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Chapter 2
Developing Marketing
Strategies And Plans
TABLE OF CONTENT
• Summary
• Marketing And Customer Value
• Corporate And Division Strategic Planning
• Business Unit Strategic Planning
• The Nature And Contents Of A Marketing Plan
SUMMARY 3
SUMMARY
• The value delivery process includes choosing (or identifying),
providing (or delivering), and communicating superior value.
The value chain is a tool for identifying key activities that
create value and costs in a specific business.
SUMMARY
• Strong companies develop superior capabilities in managing
core business processes such as new-product realization,
inventory management, and customer acquisition and
retention. In today’s marketing environment, managing these
core processes effectively means creating a marketing
network in which the company works closely with all parties in
the production and distribution chain, from suppliers of raw
materials to retail distributors. Companies no longer
compete—marketing networks do.
SUMMARY
• Market-oriented strategic planning is the managerial process
of developing and maintaining a viable fit between the
organization’s objectives, skills, and resources and its changing
market opportunities. The aim of strategic planning is to shape
the company’s businesses and products so they yield target
profits and growth. Strategic planning takes place at four
levels: corporate, division, business unit, and product.
SUMMARY
• The corporate strategy establishes the framework within
which the divisions and business units prepare their strategic
plans. Setting a corporate strategy means defining the
corporate mission, establishing strategic business units (SBUs),
assigning resources to each, and assessing growth
opportunities.
SUMMARY
• Marketers should define a business or business unit as a
customer-satisfying process. Taking this view can reveal
additional growth opportunities.
• Strategic planning for individual businesses includes defining
the business mission, analyzing external opportunities and
threats, analyzing internal strengths and weaknesses,
formulating goals, formulating strategy, formulating
supporting programs, implementing the programs, and
gathering feedback and exercising control.
SUMMARY
• Each product level within a business unit must develop a
marketing plan for achieving its goals. The marketing plan is
one of the most important outputs of the marketing process.
LEARNING OBJECTIVES
• In this chapter, we will address the following 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?
MARKETING AND CUSTOMER VALUE
Section 1
MARKETING AND CUSTOMER VALUE
The Value Delivery Process
• Marketing affects customer value.
• Successful marketers must focus on
delivering value to customers at a profit.
This is accomplished by fine tuning the
value delivery process
MARKETING AND CUSTOMER VALUE
The Value Delivery Process
• What is Value Delivery Process?
• It is a three phases to the value creation and
delivery sequence are as follows:
• Doing homework or
research on market
segmentation, target
market selection,
value positioning
Choosing the
value:
• Identification of
features, prices,
distribution
Providing the
value: • Use the Internet,
advertising, sales
force and other
communication tools
Communicating
the value:
MARKETING AND CUSTOMER VALUE
The Value Chain
• What is a Value Chain?
• A tool for identifying ways to create more customer value
• Every firm is a synthesis of activities performed to design,
produce, market, deliver, and support its product
MARKETING AND CUSTOMER VALUE
The Value Chain
• The Value Chain identifies nine – five primary and 4 support –
activities that create value and cost in a business.
• Firms examine costs and performance in each value-creating
activity and benchmark against competitors to look for ways
to improve
Procurement
Human Resource management
Technological Development
Infrastructure
Support
Activities
Primary
Activities
ServiceMarketing
Outbound
LogisticsOperations
Inbound
Logistics
Margin
MARKETING AND CUSTOMER VALUE
Video Time – “Porter’s Value Chain”
 Discover strategy expert
Michael Porter's model
to help you to identify
and maximize value in
your organization. Learn
about Primary and
Support activities and
sub-activities, and how
they affect each other.
And reduce the costs of
creating value, so that
your profit margin can
grow.
MARKETING AND CUSTOMER VALUE
Core Business Processes
• 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 following:
The market-sensing
process
The new-offering
realization process
The customer acquisition
process
The customer relationship
management process
The fulfillment
management process
MARKETING AND CUSTOMER VALUE
Core Business Processes
• The market-
sensing process:
gathering and
acting upon
information about
the product
The market-sensing
process
The new-offering
realization process
The customer acquisition
process
The customer relationship
management process
The fulfillment
management process
MARKETING AND CUSTOMER VALUE
Core Business Processes
• The new-offering
realization
process:
researching,
developing, and
launching new
high-quality
offerings quickly
and within budget
The market-sensing
process
The new-offering
realization process
The customer acquisition
process
The customer relationship
management process
The fulfillment
management process
MARKETING AND CUSTOMER VALUE
Core Business Processes
• The customer
acquisition
process: defining
target markets and
prospecting for
new customers
The market-sensing
process
The new-offering
realization process
The customer acquisition
process
The customer relationship
management process
The fulfillment
management process
MARKETING AND CUSTOMER VALUE
Core Business Processes
• The customer
relationship
management
process: building
deeper
understanding,
relationships, and
offerings to
individual
customers
The market-sensing
process
The new-offering
realization process
The customer acquisition
process
The customer relationship
management process
The fulfillment
management process
MARKETING AND CUSTOMER VALUE
Core Business Processes
• The fulfillment
management
process: receiving
and approving
orders, shipping
goods on time, and
collecting payment
The market-sensing
process
The new-offering
realization process
The customer acquisition
process
The customer relationship
management process
The fulfillment
management process
MARKETING AND CUSTOMER VALUE
Core Competencies
• What is Core Competencies?
• There are the resources and/or strategic
advantages of a business
MARKETING AND CUSTOMER VALUE
Core Competencies
• It has three main
characteristics
• Sources of competitive
advantage that make a
significant
contribution to
perceived customer
benefits
• Have applications to a
wide variety of
markets
• Are difficult for
competitors imitate
Core
Competencies
Contributes to
perceived
customer
benefits
Useful in a
wide variety of
markets
Difficult to
imitate
MARKETING AND CUSTOMER VALUE
Core Competencies
How to maximize Core Competencies?
• Businesses may need to realign themselves to maximize core
competencies, using the following three steps
Redefine the
business
concept or big
idea
Reshape the
business scope,
sometimes
geographically
Reposition the
company’s
brand identity
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning
• What is 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.
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning
• Master marketers like
Amazon.com and Ritz-
Carlton have a strong
strategic planning.
• Five Criteria of Master
Marketers are as follows:
Focus on the customer
Organized to respond effectively
to changing needs
Have well-staffed marketing
departments,
Have a successful Chief
Marketing Officers (CMOs), and
Have other departments accept
customer is king
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning
• Five priorities for a
successful CMO
Act as the visionary for the
future of the company.
Build adaptive marketing
capabilities.
Win the war for marketing
talent.
Tighten the alignment with
sales.
Take accountability for returns
on marketing spending.
MARKETING AND CUSTOMER VALUE
Video Time – “The Role of a CMO”
 Chris Williams
 CMO of Capgemini,
explains the
expanding role of
the chief marketing
officer. He says
CMOs should help
grow the business in
a weak economy
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning
• Below is the complete planning, implementation, and control
cycle of strategic planning
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning
• Marketers must
prioritize strategic
planning in three
key areas:
Businesses as
investment portfolio
Assessing each
business’s strength
Establish a strategy
MARKETING AND CUSTOMERVALUE
Central Role of Strategic Planning – Marketing Plan
• Strategic planning is a
broad process that can
address the entire
business, or a portion of
the business such as
marketing. Marketing
strategies derive from
strategic plans.
• A marketing plan operates
on a strategic level and a
tactical level.
• It directs and coordinates
the marketing effort
Strategic
Level
Planning
Tactical
Level
Planning
MARKETING AND CUSTOMERVALUE
Central Role of Strategic Planning – Marketing Plan
• The strategic
marketing plan lays
out the target
markets and the
firm’s value
proposition, based
on an analysis of the
best market
opportunities.
Strategic
Level
Planning
Tactical
Level
Planning
MARKETING AND CUSTOMERVALUE
Central Role of Strategic Planning – Marketing Plan
• The tactical
marketing plan
specifies the
marketing tactics,
including product
features, promotion,
merchandising,
pricing, sales
channels, and
service.
Strategic
Level
Planning
Tactical
Level
Planning
CORPORATE STRATEGIC PLANNING
Section 2
CORPORATE STRATEGIC PLANNING
Four Planning Activities
• Whether they let
their business units
set their own goals
and strategies or
collaborate in doing
so, all corporate
headquarters
undertake these four
planning activities.
Define the corporate
mission
Establish strategic
business units
Assign resources to each
strategic business unit
Assess growth
opportunities
CORPORATE STRATEGIC PLANNING
Defining the Corporate Mission
• Over time, the mission
may change to respond
to new opportunities or
market conditions
• These simple-sounding
questions are among the
most difficult a company
will ever face.
• Successful companies
continuously ask and
answer them.
• From these answers the
organization can develop a
good mission statement.
What is our business?
Who is the customer?
What is of value to
the customer?
What will our
business be?
What should our
business be?
CORPORATE STRATEGIC PLANNING
Defining the Corporate Mission
• Product Definition vs. Market Definition
• Market definitions of a business describe the business
as a customer-satisfying process, which is preferred
because products are transient (product definitions)
but basic needs and customer groups endure forever.
Company Product Definition Market Definition
Union Pacific We run a railroad.
We are a people-and-goods
mover.
Xerox
We make copying
equipment.
We help improve office
productivity.
Hess
Corporation
We sell gasoline. We supply energy.
Paramount
Pictures
We make movies. We market entertainment.
Encyclopaedi
a Britannica
We sell encyclopedias We distribute information.
Carrier
We make air
conditioners and
furnaces.
We provide climate control in
the home.
CORPORATE STRATEGIC PLANNING
Defining the Corporate Mission
CORPORATE STRATEGIC PLANNING
Defining the Corporate Mission
• A target market
definition tends to
focus on selling a
product or service
to a current market.
• A strategic market
definition,
however, also
focuses on the
potential market.
Target
Market
Strategic
Market
CORPORATE STRATEGIC PLANNING
Crafting a Mission Statement
• A clear, thoughtful mission statement, developed
collaboratively with and shared with managers, employees,
and often customers, provides a shared sense of purpose,
direction, and opportunity.
• At its best it reflects a vision, an almost “impossible dream,”
that provides direction for the next 10 to 20 years.
CORPORATE STRATEGIC PLANNING
Crafting a Mission Statement
• Good mission
statements have
five major
characteristics
They focus on a limited number of
goals
They stress the company’s major
policies and values
They define the major competitive
spheres within which the company
will operate
They take a long-term view
They are short, memorable and
meaningful as possible
CORPORATE STRATEGIC PLANNING
Crafting a Mission Statement
Vague Mission Statement
To build total brand value
by innovating to deliver
customer value and
customer leadership faster,
better, and more
completely than our
competition
Clear Mission Statement
To organize the world’s
information and make it
universally accessible and
useful (Google Mission
Statement)
CORPORATE STRATEGIC PLANNING
Crafting a Mission Statement
Vague Philosophy
We build brands and make the world a
little happier by bringing our best to you.
Clear Philosophy
Never settle for the best (Google
Corporate Philosophy)
• Focus on the user and all else will
follow.
• It’s best to do one thing really, really
well.
• Fast is better than slow.
• Democracy on the web works.
• You don’t need to be at your desk to
need an answer.
• You can make money without doing
evil.
• There is always more information out
there.
• The need for information crosses all
borders.
• You can be serious without a suit.
• Great just isn’t good enough.
CORPORATE STRATEGIC PLANNING
VideoTime-HowtoWriteaMissionStatementThatDoesn'tSuck
I want to show you why most
mission statements are so
terrible.
Let's say you founded a pizza
parlor. And your first idea for
a mission statement is
something like this: "Our
mission is to serve the
tastiest damn pizza in Wake
County." That's pretty good. If
I worked for you, I could get
excited about that. Now
here's how it will go off the
rails.
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• What is Strategic Business Units?
• It is a relatively autonomous division of a large company that
operates as an independent enterprise with responsibility for a
particular range of products or activities.
• Large companies normally manage quite different businesses,
each requiring its own strategy. The purpose of identifying the
company’s strategic business units is to develop separate
strategies and assign appropriate funding.
• Senior management knows its portfolio of businesses usually
includes a number of “yesterday’s has-beens” as well as
“tomorrow’s winners.”
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Three Characteristics
of an SBU:
Single business or collection of
related businesses that can be
planned separately from the rest of
the company
Own set of competitors
Manager responsible for strategic
planning and profit performance
and controls most factors affecting
profit
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Management must decide how to allocate corporate
resources to each SBU
• Portfolio-planning models such as the GE/McKinsey Matrix
and the BCG Matrix were used in the past to assist managers
in making resource allocation decisions. But they have been
replaced with newer models that consider shareholder value
analysis.
CORPORATE STRATEGIC PLANNING
Strategic Business Units
HIGHMEDLOW
HIGHMEDLOW
GE/McKinsey Matrix
Industry Attractiveness
BusinessPosition
Boston Consulting Group Matrix
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• What is shareholder value analysis (SVA)?
• SVA determines the financial value of a company by looking
at the returns it gives its stockholders (ie. with and without
an SBU). It is based on the view that the objective of
company directors is to maximize the wealth of company
stockholders
• These value calculations assess the potential of a business
based on growth opportunities from global expansion,
repositioning or retargeting, and strategic outsourcing.
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Growth
opportunities
assessment may
result in the
following:
New Businesses
(Ie New SBU)
Downsizing
Terminating
Older Businesses
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Firms can fill a gap
between future desired
sales and projected sales
via
• intensive growth
• integrative growth
• diversification growth
intensive
growth
integrative
growth
diversification
growth
Assessing growth opportunities
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Intensive growth looks for
opportunities within
current businesses. The
product-market expansion
grid looks at growth
possibilities from the
perspective of current and
new products and markets.
• Market Penetration
• Market Development
• Product Development
• Diversification
intensive
growth
integrative
growth
diversification
growth
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Market Penetration –
gaining market share with
current products and
current customers. The
company can achieve
growth by having current
customers purchase more,
attract competitors
customers, or bring non-
buyers into the market.
Products
Current
Markets Market
Penetration
Market
Development
Product
Development
Diversification
New
CurrentNew
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Market Development –
Finding new markets for
existing products. The firm
can find new buyer groups
(business customers rather
than consumers), new
distribution channels
(online), or expand
distribution to other
regions or countries.
Products
Current
Markets Market
Penetration
Market
Development
Product
Development
Diversification
New
CurrentNew
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Product Development –
Develop new products to
the current market. As the
firm already has a
relationship with current
customers, they can
develop new products to
meet other, related needs
of it’s customers.
Products
Current
Markets Market
Penetration
Market
Development
Product
Development
Diversification
New
CurrentNew
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Diversification –
Developing new products
for new markets.
Products
Current
Markets Market
Penetration
Market
Development
Product
Development
Diversification
New
CurrentNew
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Integrative growth: acquire
related businesses
• Use backward, forward or
horizontal integrations
within the industry
• May not reach desired
sales volume; challenges
with integration
intensive
growth
integrative
growth
diversification
growth
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• A business can achieve growth through backward (buy supplier),
forward (buy wholesaler), or horizontal (competitor) integration.
Business Wholesaler
Competitor
Supplier
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Diversification growth:
identify opportunities for
growth from adding
attractive, unrelated
businesses.
• Firms can often discover
opportunities outside its
present business. However,
the new industry should be
highly attractive (grow
potential) and the
company should have (or
acquire) the right
capabilities to succeed.
intensive
growth
integrative
growth
diversification
growth
CORPORATE STRATEGIC PLANNING
Strategic Business Units
• Downsizing and Divesting Older Businesses
• Companies must carefully prune, harvest, or divest tired old
businesses to release needed resources for other uses such
as for growth strategy and reduce costs
CORPORATE STRATEGIC PLANNING
Organization andOrganizational Culture
• What is organization?
• A company’s organization is its structures,
policies, and corporate culture, all of which can
become dysfunctional in a rapidly changing
business environment.
CORPORATE STRATEGIC PLANNING
Organization andOrganizational Culture
• What is organizational culture?
• Corporate culture is “the shared experiences, stories,
beliefs, and norms that characterize an organization.”
• Customer-centric culture can affect all aspects of an
organization
• Walk into any company and the first thing that strikes you is
the corporate culture—the way people dress, talk to one
another, and greet customers.
CORPORATE STRATEGIC PLANNING
Organization andOrganizational Culture
• Whereas managers can change structures and policies (though
with difficulty), the company’s culture is very hard to change.
• Yet adapting the culture is often the key to successfully
implementing a new strategy.
CORPORATE STRATEGIC PLANNING
Video Time – Apple’s Culture
A walk through the
culture of Apple.
Insights can be gained
by examining the
cultural artifacts and
inferring underlying
beliefs and value
structures
CORPORATE STRATEGICPLANNING
MarketingInnovation
• Innovation in marketing is critical - Imaginative ideas on
strategy exist in many places within a company.
• Employees can challenge company orthodoxy and stimulate
new ideas
• Senior management should identify and encourage fresh ideas
from three generally underrepresented groups:
• employees with youthful or diverse perspectives,
• employees far removed from company headquarters, and
• employees new to the industry.
• Firms develop strategy by choosing their view of the future via
Scenario Analysis
BUSINESS UNIT STRATEGIC PLANNING
Section 3
BUSINESS UNIT STRATEGIC PLANNING
Strategic Planning Level
• This section will outline the strategic planning at the SBU level.
BUSINESS UNIT STRATEGIC PLANNING
Business Mission
• Each business unit
must develop a
specific mission that
fits within the
broader company
mission.
• For example, the
specific mission for
YouTube must fit
within the overall
mission of Google.
Business Mission
SWOT Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control
BUSINESS UNIT STRATEGIC PLANNING
Business Mission
• Each business unit
must develop a
specific mission that
fits within the
broader company
mission.
• For example, the
specific mission for
YouTube must fit
within the overall
mission of Google.
Business Mission
SWOT Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
• Strategic planning requires
managers to understand the
external and internal
environments. A SWOT analysis
allows for these environments to
be monitored.
• Business units must monitor key
macro-environment forces as
well as micro-environment
factors. Monitoring the external
environment can allow firms to
identify growth opportunities
and potential threats to its
existing businesses.
• To take advantage of
opportunities the firm must be
aware of its own internal
strengths and weaknesses.
Business Mission
SWOT Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
TThreat
ExternalInternal
SStrength
WWeakness
OOpportunity
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
External Environment
• External environment (opportunity and threat) analysis:
monitor key macroenvironmental forces for
• Market Opportunity: area of buyer need and interest that a company
has a high probability of satisfying
• Environmental threat is a challenge posed by an unfavorable trend or
development that, in the absence of defensive marketing action, would
lead to lower sales
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
Market Opportunity
• Sources of market opportunities
1. Offer something in short supply
2. Supply existing product or service in a superior way
• Problem detection: ask consumers for suggestions
• Ideal method: ask consumers to imagine an ideal version
of the product or service
• Consumption chain method: chart steps in acquiring,
using, disposing of product
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
Market Opportunity
3. Benefit from converging industry trends/introduce
hybrid products or services to the market
4. Make buying process more convenient or efficient
5. Meet the need for more information and advice
6. Customize a product or service
7. Introduce a new capability
8. Deliver a product or service faster
9. Offer product at a much lower price
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
Market Opportunity
• Market opportunity analysis
questions
• To evaluate opportunities,
companies can use market
opportunity analysis (MOA) to
ask questions like those posed
on this slide
Can we articulate the benefits convincingly
to a defined target market(s)?
Can we locate the target market(s) and
reach them with cost-effective media and
trade channels
Does our company possess or have access
to the critical capabilities and resources
we need to deliver the customer benefits?
Can we deliver the benefits better than
any actual or potential competitors?
Will the financial rate of return meet or
exceed our required threshold for
investment?
BUSINESS UNIT STRATEGIC PLANNING
Conduct a SWOT Analysis
Internal Environment
• It’s one thing to find
attractive opportunities
and another to be able to
take advantage of them.
Each business needs to
evaluate its
• internal strengths and
• Internal weaknesses.
Company
Strengths
Company
Weaknesses
Internal
Environment
BUSINESS UNIT STRATEGIC PLANNING
Video Time – Starbuck’s SWOT Analysis
This video introduces
the idea behind doing
SWOT analysis using
Starbuck as an
example
BUSINESS UNIT STRATEGIC PLANNING
Goal Formulation
• Once the company has
performed a SWOT
analysis, it can proceed to
goal formulation,
developing specific goals
for the planning period.
• Goals are objectives that
are specific with respect to
magnitude and time
Business Mission
SWOT Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control
BUSINESS UNIT STRATEGIC PLANNING
Business Mission
• Each business unit
must develop a
specific mission that
fits within the
broader company
mission.
• For example, the
specific mission for
YouTube must fit
within the overall
mission of Google.
Business Mission
SWOT Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control
BUSINESS UNIT STRATEGIC PLANNING
Goal Formulation
• Managing these objectives
effectively requires these four
criteria to be met.
• They must be arranged
hierarchically, from most to
least important
• Objectives should be
quantitative whenever
possible
• Goals should be realistic
• Objectives must be
consistent
Ranked
Realistic
QuantifiedConsistent
BUSINESS UNIT STRATEGIC PLANNING
Strategic Formulation
• Strategy is a game
plan for getting what
you want to achieve
Business Mission
SWOT Analysis
Goal Formulation
Strategy Formulation
Program Formulation
Implementation
Feedback and Control
BUSINESS UNIT STRATEGIC PLANNING
Strategic Formulation
• Two type of strategies
• Porter’s Generic
Strategies
• Strategic Alliances
Porter’s
Generic
Strategies
Strategic
Alliances
BUSINESS UNIT STRATEGIC PLANNING
Strategic Formulation
Porter’s Generic Strategies
• Michael Porter has proposed
three generic strategies that
provide a good starting point
for strategic thinking:
• overall cost leadership
• differentiation, and
• focus.
• According to Porter,
competing firms directing the
same strategy to the same
target market constitute a
strategic group. The firm that
carries out the strategy best
will make the most profits.
With overall cost leadership, firms work
to achieve the lowest production and
distribution costs so they can underprice
competitors and win market share.
With differentiation, the business
concentrates on achieving superior
performance in an important customer
benefit area valued by a large part of the
market.
With focus, the business focuses on one
or more narrow market segments, gets to
know them intimately, and pursues either
cost leadership or differentiation within
the target segment.
BUSINESS UNIT STRATEGIC PLANNING
Video Time – Porter’s Generic Strategies
Porter's Generic
Strategies are so called
because they can be
useful to you no matter
what industry you work
in, what products or
services you sell, or
whether you are a
small or large
organization
BUSINESS UNIT STRATEGIC PLANNING
Strategic Formulation
Strategic Alliances
• Even giant companies often
cannot achieve leadership,
either nationally or globally,
without forming alliances
with domestic or
multinational companies that
complement or leverage their
capabilities and resources.
• Many strategic alliances take
the form of marketing
alliances. These fall into four
major categories.
Product or service alliances—One company
licenses another to produce its product, or
two companies jointly market their
complementary products or a new product.
Promotional alliances—One company
agrees to carry a promotion for another
company’s product or service.
Logistics alliances—One company offers
logistical services for another company’s
product.
Pricing collaborations—One or more
companies join in a special pricing
collaboration.
BUSINESS UNIT STRATEGIC PLANNING
Program Formulation and Implementation
• Great strategies can lead to failure unless they are
implemented properly. Proper formulation ensures that all the
pieces fit together. But firms must also examine the cost of the
marketing programs to ensure that the expense is justified.
BUSINESS UNIT STRATEGIC PLANNING
Program Formulation and Implementation
• According to McKinsey &
Company, strategy is
only one of seven
elements—all of which
start with the letter s—in
successful business
practice.
• The first three—strategy,
structure, and systems—
are considered the
“hardware” of success.
• The next four—style, skills,
staff, and shared values—
are the “software.”
The first “soft” element, style, means company
employees share a common way of thinking and
behaving.
The second, skills, means employees have the
skills needed to carry out the company’s
strategy.
Staffing means the company has hired able
people, trained them well, and assigned them to
the right jobs.
The fourth element, shared values, means
employees share the same guiding values. When
these elements are present, companies are
usually more successful at strategy
implementation.
BUSINESS UNIT STRATEGIC PLANNING
Program Formulation and Implementation
• McKinsey’s Elements of Success
Strategy
Structure
SystemsStyle
Shared values
Staff
Skills
BUSINESS UNIT STRATEGIC PLANNING
Feedbackand Control
• A company’s strategic fit with
the environment will
inevitably erode because the
market environment changes
faster than the company’s
seven Ss.
• Thus, a company might
remain efficient yet lose
effectiveness. organizations
can be changed through
strong leadership, preferably
in advance of a crisis.
Constant
Monitoring of
External and
Internal
Environment
Willingness to
adopt new
goals and
behaviors
Key to
Organizational
Health
THE NATURE AND CONTENTS OF A
MARKETING PLAN
Section 4
THE NATURE AND CONTENTS OF A MARKETING PLAN
What is a marketing plan?
• A marketing plan is a written document
that summarizes what the marketer has
learned about the marketplace and
indicates how the firm plans to meet its
marketing objectives
• Provides direction and focus for a brand,
product or company
• Informs and motivates key constituents inside
and outside an organization about its
marketing goals and how these can be
achieved
THE NATURE AND CONTENTS OF A MARKETING PLAN
Shortcomingsof Marketing Plans
• The most
frequently cited
shortcomings of
current marketing
plans, according to
marketing
executives, are:
Lack Of Realism
Insufficient
Competitive Analysis
A Short-run Focus
THE NATURE AND CONTENTS OF A MARKETING PLAN
Evaluatinga Marketing Plan
• Here are some questions to
ask in evaluating a
marketing plan.
Is the plan simple and succinct? Is
it easy to understand and act on?
Does it communicate its content
clearly and practically? Is it not
unnecessarily long?
Is the plan complete? Does it
include all the necessary
elements? Does it have the right
breadth and depth? Achieving
the right balance between
completeness and lots of detail
and simplicity and clear focus is
often the key to a well-
constructed marketing plan.
THE NATURE AND CONTENTS OF A MARKETING PLAN
Evaluatinga Marketing Plan
• Here are some questions to
ask in evaluating a
marketing plan.
Is the plan specific? Are its
objectives concrete and
measurable? Does it provide a
clear course of action? Does it
include specific activities, each
with specific dates of completion,
specific persons responsible, and
specific budgets?
Is the plan realistic? Are the sales
goals, expense budgets, and
milestone dates realistic? Has a
frank and honest self-critique
been conducted to raise possible
concerns and objections?
THE NATURE AND CONTENTS OF A MARKETING PLAN
Shorter and Less Formal Plans for Smaller Businesses
• Smaller businesses
may create
shorter or less
formal marketing
plans;
• Corporations
generally require
highly structured
documents.
Small
Business –
Shorter
Less Formal
Plan
Corporate –
Longer
Formal
Plan
THE NATURE AND CONTENTS OF A MARKETING PLAN
Marketing Plan Content
• Although the exact length
and layout varies from
company to company, most
marketing plans cover one
year in anywhere from 5 to
50 pages. Smaller
businesses may create
shorter or less formal
marketing plans, whereas
corporations generally
require highly structured
documents.
• A marketing plan usually
contains the following
sections
Executive summary
Table of contents
Situation analysis
Marketing strategy
Marketing tactics
Financial projections
Implementation
controls
THE NATURE AND CONTENTS OF A MARKETING PLAN
Marketing Plan Content
• Executive summary
• Table of contents
• Situation analysis
• relevant background data on sales, costs, the
market, competitors and the
macroenvironment
• Marketing strategy
• mission, marketing and financial objectives,
needs the marketing offering is intended to
satisfy and its competitive positioning
THE NATURE AND CONTENTS OF A MARKETING PLAN
Marketing Plan Content
• Marketing tactics
• Marketing activities that
will be undertaken to
execute the marketing
strategy
The product or service offering section
describes the key attributes and benefits
that will appeal to target customers.
The pricing section specifies the general
price range and how it might vary across
different types of customers or channels,
including any incentive or discount plans.
The channel section outlines the different
forms of distribution, such as direct or
indirect.
The communications section usually
offers high-level guidance about the
general message and media strategy. Firms
will often develop a separate
communication plan to provide the detail
necessary for agencies and other media
partners to effectively design the
communication program.
THE NATURE AND CONTENTS OF A MARKETING PLAN
Marketing Plan Content
• Financial Projections
• Include a sales forecast,
an expense forecast, and
a break-even analysis.
The break-even analysis estimates
how many units the firm must sell
monthly (or how many years it will
take) to offset its monthly fixed
costs and average per-unit variable
costs
Risk analysis obtains three
estimates (optimistic, pessimistic,
and most likely) for each uncertain
variable affecting profitability,
under an assumed marketing
environment and marketing
strategy for the planning period.
THE NATURE AND CONTENTS OF A MARKETING PLAN
Marketing Plan Content
• Implementation Controls
• Outlines the controls for monitoring and
adjusting implementation of the plan
• Spells out the goals and budget for each
month or quarter so management can review
each period’s results and take corrective action
as needed.
THE NATURE AND CONTENTS OF A MARKETING PLAN
The Role of Research
• The marketing plan
should outline what
marketing research
will be conducted
and when, as well as
how the findings will
be applied.
• Up-to-date
information is
needed about the:
Environment
Competition
Selected
Market
Segments
THE NATURE AND CONTENTS OF A MARKETING PLAN
TheRoleofResearch
• Research helps
marketers learn
about customers’
Customers’ Requirements
Customers’ Expectations
Customers’ Perceptions
Customers’ Satisfaction
Customers’ Loyalty
THE NATURE AND CONTENTS OF A MARKETING PLAN
The Role of Relationships
• Although the
marketing plan
shows how the
company will
establish and
maintain profitable
customer
relationships, it also
affects both internal
and external
relationships.
Internal
Relationships
External
relationships
THE NATURE AND CONTENTS OF A MARKETING PLAN
The Role of Relationships
• Internal
Relationships: The
marketing plan
influences how
marketing staff work
with each other and
with other
departments to
deliver value and
satisfy customers
Marketing
Department
Other
Department
Creating,
Delivering and
Communicating
Values to
Customers
THE NATURE AND CONTENTS OF A MARKETING PLAN
The Role of Relationships
• External
Relationships: The
marketing plan
affects how the
company works with
suppliers,
distributors, and
partners to achieve
the plan’s objectives
Company
Suppliers
DistributorsPartners

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CHAPTER 2 Marketing Management

  • 2. TABLE OF CONTENT • Summary • Marketing And Customer Value • Corporate And Division Strategic Planning • Business Unit Strategic Planning • The Nature And Contents Of A Marketing Plan
  • 4. SUMMARY • The value delivery process includes choosing (or identifying), providing (or delivering), and communicating superior value. The value chain is a tool for identifying key activities that create value and costs in a specific business.
  • 5. SUMMARY • Strong companies develop superior capabilities in managing core business processes such as new-product realization, inventory management, and customer acquisition and retention. In today’s marketing environment, managing these core processes effectively means creating a marketing network in which the company works closely with all parties in the production and distribution chain, from suppliers of raw materials to retail distributors. Companies no longer compete—marketing networks do.
  • 6. SUMMARY • Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit between the organization’s objectives, skills, and resources and its changing market opportunities. The aim of strategic planning is to shape the company’s businesses and products so they yield target profits and growth. Strategic planning takes place at four levels: corporate, division, business unit, and product.
  • 7. SUMMARY • The corporate strategy establishes the framework within which the divisions and business units prepare their strategic plans. Setting a corporate strategy means defining the corporate mission, establishing strategic business units (SBUs), assigning resources to each, and assessing growth opportunities.
  • 8. SUMMARY • Marketers should define a business or business unit as a customer-satisfying process. Taking this view can reveal additional growth opportunities. • Strategic planning for individual businesses includes defining the business mission, analyzing external opportunities and threats, analyzing internal strengths and weaknesses, formulating goals, formulating strategy, formulating supporting programs, implementing the programs, and gathering feedback and exercising control.
  • 9. SUMMARY • Each product level within a business unit must develop a marketing plan for achieving its goals. The marketing plan is one of the most important outputs of the marketing process.
  • 10. LEARNING OBJECTIVES • In this chapter, we will address the following 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?
  • 11. MARKETING AND CUSTOMER VALUE Section 1
  • 12. MARKETING AND CUSTOMER VALUE The Value Delivery Process • Marketing affects customer value. • Successful marketers must focus on delivering value to customers at a profit. This is accomplished by fine tuning the value delivery process
  • 13. MARKETING AND CUSTOMER VALUE The Value Delivery Process • What is Value Delivery Process? • It is a three phases to the value creation and delivery sequence are as follows: • Doing homework or research on market segmentation, target market selection, value positioning Choosing the value: • Identification of features, prices, distribution Providing the value: • Use the Internet, advertising, sales force and other communication tools Communicating the value:
  • 14. MARKETING AND CUSTOMER VALUE The Value Chain • What is a Value Chain? • A tool for identifying ways to create more customer value • Every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product
  • 15. MARKETING AND CUSTOMER VALUE The Value Chain • The Value Chain identifies nine – five primary and 4 support – activities that create value and cost in a business. • Firms examine costs and performance in each value-creating activity and benchmark against competitors to look for ways to improve Procurement Human Resource management Technological Development Infrastructure Support Activities Primary Activities ServiceMarketing Outbound LogisticsOperations Inbound Logistics Margin
  • 16. MARKETING AND CUSTOMER VALUE Video Time – “Porter’s Value Chain”  Discover strategy expert Michael Porter's model to help you to identify and maximize value in your organization. Learn about Primary and Support activities and sub-activities, and how they affect each other. And reduce the costs of creating value, so that your profit margin can grow.
  • 17. MARKETING AND CUSTOMER VALUE Core Business Processes • 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 following: The market-sensing process The new-offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
  • 18. MARKETING AND CUSTOMER VALUE Core Business Processes • The market- sensing process: gathering and acting upon information about the product The market-sensing process The new-offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
  • 19. MARKETING AND CUSTOMER VALUE Core Business Processes • The new-offering realization process: researching, developing, and launching new high-quality offerings quickly and within budget The market-sensing process The new-offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
  • 20. MARKETING AND CUSTOMER VALUE Core Business Processes • The customer acquisition process: defining target markets and prospecting for new customers The market-sensing process The new-offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
  • 21. MARKETING AND CUSTOMER VALUE Core Business Processes • The customer relationship management process: building deeper understanding, relationships, and offerings to individual customers The market-sensing process The new-offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
  • 22. MARKETING AND CUSTOMER VALUE Core Business Processes • The fulfillment management process: receiving and approving orders, shipping goods on time, and collecting payment The market-sensing process The new-offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
  • 23. MARKETING AND CUSTOMER VALUE Core Competencies • What is Core Competencies? • There are the resources and/or strategic advantages of a business
  • 24. MARKETING AND CUSTOMER VALUE Core Competencies • It has three main characteristics • Sources of competitive advantage that make a significant contribution to perceived customer benefits • Have applications to a wide variety of markets • Are difficult for competitors imitate Core Competencies Contributes to perceived customer benefits Useful in a wide variety of markets Difficult to imitate
  • 25. MARKETING AND CUSTOMER VALUE Core Competencies How to maximize Core Competencies? • Businesses may need to realign themselves to maximize core competencies, using the following three steps Redefine the business concept or big idea Reshape the business scope, sometimes geographically Reposition the company’s brand identity
  • 26. MARKETING AND CUSTOMER VALUE Central Role of Strategic Planning • What is 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.
  • 27. MARKETING AND CUSTOMER VALUE Central Role of Strategic Planning • Master marketers like Amazon.com and Ritz- Carlton have a strong strategic planning. • Five Criteria of Master Marketers are as follows: Focus on the customer Organized to respond effectively to changing needs Have well-staffed marketing departments, Have a successful Chief Marketing Officers (CMOs), and Have other departments accept customer is king
  • 28. MARKETING AND CUSTOMER VALUE Central Role of Strategic Planning • Five priorities for a successful CMO Act as the visionary for the future of the company. Build adaptive marketing capabilities. Win the war for marketing talent. Tighten the alignment with sales. Take accountability for returns on marketing spending.
  • 29. MARKETING AND CUSTOMER VALUE Video Time – “The Role of a CMO”  Chris Williams  CMO of Capgemini, explains the expanding role of the chief marketing officer. He says CMOs should help grow the business in a weak economy
  • 30. MARKETING AND CUSTOMER VALUE Central Role of Strategic Planning • Below is the complete planning, implementation, and control cycle of strategic planning
  • 31. MARKETING AND CUSTOMER VALUE Central Role of Strategic Planning • Marketers must prioritize strategic planning in three key areas: Businesses as investment portfolio Assessing each business’s strength Establish a strategy
  • 32. MARKETING AND CUSTOMERVALUE Central Role of Strategic Planning – Marketing Plan • Strategic planning is a broad process that can address the entire business, or a portion of the business such as marketing. Marketing strategies derive from strategic plans. • A marketing plan operates on a strategic level and a tactical level. • It directs and coordinates the marketing effort Strategic Level Planning Tactical Level Planning
  • 33. MARKETING AND CUSTOMERVALUE Central Role of Strategic Planning – Marketing Plan • The strategic marketing plan lays out the target markets and the firm’s value proposition, based on an analysis of the best market opportunities. Strategic Level Planning Tactical Level Planning
  • 34. MARKETING AND CUSTOMERVALUE Central Role of Strategic Planning – Marketing Plan • The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service. Strategic Level Planning Tactical Level Planning
  • 36. CORPORATE STRATEGIC PLANNING Four Planning Activities • Whether they let their business units set their own goals and strategies or collaborate in doing so, all corporate headquarters undertake these four planning activities. Define the corporate mission Establish strategic business units Assign resources to each strategic business unit Assess growth opportunities
  • 37. CORPORATE STRATEGIC PLANNING Defining the Corporate Mission • Over time, the mission may change to respond to new opportunities or market conditions • These simple-sounding questions are among the most difficult a company will ever face. • Successful companies continuously ask and answer them. • From these answers the organization can develop a good mission statement. What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be?
  • 38. CORPORATE STRATEGIC PLANNING Defining the Corporate Mission • Product Definition vs. Market Definition • Market definitions of a business describe the business as a customer-satisfying process, which is preferred because products are transient (product definitions) but basic needs and customer groups endure forever.
  • 39. Company Product Definition Market Definition Union Pacific We run a railroad. We are a people-and-goods mover. Xerox We make copying equipment. We help improve office productivity. Hess Corporation We sell gasoline. We supply energy. Paramount Pictures We make movies. We market entertainment. Encyclopaedi a Britannica We sell encyclopedias We distribute information. Carrier We make air conditioners and furnaces. We provide climate control in the home. CORPORATE STRATEGIC PLANNING Defining the Corporate Mission
  • 40. CORPORATE STRATEGIC PLANNING Defining the Corporate Mission • A target market definition tends to focus on selling a product or service to a current market. • A strategic market definition, however, also focuses on the potential market. Target Market Strategic Market
  • 41. CORPORATE STRATEGIC PLANNING Crafting a Mission Statement • A clear, thoughtful mission statement, developed collaboratively with and shared with managers, employees, and often customers, provides a shared sense of purpose, direction, and opportunity. • At its best it reflects a vision, an almost “impossible dream,” that provides direction for the next 10 to 20 years.
  • 42. CORPORATE STRATEGIC PLANNING Crafting a Mission Statement • Good mission statements have five major characteristics They focus on a limited number of goals They stress the company’s major policies and values They define the major competitive spheres within which the company will operate They take a long-term view They are short, memorable and meaningful as possible
  • 43. CORPORATE STRATEGIC PLANNING Crafting a Mission Statement Vague Mission Statement To build total brand value by innovating to deliver customer value and customer leadership faster, better, and more completely than our competition Clear Mission Statement To organize the world’s information and make it universally accessible and useful (Google Mission Statement)
  • 44. CORPORATE STRATEGIC PLANNING Crafting a Mission Statement Vague Philosophy We build brands and make the world a little happier by bringing our best to you. Clear Philosophy Never settle for the best (Google Corporate Philosophy) • Focus on the user and all else will follow. • It’s best to do one thing really, really well. • Fast is better than slow. • Democracy on the web works. • You don’t need to be at your desk to need an answer. • You can make money without doing evil. • There is always more information out there. • The need for information crosses all borders. • You can be serious without a suit. • Great just isn’t good enough.
  • 45. CORPORATE STRATEGIC PLANNING VideoTime-HowtoWriteaMissionStatementThatDoesn'tSuck I want to show you why most mission statements are so terrible. Let's say you founded a pizza parlor. And your first idea for a mission statement is something like this: "Our mission is to serve the tastiest damn pizza in Wake County." That's pretty good. If I worked for you, I could get excited about that. Now here's how it will go off the rails.
  • 46. CORPORATE STRATEGIC PLANNING Strategic Business Units • What is Strategic Business Units? • It is a relatively autonomous division of a large company that operates as an independent enterprise with responsibility for a particular range of products or activities. • Large companies normally manage quite different businesses, each requiring its own strategy. The purpose of identifying the company’s strategic business units is to develop separate strategies and assign appropriate funding. • Senior management knows its portfolio of businesses usually includes a number of “yesterday’s has-beens” as well as “tomorrow’s winners.”
  • 47. CORPORATE STRATEGIC PLANNING Strategic Business Units • Three Characteristics of an SBU: Single business or collection of related businesses that can be planned separately from the rest of the company Own set of competitors Manager responsible for strategic planning and profit performance and controls most factors affecting profit
  • 48. CORPORATE STRATEGIC PLANNING Strategic Business Units • Management must decide how to allocate corporate resources to each SBU • Portfolio-planning models such as the GE/McKinsey Matrix and the BCG Matrix were used in the past to assist managers in making resource allocation decisions. But they have been replaced with newer models that consider shareholder value analysis.
  • 49. CORPORATE STRATEGIC PLANNING Strategic Business Units HIGHMEDLOW HIGHMEDLOW GE/McKinsey Matrix Industry Attractiveness BusinessPosition Boston Consulting Group Matrix
  • 50. CORPORATE STRATEGIC PLANNING Strategic Business Units • What is shareholder value analysis (SVA)? • SVA determines the financial value of a company by looking at the returns it gives its stockholders (ie. with and without an SBU). It is based on the view that the objective of company directors is to maximize the wealth of company stockholders • These value calculations assess the potential of a business based on growth opportunities from global expansion, repositioning or retargeting, and strategic outsourcing.
  • 51. CORPORATE STRATEGIC PLANNING Strategic Business Units • Growth opportunities assessment may result in the following: New Businesses (Ie New SBU) Downsizing Terminating Older Businesses
  • 52. CORPORATE STRATEGIC PLANNING Strategic Business Units • Firms can fill a gap between future desired sales and projected sales via • intensive growth • integrative growth • diversification growth intensive growth integrative growth diversification growth
  • 54. CORPORATE STRATEGIC PLANNING Strategic Business Units • Intensive growth looks for opportunities within current businesses. The product-market expansion grid looks at growth possibilities from the perspective of current and new products and markets. • Market Penetration • Market Development • Product Development • Diversification intensive growth integrative growth diversification growth
  • 55. CORPORATE STRATEGIC PLANNING Strategic Business Units • Market Penetration – gaining market share with current products and current customers. The company can achieve growth by having current customers purchase more, attract competitors customers, or bring non- buyers into the market. Products Current Markets Market Penetration Market Development Product Development Diversification New CurrentNew
  • 56. CORPORATE STRATEGIC PLANNING Strategic Business Units • Market Development – Finding new markets for existing products. The firm can find new buyer groups (business customers rather than consumers), new distribution channels (online), or expand distribution to other regions or countries. Products Current Markets Market Penetration Market Development Product Development Diversification New CurrentNew
  • 57. CORPORATE STRATEGIC PLANNING Strategic Business Units • Product Development – Develop new products to the current market. As the firm already has a relationship with current customers, they can develop new products to meet other, related needs of it’s customers. Products Current Markets Market Penetration Market Development Product Development Diversification New CurrentNew
  • 58. CORPORATE STRATEGIC PLANNING Strategic Business Units • Diversification – Developing new products for new markets. Products Current Markets Market Penetration Market Development Product Development Diversification New CurrentNew
  • 59. CORPORATE STRATEGIC PLANNING Strategic Business Units • Integrative growth: acquire related businesses • Use backward, forward or horizontal integrations within the industry • May not reach desired sales volume; challenges with integration intensive growth integrative growth diversification growth
  • 60. CORPORATE STRATEGIC PLANNING Strategic Business Units • A business can achieve growth through backward (buy supplier), forward (buy wholesaler), or horizontal (competitor) integration. Business Wholesaler Competitor Supplier
  • 61. CORPORATE STRATEGIC PLANNING Strategic Business Units • Diversification growth: identify opportunities for growth from adding attractive, unrelated businesses. • Firms can often discover opportunities outside its present business. However, the new industry should be highly attractive (grow potential) and the company should have (or acquire) the right capabilities to succeed. intensive growth integrative growth diversification growth
  • 62. CORPORATE STRATEGIC PLANNING Strategic Business Units • Downsizing and Divesting Older Businesses • Companies must carefully prune, harvest, or divest tired old businesses to release needed resources for other uses such as for growth strategy and reduce costs
  • 63. CORPORATE STRATEGIC PLANNING Organization andOrganizational Culture • What is organization? • A company’s organization is its structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly changing business environment.
  • 64. CORPORATE STRATEGIC PLANNING Organization andOrganizational Culture • What is organizational culture? • Corporate culture is “the shared experiences, stories, beliefs, and norms that characterize an organization.” • Customer-centric culture can affect all aspects of an organization • Walk into any company and the first thing that strikes you is the corporate culture—the way people dress, talk to one another, and greet customers.
  • 65. CORPORATE STRATEGIC PLANNING Organization andOrganizational Culture • Whereas managers can change structures and policies (though with difficulty), the company’s culture is very hard to change. • Yet adapting the culture is often the key to successfully implementing a new strategy.
  • 66. CORPORATE STRATEGIC PLANNING Video Time – Apple’s Culture A walk through the culture of Apple. Insights can be gained by examining the cultural artifacts and inferring underlying beliefs and value structures
  • 67. CORPORATE STRATEGICPLANNING MarketingInnovation • Innovation in marketing is critical - Imaginative ideas on strategy exist in many places within a company. • Employees can challenge company orthodoxy and stimulate new ideas • Senior management should identify and encourage fresh ideas from three generally underrepresented groups: • employees with youthful or diverse perspectives, • employees far removed from company headquarters, and • employees new to the industry. • Firms develop strategy by choosing their view of the future via Scenario Analysis
  • 68. BUSINESS UNIT STRATEGIC PLANNING Section 3
  • 69. BUSINESS UNIT STRATEGIC PLANNING Strategic Planning Level • This section will outline the strategic planning at the SBU level.
  • 70. BUSINESS UNIT STRATEGIC PLANNING Business Mission • Each business unit must develop a specific mission that fits within the broader company mission. • For example, the specific mission for YouTube must fit within the overall mission of Google. Business Mission SWOT Analysis Goal Formulation Strategy Formulation Program Formulation Implementation Feedback and Control
  • 71. BUSINESS UNIT STRATEGIC PLANNING Business Mission • Each business unit must develop a specific mission that fits within the broader company mission. • For example, the specific mission for YouTube must fit within the overall mission of Google. Business Mission SWOT Analysis Goal Formulation Strategy Formulation Program Formulation Implementation Feedback and Control
  • 72. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis • Strategic planning requires managers to understand the external and internal environments. A SWOT analysis allows for these environments to be monitored. • Business units must monitor key macro-environment forces as well as micro-environment factors. Monitoring the external environment can allow firms to identify growth opportunities and potential threats to its existing businesses. • To take advantage of opportunities the firm must be aware of its own internal strengths and weaknesses. Business Mission SWOT Analysis Goal Formulation Strategy Formulation Program Formulation Implementation Feedback and Control
  • 73. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis TThreat ExternalInternal SStrength WWeakness OOpportunity
  • 74. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis External Environment • External environment (opportunity and threat) analysis: monitor key macroenvironmental forces for • Market Opportunity: area of buyer need and interest that a company has a high probability of satisfying • Environmental threat is a challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales
  • 75. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis Market Opportunity • Sources of market opportunities 1. Offer something in short supply 2. Supply existing product or service in a superior way • Problem detection: ask consumers for suggestions • Ideal method: ask consumers to imagine an ideal version of the product or service • Consumption chain method: chart steps in acquiring, using, disposing of product
  • 76. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis Market Opportunity 3. Benefit from converging industry trends/introduce hybrid products or services to the market 4. Make buying process more convenient or efficient 5. Meet the need for more information and advice 6. Customize a product or service 7. Introduce a new capability 8. Deliver a product or service faster 9. Offer product at a much lower price
  • 77. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis Market Opportunity • Market opportunity analysis questions • To evaluate opportunities, companies can use market opportunity analysis (MOA) to ask questions like those posed on this slide Can we articulate the benefits convincingly to a defined target market(s)? Can we locate the target market(s) and reach them with cost-effective media and trade channels Does our company possess or have access to the critical capabilities and resources we need to deliver the customer benefits? Can we deliver the benefits better than any actual or potential competitors? Will the financial rate of return meet or exceed our required threshold for investment?
  • 78. BUSINESS UNIT STRATEGIC PLANNING Conduct a SWOT Analysis Internal Environment • It’s one thing to find attractive opportunities and another to be able to take advantage of them. Each business needs to evaluate its • internal strengths and • Internal weaknesses. Company Strengths Company Weaknesses Internal Environment
  • 79. BUSINESS UNIT STRATEGIC PLANNING Video Time – Starbuck’s SWOT Analysis This video introduces the idea behind doing SWOT analysis using Starbuck as an example
  • 80. BUSINESS UNIT STRATEGIC PLANNING Goal Formulation • Once the company has performed a SWOT analysis, it can proceed to goal formulation, developing specific goals for the planning period. • Goals are objectives that are specific with respect to magnitude and time Business Mission SWOT Analysis Goal Formulation Strategy Formulation Program Formulation Implementation Feedback and Control
  • 81. BUSINESS UNIT STRATEGIC PLANNING Business Mission • Each business unit must develop a specific mission that fits within the broader company mission. • For example, the specific mission for YouTube must fit within the overall mission of Google. Business Mission SWOT Analysis Goal Formulation Strategy Formulation Program Formulation Implementation Feedback and Control
  • 82. BUSINESS UNIT STRATEGIC PLANNING Goal Formulation • Managing these objectives effectively requires these four criteria to be met. • They must be arranged hierarchically, from most to least important • Objectives should be quantitative whenever possible • Goals should be realistic • Objectives must be consistent Ranked Realistic QuantifiedConsistent
  • 83. BUSINESS UNIT STRATEGIC PLANNING Strategic Formulation • Strategy is a game plan for getting what you want to achieve Business Mission SWOT Analysis Goal Formulation Strategy Formulation Program Formulation Implementation Feedback and Control
  • 84. BUSINESS UNIT STRATEGIC PLANNING Strategic Formulation • Two type of strategies • Porter’s Generic Strategies • Strategic Alliances Porter’s Generic Strategies Strategic Alliances
  • 85. BUSINESS UNIT STRATEGIC PLANNING Strategic Formulation Porter’s Generic Strategies • Michael Porter has proposed three generic strategies that provide a good starting point for strategic thinking: • overall cost leadership • differentiation, and • focus. • According to Porter, competing firms directing the same strategy to the same target market constitute a strategic group. The firm that carries out the strategy best will make the most profits. With overall cost leadership, firms work to achieve the lowest production and distribution costs so they can underprice competitors and win market share. With differentiation, the business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. With focus, the business focuses on one or more narrow market segments, gets to know them intimately, and pursues either cost leadership or differentiation within the target segment.
  • 86. BUSINESS UNIT STRATEGIC PLANNING Video Time – Porter’s Generic Strategies Porter's Generic Strategies are so called because they can be useful to you no matter what industry you work in, what products or services you sell, or whether you are a small or large organization
  • 87. BUSINESS UNIT STRATEGIC PLANNING Strategic Formulation Strategic Alliances • Even giant companies often cannot achieve leadership, either nationally or globally, without forming alliances with domestic or multinational companies that complement or leverage their capabilities and resources. • Many strategic alliances take the form of marketing alliances. These fall into four major categories. Product or service alliances—One company licenses another to produce its product, or two companies jointly market their complementary products or a new product. Promotional alliances—One company agrees to carry a promotion for another company’s product or service. Logistics alliances—One company offers logistical services for another company’s product. Pricing collaborations—One or more companies join in a special pricing collaboration.
  • 88. BUSINESS UNIT STRATEGIC PLANNING Program Formulation and Implementation • Great strategies can lead to failure unless they are implemented properly. Proper formulation ensures that all the pieces fit together. But firms must also examine the cost of the marketing programs to ensure that the expense is justified.
  • 89. BUSINESS UNIT STRATEGIC PLANNING Program Formulation and Implementation • According to McKinsey & Company, strategy is only one of seven elements—all of which start with the letter s—in successful business practice. • The first three—strategy, structure, and systems— are considered the “hardware” of success. • The next four—style, skills, staff, and shared values— are the “software.” The first “soft” element, style, means company employees share a common way of thinking and behaving. The second, skills, means employees have the skills needed to carry out the company’s strategy. Staffing means the company has hired able people, trained them well, and assigned them to the right jobs. The fourth element, shared values, means employees share the same guiding values. When these elements are present, companies are usually more successful at strategy implementation.
  • 90. BUSINESS UNIT STRATEGIC PLANNING Program Formulation and Implementation • McKinsey’s Elements of Success Strategy Structure SystemsStyle Shared values Staff Skills
  • 91. BUSINESS UNIT STRATEGIC PLANNING Feedbackand Control • A company’s strategic fit with the environment will inevitably erode because the market environment changes faster than the company’s seven Ss. • Thus, a company might remain efficient yet lose effectiveness. organizations can be changed through strong leadership, preferably in advance of a crisis. Constant Monitoring of External and Internal Environment Willingness to adopt new goals and behaviors Key to Organizational Health
  • 92. THE NATURE AND CONTENTS OF A MARKETING PLAN Section 4
  • 93. THE NATURE AND CONTENTS OF A MARKETING PLAN What is a marketing plan? • A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to meet its marketing objectives • Provides direction and focus for a brand, product or company • Informs and motivates key constituents inside and outside an organization about its marketing goals and how these can be achieved
  • 94. THE NATURE AND CONTENTS OF A MARKETING PLAN Shortcomingsof Marketing Plans • The most frequently cited shortcomings of current marketing plans, according to marketing executives, are: Lack Of Realism Insufficient Competitive Analysis A Short-run Focus
  • 95. THE NATURE AND CONTENTS OF A MARKETING PLAN Evaluatinga Marketing Plan • Here are some questions to ask in evaluating a marketing plan. Is the plan simple and succinct? Is it easy to understand and act on? Does it communicate its content clearly and practically? Is it not unnecessarily long? Is the plan complete? Does it include all the necessary elements? Does it have the right breadth and depth? Achieving the right balance between completeness and lots of detail and simplicity and clear focus is often the key to a well- constructed marketing plan.
  • 96. THE NATURE AND CONTENTS OF A MARKETING PLAN Evaluatinga Marketing Plan • Here are some questions to ask in evaluating a marketing plan. Is the plan specific? Are its objectives concrete and measurable? Does it provide a clear course of action? Does it include specific activities, each with specific dates of completion, specific persons responsible, and specific budgets? Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Has a frank and honest self-critique been conducted to raise possible concerns and objections?
  • 97. THE NATURE AND CONTENTS OF A MARKETING PLAN Shorter and Less Formal Plans for Smaller Businesses • Smaller businesses may create shorter or less formal marketing plans; • Corporations generally require highly structured documents. Small Business – Shorter Less Formal Plan Corporate – Longer Formal Plan
  • 98. THE NATURE AND CONTENTS OF A MARKETING PLAN Marketing Plan Content • Although the exact length and layout varies from company to company, most marketing plans cover one year in anywhere from 5 to 50 pages. Smaller businesses may create shorter or less formal marketing plans, whereas corporations generally require highly structured documents. • A marketing plan usually contains the following sections Executive summary Table of contents Situation analysis Marketing strategy Marketing tactics Financial projections Implementation controls
  • 99. THE NATURE AND CONTENTS OF A MARKETING PLAN Marketing Plan Content • Executive summary • Table of contents • Situation analysis • relevant background data on sales, costs, the market, competitors and the macroenvironment • Marketing strategy • mission, marketing and financial objectives, needs the marketing offering is intended to satisfy and its competitive positioning
  • 100. THE NATURE AND CONTENTS OF A MARKETING PLAN Marketing Plan Content • Marketing tactics • Marketing activities that will be undertaken to execute the marketing strategy The product or service offering section describes the key attributes and benefits that will appeal to target customers. The pricing section specifies the general price range and how it might vary across different types of customers or channels, including any incentive or discount plans. The channel section outlines the different forms of distribution, such as direct or indirect. The communications section usually offers high-level guidance about the general message and media strategy. Firms will often develop a separate communication plan to provide the detail necessary for agencies and other media partners to effectively design the communication program.
  • 101. THE NATURE AND CONTENTS OF A MARKETING PLAN Marketing Plan Content • Financial Projections • Include a sales forecast, an expense forecast, and a break-even analysis. The break-even analysis estimates how many units the firm must sell monthly (or how many years it will take) to offset its monthly fixed costs and average per-unit variable costs Risk analysis obtains three estimates (optimistic, pessimistic, and most likely) for each uncertain variable affecting profitability, under an assumed marketing environment and marketing strategy for the planning period.
  • 102. THE NATURE AND CONTENTS OF A MARKETING PLAN Marketing Plan Content • Implementation Controls • Outlines the controls for monitoring and adjusting implementation of the plan • Spells out the goals and budget for each month or quarter so management can review each period’s results and take corrective action as needed.
  • 103. THE NATURE AND CONTENTS OF A MARKETING PLAN The Role of Research • The marketing plan should outline what marketing research will be conducted and when, as well as how the findings will be applied. • Up-to-date information is needed about the: Environment Competition Selected Market Segments
  • 104. THE NATURE AND CONTENTS OF A MARKETING PLAN TheRoleofResearch • Research helps marketers learn about customers’ Customers’ Requirements Customers’ Expectations Customers’ Perceptions Customers’ Satisfaction Customers’ Loyalty
  • 105. THE NATURE AND CONTENTS OF A MARKETING PLAN The Role of Relationships • Although the marketing plan shows how the company will establish and maintain profitable customer relationships, it also affects both internal and external relationships. Internal Relationships External relationships
  • 106. THE NATURE AND CONTENTS OF A MARKETING PLAN The Role of Relationships • Internal Relationships: The marketing plan influences how marketing staff work with each other and with other departments to deliver value and satisfy customers Marketing Department Other Department Creating, Delivering and Communicating Values to Customers
  • 107. THE NATURE AND CONTENTS OF A MARKETING PLAN The Role of Relationships • External Relationships: The marketing plan affects how the company works with suppliers, distributors, and partners to achieve the plan’s objectives Company Suppliers DistributorsPartners

Hinweis der Redaktion

  1. Nine strategically relevant activities—five primary and four support activities— create value and cost in a specific business. 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, and (4) firm infrastructure. (Infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs.)
  2. Vaguely written mission statement and philosophy
  3. Vaguely written mission statement and philosophy
  4. Assessing growth opportunities includes planning new businesses, downsizing, and terminating older businesses. If there is a gap between future desired sales and projected sales, corporate management will need to develop or acquire new businesses to fill it. Figure 2.2 illustrates this strategic-planning gap for a hypothetical manufacturer of blank DVD discs called Cineview. The lowest curve projects expected sales from the current business portfolio over the next five years. The highest describes desired sales over the same period.