POM principle of marketing

1. This chapter will explain:
 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.

2. This chapter will explain:
 Describe the elements of a customer value–
driven marketing strategy and mix and the
forces that influence them.
 List the marketing management functions, and
discuss the importance of measuring and
managing marketing return on investment.

3.  Strategic planning is the process of developing and
maintaining a strategic fit between the organization’s
goals and capabilities and its changing marketing
opportunities.
 Companies usually prepare annual plans, long-range
plans, and strategic plans. The annual and long range
plans deal with the company’s current businesses and
how to keep them going. In contrast, the strategic plan
involves adapting the firm to take advantage of
opportunities in its constantly changing environment.

4. Hormuud strategic planning
Goal or
mission capability
market
opportunit
y
• To deliver superior products and
services that create value for all
of our customers, stakeholder
and improve the lives of the
communities we serve
• Market opportunity
construction market is
booming in Somalia so let
us grab it (alburuuj)

5.  Defining the company mission
 Setting company objectives and goals
 Designing the business portfolio
 Planning marketing and other functional
strategies

6.  A mission statement is a statement of the
organization’s purpose—what it wants to
accomplish in the larger environment. A clear
mission statement acts as an “invisible hand” that
guides people in the organization.
 mission statements should be market oriented
and defined in terms of satisfying basic customer
needs

7.  The company needs to turn its broad mission
into detailed supporting objectives for each
level of management. Each manager should
have objectives and be responsible for
reaching them.

8.  Guided by the company’s mission statement
and objectives, management now must plan
its business portfolio.
 business portfolio— is the collection of
businesses and products that make up the
company.

9.  Business portfolio planning involves two
steps. First, the company must analyze its
current business portfolio and determine
which businesses should receive more, less,
or no investment. Second, it must shape the
future portfolio by developing strategies for
growth and downsizing.

10.  portfolio analysis The process by which
management evaluates the products and
businesses that make up the company.
 The company will want to put strong
resources into its more profitable businesses
and phase down or drop its weaker ones.

11.  Help company recognize where they should
invest.
 cut cost
 improve overall business

12.  The best-known portfolio-planning method was
developed by the Boston Consulting Group.
 BCG uses growth-share matrix A portfolio-
planning method that evaluates a company’s
SBUs in terms of market growth rate and relative
market share.

14.  Stars are high-growth, high-share businesses or products. They often
need heavy investments to finance their rapid growth. Eventually their
growth will slow down, and they will turn into cash cows.
 Cash cows are low-growth, high-share businesses or products. These
established and successful SBUs need less investment to hold their
market share. Thus, they produce a lot of the cash that the company
uses to pay its bills and support other SBUs that need investment.
 Question marks. Question marks are low-share business units in high-
growth markets. They require a lot of cash to hold their share, let alone
increase it. Management has to think hard about which question marks it
should try to build into stars and which should be phased out.
 Dogs are low-growth, low-share businesses and products.

16.  Market penetration Company growth by increasing sales of current
products to current market segments without changing the product.
 Market development Company growth by identifying and developing
new market segments for current company products.
 product development Company growth by offering modified or new
products to current market segments.
 Diversification Company growth through starting up or acquiring
businesses outside the company’s current products and markets.

17.  The major functional departments in each unit—marketing,
finance, accounting, purchasing, operations, information
systems, human resources, and others—must work together
to accomplish strategic objectives.

18.  First, marketing provides a guiding philosophy—the
marketing concept—that suggests the company strategy
should revolve around creating customer value and building
profitable relationships with important consumer groups.
Second, marketing provides inputs to strategic planners by
helping to identify attractive market opportunities and
assessing the firm’s potential to take advantage of them.
Finally, within individual business units, marketing designs
strategies for reaching the unit’s objectives.

19.  Marketing strategy The marketing logic by which the
company hopes to create customer value and achieve
profitable customer relationships.

20. The goal of marketing strategy is to create value for customers and build
profitable customer relationships.
differentiation and positioning
what customers will we serve
segmentation and targeting
How can we best serve
1:demographic: age,gender,income
2:geographic 3: psychographic
4:behavioral segmentation

21.  Demographic Segmentation of Coca Cola
 Age. Coca Cola targets youngster from 15 to 25 years old.
 Gender. Both Men and Women on the target list of the company.
 Income. The income level segments include different packing, for example,
returnable glass bottles, plastic bottles and Tins with different pricing
strategies.
 Geographic Segmentation of Coca Cola
 Asia, America, Europe, and Africa, Australia
 Psychographic Segmentation of Coca Cola
 Diet Coke for those who are health conscious people Coke also provide a
variety of energy drinks who need energy specially in sport Real Gold targets
busy people in offices
 Behavioral Segmentation of Coca Cola Occasions like wedding, festivals,
birthdays etc. Benefit sought. Drink to quench thirst and to refresh

22.  Market segmentation Dividing a market into distinct groups
of buyers.
 Market targeting Evaluating each market segment’s
attractiveness and selecting one or more segments to serve.
 Differentiation Actually differentiating the market offering to
create superior customer value.
 positioning Arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing
products in the minds of target consumers

23.  Marketing mix The set of tactical marketing tools— product,
price, place, and promotion— that the firm blends to produce
the response it wants in the target market.
 Product means the goods-and-services combination the
company offers to the target market
 Price is the amount of money customers must pay to obtain
the product.
 Place includes company activities that make the product
available to target consumers.
 Promotion refers to activities that communicate the merits of
the product and persuade target customers to buy it.

24.  Managing the marketing requires the five marketing
management functions
 Analysis
 Planning
 implementation
 organization, and
 control.

25.  Managing the marketing function begins with a complete
analysis of the company’s situation. The marketer should
conduct a SWOT analysis
 Strengths: Internal capabilities that may help a company
reach its objectives
 Weaknesses: Internal limitations that may interfere with a
company’s ability to achieve its objectives.
 Opportunities External factors that the company may be able
to exploit to its advantage
 Threats Current and emerging external factors that may
challenge the company’s performance

26.  the main components of a marketing plan are the executive
summary, the current marketing situation, threats and
opportunities, objectives and issues, marketing strategies,
action programs, budgets, and controls. Planning good
strategies is often easier than carrying them out.
 To be successful, companies must also be effective at
implementation—turning marketing strategies into marketing
actions.

27.  marketing control—evaluating results and taking corrective
action to ensure that the objectives are attained
 Marketing organizations carry out marketing control, both
operating control and strategic control.

28.  Marketing ROI can be difficult to measure. But marketers use
two types of measurement when assessing marketing return
on investment:
 standard marketing performance measures, such as brand
awareness, sales, or market share.
 customer-centered measures, such as customer acquisition,
customer engagement, customer experience, customer
retention, customer lifetime value, and customer equity.