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MARKETING MANAGEMENT
13th edition
2
Developing
Marketing
Strategies and Plans
Kotler
Keller
Strategic Planning
Strategic Planning is the Process of
Developing and Maintaining a Strategic Fit
Between the Organization’s Goals and
Capabilities and Its Changing Marketing
Opportunities.
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The Value Delivery Process
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Improving Value Delivery the
Japanese Way
0 customer
feedback time
0 product
improvement time
0 setup time
0
purchasing time
0 defects
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Porter’s Value Chain
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Core Business Processes
Market
sensing
Customer
relationship
management
New offering
realization
Fulfillment
management
Customer
acquisition
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Characteristics of Core Competencies
• A source of competitive advantage
• Applications in a wide variety of markets
• Difficult to imitate
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What Is Strategy?
Strategy is creation of a unique and valuable
position, involving a different set of activities.
Choosing to perform activities differently than
rivals do.
Essence of strategy is choosing what not to
do.
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What Is Strategy?
Serving few needs of many customers
Serving broad needs of few customers
Serving broad needs of many customers in a
narrow market
Trade-offs create need for choice
Trade-offs protect against imitators
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Levels of a Marketing Plan
• Strategic
– Target marketing
decisions
– Value proposition
– Analysis of
marketing
opportunities
• Tactical
– Product features
– Promotion
– Merchandising
– Pricing
– Sales channels
– Service
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The Strategic Planning, Implementation,
and Control Processes
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Elements of a Strategy Statement
–OBJECTIVE: Ends
–SCOPE: Domain
–ADVANTAGE: Means
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Elements of a Strategy Statement: Objective
OBJECTIVE
Definition of ends that strategy is designed to achieve.
Mission:
Statements of ultimate purpose
Underlying motivation for being in business
Values:
Ethical values under which company operates
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Elements of a Strategy Statement: Scope
SCOPE
Domain of business.
Boundaries beyond which company will not venture.
Customers: Who is / Who is not
Offerings: What is / What is not
Geography: Where is / Where is not
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Elements of a Strategy Statement: Advantage
ADVANTAGE
Means by which company will achieve stated objectives.
Value proposition: Why should customers buy from us?
Competitive advantage: What makes us distinctive?
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Strategy Statement
1)
2)
3)
4)
Detailed understanding of customer needs
Segmenting customers
Choosing segments to serve
Creating value for the targeted segment
 Analyze and monitor competitors’ current strategies
 Predict how they might change
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Steps in Strategic Planning
Business unit,
product,
and market
level
Corporate Level
Defining the
Company
Mission
Setting
Company
Objectives
and Goals
Designing
the Business
Portfolio
Planning,
marketing,
and other
functional
Strategies
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Corporate headquarters’ planning activities
Define the corporate mission
Establish SBUs
Assign resources to each SBU
Assess growth opportunities
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Good Mission Statements
Focus on limited number of goals
Stress major policies and values
Define major competitive spheres
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Defining the Company’s Business
and Mission
A Mission Statement is a Statement of the Organization’s Purpose.
Market Oriented
Characteristics of
a Good Mission
Statement:
Realistic
Specific
Fit Market Environment
Distinctive Competencies
Motivating
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Major Competitive Spheres
Industry
Geographical
Products
Vertical
channels
Competence
Market
segment
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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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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
– Profitability
– Efficiency
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Analyzing Current SBU’s
The Boston Consulting Group’s Growth-Share Matrix
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Analyzing Current SBU’s:
GE’s Strategic Business-Planning Grid
Industry Attractiveness
Business Strength
Strong
Average
High
Weak
C
A
Medium
B
D
Low
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Five Forces Determining Segment
Structural Attractiveness
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Five Competitive Forces
Not all forces are always present or equally critical.
Strongest Force ^a Profitability
Example: Starbucks (specialty coffee retailing)
Which threat is most critical?
Force is the threat not whether it actually occurs.
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Ansoff’s Product-Market Expansion Grid
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The Business Unit Strategic
Planning Process
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SWOT Analysis
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)-2
• 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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Contents of a Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
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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MARKETING MANAGEMENT
13th edition
11
Dealing with
Competition
Kotler
Keller
Industry Concept of Competition
• Number of sellers and degree of
differentiation
• Entry, mobility, and exit barriers
• Cost structure
• Degree of vertical integration
• Degree of globalization
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Industry Concept of Competition
Pure Monopoly
Oligopoly
Monopolistic Competition
Pure Competition
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Steps in Analyzing
Competitors
Identifying the
company’s
competitors
Assessing competitor’s
objectives, strategies,
strengths and weaknesses,
and reaction patterns
Selecting which
competitors to
attack or avoid
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Competitor Map
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Analyzing Competitors
Share of market
Share of mind
Share of heart
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Porter’s Generic Competitive
Strategies
Overall Cost
Leadership
Focus
Differentiation
Middle of
the Road
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Competitive Strategies: Value
Disciplines
Companies Gain
Leadership Positions by
Delivering Superior Value
to their Customers
Through These
Strategies:
Operational
Excellence
Customer
Intimacy
Product
Leadership
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Value Disciplines: Operational Excellence
Operational Excellence
 Providing products at competitive prices
 Delivering with minimal difficulty or inconvenience
Lead industry in
 Price
 Convenience
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Value Disciplines: Customer Intimacy
Customer Intimacy
 Segmenting and targeting precisely and tailoring
offerings to match exactly what is demanded.
 Continuous tailoring and shaping of products to fit
increasingly fine definition of customer.




Detailed customer knowledge
Operational flexibility
Quick response
Lifetime value vs transaction
Extreme Loyalty
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Value Disciplines: Product Leadership
Product Leadership
 Offering leading-edge products
 Enhance customer’s use or application of the product
 Thus, make rivals’ goods obsolete
Continuous stream of state-of-the-art products requires:
 Creativity
 Quick commercialization
 Relentlessly pursuing new solutions
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Choosing Value Disciplines vs
Choosing Customers
Choice of business discipline and customer category is a
single choice.
Customer Categories:
 Defines value by price, convenience, quality matrix
(price dominant)
 Concerned with obtaining precisely what they want
 New, different, unusual products count most
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Hypothetical Market Structure
10%
20%
Market Market
Nichers Follower
30%
Market
Challenger
40%
Market
Leader
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Competitive Marketing Strategies
Firm With the Largest Market
Share
Expand the
Total Market
Protecting
Market Share
Expanding
Market Share
Runner-Up Firms that Fight
to Increase Market Share
Attack the
Market Leader
Avoid the
Market Leader
Attack Other
Firms
Acquire Smaller
Firms
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Specific Attack Strategies
•
•
•
•
•
Price discounts
Lower-priced goods
Value-priced goods
Prestige goods
Product proliferation
•
•
•
•
Product innovation
Improved services
Distribution innovation
Manufacturing-cost
reduction
• Intensive advertising
promotion
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Competitive Marketing Strategies
Runner-Up Firms that Want
to Hold Their Share Without
Rocking the Boat
Follow
Closely
Follow at a
Distance
Firms that Serve Small Segments
Not Pursued by Other Firms
End-User
Specialist
Geographic
Market
Specialist
Customer-Size
Specialist
QualityPrice
Specialist
Service
Specialist
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Market Follower Strategies
Counterfeiter
Cloner
Imitator
Adapter
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Market Nicher Strategies
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Contents of a Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
CHP: 2&11-53
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