Marketing Strategies and Plans

ChapterChapter

2Developing

2Developing

Marketing Strategies Marketing Strategies and Plans

Dr Pusanisa ThechatakerngDr.Pusanisa [email protected]

2-1© Kotler, Keller, Ang, Leong & Tan Marketing Management

An Asian Perspective

In this chapter, wedd h f lladdress the following

questions:q

How does marketing affect customer value?How is strategic planning carried out at different levels of the organization?different levels of the organization?What does a marketing plan include?



Opening Case Study ZARAOpening Case Study - ZARA

Known for trendy affordable clothes Zara’s secret? T t l t l f b i Total control of business Design > production > distributiong p

Lead-time advantage - lower inventory levelsg y

Frequent line changes - exclusivity for customers



Opening Case Study ZARAOpening Case Study - ZARA

Zara’s “democratization of fashion”Advertising approach - its shop windowsExpansion plans - 4,000 stores worldwide



Expansion plans 4,000 stores worldwide

Two Views of the Value Delivery Process

Figure 2.1



Fig 2.2 The Generic Value Chain

Examine costs & performance ineach activity and improve it



y p

Marketing and Customer Valuecore competencies

Eg Volvo’s core competency is safety

Eg Nike does not manufacture own shoesA i fi t tAsian firms more competent

Nike’s 2 core competencies-shoe design & merchandising




i thi th t fi d ll d th t t th f ll i th diti

3

is something that a firm can do well and that meets the following three conditions

3 characteristics:1 competitive advantage 1. competitive advantage 2. applications in many marketspp y3. difficult for competitors to

imitate




Asian companies - core competence:p p

Expand quickly to capture global k t t itimarket opportunities

Become atomizersBeco e ato e sBecome asset light by using intangibles



Marketing and Customer ValueThe Central Role of Strategic Planning

Strategic planning ensure correct marketingactivities are selected & executed



Marketing and Customer ValueThe Central Role of Strategic PlanningThe Central Role of Strategic Planning

Figure 2.4 The Strategic Planning, Implementation, and Control Processes



Corporate & Division Strategic Pl iPlanning

4 corporate planning activities:4 corporate planning activities:

1. Define corporate mission2. Establish strategic business units (SBUs)3 A ig t h SBU3. Assign resources to each SBU4. Assess growth opportunitiesg pp



Corporate & Division Strategic PlanningPlanning

1. Define the Corporate Missionf p

What is our business? Who is the customer? What is of value to the customer? What is of value to the customer? What will our business be? 1st ? What should our business be?



Table 2.1 Sample Mission Statement



Corporate & Division Strategic PlanningPlanning

1. Define the Corporate Mission

Mission statements are the vision direction for company for next 10 to 20 years

33 major characteristics:1 Focus on limited number of goals1. Focus on limited number of goals2. Stress company’s major policies & values3. Define competitive spheres company will

operate in



operate in

Defining BusinessDefining Businessmarket definitions better than product definitionsa et de t o s bette t a p oduct de t o s

Customer-satisfying NOT goods-producingy g g p g

Table 2.2 Product-Oriented Versus Market-Oriented Definitions of a Business



2. Establish strategic business units (SBUs)

An SBU has 3 characteristics:An SBU has 3 characteristics:

1. SBU plan separate from company2. its own set of competitors3 has a manager for strategic 3. has a manager for strategic

planning and profit matters



3 Assign resources to each SBU3. Assign resources to each SBU

The purpose of identifying the company’s strategic business units is company s strategic business units is to develop separate strategies and assign appropriate funding



4 Assess growth opportunities4. Assess growth opportunities

l plan new business, ddownsize or terminate old business

How to fill the strategic-the strategic-planning gap? Figure 2.5

the strategic planning gap2-19© Kotler, Keller, Ang, Leong & Tan Marketing Management


the strategic planning gap

INTENSIVE GROWTHrelated to a company's current operations

The company first considers… – more market share with current products & p

markets (market-penetration strategy)? – find new markets for current products find new markets for current products

(market-development strategy)?develop new products to current markets – develop new products to current markets (product-development strategy)?d l d t f k t – develop new products for new markets (diversification strategy)?



market-penetration strategycafés serving gourmet coffee directly to customers in Seattle 1

1market-development strategysame as above throughout North America & worldwide

112

product development strategy

diversification strategy

product development strategyIncrease customers’ purchases with new in-store merchandise (CDs) 3



Frappuccino® bottled drinks, Starbucks brand ice cream & purchase of tea retailer Tazo® Tea into grocery store aisles 4

INTEGRATIVE GROWTHINTEGRATIVE GROWTHa firm acquires some other element of the chain of

di t ib ti f hi h it i bdistribution of which it is a member.

INTEGRATIVE GROWTH: backward forward INTEGRATIVE GROWTH: backward, forward or horizontal integration within its industry

acquire suppliers -backward integrationacquire retailer-forward integrationacquire competitors-horizontal integrationacquire competitors horizontal integration

If unsuccessful diversification



If unsuccessful, diversification

DIVERSIFICATION GROWTHDIVERSIFICATION GROWTH

When good opportunities are g ppfound outside present businessesbusinessesGood opportunity is when i d t i tt ti & industry is attractive & company has strengths to be successful



Organization and Organizational Culture

Corporate culture “ h h d i i b li f“the shared experiences, stories, beliefs& norms that characterize an& norms that characterize anorganization”

corporate culture, structure & li i k h & policies are key when implement new strategy




What drive successful Asian businesses?

4 organizational factors

1. Market orientation/direction 2. Innovativeness3. Corporate culture3. Corporate culture4. Organizational climate




How to adopt new view of crafting strategies?Get fresh ideas from: – employees with youthful perspectives employees with youthful perspectives – employees who are out stationed

l h i d– employees who are new to industry

Choose among different views of the futureg



Business Unit Strategic Planning - the business mission

E h b i i d d fi i Each business unit needs to define its specific mission within the broader



company mission

Business Unit Strategic Planning – SWOT Analysis

SWOTAnalysis

opportunities

Overall evaluation of a company’s company s strengths weaknesses

threats strengthsSWOTAnalysis

opportunities & threats

y

monitor external & internal

weaknesses



environmentweaknesses

Business Unit Strategic Planning –g gEXTERNAL ENVIRONMENT (OPPORTUNITY & THREAT) ANALYSIS

A business unit has to opportunitiesidentify opportunities and

threats. How?threats strengthsSWOT

AnalysisBy monitoring key macroenvironment &

weaknesses

macroenvironment & microenvironment factors that affect ability to earn that affect ability to earn profits



Business Unit Strategic Planning – SWOT Analysis

3 main sources of market opportunities

1. Supply something that is in short supply

2. Supply existing product in new way

3. Totally new product or service



Business Unit Strategic Planning – Market Opportunity Analysis (MOA)

2. Can target markets be reached with cost-effective

media & trade channels?3 Possess

Market Opportunity 1. Can benefits

i

3. Possess resources to

deliver benefits?Market Opportunity

Analysis (MOA)To evaluate opportunities

T d t i tt ti &

convincetarget markets?

To determine attractiveness & probability of success

4. Are benefits better than

competitors?

5. Is it profitable?



competitors?

Business Unit Strategic Planning –INTERNAL ENVIRONMENT (STRENGTHS/WEAKNESSES) ANALYSIS

opportunitiesChecklist to evaluate INTERNAL strengths & weaknesses

threats strengthsSWOTAnalysis

weaknesses

Go for opportunities where it has required strengths? it has required strengths?

Go for opportunities where it has to develop certain



it has to develop certain strengths?

Business Unit Strategic Planning – goal formulation

Goalsobjectives specific to objectives specific to

magnitude/greatness & time

G l f l tiGoal formulationgoals for planning period done after g p g p

doing SWOT analysis



Business Unit Strategic Planning – goal formulation

Managing by Objectives (MBO) is successful if:

1.Objectives arranged hierarchically

2.Objectives are quantitative where possible

3 Goals are realistic3.Goals are realistic

4 Objectives are consistent4.Objectives are consistent



Business Unit Strategic Planning – strategic formulation

Goals indicate what business wants to achieveStrategy is a game plan for getting Strategy is a game plan for getting there

k ti t tmarketing strategycompatible technology strategysourcing strategy




PORTER’S GENERIC STRATEGIES

Overall costleadership

FocusDifferentiationleadership

achieve lowest focuses onsuperiorf icosts to price lower

than competitors & win large market

narrow marketsegments

performance inarea valued by l f win large market

sharelarge part of market



Business Unit Strategic

STRATEGIC ALLIANCES

Planning – strategic formulationSTRATEGIC ALLIANCESCompanies need strategic partners to be effective.

A celebration at a Star Alliance brings together 16 airlines that cover most of

the globeMany strategic alliances take the form of marketing alliances.

the globe

4 major categories:1 Product or service alliances1. Product or service alliances2. Promotional alliances3. Logistics alliances4. Pricing collaborations




STRATEGIC ALLIANCES4 major categories:1. Product or service alliances1. Product or service alliances2. Promotional alliances3. Logistics alliances

i i ll b i4. Pricing collaborations

Visa has promotional alliance with Hong Kong Disneyland



Business Unit Strategic Planning -Program Formulation & Implementation

STEP ONEOnce strategies

developed work out detailed programs

STEP TWOOnce marketing

programs marketing must estimate costsprograms formulated

marketing must estimate costs

STEP THREEActivity-based

cost (ABC) accounting applied

whether results to justify the costaccounting applied

STEP FOURImplementing not lose sight of stakeholders & their needs



p gstrategy not lose sight of stakeholders & their needs

Business Unit Strategic Planning – feedback and control

Marketplace will change –review & revise implementation, programs, strategies or objectives

HAIER is a good example:Started with inferior-quality productsStarted with inferior quality products

Later, sales went upChina’s leading maker of washing machines

Faces competition in Chinese marketFaces competition in Chinese marketPartner with Sanyo in production alliancesMakes digital TVs with LG ElectronicsDiversify into finance computers cell phones



Diversify into finance, computers, cell phones

Business Unit Strategic gPlanning - Contents of a Marketing Plan

1 Is the plan simple?

marketing plan

1. Is the plan simple?

2 I th l ifi ?

A summarized writtendocument about 2. Is the plan specific?document aboutmarketplace &plans to reach

3. Is the plan realistic?plans to reach marketing objectives

4. Is the plan complete?



Business Unit Strategic gPlanning - Contents of a Marketing Plan

iExecutive summary & table of contents

Situation analysisSituation analysis

Marketing strategyg gy

Financial projections

Implementation controls



Final discussionMarketing Debate — What Good is a Mission Statement?Virtually all firms have mission statements to help guide and inspire employees as well as signal what is important to the firm to those outside the employees as well as signal what is important to the firm to those outside the firm. Mission statements are often the product of much deliberation and discussion. At the same time, some critics claim that mission statements Sometimes lack “teeth” and specificity. Moreover, critics also maintain that in many cases, mission statements do not vary much from firm to firm and make the same empty promises.make the same empty promises.

Take a position: Mission statements are critical to a successful marketing i i Mi i l id f l k i lorganization, or Mission statements rarely provide useful marketing value.

Marketing DiscussiongConsider Porter’s value chain and the holistic marketing orientation model. What implications do they have for marketing planning? How would you structure a marketing plan to incorporate some of their



How would you structure a marketing plan to incorporate some of their concepts?

Marketing Strategies and Plans

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