2
Developing Marketing
Strategies and Plans
Marketing Management, 13th 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?
2-2
3 V’s Approach to Marketing
Define the value segment
(needs and wants)
Define the value proposition
(benefits)
Define the value network to
deliver promise services.
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What is the Value Chain?
The value chain is a tool for identifying and creating more customer
value because every firm is a synthesis of primary activities:
• Inbound logistics--bringing materials into business,
• Operations--converting materials into final products,
• Outbound logistics--shipping out final products,
• Marketing products,
• Servicing products
and support activities
• Procurement,
• Technology development,
• Human resource management,
• Firm infrastructure—costs of general management, planning,
finance, accounting, legal, and government affairs
performed to design, produce, market, deliver, and support its
product.
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Core Business Processes
• 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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Competitive Advantage
 Competitive advantage: the firm has a marketing mix
that the target market sees as better than a competitor's
mix
• A better marketing mix offers target customers better
customer value
• Note: customers who are not in the target market
may not see the marketing mix as offering better
value
 Requires that the firm:
• understand current competitors' offerings
• anticipate competitors' likely plans
• monitor effects of changes in competition
• really understand the target customers' needs
Characteristics of Core Competencies
• A source of competitive advantage
(technical, production expertise, distribution,
financial strength, etc.)
• Applications in a wide variety of markets
• Difficult to imitate
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Examples of Company Resources That
May Result in Competitive Advantage
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Financial strength (Intel)
Producing flexibility (DaimlerChrysler)
Patents (IBM)
Channel relationships (Kraft)
Loyal customer base (Starbucks)
Technical capability (3M)
Becoming a Vigilant Organization
• Can we learn from the past?
• How should the present be evaluated?
• What do we envision for the future?
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What is Holistic Marketing?
Holistic marketing sees itself as
integrating the value exploration,
value creation, and value delivery
activities with the purpose of
building long-term, mutually
satisfying relationships among key
stakeholders.
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What is a Marketing Plan?
A marketing plan is the central
instrument for directing and
coordinating the marketing effort.
It operates at a
strategic and tactical level.
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Levels of a Marketing Plan
• Strategic
• Tactical
• Target marketing
decisions
• Value proposition
• Analysis of
marketing
opportunities
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•
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•
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Product features
Promotion
Merchandising
Pricing
Sales channels
Service
Relation of Strategy Policies to Operational Decisions
for Baby Shoe Company
UNSEGMENTED MARKET STRATEGY
WITH A SINGLE MARKETING MIX
COMMUNITY WRITING COMPANY
MARKETING MIX
VIEW OF MARKET
•LEAD PENCIL
•79 CENTS
•TELEVISION
•EXTENSIVE
DISTRIBUTION
ALL POTENTIAL
USERS OF A WRITING
INSTRUMENT
14
SEGMENTED MARKETING STRATEGY
WITH MULTIPLE MARKETING MIXES
MARKETING MIXES
•FELT-TIP PEN
•$1.00
•CAMPUS NEWSPARER
•VENDING MACHINES
VIEW OF MARKET
SEGMENT A
(STUDENTS)
•FELT-TIP PEN
•49 CENTS
•PERSONAL SELLING
•DIRECT FROM FACTORY
SEGMENT B
(PROFESSORS)
•GOLD INK PEN
•$50.00
•MAGAZINES
•DEPARTMENT STORES
SEGMENT C
(EXECUTIVES)
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A SEGMENTED MARKETING STRATEGY
WITH SINGLE MARKETING MIX
MARKETING MIX
VIEW OF MARKET
SEGMENT A
(PROFESSORS)
•FELT-TIP PEN
•$1.00
•CAMPUS NEWSPARER
•VENDING MACHINES
SEGMENT A
(STUDENTS)
SEGMENT C
(EXECUTIVES)
Corporate Headquarters’
Planning Activities
• Define the corporate mission
• Establish strategic business units
(SBUs)
• Assign resources to each SBU
• Assess growth opportunities
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Good Mission Statements
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Focus on a limited number of goals
Stress major policies and values
Define major competitive spheres
Take a long-term view
Short, memorable, meaningful
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Major Competitive Spheres
• 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)
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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, costeffective 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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Product Orientation vs. Market Orientation
Company
Product
Market
Missouri-Pacific
Railroad
We run a railroad
We are a peopleand-goods mover
Xerox
We make copying
equipment
We improve office
productivity
Standard Oil
We sell gasoline
We supply energy
Columbia Pictures
We make movies
We entertain
people
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Dimensions that Define a Business
• Customer groups (e.g., individuals,
businesses)
• Customer needs (e.g., functional,
aesthetic, etc.)
• Technology (e.g., digital, chemical, etc.)
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Characteristics of SBUs
• 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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Ansoff’s Product-Market Expansion
Grid
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Examples of Different Types of
Opportunities
 Market Penetration
• Arm & Hammer promotes new uses of its baking soda
 Market Development
• Marriott Hotels target families for weekend get-aways to rent
rooms filled by business travelers during the week
 Product Development
• Microsoft develops a new version of its Windows operating
system to appeal to the people who bought an earlier version
but now want more features
 Diversification
• RJR, the cigarette producer, adds baked goods to its product
line to appeal to new customers
What is Corporate Culture?
Corporate culture is the shared
experiences, stories, beliefs, and norms
that characterize an organization.
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Tactics for Managing Change
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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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SWOT Analysis
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Strengths
Weaknesses
Opportunities
Threats
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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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Goal Formulation and MBO
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Unit’s objectives must be hierarchical
Objectives should be quantitative
Goals should be realistic
Objectives must be consistent
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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
segments
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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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The Strategic Planning Gap
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The Business Unit Strategic
Planning Process
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The Marketing Plan
 Marketing plan: a written statement of a
marketing strategy and the time related
details for carrying out the strategy.
 Spells out, in detail:
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What marketing mix is to be offered
To what target market
For how long
What resources (costs) are needed at what
rate
• What results are expected
• What control procedures will be used.
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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Challenges Facing CMO’s
Doing more with less
Driving new business
development
Becoming a
full business partner
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Study Question 1
The ________ is a tool for identifying
ways to create more customer value.
A. value chain
B. customer survey
C. brand loyalty index
D. promotion channel
E. supplier database
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Study Question 2
A good way to describe the ________ would be to
discuss all the activities involved in building deeper
understanding, relationships, and offerings to individual
customers.
A. customer acquisition process
B. customer relationship management
process
C. customer prospecting process
D. customer fulfillment management process
E. customer equity process
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Study Question 3
Core competencies tend to refer to areas of special
technical and production expertise, whereas ________
tend to describe excellence in broader business
processes.
A.
B.
C.
D.
E.
process benchmarks
distinctive capabilities
core business values
value statements
mission statements
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Study Question 4
The ________ is the central instrument for directing
and coordinating the marketing effort.
A.
B.
C.
D.
E.
strategic plan
marketing plan
tactical plan
customer-value statement
corporate mission
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Study Question 5
The ________ lays out the target markets and the
value proposition that will be offered, based on an
analysis of the best market opportunities.
A.
B.
C.
D.
E.
organizational plan
strategic marketing plan
corporate tactical plan
corporate mission
customer-value statement
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