2

Developing Marketing
Strategies and Plans

Marketing Management,
 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?

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 Three V’s Approach to Marketing

Define the value segment

Define the value proposition

Define the value network

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 What is the Value Chain?

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 What is the Value Chain?

The value chain is a tool for identifying

ways to create more customer value
because every firm is a synthesis of
primary and support activities
performed to design, produce, market,
deliver, and support its product.

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 Core Business Processes

• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship management
process
• Fulfillment management process

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 Core Business Processes

• The market-sensing process—gathering and

acting upon information about the market
• The new-offering realization
process—researching, developing, and
launching new high-quality offerings quickly
and within budget
• The customer acquisition process—defining
target markets and prospecting for new
customers
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 Core Business Processes

• The customer relationship management

process—building deeper understanding,
relationships, and offerings to individual
customers
• The fulfillment management
process—receiving and approving orders,
shipping goods on time, and collecting
payment

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 Characteristics of Core Competencies

• A source of competitive advantage

• Applications in a wide variety of markets
• Difficult to imitate

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 Firms Should Consider Key Questions

• Can we learn from the past?

• How should the present be evaluated?
• What do we envision for the future?

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 What is Holistic Marketing?

Holistic marketing sees itself as

integrating the value exploration,
value creation, and value delivery
activities with the purpose of building
long-term, mutually satisfying
relationships and coprosperity among
key stakeholders.

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 What is a Marketing Plan?

A marketing plan is the central

instrument for directing and
coordinating the marketing effort.
It operates at a
strategic and tactical level.

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 Levels of a Marketing Plan

• Strategic • Tactical
• Target marketing • Product features
decisions • Promotion
• Value proposition • Merchandising
• Analysis of • Pricing
marketing • Sales channels
opportunities
• Service

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 Figure 2.2 The Strategic Planning,
Implementation,
and Control Processes

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 Corporate Headquarters’
Planning Activities

• Define the corporate mission

• Establish strategic business units
(SBUs)
• Assign resources to each SBU
• Assess growth opportunities

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 Good Mission Statements

Focus on limited number of goals

Stress major policies and values

Define major competitive spheres

Take a long-term view

Short, memorable, meaningful

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 Major Competitive Spheres

Industry

Geographic
al Products

Vertical Competenc
channels e
Market
segment
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 Rubbermaid Commercial Products, Inc.

“Our vision is to be the Global Market Share

Leader in each of the markets we serve. We
will earn this leadership position by
providing to our distributor and end-user
customers innovative, high-quality, cost-
effective and environmentally responsible
products. We will add value to these products
by providing legendary customer service
through our uncompromising Commitment
to Customer Satisfaction.”
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 Motorola

“The purpose of Motorola is to honorably

serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.”

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 eBay

“We help people trade anything on earth.

We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”

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 Table 2.3
Product Orientation vs. Market Orientation
Company Product Market
Missouri-Pacific We run a railroad We are a
Railroad people-and-goods
mover
Xerox We make copying We improve office
equipment productivity

Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We entertain

people
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 Dimensions That Define a Business

Custome
r
groups

Custome
Technolo
r
gy
needs
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 Characteristics of SBUs

• It is a single business or collection of

related businesses
• It has its own set of competitors
• It has a leader responsible for strategic
planning and profitability

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 Figure 2.3 The Strategic Planning Gap

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 Strategies Suggested by Ansoff’s
Product-Market Expansion Grid

• Market penetration
• Market development
• Product development
• Diversification

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 Intensive Growth Strategies/ Improve
existing businesses
Ansoff’s Product-Market Expansion Grid
 Intensive Growth/Improve
existing businesses
• Market-penetration strategy- Gain more
market share with current products in current
markets.
• Market-development strategy- Find or
develop new markets for current products.
• Product-development strategy- Develop new
products of potential interest to current
markets.
• Diversification strategy - Develop new
products for new markets.
Integrative growth / Build or acquire businesses
related to current businesses

• Backward
integration-Example: acquire
supplier.
• Forward
integration-Example: acquire
wholesaler or retailer.
• Horizontal integration-
Example: acquire one or more
competitors.
Diversification growth /Add attractive unrelated
businesses

• Concentric strategy-Seek new products

that have technological or marketing
synergies with existing product lines that
appeal to a different group of customers.
• Horizontal strategy-Search for
unrelated new products that appeal to
current customers.
• Conglomerate strategy-Seek new
businesses that have no relationship to
current technology, products, or markets.
 2. Downsizing businesses
3. Terminating older businesses

• Downsizing- Whereby a company

reduces its size and operations to
increase its efficiency and profitability.
Reduce employees and company
activities.
• Terminating older businesses- Sell
off old unprofitable businesses to
reduce costs.
 What is Corporate Culture?

Corporate culture is the shared

experiences, stories, beliefs, and norms
that characterize an organization.
 Tactics for Managing Change

• Avoid the innovation title for the team

• Use the buddy system
• Set the metrics in advance
• Aim for quick hits first
• Get data to back up your gut
 Figure 2.5 The Business Unit
Strategic Planning Process

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 SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

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 Market Opportunity Analysis (MOA)

• Can the benefits involved in the opportunity

be articulated convincingly to a defined target
market?
• Can the target market be located and
reached with cost-effective media and trade
channels?
• Does the company possess or have access
to the critical capabilities and resources
needed to deliver the customer benefits?

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 Market Opportunity Analysis (MOA)
(cont.)
• Can the company deliver the benefits
better than any actual or potential
competitors?
• Will the financial rate of return meet or
exceed the company’s required
threshold for investment?

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 FedEx

FedEx added
Sunday deliveries
based on customer
requests and
market demand

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 Figure 2.6 Opportunity Matrix

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 Figure 2.6 Threat Matrix

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 Goal Formulation and MBO

• Unit’s objectives must be hierarchical

• Objectives should be quantitative
• Goals should be realistic
• Objectives must be consistent

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 Porter’s Generic Strategies

Overall Cost Leadership

Differentiation

Focus

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 Categories of Marketing Alliances

Product or Service Alliances

Promotional Alliances

Logistics Alliances

Pricing Collaborations

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 Strategic Formulation

• A strategy is a game plan for getting there.

• Marketing Strategies
• Overall cost leadership-achieve the lowest
production and distribution to underprice
competitors and win market share.
• Differentiation-achieve superior performance in
an important customer benefit area valued by a
large part of the market.
• Focus-Focus on one or more narrow market
segments and pursue either cost leadership or
differentiation.
• Firms directing the same strategy to the same target market
constitute a strategic group.
 Marketing Plan Contents

✔ Executive summary
✔ Table of contents
✔ Situation analysis
✔ Marketing strategy
✔ Financial projections
✔ Implementation controls

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 Evaluating a Marketing Plan

✔ Is the plan simple?

✔ Is the plan specific?
✔ Is the plan realistic?
✔ Is the plan complete?

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 Product Planning: The nature and contents of a
Marketing Plan

• A marketing plan is written document

that summarizes what the marketer has
learned about the marketplace and
indicates how the firm plans to reach its
marketing strategies.
 Marketing Plan Contents
• Executive summary and table of contents-A
table of contents and a brief summary for top
managers of the main goals and
recommendation.
• Situation analysis-Background data on sales,
costs, the market, the competitors, and the
various forces in the marcroenviroment.
• Marketing strategy-Define the mission,
marketing and financial objectives, and the needs
that the market offering intends to satisfy plus the
competitive positioning.
 Marketing Plan Contents

• Financial projections-Includes a
sales forecast, an expense forecast,
and a break-even analysis.
• Implementation controls-Outlines the
controls for monitoring and adjusting
the implementation of the plan.
 Marketing Debate

✔ What good is a mission statement?

Take a position:
1. Mission statements are critical to a
successful marketing organization.
or
2. Mission statements rarely provide
useful marketing value.

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 Marketing Discussion

✔ What implications do Porter’s value

chain and the holistic marketing
orientation model have for
marketing planning?

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