Chapter
2
Developing
Marketing Strategies
and Plans
Dr.Pusanisa Thechatakerng
thesunny@rocketmail.com
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An Asian Perspective
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In this chapter, we
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?
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Opening Case Study - ZARA
 Known for trendy affordable
clothes
 Zara’s secret?
Total control of business
Design > production > distribution
Lead-time advantage - lower inventory levels
Frequent line changes - exclusivity for customers
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Opening Case Study - ZARA
 Zara’s “democratication of fashion”
 Advertising approach - its shop windows
 Expansion plans - 4,000 stores worldwide
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Two Views of the Value Delivery
Process
Figure 2.1
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Fig 2.2 The Generic Value Chain
Examine costs & performance in
each activity and improve it
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Marketing and Customer Value
core competencies
 Eg Volvo’s core competency is safety
 Eg Nike does not manufacture own shoes
Asian firms more competent
Nike’s 2 core competencies
-shoe design & merchandising
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Marketing and Customer Value
core competencies
is something that a firm can do well and that meets the following three conditions
3 characteristics:
1. competitive advantage
2. applications in many markets
3. difficult for competitors to
imitate
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Marketing and Customer Value
core competencies
Asian companies - core competence:
 Expand quickly to capture global
market opportunities
 Become atomizers
 Become asset light by using intangibles
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Marketing and Customer Value
The Central Role of Strategic Planning
Strategic planning ensure correct marketing
activities are selected & executed
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Marketing and Customer Value
The Central Role of Strategic Planning
Figure 2.4 The Strategic Planning, Implementation, and Control Processes
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Corporate & Division Strategic
Planning
4 corporate planning activities:
1. Define corporate mission
2. Establish strategic business units (SBUs)
3. Assign resources to each SBU
4. Assess growth opportunities
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Corporate & Division Strategic
Planning
1. Define the Corporate Mission





What is our business?
Who is the customer?
What is of value to the customer?
What will our business be? 1st ?
What should our business be?
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Table 2.1 Sample Mission Statement
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Corporate & Division Strategic
Planning
1. Define the Corporate Mission
Mission statements are the vision direction
for company for next 10 to 20 years
3 major characteristics:
1. Focus on limited number of goals
2. Stress company’s major policies & values
3. Define competitive sphere/area
company will operate in
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Defining Business
market definitions better than product definitions
Customer-satisfying NOT goods-producing
Table 2.2
Product-Oriented Versus Market-Oriented Definitions of a Business
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2. Establish strategic business units
(SBUs)
An SBU has
3 characteristics:
1. SBU plan separate from company
2. its own set of competitors
3. has a manager for strategic
planning and profit matters
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3. Assign resources to each SBU
The purpose of identifying the
company’s strategic business units is
to develop separate strategies and
assign appropriate funding
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4. Assess growth opportunities
 plan new
business,
downsize or
terminate old
business
 How to fill
the strategicplanning gap?
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Figure 2.5
the strategic planning gap
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INTENSIVE GROWTH
related to a company's current operations
 The company first considers…
– more market share with current products &
markets (market-penetration strategy)?
– find new markets for current products
(market-development strategy)?
– develop new products to current markets
(product-development strategy)?
– develop new products for new markets
(diversification strategy)?
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market-penetration strategy
cafés serving gourmet coffee directly to customers in Seattle
1
market-development strategy
2
same as above throughout North America & worldwide
product development strategy
Increase customers’ purchases with new in-store merchandise (CDs)
1
1
3
diversification strategy
Frappuccino® bottled drinks, Starbucks brand ice cream & purchase
of tea retailer Tazo® Tea into grocery store aisles
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2-21
INTEGRATIVE GROWTH
a firm acquires some other element of the chain of
distribution of which it is a member.
INTEGRATIVE GROWTH: backward, forward
or horizontal integration within its industry
 acquire suppliers -backward integration
 acquire retailer-forward integration
 acquire competitors-horizontal integration
 If unsuccessful, diversification
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Integrative Growth II
LVMH (Luis
Vuitton
+Moet
Hennessy)
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Christian Dior
(CD)
Gucci
Channel
Givenchy
Marc Jacobs
Prada
Fendi
Kenzo
DKNY
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DIVERSIFICATION GROWTH
 When good opportunities are
found outside present
businesses
 Good opportunity is when
industry is attractive &
company has strengths to be
successful
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Diversification Growth
Richemont
Group
(Cartier,
Dunhill,
Chloe)
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Stationary:
Monblanc
5 billion Euros
(2006)
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Organization and Organizational
Culture
Corporate culture
“the shared experiences, stories, beliefs
& norms that characterize an
organization”
 corporate culture, structure
& policies are key when
implement new strategy
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Organization and Organizational
Culture
What drive successful Asian businesses?
4 organizational factors
1.
2.
3.
4.
Market orientation/direction
Innovativeness
Corporate culture
Organizational climate
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Organization and Organizational
Culture
How to adopt new view of crafting strategies?
 Get fresh ideas from:
– employees with youthful perspectives
– employees who are out stationed
– employees who are new to industry
 Choose among different views of the future
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Business Unit Strategic
Planning - the business mission
Each business unit needs to define its
specific mission within the broader
company mission
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Business Unit Strategic
Planning – SWOT Analysis
SWOT
Analysis
Overall
evaluation of a
company’s
strengths
weaknesses
opportunities &
threats
opportunities
threats
monitor
external & internal
environment
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SWOT
Analysis
strengths
weaknesses
2-30
Business Unit Strategic Planning –
EXTERNAL ENVIRONMENT (OPPORTUNITY & THREAT) ANALYSIS
 A business unit has to
identify opportunities and
threats. How?
 By monitoring key
macroenvironment &
microenvironment factors
that affect ability to earn
profits
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opportunities
threats
SWOT
Analysis
strengths
weaknesses
2-31
Business Unit Strategic
Planning – SWOT Analysis
3 main sources of market opportunities
1. Supply something that is in short supply
2. Supply existing product in new way
3. Totally new product or service
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Business Unit Strategic
Planning – Market Opportunity Analysis (MOA)
2. Can target markets be
reached with cost-effective
media & trade channels?
1. Can benefits
convince
target markets?
Market Opportunity
Analysis (MOA)
To evaluate opportunities
To determine attractiveness &
probability of success
4. Are benefits
better than
competitors?
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3. Possess
resources to
deliver benefits?
5. Is it profitable?
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Business Unit Strategic Planning –
INTERNAL ENVIRONMENT (STRENGTHS/WEAKNESSES) ANALYSIS
Checklist to evaluate
INTERNAL strengths & weaknesses
opportunities
threats
SWOT
Analysis
strengths
weaknesses
 Go for opportunities where
it has required strengths?
 Go for opportunities where
it has to develop certain
strengths?
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Business Unit Strategic
Planning – goal formulation
Goals
objectives specific to
magnitude/greatness & time
Goal formulation
goals for planning period done after
doing SWOT analysis
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Business Unit Strategic
Planning – goal formulation
Managing by Objectives (MBO) is successful if:
1.Objectives arranged hierarchically
2.Objectives are quantitative where possible
3.Goals are realistic
4.Objectives are consistent
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Business Unit Strategic
Planning – strategic formulation
 Goals indicate what business wants
to achieve
 Strategy is a game plan for getting
there
marketing strategy
compatible technology strategy
sourcing strategy
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Business Unit Strategic
Planning – strategic formulation
PORTER’S GENERIC STRATEGIES
Overall cost
leadership
Differentiation
Focus
achieve lowest
costs to price lower
than competitors &
win large market
share
superior
performance in
area valued by
large part of
market
focuses on
narrow market
segments
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Business Unit Strategic
Planning – strategic formulation
STRATEGIC ALLIANCES
Companies need strategic
partners to be effective.
Many strategic alliances take the
form of marketing alliances.
A celebration at a Star Alliance brings
together 16 airlines that cover most of
the globe
4 major categories:
1.
2.
3.
4.
Product or service alliances
Promotional alliances
Logistics alliances
Pricing collaborations
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Business Unit Strategic
Planning – strategic formulation
STRATEGIC ALLIANCES
4 major categories:
1. Product or service alliances
2. Promotional alliances
3. Logistics alliances
4. Pricing collaborations
Visa has promotional alliance
with Hong Kong Disneyland
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Business Unit Strategic Planning
-
Program Formulation & Implementation
STEP ONE
Once strategies
work out detailed programs
developed
STEP TWO
Once marketing
programs marketing must estimate costs
formulated
STEP THREE
Activity-based
cost (ABC) whether results to justify the cost
accounting applied
STEP FOUR
Implementing
not lose sight of stakeholders & their needs
strategy
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Business Unit Strategic
Planning – feedback and control
Marketplace will change –
review & revise implementation,
programs, strategies or
objectives
HAIER is a good example:
Started with inferior-quality products
Later, sales went up
China’s leading maker of washing machines
Faces competition in Chinese market
Partner with Sanyo in production alliances
Makes digital TVs with LG Electronics
Diversify into finance, computers, cell phones
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Business Unit Strategic
Planning - Contents of a Marketing Plan
marketing plan
A summarized
written
document about
marketplace &
plans to reach
marketing
objectives
1. Is the plan simple?
2. Is the plan specific?
3. Is the plan realistic?
4. Is the plan complete?
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Business Unit Strategic
Planning - Contents of a Marketing Plan
Executive summary & table of contents
Situation analysis
Marketing strategy
Financial projections
Implementation controls
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Final discussion
Marketing Debate — What Good is a Mission Statement?
Virtually all firms have mission statements to help guide and inspire
employees as well as signal what is important to the firm to those outside the
firm. Mission statements are often the product of much deliberation and
discussion. At the same time, some critics claim that mission statements
Sometimes lack “teeth” and specificity. Moreover, critics also maintain that
in many cases, mission statements do not vary much from firm to firm and
make the same empty promises.
Take a position: Mission statements are critical to a successful marketing
organization, or Mission statements rarely provide useful marketing value.
Marketing Discussion
Consider Porter’s value chain and the holistic marketing orientation model.
What implications do they have for marketing planning?
How would you structure a marketing plan to incorporate some of their
concepts?
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