PART
1
UNDERSTANDING
MARKETING MANAGEMENT
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
4th Edition
2-1
Chapter
2
Developing
Marketing Strategies &
Plans
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Marketing Management - An Asian Perspective
4th Edition
2-2
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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Marketing Management - An Asian Perspective
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Marketing Strategies & Plans
- Opening case study - ZARA
 Trendy affordable clothes
 Zara’s secret?
Total control of business
Lead-time advantage - lower inventory levels
Frequent line changes - exclusivity for customers
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Marketing Strategies & Plans
- Opening case study - ZARA
 Zara’s “democratization of fashion”
 Advertising approach - shop windows
 Expansion plans - 4,000 stores worldwide
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
The Value Delivery Process
The
Value Delivery Process is
choosing (or identifying)
+
providing (or delivering)
+
communicating superior value
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Marketing Management - An Asian Perspective
4th Edition
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Figure 2.1 Two Views of the Value Delivery Process
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
The Value Delivery Process
Why Value Creation & Delivery Process?
In hypercompetitive economy
more rational buyers - many choices,
company win by
fine-tuning value delivery process &
to choose, provide & communicate
superior value
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
The Value Delivery Process
The Japanese further refined the value
delivery process:
Zero setup time
Zero customer feedback time
Zero product-improvement time
Zero defects
Zero purchasing time
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
The Value Delivery Process
“3 Vs” to Marketing
DEFINE:
 value segment
 value proposition
 value network
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
The Value Delivery Process
Marketing can be viewed as:
value defining processes
market research & self-analysis
value developing processes
new product development, sourcing
strategy & vendor selection
value delivering processes
advertising & managing distribution
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
The value chain
THE VALUE CHAIN
A tool to
identify key activities
that create value & costs
in a business
to identify ways
to create more customer value
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Marketing Management - An Asian Perspective
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Figure 2.2
The Generic Value Chain
Study costs & performance inAsian
each activity & improve 2-13
it
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Marketing Management - An
4th Edition
Perspective
Marketing & Customer Value
The value chain
Success?
How
departments
coordinate
core
business
processes
© Kotler, Keller, Ang, Leong & Tan
 market sensing process
 new offering realization
process
 customer acquisition
process
 customer relationship
management process
 fulfillment management
process
Marketing Management - An Asian Perspective
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Marketing & Customer Value
Core competencies
 Outsource less critical resources if better
quality or cost
 Own competencies - core business
• Eg Nike does not produce own shoes
• Asian firms - more competent
• Nike’s 2 core competencies?
• Shoe design & merchandising
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
Core competencies
3 characteristics:
1) Competitive advantage
2) Applications - many markets
3) Difficult to imitate
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
Core competencies
Asian companies - core competence:
 Expand quickly - capture global market
opportunities
 Become atomizers
 Become asset light - use intangibles
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Marketing Management - An Asian Perspective
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Marketing & Customer Value
Holistic Marketing Orientation & Customer Value
3 key questions:
1. Value exploration – new opportunities?
2. Value creation – new offerings?
3. Value delivery – deliver more efficiently?
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Marketing Management - An Asian Perspective
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Figure 2.3
© Kotler, Keller, Ang, Leong & Tan
A holistic marketing network
Marketing Management - An Asian Perspective
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Marketing & Customer Value
The Central Role of Strategic Planning
3 key areas in Strategic planning:
1. Manage businesses as
investment portfolio
2. Assess each business’s strength
3. Establish strategy
Ensures correct activities chosen &
executed
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Marketing Management - An Asian Perspective
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Figure 2.4 The Strategic Planning, Implementation
& Control Processes
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
4 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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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Corporate Mission
What is our business?
Who is the customer?
What is of value to customer?
What will our business be?
What should our business be?
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Corporate Mission
Mission statement:
Vision next 10-20 years
Share - managers, employees, customers
Provides employees - shared purpose,
direction & opportunity
Redefine mission if

Credibility lost or

Not optimal course for growth
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Corporate Mission
3 major characteristics:
1. Focus on limited goals
2. Stress major policies & values
3. Define competitive spheres to operate in
Industry
Products & applications
Competence
Market-segment
Vertical
Geographical
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Marketing Management - An Asian Perspective
4th Edition
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Table 2.1 Sample Mission Statement
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Business
Customer-satisfying
NOT
goods-producing
 Redefine in terms of needs not products
• Eg: IBM redefined itself
• From hardware & software manufacturer
to a “builder of networks”
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Business
Market better than product definitions
A business - 3 dimensions:
 Customer groups
 Customer needs
 Technology
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Marketing Management - An Asian Perspective
4th Edition
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Table 2.2
Product-Oriented Versus Market-Oriented
Definitions of a Business
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Business
SBU: Strategic Business Unit
3
characteristics:
1. SBU plan separate from company
2. Own set of competitors
3. Own manager- strategic plan & profit
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Defining the Business
 Large companies - different businesses,
each requiring its own strategy
Why identify strategic business units?
To develop separate strategies & assign
appropriate funding
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities

Assess growth opportunities HOW?
1) Plan new businesses
2) Downsize/terminate older businesses

How to fill strategic-planning gap?
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Marketing Management - An Asian Perspective
4th Edition
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Figure 2.5
© Kotler, Keller, Ang, Leong & Tan
The strategic planning gap
Marketing Management - An Asian Perspective
4th Edition
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities
INTENSIVE GROWTH


Review opportunities- improve existing
business
Framework - detect new intensive
growth opportunities
“product-market expansion grid”
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Marketing Management - An Asian Perspective
4th Edition
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Figure 2.6 Three Intensive Growth Strategies:
Ansoff’s Product-Market Expansion Grid
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Marketing Management - An Asian Perspective
4th Edition
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities
INTENSIVE GROWTH
 The company first considers…
• more market share - current product, market
(market-penetration strategy)?
• new markets - current products
(market-development strategy)?
• new products - current markets
(product-development strategy)?
• new products - new markets
(diversification strategy)?
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities INTENSIVE GROWTH
• Howard Schultz waves after cutting ribbon
• Starbucks’ 1st store outside North America
• Ginza, Tokyo August 1996
• Today Starbucks has stores
across the globe
Asian
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Marketing Management - An
4th Edition
Perspective
2-37
Corporate & Division Strategic Planning
- Assessing Growth Opportunities INTENSIVE GROWTH
market-penetration & developing strategy
cafés serve gourmet coffee direct to customers in Seattle
product development strategy
Increase purchases - new in-store merchandise (CDs)
diversification strategy
© Kotler, Keller, Ang, Leong
& Tan
Marketingice
Management
- An Asian
PerspectiveTea to grocery stores
Frappuccino®
drinks,
Starbucks
cream
& Tazo®
4th Edition
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities
INTEGRATIVE GROWTH:
3 types of integration within industry
Acquire:
 Suppliers - backward integration
 Retailer- forward integration
 Competitors- horizontal integration
 If unsuccessful, diversification
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities
DIVERSIFICATION GROWTH
 When good opportunities are found
outside present businesses
What is a good opportunity?
 When industry is attractive & company
has strengths to be successful
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities
Types of diversification:
1) Concentric strategy
 New products - synergy with existing
products, appeal to different group
2) Horizontal strategy
 New products appeal to current group technologically unrelated to current line
3) Conglomerate strategy
 New businesses - no relationship to
current technology, products or markets
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Assessing Growth Opportunities
DOWNSIZING & DIVESTING OLDER BUSINESSES
 Prune, harvest, divest old businesses
 Release resources & reduce costs
 Focus on growth
 Not waste resources to salvage
hemorrhaging businesses
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Organization & Organizational Culture
Corporate culture
“Shared experiences, stories, beliefs
& norms that characterize an
organization”
Corporate culture,
structure & policies

© Kotler, Keller, Ang, Leong & Tan
Key when implement
new strategy
Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Organization & Organizational Culture

Can develop & passed from CEO to staff

Varies markedly among Asian firms

Transformed- state-owned firm privatized

Clashing cultures -JV/merger- different
management style, practices - problem
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Organization & Organizational Culture
What drive successful Asian businesses?
4 organizational factors
1.
2.
3.
4.
Market orientation
Innovativeness
Corporate culture
Organizational climate
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Organization & Organizational Culture
Adopt new view of crafting strategies
HOW?
 Get fresh ideas from employees :
• with youthful perspectives
• who are out stationed
• who are new to industry
 Choose among different views of the
future
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Marketing Management - An Asian Perspective
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Corporate & Division Strategic Planning
- Organization & Organizational Culture
A scenario analysis:
Develop different possible future of firm
that make assumptions about
forces driving the market
& include different uncertainties
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Marketing Management - An Asian Perspective
4th Edition
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Figure 2.7
The Business Unit Strategic-Planning
Process
Asian
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Marketing Management - An
4th Edition
Perspective
2-48
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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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning SWOT Analysis
opportunities
Overall evaluation of a company’s
threats
SWOT
Analysis
strengths
Monitor external & internal environment
weaknesses
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Business Unit Strategic Planning
- SWOT Analysis
EXTERNAL ENVIRONMENT (OPPORTUNITY & THREAT) ANALYSIS
 A business unit to identify opportunities
& threats HOW?
 Monitor key macroenvironment &
microenvironment factors that affect
ability to earn profits
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Marketing Management - An Asian Perspective
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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
i.
Problem detection method
ii. Ideal method
iii. Consumption chain method
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
- SWOT Analysis
Market Opportunity Analysis (MOA)
1) Can benefits convince targets?
2) Can reach targets - cost-effective channels?
3) Possess resources to deliver benefits?
4) Benefits better than competitors?
5) Is it profitable?
WHY use MOA?
Evaluate opportunities
Their attractiveness & probability of success
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
- SWOT Analysis
An environmental threat
 Challenge by unfavorable trend or
development
 Absence of defensive marketing action
 Can lower sales or profit
 Weigh seriousness & probability of
occurrence
 Have contingency plans - changes to
make before/during threat
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Marketing Management - An Asian Perspective
4th Edition
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Figure 2.8 Opportunity and Threat Matrices
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Figure 2.8 Opportunity and Threat Matrices
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Business Unit Strategic Planning
- SWOT Analysis
INTERNAL ENVIRONMENT (STRENGTHS/WEAKNESSES) ANALYSIS
 Go for opportunities where it
• Has required strengths? OR
• Need to develop certain strengths?
 Critical - interdepartmental work
relationships
 Superior in-company capabilities, not just
core competencies
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Marketing Management - An Asian Perspective
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Checklist for Performing
Strengths/Weaknesses Analysis
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Business Unit Strategic Planning
- Goal Formulation
Goals
Objectives specific to magnitude & time
Goal formulation
Develop specific goals for planning period
after SWOT analysis
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
- Goal Formulation
Managing by Objectives MBO - successful IF:
1) Objectives arranged in hierarchy
2) Objectives - quantitative where possible
3) Goals - realistic
4) Objectives - consistent
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
- Goal Formulation
Some trade-offs:
• Maximize sales OR profits
• Short-term profit OR long-term growth
• Penetrate current market OR develop new ones
Each trade-off – different marketing strategy
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
– Strategic Formulation
 Goals - what business wants to
achieve
 Strategy - game plan to get there
• Marketing strategy
• Compatible technology strategy
• Sourcing strategy
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
– Strategic Formulation
PORTER’S GENERIC STRATEGIES
Overall cost leadership

Lowest cost - price < competitor – large market share
Differentiation

Superior performance - area big part of market value
Focus

On narrow market segments
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
– Strategic Formulation
PORTER’S GENERIC STRATEGIES
 Strategic group: firms with same strategy
& target market
Operational effectiveness - same activities
more effective – rivals copy
Strategy - different activities OR same
activities in different ways
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
– Strategic Formulation
STRATEGIC ALLIANCES
Strategic partners necessary to be effective
Many are marketing alliances
4 major categories:
1.
2.
3.
4.
Product/service alliances
Promotional alliances
Logistics alliances
Pricing collaborations
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning
– Strategic Formulation
Celebration at a Star Alliance inaugural
Star Alliance - 16 airlines - cover
most of the globe
Asian
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Marketing Management - An
4th Edition
Perspective
2-66
Business Unit Strategic Planning
– Strategic Formulation
Visa has promotional alliance with
Hong Kong Disneyland
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Marketing Management - An Asian Perspective
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Business Unit Strategic Planning Program Formulation & Implementation
STEP ONE
Strategies
work out detailed programs
developed
STEP TWO
Programs estimate costs
formulated
STEP THREE
ABC accounting if results justify cost
STEP FOUR
stakeholders & needs
Implement strategy consider
Asian
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Marketing Management - An
4th Edition
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Business Unit Strategic Planning
– Feedback & Control
Firm needs to track results & monitor
new developments
Marketplace will change - to review
& revise implementation, programs,
strategies or objectives
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Marketing Management - An Asian Perspective
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Business Unit
Strategic Planning
– Feedback & Control
HAIER - good example:
 China’s leading washing
machine maker
 Then, competition
 Production alliances with
Sanyo
 Digital TVs with LG
Electronics
 Diversify - finance,
computers, cell phones
A Haier ad in Charles deAsian
Gaulle Airport, Paris
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Marketing Management - An
4th Edition
Perspective
2-70
Product Planning: The Nature &
Contents of a Marketing Plan
Marketing plan
Summarized
written document
about market & plans
to reach
marketing objectives
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Marketing Management - An Asian Perspective
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Marketing Plan Criteria
1) Is the plan simple?
2) Is the plan specific?
3) Is the plan realistic?
4) Is the plan complete?
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Marketing Management - An Asian Perspective
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Product Planning: The Nature &
Contents of a Marketing Plan
- Contents of a Marketing Plan
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 & 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
& discussion. At the same time, some critics claim that mission
statements sometimes lack “teeth” & specificity. Moreover, critics also
maintain that in many cases, mission statements do not vary much from
firm to firm & 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 & 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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Marketing Management - An Asian Perspective
4th Edition
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Video Links
Secondary Videos to watch:
 Song Airlines (8:50 min)
 Marriott (9:35 min)
 NFL (9:17 min)
 Honest Tea (8:24 min)
Click here to watch the video clips from
the US Website.
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4th Edition
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