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MKTG2

MKTG2

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Published by Himanshu Sharma

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Published by: Himanshu Sharma on Apr 11, 2012
Copyright:Attribution Non-commercial

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09/10/2013

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LEARNING OBJECTIVES
Know how marketing affects customer value
Know how strategic planning is carried out at different levels of theorganization
Know what is included in a marketing plan
SUMMARY
The value delivery process involves choosing (or identifying), providing (or delivering),and communicating superior value. The value chain is a tool for identifying key activitiesthat create value and costs in a specific business.Strong companies develop superior capabilities in managing core business processes suchas new-product realization, inventory management, and customer acquisition and retention.Managing these core processes effectively means creating a marketing network in whichthe company works closely with all parties in the production and distribution chain, fromsuppliers of raw materials to retail distributors. Companies no longer compete—marketingnetworks do.According to one view, holistic marketing maximizes value exploration by understandingthe relationships between the customer’s cognitive space, the company’s competencespace, and the collaborator’s resource space; maximizes value creation by identifying newcustomer benefits from the customer’s cognitive space, utilizing core competencies from its business domain, and selecting and managing business partners from its collaborativenetworks; and maximizes value delivery by becoming proficient at customer relationshipmanagement, internal resource management, and business partnership management.Market-oriented strategic planning is the managerial process of developing and maintaininga viable fit between the organization’s objectives, skills, and resources and its changingmarket opportunities. The aim of strategic planning is to shape the company’s businessesand products so that they yield target profits and growth. Strategic planning takes place atfour levels: corporate, division, business unit, and product.The corporate strategy establishes the framework within which the divisions and businessunits prepare their strategic plans. Setting a corporate strategy entails four activities:defining the corporate mission, establishing strategic business units (SBUs), assigningresources to each SBU based on its market attractiveness and business strength, and planning new businesses and downsizing older businesses.
 DEVELOPING MARKETING  STRATEGIES AND PLANS 
 
Strategic planning for individual businesses entails the following activities: defining the business mission, analyzing external opportunities and threats, analyzing internal strengthsand weaknesses, formulating goals, formulating strategy, formulating supporting programs,implementing the programs, and gathering feedback and exercising control.Each product level within a business unit must develop a marketing plan for achieving itsgoals. The marketing plan is one of the most important outputs of the marketing process.
MARKETING AND CUSTOMER VALUE
Marketing involves satisfying consumers’ needs and wants. The task of any business is todeliver customer value at a profit.The Value Delivery ProcessThe traditional view of marketing is that the firm makes something and then sells it.A)Will not work in economies where people face abundant choice.B)New belief: marketing begins with the planning process.C) Value creation and delivery consists of three parts:1)Choosing the value (segment the market, define target market, develop“offering”).2)Providing the value (product features, prices, and distribution channels).3)Communicating the value (sales force, advertising, and promotional tools).Each of these “values” involves a cost component to the company.D)Nirmalya Kumar’s 3 “Vs” approach to marketing:)1Define the value segment or segments.)2Define the value proposition.)3Define the value network.F) Frederick Webster views marketing in terms of:)1Value defining process.)2Value developing processes.)3Value delivering processes.The Value ChainMichael Porter’s Value Chain identifies nine strategically relevant activities that create valueand costs (five primary and four support activities).A)Primary activities:1)Inbound logistics (material procurement).2)Operations (turn into final product).3)Outbound logistics (shipping and warehousing).
 
4)Marketing (marketing and sales).5)Servicing (service after the sale).B)Support activities:1)Procurement.2)Technology development.3)Human resource management.4)Firm infrastructure.The firm’s task is to examine its costs and performance in each value-creating activity and tolook for ways to improve performance.)CCore business processes:1)The market sensing process (marketing intelligence).2)The new offering realization process (research anddevelopment).3)The customer acquisition process (defining targetmarkets and consumers).4)The customer relationship management process(deeper understanding of consumers).5)The fulfillment management process (receiving,shipping, and collecting payments).Strong companies develop superior capabilities in these core business processes. Strongcompanies also reengineer the workflows and build cross-functional teams responsible for each process. Many companies have partnered with suppliers and distributors to create a superior value-delivered network.)DValue-delivery network (supply chain).To be successful today, a firm must look for competitive advantages beyond its own operations —to its suppliers and distributors to create a superior value-delivery network (supply chain).Core CompetenciesA)Companies need resources (labor, materials, energy, etc.)1)Key is to own or nurture the resources and competencies that make upthe essence of the business—outsource if competency is cheaper and available.2)Competitive advantage accrues to companies that possess distinctivecapabilities (excellence in broader business processes).3)Competitive advantage derives from how well the company fits its corecompetencies and distinctive capabilities into tightly interlocking “activity systems.”4)A core competency has three characteristicsa.Makes a significant contribution to perceived customer benefits b.Has applications in a wide variety of markets

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