ch 02 developing marketing strategies and plans

7/30/2019 Ch 02 Developing Marketing Strategies and Plans

1/24

DEVELOPINGMARKETING

STRATEGIESANDPLANS

Chapter 2


2/24

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?

How can management assess

marketing performance?


3/24

TWO VIEWSOFTHE VALUE DELIVERY

PROCESS

Traditional Physical

Process Sequence

Make the product

Sell the product

Value Creation and

Delivery Sequence

Choose the value (STP)

Provide the value(specific features, price,

distribution etc.)

Communicate the value

(announce & promote)


4/24

OTHER VIEWS

Kumars 3Vs

Define the value

segmentor customers

(and their needs)

Define the value

proposition

Define the value

networkto deliver

promised service

Frederick WebsterMarketing is: Value-defining process

like market research

Value-developingprocesses includingnew-productdevelopment, sourcingstrategy, and vendorselection

Value-deliveringprocesses such asadvertising andmanaging distribution


5/24

THEVALUECHAIN

Proposed by MichaelPorter (Harvard) in thebook: "Competitive

Advantage: Creating

and Sustaining superiorPerformance" (1985)

Tool for identifying waysto create more customervalue

Firm is a synthesis ofNINE activities

Primary Activities

Inbound logistics

Operations Outbound logistics

Marketing and sales

Service

Support Activities

Firm infrastructure

Human resource

management Technology development

Procurement

Examine the costs and performance in each value-creating

activity

Compare with Benchmarksstudy the best of class practices


6/24

Margin: effectiveness in

performing these

activities efficiently


7/24

CORECOMPETENCIES

Competitive advantage

exists in two situations: low

cost or differentiation Distinctive capabilities

excellence in broaderbusiness process

ex. Netflix, pioneer online

DVD rental service

Characteristics

A source of competitiveadvantage

Applications in a wide

variety of markets Difficult for competitors

to imitate

C. K. Prahalad and

Hamel (1990)
http://www.netflix.com/http://www.intel.com/index.htm


8/24

ROLEOF STRATEGIC PLANNING

Managing a companys businesses as an

investment portfolio

Assessing each businesss strength

Establishing a strategy to achieve its long-runobjectives


9/24

MARKETING PLAN

Central instrument for directing and coordinating

the marketing effort

Two levels:

Strategic marketing planlays out the firms target

markets and value propositions, based on the best

market opportunities.

Tactical marketing planspecifies the marketing

tactics, including product features, promotion, pricing,

and service.


10/24

CORPORATE PLANNING ACTIVITIES

I. Defining the corporate mission

Peter Drucker:

What is our business?

Who is the customer?

What will our business be?

Good Mission Statements

Ex: to organize the world's information and make it universallyaccessible and useful

Focus on limited number of goals

Stress major policies and values

Define major competitive spheres
http://www.google.com/webhp?hl=en


11/24

MAJOR COMPETITIVE SPHERES

Industry

Products and

applications (range of

same that companysupply)

Competence

(company mastered

in performing activityand leverage

Market segment

Vertical (no. of

channel levels fromr/m to final product

wherein company will

participate)

Geographical


12/24

II. Defining the Business

Product definitions (ex. Auto business, clothing business)

Market definitions (Business must be viewed as customer

satisfying process not a goods producing process)

define the business in terms of needs, not products

Hardware & software manufactures

{ Builder of networks }

Define the target market who drinks cola

Everyone who drinks something to quench thirst

Target

market def.

Strategic

market def.

Help improve officeproductivity Distribute information
http://www.ibm.com/in/en/


13/24

CHARACTERISTICSOFAN SBU

Single business or collection of

related businesses

Own set of competitors Manager responsible for strategic

planning and profit performance

BUSINESSDEFINEDIN 3 DIMENSIONS

Customer groups

Customer needs

Technology

Purpose: develop

separatestrategies &

assign appropriate

funding

Selling halogen

lighteningsystems for TV

studios


14/24

GROWTH OPPORTUNITIES

Intensive growth (identify opportunities for further growthwithin current businesses)

Integrative growth(identify opportunities to build or acquirebusinesses that are related to current businesses): forwardor backward integration

Diversification growth (identify the opportunities to addattractive businesses that are unrelated to currentbusinesses)

1. Concentric diversification: (technological or marketing

synergy)2. Horizontal diversification: (technologically unrelated)

3. Conglomerate diversification: (no relation with its currenttechnology, products or markets)


15/24

I. INTENSIVEGROWTH

Review the opportunities for improving existing

businesses

Igor Ansoffproposed product-market expansion

grid or AnsoffMatrix

Ansoff Matrix represents the different options open

to a marketing manager when considering new

opportunities for sales growth


16/24

TWOVARIABLES

Market in which firm

operates Product intended for sale

Remain in

the

Existing or

current

market

Enter in

new

market

Selling

existing

or

current

products

Developing

new ones


17/24

Existing PRODUCTS New

INCREASING RISK

INCREASINGRISK

Existing

MARKETS

New

MARKET

PENETRATION

Sell more in existing

Markets

MARKET

DEVELOPMENT

Achieve higher

sales/market share of

existing products in

new markets

PRODUCT

DEVELOPMENT

Sell new products inexisting markets

DIVERSIFICATION

Sell new products in new

markets
http://www.google.co.in/imgres?imgurl=http://www.unilever.com/images/Lifebuoy%20logo%20106x106_tcm13-31905.jpg&imgrefurl=http://www.unilever.com/brands/personalcarebrands/&h=106&w=106&sz=19&tbnid=QDEWA0La87zmVM:&tbnh=84&tbnw=84&prev=/images?q=lifebuoy+logo&hl=en&usg=__yie2XpBDUwe3hR5293wljArcb4g=&ei=imhcS8GnAY3U7AOrp6UC&sa=X&oi=image_result&resnum=1&ct=image&ved=0CAkQ9QEwAAhttp://www.google.co.in/imgres?imgurl=http://www.unilever.com/images/Lifebuoy%20logo%20106x106_tcm13-31905.jpg&imgrefurl=http://www.unilever.com/brands/personalcarebrands/&h=106&w=106&sz=19&tbnid=QDEWA0La87zmVM:&tbnh=84&tbnw=84&prev=/images?q=lifebuoy+logo&hl=en&usg=__yie2XpBDUwe3hR5293wljArcb4g=&ei=imhcS8GnAY3U7AOrp6UC&sa=X&oi=image_result&resnum=1&ct=image&ved=0CAkQ9QEwAA


18/24

Existing PRODUCTS New

Existing

MARKETS

New

MARKET PENETRATION

MARKET

EXTENSION

PRODUCT

DEVELOPMENT

DIVERSIFICATION
http://www.google.co.in/imgres?imgurl=http://www.unilever.com/images/Lifebuoy%20logo%20106x106_tcm13-31905.jpg&imgrefurl=http://www.unilever.com/brands/personalcarebrands/&h=106&w=106&sz=19&tbnid=QDEWA0La87zmVM:&tbnh=84&tbnw=84&prev=/images?q=lifebuoy+logo&hl=en&usg=__yie2XpBDUwe3hR5293wljArcb4g=&ei=imhcS8GnAY3U7AOrp6UC&sa=X&oi=image_result&resnum=1&ct=image&ved=0CAkQ9QEwAAhttp://www.google.co.in/imgres?imgurl=http://www.unilever.com/images/Lifebuoy%20logo%20106x106_tcm13-31905.jpg&imgrefurl=http://www.unilever.com/brands/personalcarebrands/&h=106&w=106&sz=19&tbnid=QDEWA0La87zmVM:&tbnh=84&tbnw=84&prev=/images?q=lifebuoy+logo&hl=en&usg=__yie2XpBDUwe3hR5293wljArcb4g=&ei=imhcS8GnAY3U7AOrp6UC&sa=X&oi=image_result&resnum=1&ct=image&ved=0CAkQ9QEwAAhttp://www.tatasky.com/index.html


19/24

THE BUSINESS UNIT STRATEGIC

PLANNING PROCESS

SWOT analysis

Business

mission

Ext. envt.

(O and threats)

Internal envt.

(S and W)

Goal

Formulation

Strategy

Formulation

ProgramFormulation

Implementation

Feedback and

Control


20/24

EFFECTIVE GOAL FORMULATION

Arranged hierarchically from most to least important

Stated quantitatively

Realistic

Consistent


21/24

PORTERS GENERIC STRATEGIES

Overall cost leadership

Differentiation

Focus


22/24

MCKINSEYS SEVENS ELEMENTS

Hardware

Strategy

Structure

Systems

Software

Style

Skills

Staff Shared values


23/24

MARKETING PLAN CONTENTS

Executive summary

Table of contents

Situation analysis

Marketing strategy Financial projections

Implementation controls


24/24

THANKYOU

ch 02 developing marketing strategies and plans

Documents