Company and Marketing Strategy

marketing fundamentals -- part 2 -- summary

Partnering to Build Customer Relationships

Companywide Strategic Planning

Strategic planning sets the stage for the rest of the company's planning. Marketing contributes to strategic planning, and the overall plan defines marketing's role in the company. Although formal planning offers a variety of benefits to companies, not all companies use it or use it well. Although many discussions of strategic planning focus on large corporations, small businesses also can benefit greatly from sound strategic planning.

Strategic planning involves developing a strategy for long-term survival and growth. It consists of four steps: defining the companies mission, setting the objectives and goals, developing a business portfolio, and developing functional plans. Defining a clear company mission begins with drafting a formal mission statement, which should be market-oriented, realistic, specific, motivating, and consistent with the marketing environment. The mission is then transformed into detailed supporting goals and objectives to guide the entire company. Based on those goals and objectives, headquarters designs a business portfolio, deciding which businesses and products should receive more or fewer resources. In turn, each business and product unit must develop detailed marketing plan's in line with a companywide plan. Comprehensive and sound marketing plans support company strategic planning by detailing specific opportunities.

Business Portfolios

Guided by the companies mission statement and objectives, management plans its business portfolio, or the collection of businesses and products that make up the company. The firm wants to produce a business portfolio that best fits its strengths and weaknesses to opportunities in the environment. To do this, it must analyze and adjust its current business portfolio and development growth in downsizing strategies for adjusting the future portfolio. The company might use a formal portfolio planning method. But many companies are now designing more customized portfolio planning approaches that better suit their unique situations. The product/market expansion grid suggest for possible growth paths: market penetration, market development, product development, and diversification.

Marketers Partners

Under the strategic plan, the major functional departments -- marketing, finance, accounting, purchasing, operations, information systems, human resources, and others -- must work together to accomplish strategic objectives. Marketing plays a key role in the companies strategic planning by providing a marketing concept philosophy and inputs regarding attractive market opportunities. Within individual business units, marketing designs strategies for reaching the units objectives and helps to carry them out profitably.

Marketers alone cannot produce superior value for customers. It can be only a partner in attracting, keeping, and growing customers. A company's success depends on how well each department performs its customer value adding activities and how well the departments work together to serve the customer. Thus, marketers must practice partner relationship management. They must work closely with partners and other company departments to form an effective value chain that serves the customer. And they must partner effectively with other companies in the marketing system to form a competitively superior value delivery network.

Customer driven marketing strategy and mix

Consumer relationships are at the center of marketing strategy and programs. Through market segmentation, target marketing, and market positioning, the company divides the total market into smaller segments it can serve best, and besides how it wants to bring value to target consumers. It then designs a marketing mix to produce the response it wants in the target market. The marketing mix consists of product, price, place, and promotion decisions.

Marketing Management Functions

To find the best strategy and mix and to put them into action, the company engages in marketing analysis, planning, implementation, and control. The main components of a marketing plan are the executive summary, current marketing situation, threats and opportunities, objectives and issues, marketing strategies, action programs, budgets, and controls. To plan good strategies is often easier than to carry them out. To be successful, companies must also be effective at implementation -- turning marketing strategies into marketing actions.

Much of the responsibility for implementation goes to the companies marketing department. Modern marketing departments can be organized in one or combination of ways: functional marketing organization, geographic organization, product management organization, or market management organization. In this age of customer relationships, more and more companies are now changing their organizational focus from product or territory management to customer relationship management. Marketing organizations carry out marketing control, both operating control and strategic control. They use marketing audits to determine marketing opportunities and problems, recommending short run and long run actions to improve overall marketing performance. Through these activities, the company watches and adapts to the marketing environment.