Summary of Marketing Management, 11Ed. Chapter 2


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Phil Kotler, Kevin Keller and Abraham Koshy

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Summary of Marketing Management, 11Ed. Chapter 2

  1. 1. logo copy.tif Supply Chain Many companies today outsource less critical resources if they can obtain better quality or lower cost. Also, many companies partner with specific suppliers and distributors to create a superior value delivery network, also known as Supply Chain. Developing Marketing Strategies And Plans Chapter 2 The Value Delivery Process Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by In this chapter, mainly the following points have been discussed • How does marketing affect customer value? • How is strategic planning carried out at different levels of the organization? • What does a marketing plan include? Developing the right marketing strategy over time, through discipline and a creative thought process can go a long way in the marketing management process. Firms must constantly strive to improve every aspect of their strategy and the plans to guide the marketing process. In the new view of business processes, marketing is viewed at the beginning of the planning stage. A smart competitor must design and deliver products for well-defined micro-markets and cater to their specific wants, perceptions and preferences. The Value Creation and Delivery Sequence can be divided into two segments of marketing: Strategic Marketing and Tactical Marketing. Core Competencies Core Competency refers to areas of special technical and production expertise, whereas distinctive capability describes excellence in broader business processes. Market-driven organizations generally excel in three distinctive capabilities: market sensing, customer linking and channel bonding.
  2. 2. Holistic Marketing Holistic marketing orientation means, integrating the value exploration, value creation and value delivery activities with the purpose of building long-term, mutually satisfying relationships and co-prosperity among key stakeholders. It helps manage a superior value chain that delivers a high level of product quality, service and speed, in addition to expanding customer share, building customer loyalty and capturing customer lifetime value. The value chain is a tool which is used for identifying ways to create more customer value. There are 9 strategically relevant activities – 5 primary and 4 support. Chapter 2 - Developing Marketing Strategies And Plans Companies need to focus on the customer and organize to respond effectively to their changing needs, to be known as master marketers. The marketing plan is the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels: strategic and tactical. • The strategic marketing plan lays out the target markets and the value proposition the firm will offer, based on an analysis of the best market opportunities. • The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels and service. A firm must coordinate all the department activities to conduct its core business processes, through cross-functional teams • Market-sensing process • New-offering realization process • Customer Acquisition process • Customer Relationship Management Process • Fulfillment Management Process Strategic Planning Value Chain Corporate Headquarters All corporate headquarters undertake four planning activities • Defining the corporate mission • Establishing strategic business units • Assigning resources to each Strategic Business Unit • Assessing growth opportunities Innovation in marketing is critical. Senior management should identify and encourage fresh ideas from a youth perspective, from people new to the field and organization, to gain an understanding and a new approach to marketing.
  3. 3. The best Mission Statement reflects a vision, an almost impossible dream that provides a direction for the company for the next 10 or 20 years. A good mission statement focuses on limited number of goals, links the company’s policies and values and gives a long term view. It is as short, relevant and meaningful as possible. Chapter 2 - Developing Marketing Strategies And Plans Mission Statement Business Unit Strategic Planning The Business Unit Strategic Planning process consists of the following steps 1. The Business Mission: Each business unit needs to define its specific mission within the broader company mission. 2. SWOT Analysis: The overall analysis of a company’s Strengths, Weaknesses, Opportunities and Threats is called SWOT analysis. It is a way of monitoring the external and internal marketing environment. To evaluate opportunities, companies can use Market Opportunity Analysis. 3. Goal Formulation: Developing specific goals for a short term is known as Goal Formulation. They are specific with respect to magnitude and time. Goals must be consistent and realistic and could be a mix of various objectives. 4. Strategy Formulation: Strategy is a game plan for achieving the goals. It consists of a Marketing Strategy, Technology Strategy and a Sourcing Strategy. 5. Program Formulation: The unit must plan programs in accordance with its goals and strategy and thus work upon the various departments, to strengthen them and integrate all of them together. 6. Implementation: Even a great marketing strategy can be sabotaged by a poor implementation. It must coordinate its tasks to implement its plan properly. These tasks must be in line with the interests of the stakeholders as well. 7. Feedback and Control: The key to organizational health is willingness to examine the changing environment and adopt new goals and behaviors. In the rapidly changing market environment, even large organizations which are subject to inertia can be changed through strong leadership. Strategic Business Unit A Strategic Business Unit is a single business (or a collection of similar businesses) that can be planned separately from the rest of the company. By identifying the company’s SBUs, it is easy to develop separate strategies and assign appropriate funding.