Marketing Strategies and plans,Marketing Strategies and plans,Marketing Strategies and plans,Marketing Strategies and plans

1. Developing Marketing Strategies
and Plans
Module 5, Marketing Management

2. Module 5: Marketing Strategies
 Developing Marketing Strategies and Plans –
Corporate And Division Strategic Planning,
 Business Unit Strategic Planning,
 Product Planning – New Product Development and
 Product Life Cycle –Stages

3. Developing Marketing Strategies and Plans
Marketing and Customer Value
The Value Delivery Process
The Value Chain
Core Competencies
The Central Role of Strategic Planning
Corporate and Division Strategic Planning

4. Marketing and Customer Value
The task of any business is to deliver customer value at a
profit. A company can win only by fine-tuning the value
delivery process and choosing, providing, and
communicating superior value to increasingly well-
informed buyers.

5. The Value Delivery Process
Instead of emphasizing making and selling, companies now see themselves as
part of a value delivery process. We can divide the value creation and delivery
sequence into three phases.
 First, choosing the value is the “homework” marketers must do before any
product exists. They must segment the market, select the appropriate target,
and develop the offering’s value positioning. The formula “segmentation,
targeting, positioning (STP)” is the essence of strategic marketing.
 The second phase is providing the value. Marketing must identify specific
product features, prices, and distribution.
 The task in the third phase is communicating the value by utilizing the
Internet, advertising, sales force, and any other communication tools to
announce and promote the product.

6. What is the Value Chain?
Harvard’s Michael Porter has proposed the value chain as a tool for
identifying ways to create more customer value.
According to this model, every firm is a synthesis of activities performed to
design, produce, market, deliver, and support its product. Nine
strategically relevant activities— five primary and four support activities—
create value and cost in a specific business.
The primary activities are (1) inbound logistics, or bringing materials into
the business; (2) operations, or converting materials into final products; (3)
outbound logistics, or shipping out final products; (4) marketing, which
includes sales; and (5) service.
Specialized departments handle the support activities—(1) procurement, (2)
technology development, (3) human resource management, and (4) firm
infrastructure. (Infrastructure covers the costs of general management,
planning, finance, accounting, legal, and government affairs.)

7. Core Business Processes
The firm’s success depends not only on how well each department performs its
work, but also on how well the company coordinates departmental activities to
conduct core business processes.
These processes include:
• The market-sensing process—gathering and acting upon information about
the market
• The new-offering realization process—researching, developing, and
launching new high-quality offerings quickly and within budget
• The customer acquisition process—defining target markets and prospecting
for new customers
• The customer relationship management process—building deeper
understanding, relationships, and offerings to individual customers
• The fulfillment management process—receiving and approving orders,
shipping goods on time, and collecting payment

8. Characteristics of Core Competencies
A source of competitive advantage
Applications in a wide variety of markets
•
•
• Difficult to imitate

9. Holistic Marketing
Key management questions are:
•Value exploration —How a company identifies new value
opportunities?
•Value creation —How a company efficiently creates more
promising new value offerings?
•Value delivery —How a company uses its capabilities and
infrastructure to deliver the new value offerings more efficiently?
Holistic Marketing sees itself as 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.

10. What is a Marketing Plan?
A marketing plan is the central instrument for
directing and coordinating the marketing effort. It
operates at a strategic and tactical level.

11. Levels of a Marketing Plan
• Strategic
• Target marketing
decisions
• Value proposition
• Analysis of
marketing
opportunities
• Tactical
• Product features
• Promotion
• Merchandising
• Pricing
• Sales channels
• Service

12. Corporate Headquarters’ Planning Activities
Define the corporate mission
Establish strategic business units (SBUs)
Assign resources to each SBU
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•
•
• Assess growth opportunities

13. Good Mission Statements
Focus on a limited number of goals
Stress major policies and values
Define major competitive spheres
•
•
•
•
•
Take a long-term view
Short, memorable, meaningful

14. Major Competitive Spheres
Industry
Products
Competence
•
•
•
•
•
•
Market segment
Vertical channels
Geographic

15. Rubbermaid Commercial Products, Inc.
“Our vision is to be the Global Market Share
Leader in each of the markets we serve. We
will earn this leadership position by
providing to our distributor and end-user
customers innovative, high-quality, cost-
effective and environmentally responsible
products. We will add value to these products
by providing legendary customer service
through our Uncompromising Commitment
to Customer Satisfaction.”

16. 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.”

17. 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.”

18. Dimensions that Define a Business
• Customer groups
• Customer needs
• Technology

19. Product Orientation vs. Market Orientation
Company Product Market
Missouri-Pacific We run a railroad
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

20. Characteristics of SBUs
• It is a single business or collection of related
businesses
It has its own set of competitors
•
• It has a manager responsible for strategic planning
and profitability

21. Assigning Resources to Each SBU
Several investment planning models provide ways to make
investment decisions as follows:
•The GE/McKinsey Matrix classifies each SBU by the extent of
its competitive advantage and the attractiveness of its industry.
Management can decide to grow, “harvest” or draw cash from,
or hold on to the business.
•Another model, BCG’s Growth-Share Matrix, uses relative
market share and annual rate of market growth as criteria to
make investment decisions, classifying SBUs as dogs, cash
cows, question marks, and stars.

23. Assessing Growth Opportunities:
Ansoff’s Product-Market Expansion Grid
Market penetration strategy
Market development strategy
Product development strategy
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•
•
• Diversification strategy

25. Business Unit
Strategic Planning

27. Business Mission
• Each business unit needs to define its specific mission
within the broader company mission. Thus, a television-
studio-lighting-equipment company might define its mission
as, “To target major television studios and become their
vendor of choice for lighting technologies that represent the
most advanced and reliable studio lighting arrangements.

28. SWOT Analysis
Strengths
Weaknesses
Opportunities
•
•
•
• Threats

29. Market Opportunity Analysis (MOA)
•
•
•
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Can the benefits involved in the opportunity be articulated
convincingly to a defined target market?
Can the target market be located and reached with cost-
effective media and trade channels?
Does the company possess or have access to the critical
capabilities and resources needed to deliver the customer
benefits?
Can the company deliver the benefits better than any
actual or potential competitors?
Will the financial rate of return meet or exceed the
company’s required threshold for investment?

30. Goal Formulation
Once the company has performed a SWOT analysis, it can
proceed to goal formulation, developing specific goals for the
planning period. Goals are objectives that are specific with
respect to magnitude and time. Most business units pursue a
mix of objectives, including profitability, sales growth, market
share improvement, risk containment, innovation, and
reputation. The business unit sets these objectives and then
manages by objectives (MBO). For an MBO system to work,
the unit’s objectives must meet four criteria:
•Unit’s objectives must be hierarchical
•Objectives should be quantitative
•Goals should be realistic
•Objectives must be consistent

31. Strategic Formulation:
Porter’s Generic Strategies
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•
•
Overall cost leadership. Firms work to achieve the lowest
production and distribution costs so they can underprice
competitors and win market share.
Differentiation. The business concentrates on achieving
superior performance in an important customer benefit
area valued by a large part of the market.
Focus. The business focuses on one or more narrow
market segments,gets to know them intimately, and
pursues either cost leadership or differentiation within the
target segment.

32. Strategic Formulation :
Marketing Alliances
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•
Product or service alliances —One company licenses
another to produce its product, or two companies jointly
market their complementary products or a new product.
Promotional alliances —One company agrees to carry a
promotion for another company’s product or service
•
•
Logistics alliances —One company offers logistical
services for another company’s product.
Pricing collaborations —One or more companies join in a
special pricing collaboration.

34.  Executive summary
 Table of contents
 Situation analysis
 Marketing strategy
 Financial projections
 Implementation controls
Marketing Plan Contents

35.  Is the plan simple?
 Is the plan specific?
 Is the plan realistic?
 Is the plan complete?
Evaluating a Marketing Plan

36. New Product
Development and
Product Life-Cycle
Strategies

37. Major Stages in New Product Development
Idea generation : systematic search for new
ideas
• Internal sources : brainstorming
• External sources : customers, competitors,
distributors and suppliers
Idea screening : identify good ideas and drop
poor ones
• Usefulness to consumers
• Good for company
• Fit with objectives and strategies
• Have the resources
• Add value

38. Major Stages in New Product Development
Concept development and concept testing :
• Concept development : detailed version of the
product concept in
meaningful consumer terms
• Concept testing : testing new-product concepts
for consumer appeal
Marketing strategy : initial strategy for product
concept :
• Target market, positioning, and sales, market
share, and profit
goals
• Price, distribution, and marketing budget
• Strategy statement, long-run sales,
profit goals, and marketing mix

39. Major Stages in New Product Development
Business analysis : review of sales, costs, and
profit projections to determine if they meet
company objectives.
Product development : developing the
product concept into a physical product
• Large investment
• Building a prototype
• Testing for safety, durability, and
acceptability

40. Major Stages in New Product Development
Test marketing : testing the product in
more realistic market settings
• Determine the target market profile
• Assess consumer acceptability, trial,
repeat purchase rate
• Evaluate trade reception and
distribution penetration
• Design effective media plans
 Standard test markets
 Controlled test markets
 Simulated test market

41. Major Stages in New Product Development
Commercialization : introducing a new
product into the market
• Introduction timing
• Market rollout or full-scale
introduction
 Sequential product development
 Simultaneous (team-based) product
development

42. Introduction to Product Life Cycle Concepts
Products, services, and processes all have a life
cycle. For products, the life cycle begins when raw
materials are extracted or harvested. Raw materials
then go through a number of manufacturing steps
until the product is delivered to a customer. The
product is used, then disposed of or recycled.
Processes also have a life cycle. The life cycle
begins with planning, research and development.
The products and processes are then designed and
constructed. A process will have an active lifetime,
then will be decommissioned and, if necessary,
remediation and restoration may occur.

43. Product Life - Cycle Template Gragh
It involves four distinct stages :
Introduction, Growth, Maturity, and Decline.
 Introduction stage : The product life-cycle
stage in which the new product is first
distributed and made available for
purchase.
 Growth stage : The product life-cycle stage
in which a product’s sales start climbing
quickly.
 Maturity stage : The stage in the product
life cycle in which sales growth slows or
levels off.
Modify the market, the product, and
the marketing mix.
 Decline Stage : The product life cycle stage
in which a product’s sales decline

44. Relationship Between Sales and Profit
in Product Life - Cycle
Product Life Cycle (PLC) : The course of a product’s sales and profits over its life

45. Introduction Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers

46. Growth Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,
warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the
mass market

47. Maturity Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defending
market share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits

48. Decline Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk
the brand
Phase out weak items
Cut price
Distribution Go selective: phase out
unprofitable
outlets
Advertising Reduce to level needed to retain
hard-core loyal customers

49. Summary of PLC
Characteristics: Introduction Growth Maturity Decline
Sales Low Rapidly rising sales Peak Declining sales
Costs High cost Average cost Low cost Low cost
per customer per customer per customer per customer
Profits Negative Rising profits High profits Declining profits
Customers Innovators Early adopters Middle majority Laggards
Competitors Few Growing number Stable number Declining number
Marketing objectives:
Create product Maximize market Maximize profit & Reduce expenditure
awareness and trial share defend market share & milk brand
Strategies:
Product Offer basic product Offer product Diversify brand and Phase out weak
extensions, service models items
Price Use cost-plus Price to penetrate Price to match or Cut price
market best competitors
Distribution Build selective Build intensive Build more Selective; phase out
distribution distribution intensive distribution unprofitable outlets
Advertising Build awareness Build awareness & Stress brand
differences
Reduce to level
needed
early adopters/dealers interest mass market and benefits to retain hard-core
loyals
Sales promotion Heavy sales
promotion
Reduce promotion
due
Increase to encourage Reduce to minimal
to entice trial to heavy demand brand switching level