Summary Marketing Chapter 7 - Principles of marketing; Kotler
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Course
Marketing
Institution
Hogeschool Utrecht (HU)
Book
Principles of Marketing
Summary of Chapter 7 Principles of Marketing (Kotler, Philip, Armstrong Gary,Harris Lloyd, Piercy Nigel) 7TH Edition. All the matters that are described in the chapter are summed up and where needed explained. course: MPEN-MKG-
Complete summary of book and lectures slides of Marketing I and II
Summary Principles of Marketing IB Y2Q2
Samenvatting marketing IBS jaar 1
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International Business and Management Studies / IB
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Marketing
Chapter 2 : company and marketing strategy – partnering to build customer
relationships
Company-wide strategic planning ; defining marketing’s role
Game plan for long-run survival and growth that makes most sense in specific
situation, opportunities, objectives and resources (strategic planning).
strategic planning sets stage for planning in firm. Strategic plan involves adapting
firm to take advantage of opportunities in changing environments. At corporate level
start strategic planning by defining purpose and mission turned into detailed
objectives that guide company head quarters decide portfolio of business and
products. Marketing planning occurs at the business-unit, product and market levels
Defining a market-oriented mission
Mission: what is our business? Who is the customer? What should our business be?
Successful companies raise these questions all the time develop mission
statement that answers this purpose. Mission statement acts like invisible hand.
Mission statements should be market oriented and defined in terms of satisfying
customer needs (meaningful and motivating and should emphasise the company’s
strengths). Focus on customers and the customer experience the company seeks to
create.
Setting objectives and goals
Mission into supporting objectives for each level of management. Broad mission
leads to hierarchy of objectives. marketing strategies and programmes be developed
to support these marketing objectives.
Designing the business portfolio
Guided by mission and objectives management must make business portfolio.
Best fit for strengths and weaknesses of the company. Involves 2 steps: 1) the
company must analyse its current business portfolio and determine which business
should receive more, less or no investment 2) shape future portfolio by developing
strategies for growth and downsizing.
Analysing the current business portfolio
Major activity in strategic planning is business portfolio analysis. Put strong
resources into more profitable businesses and phase down its weaker ones.
Management first step is to identify the key businesses (strategic business units)
An SBY can by a division, product line within division or single product. Assesses the
attractiveness of SBU’s. purpose strategic planning is finding ways the company can
best use its strengths to take advantage of attractive opportunities in the
environment.
, The Boston Consulting Group Approach
Classifies all its SBUs according to
growth-share matrix.
Vertical axis measure of market
attractiveness and horizontal axis
company strength in the market. Defines
four types of SBUs:
1. Stars, high growth and high share.
Need heavy investments for rapid
growth.
2. Cash cows, low growth high share.
Established and successful.
3. Question marks, low share and high
growth. Lot of cash to hold share.
4. Dogs, low growth low share.
Generate enough to maintain
themselves.
Build, hold, harvest (milking cash flow) or divest (selling out).
Can be: difficult, time-consuming and costly to implement. Difficult to define SBUs.
Focus on classifying current business but provide little advice for future planning.
Developing strategies for growth and downsizing
Business portfolio involves finding businesses and products that should be
considered in the future. Marketing main responsibility for achieving profitable
growth. Marketing needs to identify, evaluate and select market opportunities and
establish strategies for capturing them. product/market expansion grid useful for
identifying growth opportunities.
Product/market expansion grid:
1. Market penetration
Spur growth through
marketing improvements
(product design, pricing, etc).
add direct-to-customer
distribution channels
2. Market development
3. Product development
4. Diversification
Develop strategies for downsizing their business portfolies. Grown too fas or lack
experience enter too many international markets without research or when company
introduces new products that do not offer superior value.
Planning marketing: partnering to build customer relationships
All the functional departments in each unit must work together to accomplish
strategic objectives. marketing key role in strategic planning: 1)guiding philosophy,
marketing concept 2)inputs to strategic planners by helping identify attractive market
opportunities 3)design strategies for reaching unit’s objectives.
Customer relationship management and partner relationship management are
important. Must work together to: form effective internal value chain form
competitively superior external value delivery network.
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