MARKETING MANAGEMENT12th edition

2 Developing

Marketing Strategies and Plans

Kotler Keller

Figure 2.1 The Value Delivery Process

Improving Value Delivery (The Japanese Way)

● “0” Customer Feedback Time ● “0” Product Improvement Time ● “0” Purchasing Time ● “0” Setup Time ● “0” Defects

3 V’s Approach●Define The Value Segment●Define The Value

Proposition ●Define The Value Network

Figure 2.2 Porter’s Value Chain

Figure 2.3 A Holistic Marketing Framework

Levels of a Marketing Plan

● Target marketing decisions

○ Value proposition

○ Analysis of marketing

opportunities

● Product features

○ Promotion

○ Merchandising

○ Pricing

○ Sales channels

○ Service

Strategic Marketing Plan

Tactical Marketing Plan

Figure 2.4 The Strategic Planning, Implementation, and Control Processes

Corporate & Division Strategic Planning

●By preparing statements of mission, policy, & goals, headquarters establishes the framework within which the divisions & business units prepare their plans. There are 5 planning activities:○ Defining the corporate mission○ Establishing the strategic business units○ Assigning resources to each business SBU○ Assessing growth opportunities○ Plan new business, downsize older businesses

Corporate Headquarters’ Planning Activities

Good Mission Statements

SBUs●It is a single or collection of related

businesses

● It has its own set of competitors

● It has its own Planning, Profitability,

Efficiency

●Focus on limited number of

Goals

●Stress major policies and

Values

●Define major competitive

Spheres

Spheres ● Industry● Products● Compete

nce● Segment● Channel

s ● Geograp

hical

Figure 2.5 The Strategic Planning Gap

Assessing Growth Opportunities

Ansoff’s Product-Market Expansion Grid

Assessing Growth Opportunities

●If there is a gap between future desired sales & projected sales, corporate management will have to develop or acquire new business to fill it. It has 3 options○Intensive Growth: Identify opportunities

for improving current business. For this it can seek:■Potential users in current sale area■Additional distribution channels in present

location■Selling in new locations

Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid

4. Diversification2. Marketdevelopment

Newmarket

s

1. Marketpenetration

Existing

markets

Existing

products 3. Product

development

Newprodu

cts

Product/ Market Expansion Grid

● Market Penetration: increase sales to present customers with current products. How? Cut prices, increase advertising, get products into more stores.

● Market Development: develop new markets with current products. How? Identify new demographic or geographic markets.

● Product Development: offering modified or new products to current customers. How? New styles, flavors, colors, or modified products.

● Diversification: new products for new markets. How? Start up or buy new businesses.

Assessing Growth Opportunities

● Integrative Growth: Identify opportunities to build or acquire business that are related to current business.

● Diversification growths: Good opportunities can be found outside the present business. Several types of diversifications are possible:

○ New product that has technological or marketing similarities with existing product line even though the new product can appeal to a different group of customers-concentratic strategy

○ Search for new products that could appeal to current customers even though the new products are technologically unrelated to its current product line-horizontal strategy

○ Can seek new businesses that have no relationship to its current technology, products or markets-Conglomerate Strategy

● Downsizing & divesting older business: Companies must not only develop new business; they must also carefully harvest tired old business in order to release needed resources & reduce cost.

Figure 2.7 The Business Unit Strategic Planning Process

The Business Unit Strategic Planning Process (Cont…)

●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, "The company aims to target major television studios and become their vendor of choice for lighting technologies that represent the most advanced and reliable studio lighting arrangements."

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Goal Formulation and MBO

Requirements for using MBO(Management By Objectives)●Unit’s objectives must be hierarchical●Objectives should be quantitative●Goals should be realistic●Objectives must be consistent

Strategic Formulation

Overall Cost Leadership

Differentiation

Focus

Porter’s Generic Strategies

Strategic Alliances

Product or Service Alliances

Promotional Alliances

Logistics Alliances

Pricing Collaborations

Program Formulation and Implementation

Once the business unit has developed its principal strategies, it must work out detailed support programs. A great marketing strategy can be sabotaged by poor implementation.

If the unit has decided to attain technological leadership, it must plan programs to strengthen its R&D department, gather technological intelligence, develop leading-edge products, train the technical sales force, and develop ads to communicate its technological leadership.

Feedback and Control

Marketing Plan Contents

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