1

2
Developing
Marketing
Strategies and Plans

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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Marketing is so basic that it cannot be

considered a separate function (i.e., a
separate skill or work) within the business, on
a par with others such as manufacturing or
personnel. Marketing requires separate work
and a distinct group of activities. But it is, first,
a central dimension of the entire business. It is
the whole business seen from the point of
view of its final result, that is, from the
customers point of view.

At the corporate level, marketing

managers have a critical role to play
as advocates for the customer and for
a set of values and beliefs that put the
customer first in the firms decision
making, and to communicate the value
proposition as part of that culture
throughout the organization, both
internally and in its multiple
relationships and alliances.

Phases of Value Creation and Delivery

Choosing the value
Providing the value
Communicating the value

What is the Value Chain?

The value chain is a tool for identifying
was 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.

Nike Creates Value

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Siemens AG has grown through new product

innovation and strategic acquisitions

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Cisco Systems Taps into Partner

Expertise to Create Value

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The Value Delivery Process

Make the product
Design
Product

Procure

Make

Sell the product

Price

Advertise/
Promote

Sell

Distribute

Service

Traditional Physical Process Sequence

Choose

Provide

Communicate

the value

the value

the value

Market
Customer
Segmentation selection/
focus

Product
Value
Positioning Development

Strategic Marketing

Service
Development

Pricing

Sourcing
Making

Distributing Sales
Force
Servicing

Sales Advertising
Promotion

Tactical Marketing

Value Creation and Delivery Sequence

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Improving Value Delivery the

Japanese Way

0 customer feedback
time
0 product
improvement time
0 purchasing time
0 setup time
0 defects

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3 Vs Approach to Marketing
Define the value segment
Define the value proposition
Define the value network

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Benchmarks
Organizational
costs
and
performance
measures

Competitor
costs
and
performance
measures

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Core Business Processes

Market
sensing

Customer
relationship
management

New offering
realization

Fulfillment
management

Customer
acquisition
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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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Maximizing Core Competencies

(Re)define the business concept
(Re)shaping the business scope
(Re)positioning the companys brand
identity

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
co-prosperity among key stakeholders.

Questions to Address in Holistic Marketing

What value opportunities are available?
How can we create new value offerings
efficiently?
How can we delivery the new offerings
efficiently?

Challenges Facing CMOs

Doing more with less
Driving new business development
Becoming a full business partner

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CEOs View on Marketing

1P CEO
4P CEO
STP CEO
ME CEO

The Central Role of Strategic Planning

Companies should have capabilities of:
Understanding customer value
Creating customer value
Delivering customer value
Capturing customer value
Sustaining customer value
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Levels of a Marketing Plan

Strategic
Target

marketing
decisions
Value proposition
Analysis of marketing
opportunities

Tactical
Product

features
Promotion
Merchandising
Pricing
Sales channels
Service

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Corporate Headquarters Planning Activities

Define the corporate mission

Establish 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

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Major Competitive Spheres

Industry
Products
Competence

Market segment
Vertical channels
Geographical

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Product Orientation vs. Market Orientation

Company

Product

Market

Missouri-Pacific
Railroad

We run a railroad

We are a peopleand-goods mover

Xerox

We make copying
equipment

We improve office
productivity

Standard Oil

We sell gasoline

We supply energy

Columbia Pictures

We make movies

We entertain
people

Google

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, costeffective 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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Dimensions That Define A Business

Customer
groups

Customer
needs

Technology

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Assessing Growth Opportunity

CURRENT Products

CURRENT
Markets

NEW
Markets

1. Marketpenetration
strategy
2. Marketdevelopment
strategy

NEW Products

3. Productdevelopment
strategy
4. Diversification strategy

Ansoffs Product-Market Expansion Grid

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The Growth of Starbucks

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Assessing Growth Opportunity

Intensive Growth
Integrative Growth
Diversification Growth
Downsizing and Divesting older business

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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
Profitability
Efficiency
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Organizations
Culture
Policies
Structure

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Business Unit Strategic Planning

The Business Mission
SWOT Analysis
Marketing Opportunity
Goal Formulation
Program Formulation & Implementation
Feedbacks & Controls

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Marketing Opportunity

To supply something that is

in short supply
To supply an existing
product in a new or a
superior way
To offer a totally new
product/ service

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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)_2
Can the company deliver the benefits
better than any actual or potential
competitors?
Will the financial rate of return meet or
exceed the companys required threshold
for investment?

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Figure 2.6 Opportunity Matrix

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Figure 2.6 Threat Matrix

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FedEx
FedEx added
Sunday deliveries
based on customer
requests and
market demand

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Goal Formulation and MBO

Units objectives must be hierarchical
Objectives should be quantitative
Goals should be realistic
Objectives must be consistent

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Porters Generic Strategies

Overall Cost Leadership
Differentiation
Focus

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McKinseys Elements of Success

Skills

Strategy

Staff

Structure

Style

Systems

Shared values

Goal Formulation and MBO

Requirements for using MBO

Units

objectives must be hierarchical

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

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Categories of Marketing Alliances

Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing collaborations

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Marketing Plan
A written document that summarizes what
the marketer has learned about the
marketplace and indicates how the firm
plans to reach its marketing objectives.
Must be consumer- and competitororiented

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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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Characteristics of Core
Competencies
A source of competitive advantage
Applications in a wide variety of markets
Difficult to imitate

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Table 2.3
Product Orientation vs. Market Orientation
Company

Product

Market

Missouri-Pacific
Railroad

We run a railroad

We are a peopleand-goods mover

Xerox

We make copying
equipment

We improve office
productivity

Standard Oil

We sell gasoline

We supply energy

Columbia Pictures

We make movies

We entertain
people
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Marketing Discussion

What implications do Porters value

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

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