
+ unique and low cost + disadvantages, limitations
resources What could you improve
+factors mean that you “get +factors lose you sales
the sale”

THREATS
OPPORTUNITIES
List your
List your
+ external trouble for the
+ chances to improves business
performance
+ obstacles do you face
+good opportunities can you
spot + what your competitors are
doing
 SAMPLE SWOT ANALYSIS
POSITIVE NEGATIVE

INTERNAL STRENGTHS WEAKNESSES

FACTORS
- Your specialist marketing - Lack of marketing expertise
expertise - Undifferentiated products or services
- A new, innovative product or - Location of your services
service - Poor quality goods or services
- Location of your business - Damaged reputation
- Any other aspect of your business
that adds value to your product
or service
EXTERNAL OPPORTUNITIES THREATS
FACTORS
- A developing market such as the - A new competitor in your home
internet market
- Mergers, joint ventures or - Price wars with competitors
strategic alliances - A competitor has a new, innovative
- - moving into new market product or service
segments that offer improved - Competitors have superior access
profits to channels of distributions
- A new international market - Taxation is introduced on your
- A market vacated by an product or services
ineffective competitor
 SAMPLE SWOT ANALYSIS

[Link]
Market Planning : Parts of a Marketing
Plan

Executive Marketing Threats and

summary situation opportunities

Objective and Marketing

Action programs
issues strategy

Budgets Controls
 Marketing Implementation

 Implementing is the process that turns marketing

plans into marketing actions to accomplish strategic
marketing objectives

 Successful implementation depends on how well the

company blends its people, organizational structure,
decision and reward system, and company culture into
a cohesive action plan that supports its strategies
Marketing Department Organization

Functional organization

Geographic organization

Product management organization

Market or customer management

Marketing Department Organization

Functional organization: This is the most common form

of marketing organization with different marketing
Functional functions headed by a functional specialist.
organization
Geographic organization: Useful for companies that
Geographic sell across the country or internationally.
organization Managers are responsible for developing
strategies and plans for a specific region.
Product
management Product management: Useful for companies with
organization different products or brands. Managers are responsible
Market or for developing strategies and plans for a specific product
customer or brand..
management
Market or customer management organization:
Useful for companies with one product line sold to many
different markets and customers. Managers are
responsible for developing strategies and plans for their
specific markets or customers. Customer management
involves a customer focus and not a product focus for
managing customer profitability and customer equity.
 Marketing Control

Controlling is the Control

measurement and
evaluation of results and
the taking of corrective
action as needed

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Return on Marketing Investment
(Marketing ROI)

Is the net return from a marketing

investment divided by the costs of the
marketing investment. Marketing ROI
provides a measurement of the profits
generated by investments in marketing
activities.

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Thank You For Listening
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