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?
Section 1
MARKETING AND CUSTOMER
VALUE
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:
Providing
• Doing homework or thevalue: • Use the Internet,
research on market advertising, sales
segmentation, target • Identification of force and other
market selection, features, prices, communication tools
value positioning distribution

Choosing Communicating
thevalue: 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
Primary Inbound Outbound
Logistics Operations Logistics Marketing Service
Activitie
s

Margin
Procurement
Support Human Resource management
Activitie
s Technological Development
Infrastructure
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 The market-
depends not only on sensing process
how well each
department performs The new-offering
its work, but also on realization
how well the company process
The customer
coordinates acquisition process
departmental
activities to conduct The customer
core business relationship management
processes. These process
processes
include the following: The fulfillment
management
process
MARKETING AND CUSTOMER
VALUE Core Business Processes
• The market- The market-
sensing process
sensing process:
The new-offering
gathering and realization
acting upon process
The customer acquisition
information about process
the product The customer
relationship management
process
The fulfillment
management process
MARKETING AND CUSTOMER
VALUE Core Business Processes
• The new-offering The market-
sensing process
realization
The new-offering
process: realization
researching, process
The customer
developing, and acquisition process
launching new The customer
high-quality relationship management
process
offerings quickly
and within The fulfillment
management
budget process
MARKETING AND CUSTOMER
VALUE Core Business Processes
• The customer The market-
sensing process
acquisition
The new-offering
process: defining realization
target markets process
The customer
and prospecting acquisition process
for new The customer
customers relationship management
process
The fulfillment
management process
MARKETING AND CUSTOMER
VALUE Core Business Processes
• The customer The market-
relationship sensing process
management The new-offering
process: building realization
deeper process
The customer
understanding, acquisition process
relationships,
The customer
and offerings to relationship management
individual process
The fulfillment
customers management process
MARKETING AND CUSTOMER
VALUE Core Business Processes
• The fulfillment The market-
sensing process
management
process: receiving The new-offering
and approving realization
process
orders, shipping The customer
goods on time, acquisition process
and collecting The customer
payment 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 Useful in
a
competitive wide variety
of
Contributes to
advantage that make perceived markets Difficult to
a significant customer
benefits
imitate

contribution to
• perceived
Have applications
customerto Core
a benefits Competencies

wide variety of
markets
• Are difficult for
competitors 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

Reposition the
company’s
Reshape the brand identity
business
Redefine the scope,
business geographically
sometimes
concept or
idea
big
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 Focus on the
Amazon.com and customer
Ritz- Carlton have a
strong strategic Organized to respond
effectively to changing needs
planning.
• Five Criteria of Master Have well-staffed marketing
Marketers are as departments,
follows:
Have a successful Chief
Marketing Officers (CMOs),
and
Have other departments
accept customer is king
MARKETING AND CUSTOMER
VALUE Central Role of Strategic
Planning Act as the visionary for
• Five priorities for
the future of the
a successful CMO 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 Businesses as
investment
prioritize portfolio
strategic
planning in three Assessing each
business’s
key areas: strength

Establish a
strategy
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning – Marketing
Plan

• Strategic planning is a
broad process that can
Strategic
address the entire Level
business, or a portion
of the business such as
Planning
marketing. Marketing
strategies derive from
strategic plans. Tactical
• A marketing plan
operates on a strategic
Level
level and a tactical level. Planning
• It directs and
coordinates the
marketing effort
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning – Marketing
Plan
• The strategic
marketing plan lays
Strategic
out the target Level
markets and the Planning
firm’s value
proposition, based
on an analysis of Tactical
the best market
opportunities. Level
Planning
MARKETING AND CUSTOMER VALUE
Central Role of Strategic Planning – Marketing
Plan
• The tactical
marketing
Strategic
plan Level
specifies the Planning
marketing tactics,
including product
features, promotion, Tactical
merchandising, Level
pricing, sales Planning
channels, and
service.
Section 2
CORPORATE STRATEGIC
PLANNING
CORPORATE STRATEGIC
PLANNING
Four Planning Activities Define the corporate
• Whether they let mission
their business units
set their own goals
Establish strategic
and strategies or business units
collaborate in doing
so, all corporate Assign resources to
each
strategic business unit
headquarters
undertake these
four planning Assess growth
opportunities
activities.
CORPORATE STRATEGIC
PLANNING Defining the
Corporate
• Over time, Mission
the mission
may change to respond What is our
business?
to new opportunities
or market conditions
Who is the
• These simple-sounding customer?
questions are among
the most difficult a What is of value
company will ever face. to customer?
the
• Successful
companies What will
our
business
continuously ask and be?
answer them.
What should
• From these answers the our
business
organization can develop be?
a good mission
statement.
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.
CORPORATE STRATEGIC
PLANNING Defining the
CorporateProduct
Company
MissionDefinition Market Definition
We are a people-and-
Union Pacific We run a railroad.
goods mover.
We make We help improve
Xerox
copying office productivity.
equipment.
Hess
We sell gasoline. We supply energy.
Corporation
Paramount
We make movies. We market entertainment.
Pictures
Encyclopaedi
We sell encyclopedias We distribute information.
a Britannica
We make air
We provide climate control
Carrier conditioners
in the home.
and furnaces.
CORPORATE STRATEGIC
PLANNING Defining the
Corporate Mission
• A target market
definition tends to Target Strategic
focus on selling a Marke Market
product or service t
to a current
market.
• A strategic market
definition,
however, also
focuses on the
potential 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 They focus on a limited number
• Good mission of goals
statements
They stress the company’s major
have policies and values

five major They define the major

characteristics 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 Clear Mission
Statement Statement
To build total brand value To organize the world’s
by innovating to deliver information and make it
customer value and universally accessible
and useful (Google
customer leadership
Mission Statement)
faster, better, and more
completely than our
competition
CORPORATE STRATEGIC
PLANNING Crafting a Mission
Statement
Vague Philosophy Clear Philosophy
We build brands and make the world a Never settle for the best
little happier by bringing our best to (Google Corporate Philosophy)
you.
• 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
Video Time- How to Write a Mission Statement That
Doesn't Suck

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 Single business or collection
• Three of related businesses that
Characteristics of can be separately from the rest
planned
of the company
an SBU:

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
GE/McKinsey Matrix
HIG
H

Boston Consulting Group

Business Position

Matrix
ME
D
LO
W

LOW MED HIGH

Industry Attractiveness
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 New
Businesses (Ie
opportunities New SBU)
assessment
may result in Downsizing
the
following:
Terminating
Older
Businesses
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Firms can fill a gap
between future desired intensive
sales and projected
sales via growth
• intensive growth
• integrative growth integrative
• diversification growth
growth
diversification
growth
Assessing growth
opportunities
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Intensive growth looks for
opportunities within intensive
current businesses. The
product-market expansion growth
grid looks at growth
possibilities from the
perspective of current and
integrative
new products and growth
markets.
• Market Penetration
• Market Development diversification
•
•
Product Development
Diversification growth
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Market Penetration –
gaining market share with Market
Diversification

Ne
current products and

w
Development
current customers. The

Market
company can achieve
growth by having current

Curren s
customers purchase
Market Product
more, attract competitors Penetration Development
customers, or bring non-
buyers into the market. t
Current New
Products
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Market Development –
Finding new markets for Market
Diversification

Ne
existing products. The firm

w
Development
can find new buyer

Market
groups (business
customers rather than

Curren s
consumers), new
Market Product
distribution channels Penetration Development
(online), or expand
distribution to other t
regions or countries. Current New
Products
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Product Development –
Develop new products to Market
the current market. As Diversification

Ne
w
Development
the firm already has a

Market
relationship with current
customers, they can
develop new products to

Curren s
meet other, related needs Market Product
of it’s customers. Penetration Development
t
Current New
Products
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Diversification –
Developing new
products for new Market
Diversification

Ne
w
markets. Development

Market
Curren s
Market Product
Penetration Development
t
Current New
Products
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Integrative growth:
acquire related businesses intensive
• Use backward, forward
or horizontal integrations growth
within the industry
• May not reach desired
sales volume; integrative
challenges with
integration 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.

Supplier Business Wholesaler

Competitor
CORPORATE STRATEGIC
PLANNING Strategic Business
Units
• Diversification growth:
identify opportunities for
growth from adding
intensive
attractive, unrelated
businesses.
growth
• Firms can often discover
opportunities outside its integrative
present business. However,
the new industry should growth
be highly attractive (grow
potential) and the
company should have diversification
(or acquire) the right
capabilities to succeed. growth
CORPORATE STRATEGIC
PLANNING Strategic Business
Units

• Downsizing and Divesting OlderBusinesses

• 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 and Organizational
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 and Organizational
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 and Organizational
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 STRATEGIC
PLANNING Marketing Innovation
• 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
Section 3
BUSINESS UNIT STRATEGIC
PLANNING
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 Business Mission

must develop a
SWOT
specific mission Analysis
that fits within the Goal Formulation
broader
company Strategy Formulation

mission.
Program Formulation
• For example, the
specific mission Implementation
for YouTube must
fit within the Feedback and Control

overall mission of
Google.
BUSINESS UNIT STRATEGIC
PLANNING
Business Mission
• Each business unit Business Mission

must develop a
SWOT
specific mission Analysis
that fits within the Goal Formulation
broader
company Strategy Formulation

mission.
Program Formulation
• For example, the
specific mission Implementation
for YouTube must
fit within the Feedback and Control

overall mission of
Google.
BUSINESS UNIT STRATEGIC
PLANNING Conduct a SWOT
Analysis
• Strategic planning requires Business Mission
managers to understand the
external and internal
environments. A SWOT analysis SWOT
allows for these environments Analysis
to be monitored.
• Business units must monitor Goal Formulation
key macro-environment forces
as well as micro-
environment factors. Strategy Formulation
Monitoring the external
environment can allow firms to
identify growth opportunities Program Formulation
and potential threats to its
existing businesses.
• To take advantage of Implementation
opportunities the firm must
be aware of its own internal
strengths and weaknesses. Feedback and Control
BUSINESS UNIT STRATEGIC
PLANNING Conduct a SWOT
Analysis

Internal
External
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 Can we articulate the benefits
convincingly to a defined target
• Market opportunity market(s)?
analysis questions
Can we locate the target market(s) and
• To evaluate opportunities, reach them with cost-effective media and
companies can use market trade channels

opportunity analysis (MOA) Does our company possess or have

to ask questions like those access to the critical capabilities and
posed on this slide 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
Company
• It’s one thing to find Strengths
attractive opportunities
and another to be able
to take advantage of Internal
them. Each business Environment
needs to evaluate its
• internal strengths and
Company
• Internal weaknesses. Weaknesses
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 Business Mission

performed a SWOT SWOT

Analysis

analysis, it can proceed to Goal Formulation

goal formulation,
Strategy Formulation

developing specific goals

Program Formulation

for the planning period.

• Goals are objectives that Implementation

are specific with respect Feedback and Control

to
magnitude and time
BUSINESS UNIT STRATEGIC
PLANNING
Business Mission
• Each business unit Business Mission

must develop a
SWOT
specific mission Analysis
that fits within the Goal Formulation
broader
company Strategy Formulation

mission.
Program Formulation
• For example, the
specific mission Implementation
for YouTube must
fit within the Feedback and Control

overall mission of
Google.
BUSINESS UNIT STRATEGIC
PLANNING Goal Formulation
• Managing these objectives
effectively requires these
four criteria to be met.
Ranked
• They must be arranged

hierarchically, from most

to least important
• Objectives should be
Consistent Quantified
quantitative
whenever possible
• Goals should be realistic
• Objectives must Realisti
be consistent c
BUSINESS UNIT STRATEGIC
PLANNING Strategic Formulation
Business Mission
• Strategy is a game
plan for getting SWOT
what you want to Analysis

achieve Goal Formulation

Strategy Formulation

Program Formulation

Implementation

Feedback and Control

BUSINESS UNIT STRATEGIC
PLANNING Strategic Formulation
• Two type of
strategies Porter’s
• Porter’s
Generic
Strategies
Generic
• Strategic Alliances Strategie
s
Strategic
Alliance
s
BUSINESS UNIT STRATEGIC
PLANNING Strategic Formulation
Porter’s Generic Strategies With overall cost leadership, firms
• Michael Porter has work to achieve the lowest production
proposed three generic and distribution costs so they can
underprice competitors and win
strategies that provide a
market share.
good starting point for
strategic thinking: With differentiation, the business
• overall cost leadership concentrates on achieving superior
performance in an important customer
• differentiation, and benefit area valued by a large part of
• focus. the market.

• According to Porter, With focus, the business focuses on one

competing firms directing or more narrow market segments, gets
the same strategy to the to know them intimately, and pursues
either cost leadership or differentiation
same target market within the target segment.
constitute a strategic
group. The firm that carries
out the strategy best will
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 Product or service alliances—One
company licenses another to produce its
• Even giant companies often product, or two companies jointly market
cannot achieve leadership, their complementary products or
a new product.
either nationally or globally, Promotional alliances—One company
without forming alliances agrees to carry a promotion for
another company’s product or
with domestic or service.
multinational companies that
complement or leverage Logistics alliances—One company
offers logistical services for another
their capabilities and company’s product.
resources.
• Many strategic alliances Pricing collaborations—One or more
companies join in a special pricing
take the form of marketing collaboration.
alliances. These fall into
four major categories.
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 The first “soft” element, style, means
company employees share a common way of
& Company, strategy is thinking and behaving.
only one of seven
elements—all of which
The second, skills, means employees have
start with the letter s— the skills needed to carry out the
in successful business company’s strategy.

practice.
• The first three—
strategy, structure, and Staffing means the company has hired able
systems— are people, trained them well, and assigned them
considered the to the right jobs.
“hardware” of success.
• The next four—style,
skills, staff, and shared The fourth element, shared values, means
values— are the employees share the same guiding values.
“software.” 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

Skills Strategy

Staff Structure

Style Systems

Shared values
BUSINESS UNIT STRATEGIC
PLANNING Feedback and Control
• A company’s strategic fit
with the environment will Constant
Monitoring
inevitably erode because the of
market environment External and
changes faster than the Internal
Environment
company’s seven Ss. Key
to
• Thus, a company might
Organizational
remain efficient yet lose
Health
effectiveness. organizations Willingness to
adopt new
can be changed through goals and
strong leadership, behaviors

preferably in advance of a
crisis.
Section 4
THE NATURE AND CONTENTS
OF A
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
THE NATURE AND CONTENTS OF A MARKETING
PLAN Shortcomings of Marketing Plans

• The most Lack Of

frequently cited Realism
shortcomings of
current marketing Insufficient
plans, according Competitive
to marketing Analysis
executives, are:
A Short-run Focus
THE NATURE AND CONTENTS OF A MARKETING
PLAN Evaluating a Marketing Plan
• Here are some questions Is the plan simple and succinct?
to ask in evaluating a Is it easy to understand and act
on? Does it communicate its
marketing plan.
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 Evaluating a Marketing Plan
• Here are some questions Is the plan specific? Are its
to ask in evaluating a objectives concrete and
measurable? Does it provide a
marketing plan.
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 Small
Business
businesses may –
create Shorter
Less
shorter or less Formal
formal Plan
marketing plans; Corporate
–
• Corporations Longer
Formal
generally require Plan
highly structured
documents.
THE NATURE AND CONTENTS OF A MARKETING
PLAN Marketing Plan Content
• Although the exact length
and layout varies from Executive summary
company to company,
most marketing plans
cover one year in Table of contents
anywhere from 5 to 50
pages. Smaller Situation analysis
businesses may create
shorter or less formal
marketing plans, whereas Marketing strategy
corporations generally
require highly structured Marketing tactics
documents.
• A marketing plan usually
contains the following Financial projections
sections
Implementation
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
THE NATURE AND CONTENTS OF A MARKETING
PLAN Marketing Plan Content
• Marketing tactics The product or service offering section
describes the key attributes and
• Marketing activities benefits that will appeal to target
customers.
that will be undertaken
to execute the
The pricing section specifies the
marketing strategy general price range and how it might
vary across different types of
customers or channels, including any
The channel
incentive section outlines
or discount plans. 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 The break-even analysis
estimates how many units the
• Include a sales forecast, firm must sell monthly (or how
an expense forecast, many years it will take) to offset
and a break-even its monthly fixed costs and
analysis. 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 Environment
marketing research
will be conducted
and when, as well
Competition
as how the findings
will be applied.
• Up-to-date Selected
information is Market
needed about Segments
the:
THE NATURE AND CONTENTS OF A MARKETING
PLAN
The Role of Research

• Research helps Customers’ Requirements

marketers learn
about Customers’
Expectations
customers’
Customers’
Perceptions

Customers’
Satisfaction

Customers’
Loyalty
THE NATURE AND CONTENTS OF A MARKETING
PLAN The Role of Relationships

• Although the
marketing plan Internal
shows how the
company will
Relationship
establish and s
maintain profitable
customer
relationships, it
also affects both
internal and
External
external relationship
relationships.
s
THE NATURE AND CONTENTS OF A MARKETING
PLAN The Role of Relationships

• Internal
Relationships: The
Marketing
marketing plan Department

influences how Creating,

marketing staff Delivering and
Communicating
work with each Values to
Customers
other and with
Other
other Department

departments to
deliver value and
satisfy customers
THE NATURE AND CONTENTS OF A MARKETING
PLAN The Role of Relationships

• External
Relationships: Suppliers

The marketing
plan affects
company
how the works
with suppliers, Company

distributors, and
partners to achieve Partners Distributors

the plan’s objectives