Marketing Management

Module 1
I. The Corporate Planning Process
The Corporate Planning Process
A broad model of the Corporate Planning Process

Corporate Level Business Level

Planning Marketing
Setting Objectives
Defining the Designing the and other
and Goals for the
Company Mission Business Portfolio Functional
Company
Strategies
The Corporate Planning Process
A broad model of the Corporate Planning Process

Corporate Level Business Level

Planning Marketing
Setting Objectives
Defining the Designing the and other
and Goals for the
Company Mission Business Portfolio Functional
Company
Strategies
The Corporate Planning Process
Company’s Mission and Goals
A Mission Statement is the first indication of how a company views the claims of its Stakeholders. A Mission
Statement is expected to:
1. Define the Business 2. Outline the a)Vision, b)Goals and c)
Corporate Philosophy and Values

W tis
Sa sto )
ha fie er
Vision : A company’s vision is where it wants to be in the
s)

t i d?
(C eed
up

s
us ied? ing

future. It ought to an inspirational statement

N
u s

Be
ro
e

in
rG
tis s b

g
me
Sa ho i
f
to

Goals : Unlike Vision, the Goals of a company is a

W

Definition
precise and measureable desired future state, which
(C

of
Business addresses crucial issues, are challenging yet realistic
with a specified period of time.
How are customer needs
being satisfied?
(Distinctive Philosophy and Values: This describes the basic beliefs
Competitiveness)
and values basis which the managers of the company are
expected to conduct themselves
Abell’s framework of “Defining the Business”
The Corporate Planning Process
Mission and Vision Statements

Our Goal for ____ is to be the most

respected global financial services
company. Like any other public
company, we’re obligated to
deliver profits and growth to our
shareholders. Of equal importance
Citigroup
is to deliver those profits and
The Corporate Planning Process
Mission and Vision Statements

I. To be a World Class Indian Bank

II. Benchmarking against international stan
dards.
III. To build sound customer
franchises across distinct businesses
IV. Best practices in terms of product
HDFC Bank
offerings, technology, service
The Corporate Planning Process
Mission and Vision Statements

IV. The Global

I. The Best Place to Work
Beauty WeWe
Leader. willwill
be build
knowna unique
for our
leadership edge,
portfolio of through
Beauty our passion
and related forstriving
brands, high standards,
to surpass
our
ourrespect for diversity
competitors andinnovation
in quality, our commitment to create
and value, and
exceptional opportunities
elevating our for professional
image to become the Beautygrowth
companyso that
most
associates
women turncantofulfill their highest potential.
worldwide.
V.
II. The
TheLargest
Women'sWomen's
Choice Foundation
for Buying We will be a
become the
committed
destinationglobal champion
store for women,for the health
offering and well-being
the convenience of
ofmultiple
womenbrands
through philanthropic
and efforts
channels, and that eliminate
providing a personal
breast cancershopping
high touch from theexperience
face of thethat
earth, andcreate
helps that lifelong
empower
customerwomen to achieve economic independence.
relationships.
VI.
III. The
TheMost Admired
Premier DirectCompany
Seller WeWewillwill deliver
expand oursuperior
Avon presence in
returns to our shareholders
direct selling by tirelesslyofpursuing
and lead the reinvention new
the channel,
The Corporate Planning Process
Mission and Vision Statements

Through the partnering of

Distributors, Employees, and the
Founding Families, and the
support of quality products and
service, we offer all people the
opportunity to achieve their
goals through the _____ Sales
Amway
and Marketing Plan
The Corporate Planning Process
Mission and Vision Statements

We have a relentless drive to invent

things that matter: innovations that
build, power, move and help cure the
world. We make things that very few
in the world can, but that everyone
needs. This is a source of pride. To
our employees and customers, it
defines _____. GE
The Corporate Planning Process
Mission and Vision Statements

____’s mission is to organize the

world’s information and make it
universally accessible and
useful.

Google
The Corporate Planning Process
Mission and Vision Statements

To be a globally respected corporation

that provides best-of-breed business
solutions, leveraging technology,
delivered by best-in-class people."

To achieve our objectives in an

environment of fairness, honesty, and
courtesy towards our clients, Infosys
The Corporate Planning Process
Company’s Mission and Goals
A Mission Statement is the first indication of how a company views the claims of its Stakeholders. A Mission
Statement is expected to:
1. Define the Business Translated into Marketing Jargons

Segmentation and Targeting

W tis
Sa sto )
ha fie er
s)

t i d?
(C eed
up

s
us ied? ing

N
u s

Be
ro
e

in
rG
tis s b

g
me
Sa ho i
f
to

Customer Needs and Wants / Value

W

Definition
(C

of
Business
Proposition

How are customer needs

being satisfied?
(Distinctive
Competitiveness)
Product Offering
Abell’s framework of “Defining the Business”
The Corporate Planning Process
A broad model of the Corporate Planning Process

Corporate Level Business Level

Planning Marketing
Setting Objectives
Defining the Designing the and other
and Goals for the
Company Mission Business Portfolio Functional
Company
Strategies
The Corporate Planning Process
Designing the Business Portfolio

A strategic business unit, popularly known as SBU, is a

fully-functional unit of a business that has its own vision and
direction. Typically, a strategic business unit operates as a
separate unit, but it is also an important part of the company.

A diversified firm should be managed as a ‘portfolio’ of

businesses, with each business unit serving a clearly defined
product-market segment with a clearly defined strategy.

The portfolio of Businesses should be managed by allocating

capital and managerial resources to serve the interests of the
firm as a whole. In essence the portfolio should be designed
and managed to achieve overall corporate strategy.
 FMCG
- Cigarettes
- Personal Care
- Foods
Information -Agarbattis
Hotels
Technology - Stationery
- Sheraton
- Software - Fortune ITC Mission
- Consulting - ITC To enhance the wealth
generating capability of
the enterprise in a
Agri Business Paper and globalizing environment,
- Food Grains
delivering superior and
Packaging sustainable stakeholder
- Processed Fruits
- Boards value
- Marine Products
- Specialty paper
-Coffee Fashion and
Cartons
-Tobacco Retail - Tobacco packing
- Wills Lifestyle
- John Players
The Corporate Planning Process
Designing the Business Portfolio – Market Expansion Strategy (Ansoff’s Matrix)
Existing Markets Existing Products
Market Penetration
A strategy for growth by
increasing sales of current
products to current market
segments without
changing the product
New Markets
Market Development
A strategy for growth by
identifying and developing
new market segments for
current company products
New Products
Product
Development
A strategy for growth by
offering modified or new
products to current market
segments.
Diversification
A strategy for growth
through starting up or
acquiring businesses
outside the company’s
current products and
markets.
The Corporate Planning Process
Managing a Business Portfolio – BCG Matrix

High Low

Stars Question Marks

High-growth, High-Share businesses Low-share business in high growth
market, requiring large investments to
Market Growth Rate

High

and products. These often require

heavy investments to support the rapid sustain or grow market share. Firm
growth needs to choose which ones to grow
into stars & which to exit.

Cash Cow Dog

High-Share business in low growth Low-share businesses in low-growth
markets. Little investment required to markets, which may be currently
Low

sustain business, thus producing a lot of sustaining themselves, but do not have
cash flow for the company. the potential to be large sources of
cash.

Relative Market Share

 The Corporate Planning Process
Managing a Business Portfolio – GE Matrix

Strong Medium Weak

High

Protect Position Invest to build Build Selectively

Market Attractiveness

Medium

Selectively Manage for

Build Selectively Limited expansion or harvest
earnings
Low

Protect and Refocus Manage for earnings Divest

Business Strength
II. Strategic Marketing Process
Strategic Marketing Process
Differentiating between Marketing Management and Strategic Marketing
Strategic Marketing Marketing Management

Time Long Term (minimum 3 years time frame) Short term (maximum 1 year time frame)

To build a brand and market the company

Objective To drive the company in the right direction
and its products.

Searching for new opportunities from

Tapping the existing opportunities with the
Opportunity existing business and exploring new
set business
business

Manager’s Requires vision, creativity and risk taking Requires control, discipline and
Approach ability proactivness
Strategic Marketing Process
Key Elements of Marketing Strategy Formulation

ent Tech
onm nolo
Envir gical
Envi
egal ronm
l/L ent
tica Customer
Poli

Marketing Strategy :
Achieving Maximum
positive differentiation
over competition in
meeting customer
Corporation needs Competition
Soc
ial E
nvir n ment
onm i c Enviro
ent m
Econo
Strategic Marketing Process
Key Elements of Marketing Strategy Formulation

Based on the interplay of the strategic three Cs

(Customer, Corporation, Competition), the following
decision are made :

1 2 How to compete?
Where to (e.g. Introducing a new
compete? product to meet
Defining the market consumer need or
segments re-positioning an existing
product?)

3 When to compete?
Timing of Market Entry
(e.g. being first in the
market or waiting for the
primary demand to be
established)
III. The Corporation
The Corporation
Key Elements of Marketing Strategy Formulation

ent Tech
onm nolo
Envir gical
Envi
egal ronm
l/L ent
tica Customer
Poli

Marketing Strategy :
Achieving Maximum
positive differentiation
over competition in
meeting customer
Corporation needs Competition
Soc
ial E
nvir n ment
onm i c Enviro
ent m
Econo
The Corporation
Factors influencing Corporate Appraisal : 1) Corporate publics (Stakeholders)
Through the 1950s, 60s, 70s and most of 80s, the operative word for any Business was “Shareholder
Value”. This obsession with “Shareholder” continued till about late 80s….till…..
The Corporation
Factors influencing Corporate Appraisal : 1) Corporate publics (Stakeholders)
- In the early 90s, the focus shifted from Shareholder Value to Stakeholder Value

Who is a Stakeholder??

A Stakeholder is anybody or any group which can influence or get affected (or thinks they are getting
affected) by your actions.
The Corporation
Factors influencing Corporate Appraisal : 2. Value Orientation of top management

Companies in the same

business move in different
strategic directions because of
different top management
values.
The Corporation
Factors influencing Corporate Appraisal : 2. Value Orientation of top management

As with human beings, the

core values of an organization
are unlikely to change, and
every strategic decision made
is dependent on these values.
The Corporation
Factors influencing Corporate Appraisal : 3. Resources and Capabilities
Lets start by understanding the differences between Resources and Capabilities

Resources Capabilities

Land is a resource How it is used depends on the company’s capability

The Corporation
Factors influencing Corporate Appraisal : 3. Resources and Capabilities

A company is said to have a

Resources Build
Competitive Advantage if it
delivers PROFITS which
are ABOVE the Industry
Shape Superior
Distinctive
Capabilities
Strategies average.Competitive
Advantage Profitability

Build
Capabilities
III. Competitive Advantage
Competitor Analysis
Distinctive Capabilities and Competitive Advantage

A company is said to have a

Resources Build
Competitive Advantage if it ??
delivers PROFITS which
are ABOVE the Industry
Shape Superior
Distinctive
Capabilities
Strategies average.Competitive
Advantage Profitability

Build
Capabilities
Competitor Analysis
Competitive Advantage
Industry Average Above Average Profits
Customer
Surplus Above
V
icing Avg. Profit
iu m pr a
rem
Customer P Customer
V Surplus l V Surplus
P
a u Profit a
P r P
l r Profit
e l r
I Profit
u i u I
c
e Lower e Above
c Cost e Cost c
Costs Avg. Profit
s e
e Cost

Option 1 : Increased Revenue Option 2 :Reduce Cost

Competitor Analysis
Competitive Advantage
Cost (C) = Cost of production
(including cost of capital invested)

= Cost of creating value

Value (V) = Value to customer

= Customer’s Perceived Value

Price (P) = Price

= The Customer’s cost for the

product

P- C = Profit Margin
V - P = Customer Surplus
V – C = Value Created
Competitor Analysis
Competitive Advantage
Cost (C) = Cost of production
(including cost of capital invested)

= Cost of creating value

Value (V) = Value to customer
Value
Creation = V - C = Customer’s Perceived Value
Price (P) = Price

= The Customer’s cost for the

product

P- C = Profit Margin
V - P = Customer Surplus
V – C = Value Created
Competitor Analysis
Distinctive Capabilities and Competitive Advantage

V Product Differentiation
C Cost Reduction
Competitor Analysis
Distinctive Capabilities and Competitive Advantage

V Product Differentiation
C Cost Reduction

What job do your customers buy your product to do?

Better or at least a different job than

Same job at a lower cost
your competitor
(Providing more value which would allow you
(Providing the same value as the competitor
to charge higher than industry average prices
but at a lower cost - therefore higher than
– therefore higher than industry average
industry average profits)
profits)
Competitor Analysis
Distinctive Capabilities and Competitive Advantage

V Product Differentiation
C Cost Reduction

What job do your customers buy your product to do?

Achieved through.. Achieved through..

- Product Features - Economies of Scale

- Quality and Reliability - Learning curve

- Convenience - Proprietary knowledge

- Positioning - Lower input costs

End of Module 1