MSMK7001 Chap.2 Company Strategy and Marketing's Role in Planning
Company Strategy and Marketing's Role in Planning
Planning runs from the top down
Strategic planning keeps a fit between what an organization wants and can do and the opportunities that keep changing around it. The course sets it out as four steps: define the mission, set objectives, design the business portfolio, and plan marketing strategies for each unit.
Marketing's detailed work comes last, but it supplies the customer view at every step, and a plan that ignores the steps above it will not be approved or funded.
Testing a mission statement
A usable mission is market oriented, motivating, realistic and specific, rests on distinctive competencies and fits the environment.
It also answers three questions: who the key market is, what contribution is offered to it, and what distinction makes that market choose this firm.
The lecture presents three well-known corporate missions for students to judge against these tests, and it contrasts product-oriented self-descriptions with market-oriented ones that describe a customer-satisfying process.
Judging the businesses a company already has
Portfolio analysis evaluates the strategic business units that make up a company.
The growth-share matrix places each unit by market growth rate and relative share, giving stars, cash cows, question marks and dogs, and the classic approach moves cash from mature units to promising ones.
The course lists its strengths in guiding allocation and its limits: hard-to-get competitive data, cost, only two dimensions, and weakness when markets are disrupted.
Finding growth, then managing the effort
The product/market expansion grid looks forward, crossing existing and new products with existing and new markets into penetration, market development, product development and diversification.
Within each unit, marketing chooses targets through segmentation, targeting and positioning, and builds a mix of product, price, place and promotion, which from the buyer's side reads as solution, cost, convenience and communication. SWOT and the return on marketing investment are the tools for managing that effort.
What this chapter covers
- 01
The four strategic planning steps
- 02
Three components of a mission statement
- 03
Product orientation against market orientation
- 04
Business and marketing objectives
- 05
Strategic business units and portfolio analysis
- 06
The growth-share matrix and its limits
- 07
The product/market expansion grid
- 08
Four Ps, four Cs, SWOT and marketing ROI
Worked example · free
Place four business units and decide where cash should go
- 4Place each unit in the growth-share matrix.
- 2Recommend where cash should be generated and where it should be invested.
- 2State one limit of relying on the matrix for this decision.
Key terms
- Strategic Planning
- Matching what an organization aims for and can do with market opportunities that keep changing, and keeping that match over time.
- Mission Statement
- A statement of an organization's purpose, expected to be market oriented and to name its key market, its contribution and its distinction.
- Business Portfolio
- Every business and product a company holds, taken together and evaluated through portfolio analysis.
- Strategic Business Unit
- A company division, product line or single brand with its own mission, competitors and plans, analyzed as a unit in portfolio planning.
- Growth-Share Matrix
- A portfolio-planning method that evaluates business units by market growth rate and relative market share, sorting them into stars, cash cows, question marks and dogs.
- Product/Market Expansion Grid
- A tool that identifies growth opportunities by crossing existing and new products with existing and new markets.
- Marketing Mix
- The tactical levers a firm controls, product, price, place and promotion, combined to draw the reaction it wants from its target market.
- Marketing ROI
- The net return from a marketing investment divided by the cost of that investment.
Company Strategy and Marketing's Role in Planning FAQ
What are the three essential parts of a mission statement?
The course names the key market, meaning who the target customers are; the contribution, meaning the product or service provided to them; and the distinction, meaning what makes it unique enough that customers choose this firm. A mission missing any of these gives managers no way to rule an opportunity in or out.
What are the weaknesses of the BCG matrix?
The lecture lists four. Competitive information is difficult to obtain, the analysis is slow and expensive, only two dimensions are considered, and it may not apply well in markets facing structural change or disruption. Many companies have therefore moved to customized approaches that suit their own situation rather than a single formal matrix.
How do the four Cs relate to the four Ps?
They are the same mix seen from the buyer's side. Product becomes customer solution, price becomes customer cost, place becomes convenience and promotion becomes communication. The course raises them as a warning that the four Ps take the seller's view, which is useful when a plan's tactics look coherent to the company but not to the customer.
Assessment move
Draw the growth-share matrix and the expansion grid from memory, then place the units of one company you know, such as a conglomerate listed in Hong Kong, on both. Write one sentence per unit saying what the matrix recommends and one saying what it cannot see. That pairing of recommendation and limit is what separates analysis from description in the case report.
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