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Developing Marketing
Strategies and Plans
Dr. Md. Kashedul Wahab Tuhin
Professor
Department of Marketing
Faculty of Business Studies
Jahangirnagar University
Savar, Dhaka-1342.
Marketing Management, 15th ed
Chapter Questions
• How does marketing affect customer
value?
• How is strategic planning carried out at
different levels of the organization?
• What does a marketing plan include?
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Marketing and Customer Value
The Value-Delivery Process
(a) Traditional physical process sequence
Make the product Sell the product
Design Procure Make
product Price Sell Advertise/
promote Distribute Service
(b) Value creation & delivery sequence
Choose the Value Provide the Value Communicate the Value
Strategic marketing Tactical marketing
What is the Value Chain?
The value chain is a tool for identifying
and creating more customer value.
Every firm is a synthesis of primary and
support activities performed to design,
produce, market, deliver, and support
its product.
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Figure 3-3: The Generic Value Chain
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:
• Market-sensing process (marketing intelligence).
• New-offering realization process (research and development).
• Customer acquisition process (defining target markets and consumers).
• Customer relationship management process (deeper understanding of
consumers).
• Fulfillment management process (receiving, shipping, and collecting
payments).
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Characteristics of Core Competencies
• Companies today outsource less-critical resources if they can obtain better
quality or lower cost.
• The key is to own and nurture the resources and competencies that make
up the essence of the business.
• A source of competitive advantage (technical, production expertise,
distribution, financial strength, etc.)
• Applications in a wide variety of markets
• Difficult to imitate
• Businesses may need to realign themselves to maximize core
competencies.
• Realignment has three steps:
• (1) (re)defining the business concept or “big idea”;
• (2) (re)shaping the business scope, sometimes geographically; and
• (3) (re)positioning the company’s brand identity
Central role of strategic planning
• To ensure they execute the right activities, marketers must
prioritize strategic planning in three key areas:
(1) managing the businesses as an investment portfolio,
(2) assessing the market’s growth rate and the company’s
position in that market, and
(3) establishing a strategy.
The company must develop a game plan for achieving each
business’s long-run objectives
Central role of strategic planning
A marketing plan is the central
instrument for directing and
coordinating the marketing effort.
It operates at a
strategic and tactical level.
Levels of a Marketing Plan
• Strategic Marketing • Tactical Marketing
Plan- lays out the target Plan- specifies the
markets and the firm’s value marketing tactics, including-
proposition, based on an
analysis of the best market • Product features
opportunities • Promotion
• Target marketing • Merchant desing
decisions • Pricing
• Value proposition • Sales channels
• Analysis of marketing • Service
opportunities
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Central role of strategic planning
Strategic-Planning, Implementation, and Control Process
Planning Implementation Control
Organizing
Corporate Measuring
planning results
Division
planning Diagnosing
Implementing
results
Business
planning
Taking
Product corrective
planning action
Corporate and Division Strategic
Planning
• Define the corporate mission
• Establish strategic business units
(SBUs)
• Assign resources to each SBU
• Assess growth opportunities
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Defining the Corporate Mission
• An organization exist to accomplish something.
• To define its mission a company should address Peter
Drucker’s classic questions-
• What is our business?
• Who is our customer?
• What is our value to customer?
• What will our business be?
• What should our business be?
• Business Definition- companies often define their business
• Product definition
• Market definition
• Strategic market definition
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 entertain
people
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Defining the Corporate Mission
• Crafting a mission statement
• A clear thoughtful mission statement, developed collaboratively with and
shared with managers, employees, and provides a shared sense of
purpose, direction, and opportunity.
• Good mission statements have five characteristics-
• on a limited number of goals
• Stress major policies and values
• Define major competitive spheres: Major Competitive Spheres are:
• Industry (consumer(s) and/or industrial(s)
• Products (range)
• Competence (technological, production, etc.)
• Market segment (type of market or customer)
• Vertical channels (number of channel levels, from raw materials to final
product and distribution)
• Geographic (range of regions, countries, or country groups)
• Take a long-term view
• Short, memorable, meaningful
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Rubbermaid Commercial Products, Inc.
“Our vision is to be the Global Market Share
Leader in each of the markets we serve. We
will earn this leadership position by
providing to our distributor and end-user
customers innovative, high-quality, cost-
effective and environmentally responsible
products. We will add value to these products
by providing legendary customer service
through our Uncompromising Commitment
to Customer Satisfaction.”
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Motorola
“The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.”
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eBay
“We help people trade anything on earth.
We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”
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Establishing Strategic Business
Units
• It is a single business or collection of
related businesses
• It has its own set of competitors
• It has a leader responsible for strategic
planning and profitability
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Assigning Resources to Each SBU
• The Growth-Share Matrix
• Relative market share and market growth rate
• BCG Approach: Four Cells
• Question Marks
• Stars
• Cash Cows
• Dogs
• More recent methods firms use to make internal investment
decisions are based on Shareholder Value Analysis (SVA) and
whether the market value of a company is greater with an SBU or
without it.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2-20
Assigning Resources to Each SBU
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2-21
Assigning Resources to Each SBU
• Some strategic choices that are in conformity with the BCG matrix could
be:
• 1. Build strategy
Create a new brand and a new target audience by means of a Question
Mark.
• 2. Hold strategy
Maintain this success and benefit from market growth by means of a Star.
• 3. Harvest strategy
Make as much money as possible with the product by means of the Cash
Cow. This can be achieved by improving or renewing the product or by
manufacturing by-products.
• 4. Divest strategy
Abandon the investment in the product by means of a Dog; the market is
saturated or there is no or little interest in the product.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2-22
Assessing Growth Opportunities
• Strategic Gap: If there is a gap between future desired sales and projected
sales.
• Corporate management will need to develop or acquire new business to fill
it. The are three ways:
• Intensive Growth
• Integrative growth
• Diversification Growth.
The Strategic Planning Gap
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Intensive Growth: Corporate managers should review the opportunities for
improving existing business.
Ansoff’s Product-Market Expansion Grid:
1. Market penetration strategy
2. Market development strategy
3. Product development strategy
4. Diversification strategy
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Ansoff’s Product-Market Expansion
Grid
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• Integrative Growth:
• Backward
• Forward
• Horizontal
• Diversification Growth:
• Concentric Diversification: Develop a products that have technology or marketing synergies
with existing product lines appealing to a new group of customer.
• Horizontal diversification: Develop products that are technologically unrelated to its current
product line and could appeal to its current customers.
• Conglomerate Diversification: Seek new opportunities that have no relation with its current
technology, products or markets.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2-27
Organization and 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.
• Whereas managers can change structures and policies
(though with difficulty), the company’s culture is very hard
to change.
• Corporate culture is the shared experiences, stories,
beliefs, and norms that characterize an organization.
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Tactics for Managing Change
• Avoid the innovation title for the team
• Use the buddy system
• Set the metrics in advance
• Aim for quick hits first
• Get data to back up your gut
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The Business Unit Strategic
Planning Process
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SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
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External Environment (Opportunity & Threat) Analysis:
• A marketing opportunity is an area of buyer need and interest that a
company has a high probability of profitably satisfying.
• There are three main sources of market opportunities.
• The first is to offer something that is in short supply.
• The second is to supply an existing product or service in a new or
superior way. How?
• The problem detection method asks consumers for their suggestions,
the ideal method has them imagine an ideal version of the product or
service,
• The consumption chain method asks them to chart their steps in
acquiring, using, and disposing of a product
External Environment (Opportunity & Threat) Analysis:
• Marketers need to be good at spotting opportunities. Consider the following:
External Environment (Opportunity & Threat) Analysis:
Market Opportunity Analysis (MOA)
• Can the benefits involved in the opportunity
be articulated convincingly to a defined target
market?
• Can the target market be located and
reached with cost-effective media and trade
channels?
• Does the company possess or have access
to the critical capabilities and resources
needed to deliver the customer benefits?
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Market Opportunity Analysis (MOA)
(cont.)
• Can the company deliver the benefits
better than any actual or potential
competitors?
• Will the financial rate of return meet or
exceed the company’s required
threshold for investment?
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Figure 4-7: Opportunity and Threat Matrices
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.
Analysis Goal Formulation and MBO
• Unit’s objectives must be hierarchical
• Objectives should be quantitative
• Goals should be realistic
• Objectives must be consistent
Strategy Formulation
• Goals indicate what a business unit wants to achieve; strategy is a game plan for
getting there.
• Every business must design a strategy for achieving its goals, consisting of a
marketing strategy and a compatible technology strategy and sourcing strategy.
Porter’s Generic Strategies
Overall Cost Leadership—lowest
production and distribution costs to be
able to price lower than competitors and
to obtain larger market share.
Differentiation—uniquely achieving
superior performance in an important
customer benefit area.
Focus—on one or more narrow market
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Strategic/Categories of
Marketing Alliances
Product or Service Alliances—jointly
market complementary products
Promotional Alliances—promotion
of another company’s products
Logistics Alliances—logistical services
for another company’s products.
Pricing Collaborations—one or more
companies join in special price reduction.
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Program Formulation and
Implementation
• Even a great marketing strategy can be sabotaged by poor
implementation.
• If the unit has decided to attain technological leadership, it must
strengthen its R&D department, gather technological intelligence, develop
leading-edge products, train its technical sales force, and communicate its
technological leadership.
• Once they have formulated marketing programs, marketers must estimate
their costs
• A businesses recognize that unless they nurture other stakeholders—
customers, employees, suppliers, distributors—they may never earn
sufficient profits for the2-40
stockholders
Marketing Plan Contents
✓ Executive summary
✓ Table of contents
✓ Situation analysis
✓ Marketing strategy
✓ Financial projections
✓ Implementation controls
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Evaluating a Marketing Plan
✓ Is the plan simple?
✓ Is the plan specific?
✓ Is the plan realistic?
✓ Is the plan complete?
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