Principles of Marketing Essay

1910 Words Oct 30th, 2012 8 Pages
Summary of Key Points for Chapter 2

Chapter Objectives:

1. Explain companywide strategic planning and its four steps. 2. Discuss briefly how to design business portfolios and develop growth strategies. 3. Explain marketing’s role under strategic planning and how marketing works with its partners to create and deliver customer value. 4. Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it. 5. List the marketing management functions, including the elements of a marketing plan.

COMPANYWIDE STRATEGIC PLANNING: DEFINING MARKETING’S ROLE

The task of selecting an overall company strategy for long-run survival and growth is called strategic planning. Companies
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Marketing strategies and programs must be developed to support these marketing objectives.

3. Designing the Business Portfolio
A business portfolio is the collection of businesses and products that make up the company.

The best portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment. The major activity in strategic planning is business portfolio analysis, whereby management evaluates the products and businesses making up the company.

A strategic business unit (SBU) is a unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.

The next step in business portfolio analysis calls for management to assess the attractiveness of its various SBUs and decide how much support each deserves.

Most standard portfolio-analysis methods evaluate SBUs on two important dimensions – the attractiveness of the SBU’s market or industry and the strength of the SBU’s position in that market or industry.

The Boston Consulting Group Approach: The best-known portfolio-planning method was developed by the Boston Consulting Group (Figure 2.2, pg. 66).

The company can invest more in the business unit in order to grow its share. It can invest just enough to hold the SBU’s share at the current level. It can harvest the SBU, milking its short-term cash flow regardless of the long-term effect. Or it can divest the SBU by selling it or phasing it

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