Phillip Kevin Lane

Kotler • Keller
Marketing Management
Developing Marketing
Strategies and Plans
Discussion Questions

1. How does marketing affect customer

value?

2. How is strategic planning carried out

at different levels of the organization?

3. What does a marketing plan include?

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 Key ingredients of the marketing management
process are insightful, creative strategies and
plans that can guide marketing activities.
Developing the right marketing strategy over
time requires a blend of discipline and
flexibility.

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 Marketing and Customer
Value
• The task of any business is to deliver customer
value at a profit.
• In a hypercompetitive economy with increasingly
informed buyers faced with abundant choices, a
company can win only by fine-tuning the value
delivery process and choosing, providing, and
communicating superior value.

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The Value Delivery Process
• The traditional view of marketing is that the firm makes
something and then sells it, with marketing taking place in
the selling process
• The smart competitor must design and deliver offerings for
well-defined target markets. This realization inspired a new
view of business processes that places marketing at the
beginning of planning.
• Instead of emphasizing making and selling, companies now
see themselves as part of a value delivery process.
• We can divide the value creation and delivery sequence into
three phases

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The Value Delivery Process
• Marketers must segment the market, select the appropriate
target, and develop the offering’s value positioning.

• The formula “segmentation, targeting, positioning (STP)” is

the essence of strategic marketing.

• The second phase is providing the value. Marketing must

determine specific product features, prices, and distribution.

• The task in the third phase is communicating the value by

utilizing the sales force, Internet, advertising, and any other
communication tools to announce and promote the product.

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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?

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.
OR
Value chain is a tool for identifying ways to
create more customers value

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 Value chain

Every firm is a synthesis of activities performed to design, produce,

market, deliver, and support its product product. The value chain
identifies nine strategically relevant activities—five primary and
four support activities—that create value and cost in a specific
business.

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Value chain

• The primary activities are

• (1) inbound logistics, or bringing materials into the business;
(2) operations, or converting materials into final products;
• (3) outbound logistics, or shipping out final products;
• (4) marketing, which includes sales; and
• (5) service.
Specialized departments handle the
• support activities—(1) procurement, (2) technology
development, (3) human resource management,
(4) firm infrastructure. (Infrastructure covers the costs of general
management, planning, finance, accounting, legal, and
government affairs.)
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Core Business Processes
Customer relationship
management
Fulfillment
management
Customer
acquisition

New-offering
realization

Market-sensing

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Core business process

• The firm’s success depends not only on how well each

department performs its work, but also on how well the
company coordinates departmental activities to conduct core
business processes.
• These processes include:
• • The market-sensing process. All the activities in gathering
and acting upon information about the market
• • The new-offering realization process. All the activities in
researching, developing, and launching new high-quality
offerings quickly and within budget

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Core business process
• The customer acquisition process. All the activities
in defining target markets and prospecting for new
customers
• The customer relationship management process. All
the activities in building deeper
• understanding, relationships, and offerings to
individual customers
• The fulfillment management process. All the
activities in receiving and approving orders,
shipping the goods on time, and collecting payment

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 Core Competencies

• Traditionally, companies owned and controlled most of the

resources that entered their businesses— labor power,
materials, machines, information, and energy—but many
today outsource less-critical resources if they can obtain
better quality or lower cost.
• The key, then, is to own and nurture the resources and
competencies that make up the essence of the business
• Competitive advantage ultimately derives from how well the
company has fitted its core competencies and distinctive
capabilities into tightly interlocking “activity systems.”.

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Core Competencies

Difficult to
imitate
Useful in a
wide variety
of markets
Contributes to
perceived
customer benefits
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Holistic Marketing

Value Value
Exploration Creation

Value
Delivery

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Value exploration How a company identifies
new value opportunities

Value creation How a company efficiently

creates more promising new value offerings

Value delivery How a company uses its

capabilities and infrastructure to deliver the
new value offerings more efficiently

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Central role of strategic planning

• To ensure they select and execute the right activities,

marketers must give priority to strategic
• planning in three key areas: (1) managing a
company’s businesses as an investment portfolio,
• (2) assessing each business’s strength by considering
the market’s growth rate and the company’s
• position and fit in that market, and (3) establishing a
strategy. The company must develop a game
• plan for achieving each business’s long-run
objectives.
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Central role of strategic planning
• Most large companies consist of four organizational levels: (1)
corporate, (2) division, (3) business unit, and (4) product.
• Corporate headquarters is responsible for designing a
corporate strategic plan to guide the whole enterprise; it
makes decisions on the amount of resources to allocate to
each division, as well as on which businesses to start or
eliminate.
• Each division establishes a plan covering the allocation of
funds to each business unit within the division. Each business
unit develops a strategic plan to carry that business unit into a
profitable future.
• Finally, each product level (product line, brand) develops a
marketing plan for achieving its objectives.
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Marketing Plan

• Directs and coordinates the

marketing effort
• Product Line or Brand Level
• Strategic and Tactical levels

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 Levels of a Marketing Plan

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

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Corporate and division Strategic
Planning

1 Define corporate mission

2 Establish SBU’s

3 Assign resources to SBU’s

4 Assess growth opportunities

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Defining the Corporate Mission

Who is the
customer? What is of
value to the
What is our customer?
business?

What should
our business What will our
be? business be?
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Examples

Unilever’s Mission Statement

Unilever’s corporate mission is “to add vitality
to life. We meet everyday needs for
nutrition, hygiene and personal care with
brands that help people feel good, look
good and get more out of life.”
Google’s mission statement
Our mission is to organize the world's
information and make it universally
accessible and useful. 26
Copyright © 2016 Pearson
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 Major Competitive Spheres

• Industry Some companies will operate in only

one industry; some only in a set of related
industries; some only in industrial goods,
consumer goods, or services; and some in any
industry.
• Products the range of products
• Competence technological and other core
competencies

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• Market segment The type of market or
customers a company will serve is the market
segment.

• Vertical channels from raw material to final

product and distribution

• Geographic regions, cities, countries etc

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• A market orientated company is one that
organizes its activities, products and services
around the wants and needs of its customers.
• A product-orientated firm has its primary
focus on its product and on the skills,
knowledge and systems that support that
product.

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Market orientation gets the right product: product orientation
get the product right

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Strategies Suggested by Ansoff’s Product-
Market Expansion Grid

• Market penetration
• Market development
• Product development
• Diversification

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 Present products New Products

Present Market Product

Markets
Penetration Development

New
Markets Market
Diversification
Development

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• The company first considers whether it could gain more market
share with its current products in their current markets, using a
market-penetration strategy. Next it considers whether it can
find or develop new markets for its current products, in a
market-development strategy. Then it considers whether it can
develop new products of potential interest to its current
markets with a product-development strategy. Later the firm
will also review opportunities to develop new products for new
markets in a diversification strategy.

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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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 Porter’s Generic Strategies

Overall Cost Leadership

Differentiation

Focus

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 Strategy Formulation
Porter’s Generic Strategies

Strategic Alliances
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Porter’s Generic Strategies

• Overall cost leadership aiming to be the lowest

cost producer and/or distributor within their
industry.

• Differentiation Creating a product or service

that is perceived as being unique through out
the industry

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Focus concentrating on the limited part of the market .
(offering a specialized service in a niche market). He then
subdivided the Focus strategy into two parts: "Cost Focus"
and "Differentiation Focus”.

Cost Focus means emphasizing cost-minimization within a

focused market, and Differentiation Focus means pursuing
strategic differentiation within a focused market.

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