Chapter 2

Developing Marketing Strategies and

plans

Marketing Management
Course Instructor : Hadiqa Riaz
Business Studies Department, BUKC
1
Marketing and Customer Value

• The task of any business is to deliver customer value at a profit.

• Instead of emphasizing making and selling, companies see themselves as part of a value
delivery process.
Marketing and Customer Value

Value Delivery Process

The process consists of three parts:
1. Choosing the value ( Segmentation, targeting, positioning “STP”)
2. Providing the value (Marketing must determine specific product features, prices, and
distribution)
3. Communicating the value ( utilizing the sales force, sales promotion, advertising, and other
communication tools to announce and promote the product).

The value delivery process begins before there is a product and continues while it is being
developed and after it becomes available.
Marketing and Customer Value

The Value Chain

Marketing can’t go it alone in creating customer value. Under the company-wide strategic plan,
marketing must work closely with other departments to form an effective internal company value
chain and with other companies in the marketing system to create an external value delivery
network that jointly serves customers.
A value chain is used to describe all the business activities it takes to create a product from start
to finish (e.g., design, production, distribution, etc.). And a value chain analysis gives businesses
a visual model of these activities. With this analysis, you can take steps to create a competitive
advantage, improve efficiency, and increase profit margins.
Michael Porter Value chain Model
Marketing and Customer Value
The firm's success depends not only on how well each department performs its work, but also on
how well the various departmental activities are coordinated to conduct core business processes.
These core business processes include:
• The market sensing process.
• The new offering realization process.
• The customer acquisition process.
• The customer relationship management process.
• The fulfillment management process.
A network of delivering products to the customer which is composed of distributors, suppliers,
and manufacturing company is classified as Value delivery network. It is made up of the
company, suppliers, distributors, and ultimately customers who partner with each other to
improve the performance of the entire system.
Value Delivery Network
Marketing and Customer Value

Core Competencies:
A core competency has three characteristics:
1. It is a source of competitive advantage in that it makes a significant contribution to perceived
customer benefits
2. It has applications in a wide variety of markets, and
3. It is difficult for competitors to imitate.
Nike, for example, does not manufacture its own shoes, because certain Asian manufacturers are
more competent in this task; Nike nurtures its superiority in shoe design and shoe merchandising,
its two core competencies.
Marketing and Customer Value

Strategic Planning: Strategic planning is an organization's process of defining its strategy, or

direction, and making decisions on allocating its resources to pursue this strategy.
To ensure they execute the right activities, marketers must prioritize strategic planning in three
key areas:
1. Managing the businesses as an investment portfolio
2. Assessing the market’s growth rate and the company’s position in that market
3. Establishing a strategy
Marketing and Customer Value

• Most Large consist of four organizational Levels

• Corporate
• Division
• Business Unit
• Product
What is Marketing Plan?

A marketing plan is the central instrument for directing and coordinating the marketing effort. It
operates at a strategic and tactical level
Levels of a Marketing Plan:
Strategic: Target marketing decisions, Value proposition, Analysis of marketing opportunities.
Tactical: Product features Promotion Merchandising Pricing Sales channels Service
Corporate and Division Strategic Planning

All corporate headquarters undertake four planning activities/Organizational activities:

1. Defining the corporate mission
2. Establishing strategic business units
3. Assigning resources to each SBU
4. Assessing growth opportunities

ORGANIZATIONAL MISSION is the purpose for which the Organization exists. The firms
organizational mission reflects such information as what types of products or services it
produces, who its customers tend to be, and what important values it holds.
Corporate and Division Strategic Planning

Tesla’s mission statement was “to

accelerate the world’s transition
to sustainable transport.”
However, in mid-2016, under Elon
Musk’s leadership, the company
changed the corporate mission to
“to accelerate the world’s
transition to sustainable energy.”
Corporate and Division Strategic Planning
Good Mission Statements:
• Focus on a limited number of goals
• Stress major policies and values
• A good mission statement should be market oriented not product oriented.
• Take a long-term view
• Short, memorable, meaningful
Corporate and Division Strategic Planning
What is Corporate Culture?
“The shared experiences, stories, beliefs, and norms that characterize an
organization."
Yet, walk into any company and the first thing that strikes you is the corporate
culture—the way people are dressed, how they talk to one another, the way they
greet customers.
One example of how the Nokia creates its culture can be seen in the company
cafeteria where employees view a slide show as they eat. It's not just any slide
show, but one of pictures taken with camera phones by some of Nokia's 1,500
employees—part of an internal corporate competition that rewards staff creativity.
Nokia even has a watchword for its culture of continuous innovation: "renewal
The Corporate culture of Google

• https://www.youtube.com/watch?v=XMdBNZ1ck-s
Corporate and Division Strategic Planning

SBU ( Strategic Business Unit):

Management’s first step is to identify the key businesses that makeup the company, called
Strategic Business Units (SBUs).
When a firm has multiple strategic business units, it must decide what the objectives and
strategies for each business are and how to allocate resources among them. A group of businesses
can be considered a portfolio.
For example, PepsiCo
Corporate and Division Strategic Planning

Characteristics of SBUs
1. It is a single business or collection of related businesses
2. It has its own set of competitors
3. It has a leader responsible for strategic planning and profitability
Corporate and Division Strategic Planning

Assigning Resources to each SBU:

Once it has defined SBUs, management must decide how to allocate corporate resources to each.
• BCG’s growth-share Matrix
• Ansoff’s Product-Market Expansion Grid
Designing The Business Portfolio

Figure 2.2 The BC G Growth-Share Matrix

Corporate and Division Strategic Planning

Assessing growth opportunities: It involves planning new businesses, downsizing, or

terminating older businesses. The company's plans for existing businesses allow it to project total
sales and profits. If there is a gap between future desired sales and projected sales, corporate
management will have to develop or acquire new businesses to fill it.
• INTENSIVE GROWTH
• INTEGRATIVE GROWTH
• DIVERSIFICATION GROWTH
• DOWNSIZING AND DIVESTING OLDER BUSINESSES
Corporate and Division Strategic Planning
Intensive Growth
Corporate and Division Strategic Planning

Market Penetration: Company growth by increasing sales of current products to

current market segments without changing the product.
Market Development: Company growth by identifying and developing
New market segments for current company products.
Product Development: Company growth by offering modified or new products
to current market segments.
Diversification: Company growth through starting up or acquiring businesses
outside the company’s current products and markets.
 Cont.…

Examples of Market penetration strategy

• Southwest airline in the current market by offering flights for the small distance cities.
Examples of Market development strategy
• Pakistan State Oil(PSO) developing new market by exporting oil to Afghanistan.
• Chinese products developed new market for their product worldwide.
Examples of Product development strategy
• McDonalds is always within the fast-food industry, but frequently markets new burgers.
Examples of Diversification strategy
• Canon diversified from a camera-making company into producing whole new range of office equipment.
Integrative Growth

• Forward Integration: The company acquire or merge with a distributor to gain over the
distribution chain.
• Backward Integration: The company acquire/merge with a supplier or manufacturer to gain
over the supply chain.
• Horizontal Integration: Horizontal integration is the acquisition of a related business.
Business Unit Strategic Planning
Business Unit Strategic Planning

A SWOT Analysis is one of the most commonly used tools to assess the internal and external
environments of a company and is part of a company’s strategic planning process.
The goal is to match the company’s strengths to attractive opportunities in the environment while
eliminating or overcome the weaknesses and minimizing the threats.
Business Unit Strategic Planning
Business Unit Strategic Planning
Market Opportunity Analysis (MOA)
Market opportunity analysis framework revolves around four key elements
• Customers
• Competitors
• Technology
• Company
Business Unit Strategic Planning
Business Unit Strategic Planning
Goal Formulation: Unit’s objectives must be hierarchical Objectives, should be quantitative,
Goals should be realistic, Objectives must be consistent.
Strategic Formulation: Every business must design a strategy for achieving its goals, consisting
of a marketing strategy, and a compatible technology strategy and sourcing strategy.
Porter’s Generic Strategies
1. Overall cost leadership
2. Differentiation
3. Focus
Business Unit Strategic Planning
Categories of Marketing Alliances:
1. Product or service alliance
2. Promotional alliance
3. Logistics alliances
4. Pricing collaborations 
Marketing Implementation:
It is the process that turns marketing plans into marketing actions to accomplish company’s
strategic objectives. A process which should ensure the achievement of the strategic objectives
adopted by the company. A special role in this process plays a function of organizing and
directing people. It involves preparing comprehensive list of activities to be performed, people
responsible for this activities and resources needed.
Business Unit Strategic Planning
Marketing Control:
The main objective controlling is the current monitoring and evaluation of the marketing
activities of the company, recording and reporting of deviations to management, which takes
decisions based on this information.
Marketing controls involves 4 steps:
• Establishing Performance Standards.
• Measuring the Actual Performance.
• Comparing Actual Performance to the Standards.
• Taking Corrective Action.
Marketing Strategy of Nike and Starbucks

• Nike Branding Flatters Athlete Egos

• https://www.youtube.com/watch?v=HkWRF23pj6M
• Marketing Strategy of Starbucks
• https://www.youtube.com/watch?v=XUBeH7VQaFY&t=181s
Marketing Plan and its contents
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. It contains
tactical guidelines for the marketing programs and financial allocations over the planning period.
It is one of the most important outputs of the marketing process.
Marketing Plan Contents:
• Executive summary
• Table of contents
• Situation analysis
• Marketing strategy
• Financial projections
• Implementation controls