The document discusses developing marketing strategies and plans. It covers topics such as marketing and customer value, Porter's value chain model, core competencies, strategic planning, and developing a marketing plan. Specifically, it discusses defining a company's mission and strategic business units, analyzing SBUs, assigning resources, assessing growth opportunities, and developing strategies for growth and downsizing. The importance of strategic planning for a company's different business units is emphasized.

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2Developing Marketing Strategies and Plans
1Marketing and Customer Value
•Marketing creates and delivers CV at a profit.
•A company can win only by:
–fine-tuning the value delivery process, and
–choosing, providing, and communicating superior value
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-2Value Delivery Process
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The Value Chain
•Michael Porter proposed the value chain is a tool for identifying ways to create more CV
–Every firm is a synthesis of primary and support activities performed to design, produce, market, deliver, and support its product.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-4Michel Porter‘s Value Chain
Infrastructure covers the cost of general management, planning, finance, accounting, legal, and government affairs
Benchmarking Costs and PerformanceCompany‘s costs and performance measuresCompetitors‘ costs and performance measures
•To create more CV each firm compares its costsand performanceof each value-creating activity with those of competitors and look for ways to improve it
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Core Business ProcessesMarket sensingFulfillmentmanagementCustomer acquisition
New offering
realization
Customer
relationship
management
•Firm‘s success depends on:
–how well each department performs its work and
–how well the firm coordinates departmental activities to conduct core business processesCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-7Core Competencies
•Why does a firm produce its own products or import from offshore manufactures?
–It‘s all about core competencies (skills, experiences, resources, and technologies)
•3 characteristics of core competency :
–A source of competitive advantage
–Applications in a wide variety of settings
–Difficult to imitate
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Maximizing Core Competencies
•Three steps of realignment to maximize core competencies:
–(Re)define the business concept or ‗big idea‘
–(Re)shape the business scope
–(Re)position the company‘s brand identity
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-9Becoming a Vigilant Marketing Organization
•Can we learn from the past?
•How should the present be evaluated?
•What do we envisage for the future?
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A Holistic Marketing Orientation and Customer Value
•Holistic marketing can ensure superior CV
•Holistic marketers address three management questions:
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-11What value opportunities are available? How to create new value offerings efficiently?
How to deliver the new offerings efficiently?
Value ExplorationValue CreationValue DeliveryA Holistic Marketing Framework and Customer ValueNOT FOR EXAMINATIONNOT EXAMINATION

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3What is Strategic Planning?
•An organization's process of defining its strategy or direction, and making decisionson allocating its resources to pursue this strategy
–Deals with setting vision, mission, goals, and objectives
–Maintains a viable fit between the organization's objectives, skills and resources, and its changing market opportunities
–Set by and for top management
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-13The Central Role of Strategic Planning
•Marketers must focus on 3 key areas:
(a)Managea company‘s different business units,
(b)Assesseach unit by considering its growth, opportunities and challenges and company‘s position, and
(c)Set suitable strategies
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-14Four organizational levels of most large companies
•Four organizational levels:
–Corporate level− guides the whole enterprise
–Division level− allocates funds to each division and decides which business to start/drop
–Business unit level− carries each business unit into a profitable future
–Product level− achieves its objectives in its product market
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-15Marketing Plan
–Strategic plan lays out the target markets and the firm‘s value proposition, based on an analysis of the best market opportunities.
–Tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service
•Marketing plan is the central instrument for directing andcoordinating the marketing effort
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-16Figure 2.1 The Strategic Planning, Implementation, and Control ProcessesCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-17Corporate Headquarters’ Four Planning Activities
•Define the corporate mission
•Establish strategic business units (SBUs)
•Assign resources to each SBU
•Assess growth opportunities
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Define the corporate mission
• A statement of the organization‘s purpose
− A clear mission statement provides a shared
sense of purpose, direction, and opportunity.
− Acts as an invisible hand to guide employees
− Can be changed to take advantage of new
opportunities
− Should be short, meaningful, and memorable
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Characteristics of Mission Statements
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 Copyright 1998 Prentice Hal l
22-3-3
Market
Oriented
Market
Oriented
Fit Market
Environment
Fit Market
Environment
MMoottiivvaattiinngg RReeaalliissttiicc
Distinctive
Competencies
Distinctive
Competencies
SSppeecciiffiicc
Characteristics
of Good Mission
Statements
Characteristics
of Good Mission
Statements
MMiissssiioonn SSttaatteemmeennttss
Product Orientation vs.
Market Orientation
Company Product Market
Missouri-Pacific
Railroad
We run a railroad We are a people-and-
goods mover
Xerox We make copying
equipment
We improve office
productivity
Standard Oil We sell gasoline We supply energy
Columbia Pictures We make movies We entertain
people
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Address Peter Drucker‘s Classic
Questions to Define Mission
What is our business?
Who is the customer?
What do consumers value?
What should our business be?
What will our business be?
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Google
Vague mission
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Mission of Motorola
―The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.‖
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Mission of eBay
―We help people trade anything on earth.
We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.‖
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Establish Strategic Business Units
(SBUs)
• Define business in terms of customer-satisfying
process
• A business can be defined in 3 dimensions:
−What customer groups you serve?
−What customer needs you address?
−What technology you use to satisfy customer
needs?
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Three Characteristics of SBUs
• It is a single business or collection of related
businesses
• It has its own set of competitors
• It has a leader responsible for strategic
planning and profitability
− Different SBUs need separate growth strategies and
varying amount of resources
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The Kate Spade brand allows Liz Claiborne to
attract a more youthful customer
Liz Claiborne‘s ―The Kate Spade
Brand‖- A SBU
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Analyze Each Current SBU: BCG
Approach
Analyze Each Current SBU: GE
Approach
Competitive position
Low
Winner
Medium
High
Good
Competitive position
1. Market share
2. Technological know-how
3. Product quality
4. Service network
5. Price competitiveness
6. Operating costs
Industry attractiveness
1. Market growth
2. Market size
3. Capital requirements
4. Competitive intensity
Medium Poor
Winner
Profit
producer
Winner
Average
business
Loser
Question
mark
Loser
Loser
Industry growth rate

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•Difficulty in defining SBUs and measuring market share and growth
•Time consuming and expensive
•Focus on current businesses, not future planning
•Fail to show the synergies between two/more SBUs
Problems with Matrix ApproachesCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-31
•After identifying and assessing each SBU, assign appropriate resources
•Choose any of the following resource allocation strategies:
–Build (more investment)
–Hold (status quo)
–Harvest (less investment)
–Divest (withdrawal)
Assign Resources to Each SBU
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Figure 2.2 The Strategic Planning Gap
Assess Growth Opportunities
1.Grow within current businesses
2.Build or acquire related businesses
3.Add attractive unrelated businesses
1.
2.
3. Ansoff‘sProduct/Market Expansion GridCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-34Develop Strategies for Growth and Downsizing
•Product/market expansion grid is a tool for identifying company growth opportunities through:
Growth Strategy of Starbucks
•Starbucks has designed an ambitious, multi-pronged growth strategy to maintain its phenomenal growth
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•Market penetration: Make more sales to current customers without changing products
•Market development: Identify and develop new markets for current products
•Product development: Offer modified or new products to current markets
•Diversification: Start up or buy businesses outside current products and markets
Growth Strategy of Starbucks
–How? Add new stores in current market areas; improve ad, prices, menu, service, attract competitors‘ customers.
–How? Review new demographic (seniors/ethnic consumers) or geographic (Asian, European, & South American) markets; convert non-users to users in current market.
–How? Add food offerings, sell coffee in supermarkets, co-brand products in current markets.
–How? Make and sell CDs, testing restaurant concepts, or branding casual clothing
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Intensive
Growth
Integrative Growth
Diversification Growth
Market
penetration
Backward integration
Concentric diversification
Market
development
Forward integration
Horizontal
diversification
Product-development strategy
Horizontal integration
Conglomerate
diversification
Details of Three Growth OpportunitiesCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-37
Backward Integration
–Acquire one or more supplies to gain more business/controlForward Integration
–Acquire one or more wholesalers or retailers to gain business/controlHorizontal Integration
–Acquire one or more competitors to gain more business/control
Integrative Growth Opportunities
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-38Concentric Diversification
–Seek new products that have technological and/or marketing synergies with existing product lines
Horizontal Diversification
–Search for new products that are technologically unrelated to its current product linesConglomerate Diversification
–Seek new businesses that have no synergies of technology and marketing
Diversification Growth OpportunitiesCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-39
Organization and Organizational Culture
•Strategic planning is done within the context of a company’s structures, policies, and corporate culture
–These three can be dysfunctional due to changing environment
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Business Unit Strategic Planning ProcessCopyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-41The Business Mission
•Each business unit needs to define its specific mission within broader company mission
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8SWOT AnalysisA formal framework for identifying and framing organizational growth opportunities.
StrengthstrengthsWeaknesseseaknesses
InternalInternalCapabilitiesCapabilities
OpportunitiespportunitiesExternalExternalEnvironmentEnvironmentThreatshreatsOrganizationFavorable
Unfavorable
-Type of Factor -
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-43A Sample SWOT Analysis Framework
StrengthstrengthsWeaknesseseaknesses
InternalFactors
Opportunitiespportunities
ExternalFactorsThreatshreatsManagementManagementMarketingMarketing
ManufacturingManufacturing
R&DR&D
FinanceFinance
OfferingsOfferings
EconomicEconomic
CompetitionCompetition
ConsumerConsumer
TechnologyTechnology
Legal/RegulatoryLegal/Regulatory
Industry/MarketIndustry/MarketStructureStructure
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-44Goal Formulation
•Goals are objectives that are specified with respect to magnitude and time
–Most business units pursue a mix of objectives
–Set objectives and then manage by objectives (MBO)
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Goal Formulation
•Unit‘s goals/objectives must meet four criteria:
–Unit‘s objectives must be hierarchical
–Objectives should be quantitative
–Goals should be realistic
–Objectives must be consistent
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•Strategy is a game plan for achieving goals
•Strategy may consist of:
–a marketing strategy
–a compatible technology strategy
–a sourcing strategy
Strategic Formulation
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Porter‘s Generic StrategiesOverall Cost Leadership
DifferentiationFocusAccording to Porter, firms directing the same strategy to the same target market constitute a strategic group.
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The Star Alliance
Strategic alliances can be formed to become effective
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NOT FOR EXAMINATIONNOT EXAMINATIONCategories of Marketing Alliances
Product or Service AlliancesPromotional AlliancesLogistics Alliances
Pricing Collaborations
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•Work out detailed support programs
•Estimate their costs
•Consider the impact on the interests of all stakeholders
•Ensure flawless execution
Program Formulation and Implementation
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•Track the results and monitor new developments
•Some environments are stable; some are not
•Strategic fit erodes due to these changes
•Respond to the changes and adopt new goals and behaviors
Feedback and Control
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McKinsey’s Elements of SuccessStrategyStructure
Systems
Style
Shared valuesStaff
Skills
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-53Marketing Plan Contents
Executive summary
Table of contents
Situation analysis
Marketing strategy
Financial projections
Implementation controls
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10Evaluating a Marketing Plan
Is the plan simple?
Is the plan specific?
Is the plan realistic?
Is the plan complete?
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Marketing Debate
Q-1: What good is a mission statement? Take a position: 1. Mission statements are critical to a successful marketing organization. 2. Mission statements rarely provideuseful marketing value.
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Marketing Debate
What implications do Porter‘s value chain and the holistic marketing orientation model have for marketing planning? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall2-57