Kotler Mm15e Inppt 02

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Chapter

2

Developing

Marketing

Strategies and

Plans

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Learning Objectives

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1. How does marketing affect customer value?How does marketing affect customer value?

2.

2. How is strategic planning carried out at theHow is strategic planning carried out at the

corporate and divisional levels? corporate and divisional levels?

3.

3. How is strategic planning carried out at theHow is strategic planning carried out at the

business unit level business unit level??

4.

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Marketing and customer Value

•

• The value delivery processThe value delivery process

•

• The value chainThe value chain

•

• Core competenciesCore competencies

•

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The value delivery process

CHOOSING TH

CHOOSING THE VE VALUEALUE

PROVIDING

PROVIDING THE VTHE VALUEALUE

COMMUNICATING THE VALUE COMMUNICATING THE VALUE

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The Value chain

•

• A tool for identifying ways to A tool for identifying ways to create morecreate more customer value

customer value –

– Every firm is a Every firm is a synthesis of activitiessynthesis of activities

performed to design, produce, market, deliver,

and support its product

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Core business processes

•

• Market-sensing Market-sensing processprocess •

• New-offering realization processNew-offering realization process •

• Customer acquisition processCustomer acquisition process •

• Customer relationship Customer relationship managememanagementnt process

process •

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Core competencies

•

• A source of competitive ad A source of competitive advantage avantage andnd makes a significant contribution to

makes a significant contribution to perceived customer benefits

perceived customer benefits •

• Applications in a wide varie Applications in a wide variety of marketsty of markets •

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Maximizing Core competencies

•

• (Re)define the business concept(Re)define the business concept •

• (Re)shaping the business scope(Re)shaping the business scope •

• (Re)positioning the company’s brand(Re)positioning the company’s brand identity

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Central role of strategic

planning

•

• Managing the businesses as anManaging the businesses as an investment portfolio

investment portfolio •

• Assessing the market’s growth Assessing the market’s growth rate andrate and the company’s position in that market

the company’s position in that market •

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Marketing plan

•

• The central instrument for directing andThe central instrument for directing and coordinating the marketing effort

coordinating the marketing effort –

– StrategicStrategic

–

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Figure 2.1

Strategic Planning, Implementation,

and Control Processes

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Corporate and division strategic

planning

•

• Defining the corporate missionDefining the corporate mission •

• Establishing strategic business unitsEstablishing strategic business units •

• Assigning resources to ea Assigning resources to each strategicch strategic business unit

business unit •

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Defining the

corporate mission

•

• What is our business?What is our business? •

• Who is the customer?Who is the customer? •

• What is of value to the customer?What is of value to the customer? •

• What will our business be?What will our business be? •

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Product Orientation vs.

Market Orientation

C

Coommppaannyy PPrroodduucctt MMaarrkkeett

Missouri-Pacific Missouri-Pacific Railroad

Railroad

W

We e rruun n a ra raaiillrrooaadd WWe e aarre e a pa peeoopplle e--and-goods mover and-goods mover X Xeerrooxx WWe e mmaakke e ccooppyyiinngg equipment equipment We improve office We improve office productivity productivity S

Sttaannddaarrd d OOiill WWe e sseelll l ggaassoolliinnee WWe e ssuupppplly y eenneerrggyy

C

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Good Mission statements

•

• Focus on a limited number of goalsFocus on a limited number of goals •

• Stress the company’s major policies andStress the company’s major policies and values

values •

• Define the major competitive spheresDefine the major competitive spheres within which the company will operate within which the company will operate •

• Take a long-term viewTake a long-term view •

• Are as short, memorable, a Are as short, memorable, and meaninnd meaningfulgful as possible

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Establishing Strategic Business

Units

•

• A single business or coll A single business or collection of relateection of relatedd businesses

businesses •

• Has its own set of competitorsHas its own set of competitors •

• Has a leader responsible for strategicHas a leader responsible for strategic planning and profitability

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Assigning Reso

urces

to Each SBU

•

• Management must decide how to allocateManagement must decide how to allocate corporate resources to each SBU

corporate resources to each SBU –

– Portfolio-planning modelsPortfolio-planning models

–

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Assessing gro

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•

• Intensive GrowthIntensive Growth

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• Integrative GrowthIntegrative Growth

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• Diversification GrowthDiversification Growth

•

• Downsizing and Divesting Older BusinessesDownsizing and Divesting Older Businesses

Assessing gro

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Intensive growth

• • CorporateCorporate management management

should first review should first review opportunities for opportunities for improving existing improving existing businesses businesses

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Figure 2.3

ESPN Growth

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INTEGRATIVE GROWTH

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• A business can increase A business can increase sales and psales and profitsrofits through backward, forward, or

through backward, forward, or horizontalhorizontal integration within its industry

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Diversification growth

•

• Diversification growth makes sense whenDiversification growth makes sense when good opportunities exist outside the

good opportunities exist outside the present businesses

present businesses –

– The industry is highly attractive and theThe industry is highly attractive and the

company has the right mix

company has the right mix of businessof business

strengths to succeed

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Downsizing and Divesting Older

Businesses

•

• Companies must carefully prune, harvest,Companies must carefully prune, harvest, or divest tired old

or divest tired old businesses to releasebusinesses to release needed resources for other uses and

needed resources for other uses and reduce costs

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Organization and Organizational

Culture

•

• A company’s organization consists of its A company’s organization consists of its

structures, policies, and corporate culture, all of structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly

which can become dysfunctional in a rapidly changing business environment

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Organization and Organizational

Culture

•

• Corporate culture: “The sharedCorporate culture: “The shared

experiences, stories, beliefs, and norms experiences, stories, beliefs, and norms that characterize an organization

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Marketing Innovation

•

• Innovation in marketing is criticalInnovation in marketing is critical •

• Employees can challenge companyEmployees can challenge company orthodoxy and stimulate new ideas orthodoxy and stimulate new ideas •

• Firms develop strategy by Firms develop strategy by choosing theirchoosing their view of the future

view of the future –

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Figure 2.4

The Business Unit

Strategic

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SWOT Analysis

Strengths Strengths Weaknesses Weaknesses Opportunities Opportunities Threats Threats

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External environment

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• Marketing opportunity: an area of buyer needMarketing opportunity: an area of buyer need and interest that a company has a high

and interest that a company has a high probability of profitably satisfying.

probability of profitably satisfying.

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• Environmental threat: challenge posed by anEnvironmental threat: challenge posed by an unfavorable trend or development that, in the unfavorable trend or development that, in the absence of defensive marketing action, would absence of defensive marketing action, would lead to lower sales or profit

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Market Opportunity Analysis

(MOA)

•

• Can we articulate the benefits convincinglyCan we articulate the benefits convincingly to a defined target market(s)?

to a defined target market(s)? •

• Can we locate the target market(s) andCan we locate the target market(s) and reach them with cost-effective media and reach them with cost-effective media and trade channels?

trade channels? •

• Does our company possess or have accessDoes our company possess or have access to the critical capabilities and resources we to the critical capabilities and resources we need to deliver the customer benefits?

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Market Opportunity Analysis

(MOA)

•

• Can we deliver the benefits better thanCan we deliver the benefits better than any actual or potential competitors?

any actual or potential competitors? •

• Will the financial rate of return meet orWill the financial rate of return meet or exceed our required threshold for

exceed our required threshold for investment?

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Figure 2.5

Opportunity And Threat Matrices

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Internal environment

• • StrengthsStrengths • • WeaknessesWeaknesses

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Goal formulation (MBO)

•

• Unit’s objectives must be arrangedUnit’s objectives must be arranged hierarchically

hierarchically •

• Objectives should be Objectives should be quantitativequantitative •

• Goals should be realisticGoals should be realistic •

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Strategic formulation:

Porter

’’

s Generic Strategies

OVERALL COST LEADERSHIP OVERALL COST LEADERSHIP

DIFFERENTIATION DIFFERENTIATION

FOCUS FOCUS

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Strategic formulation:

Strategic alliances

•

• Categories of marketing alliancesCategories of marketing alliances –

– Product or service allianceProduct or service alliance

–

– Promotional alliancePromotional alliance

–

– Logistics alliancesLogistics alliances

–

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Program Formulation and

Implementation

•

• McKinseyMcKinsey’’s Elements of Successs Elements of Success

Strategy Strategy Structure Structure Systems Systems Style Style Staff Staff Skills Skills

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Feedback and control

•

• Peter Drucker: it is more important to “doPeter Drucker: it is more important to “do the right thing”—

the right thing”—to be effectiveto be effective—than “to—than “to do things right”—

do things right”—to be efficientto be efficient –

– The most successful companies, however,The most successful companies, however,

excel at both

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Marketing Plan Contents



 Executive summaryExecutive summary 

 Table of contentsTable of contents 

 Situation analysisSituation analysis 

 Marketing strategyMarketing strategy 

 Marketing tacticsMarketing tactics 

 Financial projectionsFinancial projections 

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Evaluating a Marketing Plan

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 Is the plan simple/succinct?Is the plan simple/succinct? 

 Is the plan complete?Is the plan complete? 

 Is the plan specific?Is the plan specific? 

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