Developing Marketing Strategies And Plans

Kotler, Philip. Marketing management/Philip Kotler, Kevin Lane Keller. — 14th ed. p. cm
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?

 Three V’s Approach to
Market Offering
• Value Creation How can a company efficiently create more promising
new value offerings?

• Value Communication is based on relevant and timely information.

Without such information, there can be no effective communication.

• Value Delivery How can a company use its capabilities and infrastruc-
ture to deliver the new value offerings more efficiently?
Eg: advertising and managing distribution
 What is the Value Chain Model?
Michael Porter has proposed the value chain as a tool for identifying ways to create more
customer value. According to this model, every firm is a combination of activities performed to
des
ign, produce, market, deliver, and support its product. The value chain identifies nine strategically
relevant activities

Five primary and four support activities that create value and cost in a specific business.
 What is the Value Chain Model?
Primary Activities
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.

Support activities
6. Procurement,
7. Technology development,
8. Human resource management, and
9. Firm infrastructure. (Infrastructure covers the costs of general management, planning, fi-
nance, accounting, legal, and government affairs.)
Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service.
They consist of the following:
Inbound logistics – These are all the processes related to receiving, storing, and distributing inputs internally.
Your supplier relationships are a key factor in creating value here.
Operations – These are the transformation activities that change inputs into outputs that are sold to customers.
Here, your operational systems create value.
Outbound logistics – These activities deliver your product or service to your customer. These are things like
collection, storage, and distribution systems, and they may be internal or external to your organization.
Marketing and sales – These are the processes you use to persuade clients to purchase from you instead of
your competitors. The benefits you offer, and how well you communicate them, are sources of value here.
Service – These are the activities related to maintaining the value of your product or service to your customers,
once it's been purchased.
Support Activities:
These activities support the primary functions above. In our diagram, the dotted lines show that each support, or
secondary, activity can play a role in each primary activity. For example, procurement supports operations with
certain activities, but it also supports marketing and sales with other activities.
Procurement (purchasing) – This is what the organization does to get the resources it needs to operate. This
includes finding vendors and negotiating best prices.
Human resource management – This is how well a company recruits, hires, trains, motivates, rewards, and
retains its workers. People are a significant source of value, so businesses can create a clear advantage with
good HR practices.
Technological development – These activities relate to managing and processing information, as well as
protecting a company's knowledge base. Minimizing information technology costs, staying current with technolog-
ical advances, and maintaining technical excellence are sources of value creation.
Infrastructure – These are a company's support systems, and the functions that allow it to maintain daily
operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure
that businesses can use to their advantage.
Core Business Processes
Fulfillment Management:
Fulfillment management process all activities in receiving ,orders shipping and collecting money
Fulfillment services ensure that the right system is employed at the right time for specific products. It allows con-
tinuous improvements to be made to increase efficiency and minimize waste. A great order fulfillment process is
designed to please customers while adding value to the services that are offered. If any part of the process fails
or is inefficient, it may create bottlenecks and increased costs. Customers may also be dissatisfied with their or-
dering experience if products are late, never received, or damaged.
With fulfillment, a company can expand its operations on a global scale while keeping supply chain costs man-
ageable. It can improve its marketing fulfillment to successfully please its existing customer base while bringing in
new customers. A business can also be more competitive in its industry. It can adapt operations when any un-
foreseen issues arise to ensure that the supply chain continues to operate at full capacity.
Core Competencies

Difficult to
imitate
Useful in a
wide variety
of markets
Contributes to
perceived cus-
tomer benefits
Holistic Marketing

Value
Value
Exploration
Creation
Value
Delivery
Marketing Plan

• Directs and coordinates the marketing effort

• Product Line or Brand Level
• Strategic and Tactical levels
 Levels of a Marketing Plan

Strategic Tactical
– Analysis of marketing opportunities – Product features
– Target marketing decisions – Promotion
– Value proposition – Merchandising
– Pricing
– Sales channels
– Service
Defining the Corporate Mission
Major Competitive Spheres
 Industry :one or more
 Products: define the range of products they will supply
 Competence: identify the level of technology it will master and leverage
 Market segment: the type of customers
 Vertical channels: the number of channel levels , from raw material to final product and distribution
 Geographic: range of regions, countries in which company operate
A vertical marketing system refers to the teamwork of the different members of any distribution channel.
This can include producers, retailers, and wholesalers. All of them need to work with one another in order to
successfully deliver products to consumers and achieve the best possible efficiency.
 Market orientation gets the right product: product orientation
get the product right.

A market orientated company is one that orga-

nizes its activities, products and services around
the wants and needs of its customers.

A product-orientated firm has its primary fo-

cus on its product and on the skills, knowledge
and systems that support that product.
Product Matrix- Growth Matrix
SWOT Analysis
 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?
• 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?
Porter’s Generic Strategies
 Differentiation is a type of competitive strategy with which a company seeks to distinguish its products or ser-
vices from that of competitors: the goal is to be unique.
 A company may use creative advertising, distinctive product features, higher quality, better performance, ex-
ceptional service or new technology to achieve a product being perceived as unique.
 A differentiation strategy can reduce rivalry with competitors if buyers are loyal to a company’s brand.
 Companies with a differentiation strategy therefore rely largely on customer loyalty.
 Because of the uniqueness, companies with this type of strategy usually price their products higher than
 competitors. Examples of companies with differentiated products and services are: Apple, Harley-Davidson,
LEGO,Nike and Starbucks.
 Cost Leadership is a type of competitive strategy with which a company aggressively seeks efficient
large-scale production facilities, cuts costs, uses economies of scale, gains production experience and
employs tight cost controls to be more efficient in the production of products or the offering of services than com-
petitors: the goal is to be the low-cost producer in the industry.
 Penetration pricing and can still offer comparable quality against reasonable profits. Low-cost producers typi-
cally sell standard no-frills products or services. Examples of companies with cost leadership positions are:
Southwest Airlines, Wal-Mart, McDonald’s, EasyJet, Costco and Amazon.
 Focus is a type of competitive strategy that emphasizes concentration on a specific regional market or buyer
 group: a niche.
 The company will either use a differentiation or cost leadership strategy, but only for a narrow target market
rather than offering it industry-wide.
 The company first selects a segment or group of segments in an industry and then tailors its strategy to serve
 those segments best to the exclusion of others.
 Like mentioned, the focus strategy has two variants: Differentiation Focus and Cost Focus.
 These two strategies differ only from Differentiation and Cost Leadership in terms of their competitive scope.
 Examples of companies with a differentiation focus strategy are: Rolls Royce, Omega, Prada and Razer.
 Examples of companies with a cost focus strategy are: Claire’s, Home Depot and Smart.