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Developing Marketing Strategies and Plans

Chapter -2

A. Marketing and customer value

1. The value Delivery Process.


2. The value Chain.
3. Core Competencies.
4. A Holistic Marketing Orientation and Customer value.
5. The central Role of strategic planning.

1. The value Delivery Process.

– Traditional Physical Process Sequence:


– Make the product
– Sell the product

– Value Creation and Value Delivery Sequence:


– Choose the value
– Provide the value
– Communicate the value
 Value Creation and Value Delivery Sequence: Extension:
– Zero customer feedback time
– Zero product improvement time
– Zero purchase time
– Zero setup time
– Zero defects

2. Value Chain

o Proposed by Michael Porter of Harvard University.


o It is a portfolio tool for identifying ways to create more
value for customers.
o It has two parts.
o A company’s business consists of all activities undertaken
in designing, producing, marketing, delivering, and supporting its
product or service
o A company’s value chain consists of a linked set of value-
creating activities performed internally
o The value chain contains two types of activities
o Primary activities -- where most of the value
for customers is created
o Support activities -- facilitate performance of the primary
activities
o Figure 2-2: The Generic Value Chain
o Benchmarks
o Core Business Processes
o The market sensing process
o The new offering realization process
o The customer acquisition process
o The customer relationship
management process
o The fulfillment management process
o The Value Delivery Network (Supply Chain)

3. Core Competencies

 A competence is the product of organizational learning and


experience and represents real proficiency in performing an internal
activity
 A core competence is a well-performed internal activity that is
central (not peripheral or incidental) to a company’s
competitiveness and profitability
 A distinctive competence is a competitively valuable activity that
a company performs better than its rivals
4. A Holistic Marketing Orientation and Customer Value

• A Holistic Marketing Framework: Fig: 2.3


• Value Exploration

• Value Creation

• Value Delivery

5. The Central Role of Strategic Planning


A Marketing Plan: instrument of directing and coordinating
marketing efforts.
 Strategic Marketing Plan
 Tactical Marketing Plan
 Strategic Planning is the Process of Developing and
Maintaining a Strategic Fit between the Organization’s Goals
and Capabilities and Its Changing Marketing Opportunities.
 Tactical Planning is the short term planning that will
ultimately help to achieve strategic planning.
– Strategic Marketing Plan lies out:

 Target markets
 Value proposition
 Strategic Marketing Plan lays out:
 Target markets
 Value proposition
Strategic Marketing Plan lays out:
 Target markets
 Value proposition
 The Strategic Planning, Implementation and Control
Process
B. Corporate and Division Strategic Planning
• All corporate headquarters undertake four planning activities

– Defining the Corporate Mission

– Establishing Strategic Business Units (SBUs)

– Assigning resources to each SBU

– Assessing growth opportunity

– Planning new businesses, downsizing, or terminating older


businesses
• Defining the Corporate Mission

– Good Mission statements have 3 major characteristics:

• Focus on limited number of goals.

• Stress the company’s major policies and values.


• Define the major competitive spheres.

• Mission statements define which competitive scopes the


company will operate in
• Industry scope

• Products and applications scope

• Competence scope

• Market-segment scope

• Vertical scope

• Geographical scope

• Mission statements should be:

• Market oriented

• Realistic

• Brief and specific

• Fit to the market environment

• Based on organizational distinctive competence.

• Establishing Strategic Business Units (SBUs)

• Table 2.2: Product-Oriented versus Market-Oriented


Definitions of a Business
• Three characteristics of SBUs

• Single business or collection of related businesses that can


be planned for separately
• Has its own set of competitors

• Has a manager who is responsible for strategic planning


and profit
• Assessing Growth opportunities

• Intensive Growth: growth within current business.

• Product / Market Expansion Grid


• Integrative Growth: Identify opportunity to build or acquire
businesses that are related to current business.
• Diversification Growth: Identify opportunity to add attractive
businesses that are unrelated to current business.
• Downsizing Older Businesses: To prune, harvest or divest
tired old businesses in order to release needed resources or
reduced costs.
• Organization and Organizational Culture

B. The Business Unit Strategic Planning:


• The Business Unit Strategic Planning:

• Mission statements should be:

• Market oriented

• Realistic

• Brief and specific

• Fit to the market environment

• Based on organizational distinctive competence.

• SWOT Analysis

• SWOT analysis is a simple but powerful tool for sizing up a


company’s resource capabilities and deficiencies, its market
opportunities and the external threats to its future well-being.
• Marketing Opportunity: is an area of buyer need and interest
in which there is a high profitability that a company can
profitably satisfy the needs.
• Marketing Threat: is a challenge posed by an unfavorable
trend or development that would lead, in the absence of
defensive marketing action, to lower sales or profits.
• Internal Environmental Analysis (Strength/Weakness Analysis)
• Marketing Memo: Checklist

• Goal Formation

– Arranged hierarchically

– Stated quantitatively

– Realistic

– consistent

• Strategic
Formulation
– Strategy

• Porter’s Generic Strategies

– Overall cost leadership

– Differentiation

– Focus

• Overall cost leadership

• Differentiation

• Operational Effectiveness and Strategy

– Strategic group

– Strategic alliances

 A strategic group is a cluster of firms in an industry with


similar competitive approaches and positions in the market.
 A strategic group map is using to assess the market positrons
of key competitors.
Example: Strategic Group Map of Selected Retail Chains
 A strategic Alliance is collaborative partnerships where two or
more companies join together to achieve mutually beneficial
strategic outcomes.
 Marketing Alliances
 Product or service alliances
 Promotional alliances
 Logistical alliances
 Pricing collaborations
• Marketing Alliances

– Product or service alliances

– Promotional alliances

– Logistical alliances

– Pricing collaborations

 A Marketing Plan is a written document that summarizes what


the marketer has learned about the marketplace and indicates
how the firm plans to reach its marketing objectives.
 Contents of the Marketing Plan
 Executive Summary and Table of Contents.
 Current Marketing Situation
 Opportunity and issue analysis
 Objectives
 Marketing strategy
 Action programs
 Financial projections
 Implementation controls