Chapter

2
Developing
Marketing
Strategiesand
Plans

Copyright © 2016 Pearson Education Ltd. 2-1

 Learning Objectives
1. How does marketing affect customer value?
2. How is strategic planning carried out at the
corporate and divisional levels?
3. How is strategic planning carried out at the
business unit level?
4. What does a marketing plan include?

Copyright © 2016 Pearson Education Ltd. 2-2

Marketing and customer
Value
• The value delivery process

• The value chain

• Core competencies

• The central role of strategic planning

Copyright © 2016 Pearson Education Ltd. 2-3

The value delivery process

CHOOSING THE VALUE

PROVIDING THE VALUE

COMMUNICATING THE

VALUE

Copyright © 2016 Pearson Education Ltd. 2-4

 The 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

Copyright © 2016 Pearson Education Ltd. 2-5

 Core business processes
• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship management
process
• Fulfillment management process

Copyright © 2016 Pearson Education Ltd. 2-6

 Core competencies
• A source of competitive advantage
and makes a significant contribution
to perceived customer benefits
• Applications in a wide variety of markets
• Difficult for competitors to imitate

Copyright © 2016 Pearson Education Ltd. 2-7

Maximizing Core competencies
• (Re)define the business concept

• (Re)shaping the business scope

• (Re)positioning the company’s brand

identity

Copyright © 2016 Pearson Education Ltd. 2-8

 Central role of
strategic
planningas an
• Managing the businesses
investment portfolio

• Assessing the market’s growth rate and

the company’s position in that market

• Establishing a strategy

Copyright © 2016 Pearson Education Ltd. 2-9

 Marketing plan
• The central instrument for directing and
coordinating the marketing effort

– Strategic

– Tactical

Copyright © 2016 Pearson Education Ltd. 2-10

 Figure 2.1
Strategic Planning,
Implementation, and Control
Processes

Copyright © 2016 Pearson Education Ltd. 2-11

Corporate and division strategic
planning
• Defining the corporate mission

• Establishing strategic business units

• Assigning resources to each strategic
business unit

• Assessing growth opportunities

Copyright © 2016 Pearson Education Ltd. 2-12

 Defining the
corporate mission
• 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?

Copyright © 2016 Pearson Education Ltd. 2-13

 Product Orientation vs.
Market Orientation
Company Product Market
Missouri-Pacific We run a railroad We are a people-
Railroad and-goods mover

Xerox We make copying We improve office

equipment productivity
Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We market

entertainment

Copyright © 2016 Pearson Education Ltd. 2-14

 Good Mission statements
• Focus on a limited number of goals
• Stress the company’s major policies and
values
• Define the major competitive spheres
within which the company will operate
• Take a long-term view
• Are as short, memorable, and meaningful
as possible
Copyright © 2016 Pearson Education Ltd. 2-15
Establishing Strategic Business
Units
• A single business or collection of
related businesses

• Has its own set of competitors

• Has a leader responsible for strategic

planning and profitability

Copyright © 2016 Pearson Education Ltd. 2-16

 Assigning Resources
to Each SBU
• Management must decide how to allocate
corporate resources to each SBU

– Portfolio-planning models

– Shareholder/market value analysis

Copyright © 2016 Pearson Education Ltd. 2-17

Assessing growth opportunities

Copyright © 2016 Pearson Education Ltd. 2-18

Assessing growth opportunities
• Intensive Growth

• Integrative Growth

• Diversification Growth

• Downsizing and Divesting Older Businesses

Copyright © 2016 Pearson Education Ltd. 2-19

 Intensive growth
• Corporate
management
should first review
opportunities for
improving existing
businesses

Copyright © 2016 Pearson Education Ltd. 2-20

 Figure 2.3
ESPN Growth
Opportunities

Copyright © 2016 Pearson Education Ltd. 2-21

 INTEGRATIVE
GROWTH
• A business can increase sales and
profits through backward, forward, or
horizontal integration within its industry

Copyright © 2016 Pearson Education Ltd. 2-22

 Diversification growth
• Diversification growth makes sense when
good opportunities exist outside the
present businesses

–
The industry is highly attractive and the
company has the right mix of business
strengths to succeed

Copyright © 2016 Pearson Education Ltd. 2-23

 Downsizing and Divesting Older
Businesses
• Companies must carefully prune, harvest,
or divest tired old businesses to release
needed resources for other uses and
reduce costs

Copyright © 2016 Pearson Education Ltd. 2-24

Organization and Organizational
Culture
• A company’s organization consists of its
structures, policies, and corporate culture, all of
which can become dysfunctional in a rapidly
changing business environment

Copyright © 2016 Pearson Education Ltd. 2-25

Organization and Organizational
Culture
• Corporate culture: “The shared
experiences, stories, beliefs, and norms
that characterize an organization”

Copyright © 2016 Pearson Education Ltd. 2-26

 Marketing Innovation
• Innovation in marketing is critical

• Employees can challenge company

orthodoxy and stimulate new ideas

• Firms develop strategy by choosing their

view of the future
–
Scenario analysis
Copyright © 2016 Pearson Education Ltd. 2-27
 Figure 2.4
The Business Unit
Strategic-planning Process

Copyright © 2016 Pearson Education Ltd. 2-28

 SWOT
Analysis
Strengths

Weaknesses

Opportunities

Threats

Copyright © 2016 Pearson Education Ltd. 2-29

 External environment
• Marketing opportunity: an area of buyer need
and interest that a company has a high
probability of profitably satisfying.

• Environmental threat: challenge posed by an

unfavorable trend or development that, in the
absence of defensive marketing action, would
lead to lower sales or profit

Copyright © 2016 Pearson Education Ltd. 2-30

 Market Opportunity Analysis
(MOA)
• 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?

Copyright © 2016 Pearson Education Ltd. 2-31

 Market Opportunity Analysis
(MOA)
• 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?

Copyright © 2016 Pearson Education Ltd. 2-32

 Figure 2.5
Opportunity And Threat
Matrices

Copyright © 2016 Pearson Education Ltd. 2-33

 Internal environment
• Strengths

• Weaknesses

Copyright © 2016 Pearson Education Ltd. 2-34

 Goal formulation (MBO)
• Unit’s objectives must be arranged
hierarchically

• Objectives should be quantitative

• Goals should be realistic

• Objectives must be consistent

Copyright © 2016 Pearson Education Ltd. 2-35

 Strategic formulation:
Porter’s Generic
Strategies
OVERALL COST LEADERSHIP

DIFFERENTIATION

FOCUS

Copyright © 2016 Pearson Education Ltd. 2-36

 Strategic formulation:
Strategic alliances
• Categories of marketing alliances
– Product or service alliance

– Promotional alliance

– Logistics alliances

– Pricing collaborations

Copyright © 2016 Pearson Education Ltd. 2-37

 Program Formulation and
Implementation
• McKinsey’s Elements of Success

SkillsStrategy

Staff Structure
StyleSystems Shared

values

Copyright © 2016 Pearson Education Ltd. 2-38

 Feedback and control
• Peter Drucker: it is more important to “do
the right thing”—to be effective—than “to
do things right”—to be efficient

–
The most successful companies,
however, excel at both

Copyright © 2016 Pearson Education Ltd. 2-39

MarketingPlan
Contents
Executive summary
Table of contents
Situation analysis
Marketing strategy
Marketing tactics
Financial projections
Implementation controls
Copyright © 2016 Pearson Education Ltd. 2-40
Evaluating a Marketing Plan

Is the plan simple/succinct?

Is the plan complete?
Is the plan specific?
Is the plan realistic?

Copyright © 2016 Pearson Education Ltd. 2-41

 Other marketing plan contents
• Marketing research

• Specifications for internal and external

relationships

• Action plans and schedules

Copyright © 2016 Pearson Education Ltd. 2-42

Copyright © 2016 Pearson Education Ltd. 2-43