Chapter

2
Developing
Marketing
Strategies and
Plans

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Learning Objectives
1. How does marketing affect customer
value?
2. How is strategic planning carried out at
the corporate and divisional levels?
3. How is strategic planning carried out at
the business unit level?
4. What does a marketing plan include?

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 Marketing and customer
Value
The value delivery process

The value chain

Core competencies

The central role of strategic planning

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The value delivery process/
value creation is:
CHOOSING THE/ segment, select
target, develop offering value
proposition,

PROVIDING THE VALUE/ identify

product feature, price, distribution.

COMMUNICATING THE VALUE/

promoting through internet,
advertising, sales force.

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 The Value chain
A tool for identifying ways to create more
customer value/ adding up values from
raw material to finished product.
Every firm is a synthesis of activities performed to
design, produce, market, deliver, and support its
product.
Related strategic activities:
1. inbound material logistics to business. 2. operations.
3. outbound final product logistics to customers. 4.marketing
5. services provided. 6. HRM 7. arrangement 8. technology
9. infrastructure: costs of mgt, planning, finance, legal.
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 Core business processes
Market-sensing process/ market discovery
New-offering realization process/ research
and develop the product, offer the product/
sampling test (pre commercialization).
Customer acquisition process/ look after the
target, gain and retain your customers.
Customer relationship management
process/ build up deep understanding of
customers, and a long lasting relationship.
Fulfillment management process/marketing,
receiving orders, shipping, follow-up,
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 Core competencies/ the
competitive advantage
A source of competitive advantage and
makes a significant contribution to
perceived customer benefits
Applications in a wide variety of markets
Difficult for competitors to imitate
Competitive advantage in:
the product. Human, channels, services,
technology.
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 Steps to Maximizing Core
competencies
(Re)define the business concept/ review
business philosophy, mission and vision.

(Re)shaping the business scope/ redesign

your business in terms of product and
market.

(Re)positioning the companys brand identity/

Redesign value if it was changed.
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 Central role of strategic
planning
Managing the businesses as an
investment portfolio
Assessing the markets growth rate and
the companys position in that market
Establishing a strategy
Organization is consisting of four levels:
Corporate: design the overall strategy.
Division: to design plans for the business units.
Business unit: to design plans for the product.
product line.
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 Marketing plan
The central instrument for directing
and coordinating the marketing effort

Strategic: Target decisions, Value proposition,

market opportunities. Done by the corporate
level.,
Tactical: the Ps decisions.

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 Figure 2.1
Strategic Planning,
Implementation, and Control
Processes

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2016 Pearson INC.
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 Corporate and division
strategic planning
Defining the corporate mission GM

Establishing strategic business units/

Buick

Assigning resources to each strategic

business unit

Assessing growth opportunities

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 Defining the
corporate mission
What is our business?
Who is the customer?
What is of value to the customer?
What will our business be?
What should our business be?
Major competitive spheres:
industry. Product. Competence. Market
segment. Channels. Geographic
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 Product Orientation vs.
Market Orientation
Company Product Market
Missouri-Pacific We run a railroad We are a people-
Railroad and-goods mover

Xerox We make copying We improve office

equipment productivity

Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We market

entertainment

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 Good Mission statements
Focus on a limited number of goals
Stress the companys major policies
and values
Define the major competitive spheres
within which the company will operate
Take a long-term view
Are as short, memorable, and
meaningful as possible

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 Establishing Strategic
Business Units
A single business or collection of
related businesses/ Buick in GM.

Has its own set of competitors

Has a leader responsible for strategic

planning and profitability/ Officer.

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 Assigning Resources
to Each SBU
Management must decide how to
allocate corporate resources to each
SBU

Portfolio-planning models

Shareholder/market value analysis

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Assessing growth
opportunities

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 Assessing growth
opportunities
Intensive Growth

Integrative Growth

Diversification Growth

Downsizing and Divesting Older

Businesses
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 Intensive growth
Corporate management
should first review
opportunities for improving
existing businesses.
Market penetration st.
market development st.
Product development st.

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 Figure 2.3
ESPN Growth Opportunities

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 INTEGRATIVE GROWTH
A business can increase sales and
profits through backward, forward, or
horizontal integration within its
industry.
Backward: take over supplier.
Forward: take over distributors.
Take over rivals.
All are based on acquisition
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 Diversification growth
Diversification growth makes sense
when good opportunities exist outside
the present businesses/ or current
industry in saturated.

The industry is highly attractive and the company

has the right mix of business strengths to succeed
Related product st.
Unrelated product st.

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 Downsizing and Divesting
Older Businesses
Companies must carefully prune (cut
of), harvest, or divest tired old
businesses to release needed resources
for other uses and reduce costs/ most
likely economic, or tough competition.

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 Organization and
Organizational Culture
A companys organization consists of its
structures, policies, and corporate culture,
all of which can become dysfunctional in a
rapidly changing business environment

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 Organization and
Organizational Culture
Corporate culture: The shared
experiences, stories, beliefs, and norms
that characterize an organization,
values, the founder.

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 Marketing Innovation
Innovation in marketing is critical

Employees can challenge company

orthodoxy (taboo) and stimulate new
ideas

Firms develop strategy by choosing their

view of the future
Scenario analysis
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 Figure 2.4
The Business Unit
Strategic-planning Process

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 SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

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 External environment
Marketing opportunity: an area of buyer
need and interest that a company has a high
probability of profitably satisfying.

Environmental threat: challenge posed by an

unfavorable trend or development that, in
the absence of defensive marketing action,
would lead to lower sales or profit
Opportunities. Leave of rival.
Threats. Lowering import taxes and tariffs.
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 Market Opportunity Analysis
(MOA)
Can we articulate the benefits convincingly to a
defined target market(s)? Can the opportunity be a
market.?
Can we locate the target market(s) and reach them
with cost-effective media and trade channels? Can
the target market be communicated with
effectively?
Does our company possess or have access to the
critical capabilities and resources we need to
deliver the customer benefits? Can the firm
process the product efficiently and effectively?
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 Market Opportunity Analysis
(MOA)
Can we deliver the benefits better than
any actual or potential competitors?
Can the firm
deliver the product competitively?

Will the financial rate of return meet or

exceed our required threshold for
investment? Does it worth it financially?

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 Figure 2.5
Opportunity And Threat
Matrices

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 Internal environment
Strengths

Weaknesses
For all functions and activities.

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 Goal formulation (MBO)
Units objectives must be arranged
hierarchically/ ROI 5%, sales +, expenses -,
salesforce training, enhance customer relation,
Just-on-time, wastes -.
Objectives should be quantitative. #, %, ABC
Goals should be realistic. Based on forecasting
Objectives must be consistent
Objectives as: profit, sale, market share,
reputation, survival, growth, innovation.

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 Strategic formulation:
Porters Generic Strategies

OVERALL COST LEADERSHIP/ Make your costs of production

and distributing low.
.

DIFFERENTIATION/ Make your product differ

From rivals

FOCUS/ focus on one market or segment/ Niche

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 Strategic formulation:
Strategic alliances
Categories of marketing alliances
Product or service alliance/ outsourcing,
offshoring, giving a license or joint production..
One market outlet for tow or more products..
Promotional alliance/ joint promotion, one touristic
package. KFC and Pepsi..
Logistics alliances/ shipping tow or more products.
Pricing collaborations/ KFC and Pepsi. Trave=ling
package.

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 Program Formulation and
Implementation
McKinseys Elements of Success/ Hardware
and software.
Skills Strategy

Staff Structure
Systems/
Style
MIS

Shared values

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 Feedback and control
Peter Drucker: it is more important to do
the right thingto be effectivethan to
do things rightto be efficient
Because environment change faster than
firm, firm may stay efficient and lose
environment opportunity..
The most successful companies, however, excel at
both
Its better doing the right thing in lower grade than
doing the wrong thing in higher grade.
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Marketing Plan Contents

Executive summary
Table of contents
Situation analysis
Marketing strategy
Marketing tactics
Financial projections
Implementation controls

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Evaluating a Marketing
Plan

Is the plan simple/succinct?

Is the plan complete?
Is the plan specific?
Is the plan realistic?

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 Other marketing plan
contents
Marketing research

Specifications for internal and external

relationships/ internally between
departments, and externally with customers
Action plans and schedules/ break down
strategy to action plans and programs. As
well budget, timeframe, schedules as
metrics.
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