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Developing Marketing
Strategies and Plans

Marketing Management, 13th ed

 The Value Chain
 The value chain as a tool for identifying ways to create more customer
value. The value chain identifies nine strategically relevant activities-five
primary and four support activities-that create value and cost in a
specific business.
 Characteristics of Good Mission statements
 They focus on a limited number of goals.
 Stress the company’s major policies and values.
 They define the major competitive spheres within which the company will
operate.
 They take a long-term view.
 A good mission statement is as short, memorable, and meaningful as
possible.
Characteristics of SBU (Strategic Business Unit)
 It is a single business, or a collection of related businesses, that can be
planned separately form the rest of the company.
 It has its own set of competitors.
 It has a manager responsible for strategic planning and profit
performance, who controls most of the factors affecting profit.
 The Strategic-Planning Gap
A gap between future desired sales and projected sales, corporate
management will need to develop or acquire new businesses to fill it.
1. Intensive Growth:
2. Integrative Growth:
Sales and profits of a business can be increased through
backward, forward or horizontal integration within its industry.
 Backward Integration: Music-India might acquire one ore more of its
supplier.
 Forward Integration: Music-India might enter music distribution, wholesale,
or retail.
 Horizontal Integration: Music-India can acquire one or more of its
competitors.
2. Diversification Growth:
Three types of diversification:
 Concentric diversification: The company could seek new products that
have technological or marketing synergies with existing product lines
appealing to a new group of customers. For example, Music-India might
start a computer tape manufacturing operation leveraging its audio cassette
manufacturing capability.
 Horizontal diversification: The company can develop new products that
are technologically unrelated to its current product line and could appeal to
its current customers. For example, Music-India might produce cassette
holding trays.
 Conglomerate diversification: The company may seek new opportunities
that have no relation with its current technology, products, or markets. For
example, Music-India may consider entering new businesses such as
application software.
 Goal Formulation
Goals are objectives that are specific with respect to magnitude and time.
Objectives must meet four criteria:
1. They must be arranged hierarchically, from the most to the least
important.
2. Objectives should be quantitative whenever possible.
3. Objectives should be realistic.
4. Objectives must be consistent.
 Porter’s Generic Strategies
Michael Porter has proposed three generic strategies that provide a good
starting point for strategic thinking: overall cost leadership,
differentiation, and focus.
 Overall cost leadership: Firms pursuing this strategy work hard to
achieve the lower production and distribution costs so they can price
lower than their competitors and win a large market share.
 Differentiation: The firm seeking quality leadership, for example, must
make products with the best components, put them together expertly,
inspect them carefully, and effectively communicate their quality.
 Focus: The business focuses on one or more narrow market segments.
The firm gets to know these segments intimately and pursues either cost
leadership or differentiation within the target segment.