Developing Marketing Strategies and Plans

Marketing Management, 13th ed

2

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Chapter Questions

• How does marketing affect customer value?

• How is strategic planning carried out at different levels of the organization?

• What does a marketing plan include?

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3 V’s Approach to Marketing

Define the value segment (needs and wants)

Define the value segment (needs and wants)

Define the value proposition (benefits)

Define the value proposition (benefits)

Define the value network to deliver promise services.

Define the value network to deliver promise services.

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What is the Value Chain?

The value chain is a tool for identifying and creating more customer value

because every firm is a synthesis of primary and support activities

performed to design, produce, market, deliver, and support its product.

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Core Business Processes

• Market-sensing process (marketing intelligence).• New-offering realization process (research and

development).• Customer acquisition process (defining target

markets and consumers).• Customer relationship management process

(deeper understanding of consumers).• Fulfillment management process (receiving and

approving, orders, shipping, and collecting payments).

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Characteristics of Core Competencies

• A source of competitive advantage (technical, production expertise, distribution, financial strength, etc.)

• Applications in a wide variety of markets• Difficult to imitate

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Becoming a Vigilant Organization

• Can we learn from the past?

• How should the present be evaluated?

• What do we envision for the future?

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What is Holistic Marketing?

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

coprosperity among key stakeholders.

A Holistic Marketing Orientation and Customer Value

• Holistic marketers succeed by managing a superior value chain that delivers a high level of product quality, service, and speed.

• Holistic marketers achieve profitable growth by expanding customer share, building customer loyalty, and capturing customer lifetime value

Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 2-9

Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 2-10

• The holistic marketing framework is designed to address three key management questions:

1.Value exploration-How can a company identify new value opportunities?

2.Value creation-How can a company efficiently create more promising new value offerings?

3.Value delivery-How can a company use its capabilities and infrastructure to deliver the new value offerings more efficiently

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A Holistic Marketing Framework

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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.

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Levels of a Marketing Plan

• Strategic• Target marketing

decisions• Value proposition• Analysis of

marketing opportunities

• Tactical• Product features• Promotion• Merchandising• Pricing• Sales channels• Service

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Corporate Headquarters’ Planning Activities

• Define the corporate mission

• Establish strategic business units (SBUs)

• Assign resources to each SBU (The GE/McKinsey matrix-classifies each SBU according to the extent of its competitive advantage and attractiveness of its industry, BCG”s growth-share matrix

Corporate Headquarters’ Planning Activities cont’

• Assess growth opportunities (planning new businesses, downsizing and terminating older businesses)

Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 2-15

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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

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Major Competitive Spheres

• Industry (consumer(s) and/or industrial(s)• Products and applications(range and

applications)• Competence (technological, production,

etc.)• Market segment (type of market or

customer)• Vertical channels (number of channel

levels, from raw materials to final product and distribution)

• Geographic (range of regions, countries, or country groups)

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Rubbermaid Commercial Products, Inc.

“Our vision is to be the Global Market ShareLeader 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.”

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Motorola

“The purpose of Motorola is to honorablyserve the needs of the community by providingproducts and services of superior quality at a fair price to our customers; to do this so as toearn an adequate profit which is required forthe total enterprise to grow; and by doing so, provide the opportunity for our employees andshareholders to achieve their personal objectives.”

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eBay

“We help people trade anything on earth.We will continue to enhance the onlinetrading experiences of all—collectors, dealers, small businesses, unique itemseekers, bargain hunters, opportunitysellers, and browsers.”

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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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Dimensions that Define a Business

• Customer groups

• Customer needs

• Technology

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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

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Ansoff’s Product-Market Expansion Grid

• Market penetration strategy

• Market development strategy

• Product development strategy

• Diversification strategy

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What is Corporate Culture?

Corporate culture is the shared experiences, stories, beliefs, and norms

that characterize an organization.

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Tactics for Managing Change

• Avoid the innovation title for the team

• Use the buddy system

• Set the metrics in advance

• Aim for quick hits first

• Get data to back up your gut

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SWOT Analysis

• Strengths

• Weaknesses

• Opportunities

• Threats

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Market Opportunity Analysis (MOA)

• 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?

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Market Opportunity Analysis (MOA) (cont.)

• 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?

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Goal Formulation and MBO (manages by objectives)

• Unit’s objectives must be hierarchical

• Objectives should be quantitative

• Goals should be realistic

• Objectives must be consistent

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Porter’s Generic Strategies

Overall Cost Leadership—lowest production and distribution costs to be

able to price lower than competitors and to obtain larger market share.

Differentiation—uniquely achieving superior performance in an important

customer benefit area.

Focus—on one or more narrow marketsegments

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Categories of Marketing Alliances

Product or Service Alliances—jointly market complementary products

Product or Service Alliances—jointly market complementary products

Promotional Alliances—promotion of another company’s products

Promotional Alliances—promotion of another company’s products

Logistics Alliances—logistical services for another company’s products.

Logistics Alliances—logistical services for another company’s products.

Pricing Collaborations—one or more companies join in special price reduction.Pricing Collaborations—one or more

companies join in special price reduction.

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The Strategic Planning Gap

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Ansoff’s Product-Market Expansion Grid

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The Business Unit Strategic Planning Process

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Marketing Plan Contents

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

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Evaluating a Marketing Plan

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

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Challenges Facing CMO’s

Doing more with less

Driving new businessdevelopment

Becoming a full business partner

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Study Question 1

The ________ is a tool for identifying

ways to create more customer value.  

A.  value chain 

B.customer survey

C.brand loyalty index

D.promotion channel

E.supplier database

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Study Question 2

A good way to describe the ________ would be to

discuss all the activities involved in building deeper

understanding, relationships, and offerings to individual

customers.  

A.  customer acquisition process

B.  customer relationship management

process

C.  customer prospecting process

D.  customer fulfillment management process

E.  customer equity process

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Study Question 3

Core competencies tend to refer to areas of special

technical and production expertise, whereas ________

tend to describe excellence in broader business

processes.  

A.  process benchmarks

B.  distinctive capabilities

C.  core business values

D.  value statements

E.  mission statements

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Study Question 4

The ________ is the central instrument for directing

and coordinating the marketing effort.  

A.  strategic plan

B.  marketing plan

C.  tactical plan

D.  customer-value statement

E.  corporate mission

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Study Question 5

The ________ lays out the target markets and the

value proposition that will be offered, based on an

analysis of the best market opportunities.    

A.  organizational plan

B.  strategic marketing plan

C.  corporate tactical plan

D.  corporate mission

E.  customer-value statement