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Developing Marketing Strategies and Plans


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Title: Developing Marketing Strategies and Plans

Developing Marketing Strategies and Plans
Developing Marketing Strategies and Plans
A strategy is a theory about how to gain
competitive advantages. A good strategy is a
strategy that actually generates such
advantages. Strategic management is the process
of specifying an organizations objectives,
developing policies and plans to achieve these
objectives, and allocating resources so as to
implement the plans.
Levels of Goals/Plans Their Importance
External Message Legitimacy for investors,
customers, suppliers, community
Mission Statement
Strategic Goals/Plans Senior
Management (Organization as a whole)
Internal Message Legitimacy,
Tactical Goals/Plans Middle
Management (Major divisions,
Operational Goals/Plans
Lower Management
(Departments, individuals)
Strategic Goals and Plans
  • Strategic Goals
  • Where the organization wants to be in the future
  • Pertain to the organization as a whole
  • Strategic Plans
  • Action Steps used to attain strategic goals
  • Blueprint that defines the organizational
    activities and resource allocations
  • Tends to be long term

Levels of a Marketing Plan
  • Strategic
  • Target marketing decisions
  • Value proposition
  • Analysis of marketing opportunities
  • Tactical
  • Product features
  • Promotion
  • Merchandising
  • Pricing
  • Sales channels
  • Service

Developing Marketing Strategies and Plans
  • Part 1 Marketing Value and Customer Value
  • The value delivery process
  • The value chain
  • Core competencies
  • A holistic marketing orientation and customer
  • The central role of strategic planning
  • Part 2 Corporate and Division Strategic Planning
  • Defining the corporate mission
  • Defining the business
  • Assessing growth opportunities
  • Organization and organizational culture

Developing Marketing Strategies and Plan
  • Part 3 Business Unit Strategic Planning
  • The business Mission
  • SWOT analysis
  • Goal Formulation
  • Strategic Formulation
  • Program Formulation and Implementation
  • Feedback and Control

Developing Marketing Strategies and Plan
  • Part 4 Product Planning the Nature and Contents
    of a Marketing Plan
  • Contents of the Marketing Plan

Hennes and Mauritz
  • Walk into a trendy Soho boutique in New York City
    and you might see high-fashion T-shirts selling
    for 250.
  • Go into an HM clothing store and you can see a
    version of the same style for 25.
  • Founded 55 years ago as a provincial Swedish
    clothing company, HM (Hennes and Mauritz) has
    morphed into a clothing colossus with 950 stores
    in 19 countries and an ambitious plan to expand
    by 100 stores a year.
  • The reason HM has reached this point while so
    many other storessuch as once-hot Italian
    retailer Benettonhave floundered is that the
    company has a clear mission and the creative
    marketing strategies and concrete plans with
    which to carry it out.
  • "Our business concept is to give the customer
    unbeatable value by offering fashion and quality
    at the best price," is the HM mission as
    expressed on the company's Web site.
  • Nothing could sound simpler. Yet, fulfilling that
    mission requires a well-coordinated set of
    marketing activities.

Hennes and Mauritz
  • For instance, it takes HM an average of three
    months to go from a designer's idea to a product
    on a store shelf, and that "time to market" falls
    to three weeks for "high-fashion" products. HM
    is able to put products out quickly and
    inexpensively by
  • 1- having few middlemen and owning no factories
  • 2-buying large volumes
  • 3- having extensive experience in the clothing
  • 4- having a great knowledge of which goods should
    be bought from which markets
  • 5- having efficient distribution systems
  • 6- being cost-conscious at every stage

  • Critics of Nike often complain that its shoes
    cost almost nothing to make yet cost the consumer
    so much.
  • True, the raw materials and manufacturing costs
    involved in the making of a sneaker are
    relatively cheap, but marketing the product to
    the consumer is expensive.
  • Materials, labor, shipping, equipment, import
    duties, and suppliers' costs generally total less
    than 25 a pair.
  • Compensating its sales team, its distributors,
    its administration, and its endorsers, as well as
    paying for advertising and RD, adds 15 or so to
    the total.
  • Nike sells its product to retailers to make a
    profit of 7. The retailer therefore pays roughly
    47 to put a pair of Nikes on the shelf. When the
    retailer's overhead (typically 30 covering
    personnel, lease, and equipment) is factored in
    along with a 10 profit, the shoe costs the
    consumer over 80.

  • Encyclopedia Britannica
  • http//
  • The Encyclopædia Britannica was born in
    18th-century Scotland amid the great intellectual
    ferment known as the Scottish Enlightenment.
  • According to one chronicler of Britannica
    history, Edinburgh in the mid-1700s was "a city
    on the verge of a golden age, a center of
    learning and a home of writers, thinkers, and
  • The first edition of the Britannica was published
    one section at a time, over a three-year period,
    beginning in 1768.
  • In 1990 Encyclopædia Britannica found itself in a
    precarious competitive environment. CD-ROMs and
    the internet had become the study tools of choice
    for students and others.
  • Microsofts Encarta CD-ROM and IBMs CD-ROM
    joint venture World Book were attracting
    Britannicas customers.
  • The result book sales fell 83 between 1990-1997.
  • In 1994 the company developed Britannica Online,
    the first encyclopedia for the Internet, which
    made the entire text of the Encyclopædia
    Britannica available worldwide. That year the
    first version of the Britannica on CD-ROM was
    also published.
  • According to a company official were
    reinventing our business. We are not in the book
    business. Were in the information business.
  • By the 2006, the company had become a premier
    information site on the internet (200,000)
    subscribers and (150,000) web sites selected

Marketing and Customer Value
Part 1 Marketing Value and Customer Value
  • Marketing involves satisfying consumers' needs
    and wants.
  • The task of any business is to deliver customer
    value at a profit.
  • In a hypercompetitive economy with increasingly
    rational buyers faced with abundant choices, a
    company can win only by fine-tuning the value
    delivery process and choosing, providing, and
    communicating superior value.
  • The traditional view of marketing is that the
    firm makes something and then sells it. In this
    view, marketing takes place in the second half of
    the process.
  • The company knows what to make and the market
    will buy enough units to produce profits.
    Companies that subscribe to this view have the
    best chance of succeeding in economies marked by
    goods shortages where consumers are not fussy
    about quality, features, or stylefor example,
    with basic staple goods in developing markets.

Marketing and Customer Value
Part 1 Marketing Value and Customer Value
The value delivery process
The value delivery process
  • The traditional view of the business process,
    however, will not work in economies where people
    face abundant choices.
  • The smart competitor must design and deliver
    offerings for well-defined target markets.
  • This belief is at the core of the new view of
    business processes, which places marketing at the
    beginning of planning.

Marketing and Customer Value
Part 1 Marketing Value and Customer Value
The value delivery process
The value delivery process
Marketing and Customer Value
Part 1 Marketing Value and Customer Value
The value delivery process
  • The Japanese have further refined this view with
    the following concepts
  • Zero customer feedback time. Customer feedback
    should be collected continuously after purchase
    to learn how to improve the product and its
  • Zero product improvement time. The company
    should evaluate all improvement ideas and
    introduce the most valued and feasible
    improvements as soon as possible.
  • Zero purchasing time. The company should receive
    the required parts and supplies continuously
    through just-in-time arrangements with suppliers.
    By lowering its inventories, the company can
    reduce its costs.
  • Zero setup time. The company should be able to
    manufacture any of its products as soon as they
    are ordered, without facing high setup time or
  • Zero defects. The products should be of high
    quality and free of flaws.

2) The Value Chain
Part 1 Marketing Value and Customer Value
  • Michael Porter of Harvard has proposed the value
    chain as a tool for identifying ways to create
    more customer value.
  • According to this model, every firm has
    combination of activities performed to design,
    produce, market, deliver, and support its
  • The value chain identifies nine strategically
    relevant activities that create value and cost in
    a specific business.
  • These nine value-creating activities consist of
    five primary activities and four support

2) The Value Chain
Part 1 Marketing Value and Customer Value
  • The primary activities cover the sequence of
  • 1) bringing materials into the business (inbound
  • 2) converting them into final products
  • 3) shipping out final products (outbound
  • 4) marketing them (marketing and sales), and
  • 5) servicing them (service).

2) The Value Chain
Part 1 Marketing Value and Customer Value
  • The support activities
  • 1) technology development,
  • 2) human resource management,
  • 3) firm infrastructureare handled in certain
    specialized departments, as well as elsewhere.
  • 4) Procurement and hiring

Part 1 Marketing Value and Customer Value
2) The Value Chain
Part 1 Marketing Value and Customer Value
  • Core Business Processes Include
  • The market sensing process.
  • The new offering realization process. All the
    activities involved in researching, developing,
    and launching new high-quality offerings quickly
    and within budget.
  • The customer acquisition process. All the
    activities involved in defining target markets
    and prospecting for new customers.
  • The customer relationship management process.
  • The fulfillment management process. All the
    activities involved in receiving and approving
    orders, shipping the goods on time, and
    collecting payment.

3) Core Competencies (page 39)
Part 1 Marketing Value and Customer Value
  • To be successful, a firm also needs to look for
    competitive advantages beyond its own operations,
    into the value chains of suppliers, distributors,
    and customers.
  • Value delivery network also called A supply Chain
  • To carry out its core business processes, a
    company needs resources.
  • In the past companies controlled most of the
  • Change regarding this concept is changing
  • Many companies today have partnered with
    specific suppliers and distributors to create a
    superior value delivery network also called a
    supply chain.

3) Core Competencies
  • To carry out its core business processes, a
    company needs resourceslabor power, materials,
    machines, information, and energy.
  • Traditionally, companies owned and controlled
    most of the resources that entered their
    businesses, but this situation is changing.
  • Many companies today outsource less critical
    resources if they can be obtained at better
    quality or lower cost.
  • Frequently, outsourced resources include cleaning
    services, landscaping, and auto fleet management.
    Kodak even turned over the management of its data
    processing department to IBM.

4) 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 and
    co prosperity among key stakeholders.

Holistic Marketing Framework
The holistic marketing framework is designed to
address three key management questions 1. Value
exploration - How can a company identify new
value opportunities? 2. Value creation- flow can
a company efficiently create more promising new
value offerings? 3. Value delivery- How can a
company use its capabilities and infrastructure
to deliver the new value offerings more
A Holistic Marketing Orientation And Customer
A Holistic Marketing Orientation And Customer
VALUE EXPLORATION Because value flows within and
across markets that are themselves dynamic and
competitive, companies need a well-defined
strategy for value exploration. Developing such a
strategy requires an understanding of the
relationships and interactions among three
spaces (1) the customer's cognitive space (2)
the company's competence space and (3) the
collaborator's resource space. The customer's
cognitive space reflects existing and latent
needs and includes dimensions such as the need
for participation, stability, freedom, and change
A Holistic Marketing Orientation And Customer
  • To exploit a value opportunity, the company needs
    value-creation skills. Marketers need to
  • identify new customer benefits from the
    customer's view
  • utilize core competencies from its business
    domain and
  • select and manage business partners from its
    collaborative networks.
  • To craft new customer benefits, marketers must
    understand what the customer thinks about, wants,
    does, and worries about.
  • Marketers must also observe who customers admire,
    who they interact with, and who influences them

  • Delivering value often means substantial
    investment in infrastructure and capabilities.
  • The company must become proficient at customer
    relationship management, internal resource
    management, and business partnership management.
  • Customer relationship management fallows the
    company to discover who its customers are, how
    they behave, and what they need or want.
  • It also enables the company to respond
    appropriately, coherently, and quickly to
    different customer opportunities.

5) The Central Role of Strategic Planning
Developing Marketing Strategies and Plan
  • Companies should have the capabilities to
  • understanding customer value,
  • creating customer value,
  • delivering customer value,
  • capturing customer value, and
  • sustaining customer value.

5) The Central Role of Strategic Planning
  • Only a handful of companies stand out as master
    marketers Procter Gamble, Southwest Airlines,
    Nike, Disney, Nordstrom, Wal-Mart, McDonald's,
    Marriott Hotels, and several Japanese (Sony,
    Toyota, Canon) and European (IKEA, Club Med, Bang
    Olufsen, Electrolux, Nokia, Lego, Tesco)
  • These companies focus on the customer and are
  • 1)organized to respond effectively to changing
    customer needs.
  • 2)have well-staffed marketing departments, and
  • 3) all their other departmentsmanufacturing,
    finance, research and development, personnel,
    purchasingalso accept the concept that the
    customer is king.

Part 2 Corporate and Division Strategic Planning
Part 2 Corporate and Division Strategic Planning
  • Defining the corporate mission
  • Defining the business
  • Assessing growth opportunities
  • Organization and organizational culture

Part 2 Corporate and Division Strategic Planning
What is Strategic Planning?
  • It is the managerial process that helps to
    develop a strategic and viable fit between the
    firms objectives, skills, resources with the
    market opportunities available.
  • It helps the firm deliver its targeted profits
    and growth through its businesses and products.

Part 2 Corporate and Division Strategic Planning
Strategic Planning calls for Action in three key
  • managing a company's businesses as an investment
  • assessing each business's strength by considering
    the market's growth rate and the company's
    position and fit in that market.
  • establishing a strategy For each business.

Understanding Marketing Management
  • To understand marketing management, we must
    understand strategic planning.
  • Most large companies consist of four
    organizational levels
  • the corporate level,
  • the division level,
  • the business unit level, and
  • the product level.

Understanding Marketing Management
  • Corporate headquarters is responsible for
    designing a corporate strategic plan to guide the
    whole enterprise it makes decisions on the
    amount of resources to allocate to each division,
    as well as on which businesses to start or
  • Each division establishes a plan covering the
    allocation of funds to each business unit within
    the division.
  • Each business unit develops a strategic plan to
    carry that business unit into a profitable
  • Finally, each product level (product line, brand)
    within a business unit develops a marketing plan
    for achieving its objectives in its product

Part 2 Corporate and Division Strategic Planning
  • A marketing plan is the central instrument for
    directing and coordinating the marketing effort.
    It operates at a strategic and tactical level.

planning, implementation, and control cycle
  • Defining the corporate mission

How to go about it?
  • Defining the corporate mission
  • Establishing SBUs
  • Allocating resources for SBUs
  • Planning for new business

Corporate Mission
  • This seeks to embody the entire goals of the
    organization and the objective of its existence.
  • It seeks to provide a sense of purpose, direction
    and opportunity

Defining the Corporate Mission
  • According to Peter Drucker, it is time to ask
    some fundamental questions. What is our business?
    Who is the customer? What is of value to the
  • customer? What will our business be? What should
    our business be? Successful companies
    continuously raise these questions and answer
    them thoughtfully and thoroughly.

5 questions that the firm must ask itself
  • What is our business?
  • Who is our customer?
  • What does our customer need?
  • What will our business be?
  • What should our business be?

Organizations develop mission statements to
share with managers, employees, and (in many
cases) customers.
A clear, thoughtful mission statement provides
employees with a shared sense of purpose,
direction, and opportunity. The statement guides
geographically dispersed employees to work
independently and yet collectively toward
realizing the organization's goals.
Good mission Statements
Mission statements are at their best when they
reflect a vision, an almost "impossible dream"
that provides a direction for the company for the
next 10 to 20 years.
Fred Smith wanted to deliver mail anywhere in
the United States before 1030 A.M. the next day,
so he created FedEx.
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
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.
We help people trade anything on earth. We will
continue to enhance the online trading
experiences of allcollectors, dealers, small
businesses, unique item seekers, bargain hunters,
opportunity sellers, and browsers.
Good Mission Statements
  • focus on a limited number of goals. The
    statement, "We want to produce the
    highest-quality products, offer the most service,
    achieve the widest distribution, and sell at the
    lowest prices" claims too much.
  • stress the company's major policies and values.
  • define the major competitive spheres within which
    the company will operate

Major Competitive Spheres
  • Industry
  • Products
  • Competence
  • Market segment
  • Vertical channels (Ford)
  • Geographic

Defining the Business
  • Companies often define their businesses in terms
    of products
  • They are in the "auto business" or the "clothing

Defining the Business
  • A business must be viewed as a customer-satisfying
    process, not a goods-producing process.
  • Products are transient basic needs and customer
    groups endure forever. Transportation is a need
    the horse and carriage, the automobile, the
    railroad, the airline, and the truck are products
    that meet that need.

Dimensions that Define a Business
  • Customer groups
  • Customer needs
  • Technology

Table 2.2Product Orientation vs. Market
Strategic Business Units
The purpose of identifying the company's
strategic business units is to develop separate
strategies and assign appropriate funding.
SBU has three characteristics
  • It is a single business or collection of related
    businesses that can be planned separately from
    the rest of the company.
  • It has its own set of competitors.
  • It has a manager who is responsible for strategic
    planning and profit performance and who controls
    most of the factors affecting profit.

Assessing Growth Opportunities
  • planning new businesses,
  • downsizing, or
  • terminating older businesses.

Assessing Growth Opportunities
Assessing Growth Opportunities
  • Integrative Growth
  • Diversification Growth
  • Downsizing and Divesting Older Business

Assessing Growth Opportunities
Assessing Growth Opportunities
  • market-penetration strategy The company first
    considers whether it could gain more market share
    with its current products in their current
    markets .
  • market-development strategy the company considers
    whether it can find or develop new markets for
    its current products.
  • product-development strategy the company
    considers whether it can develop new products of
    potential interest to its current markets
  • diversification strategy the company will also
    review opportunities to develop new products for
    new markets.

Four market-product strategies alternative ways
to expand sales revenues for Ben Jerrys
Slide 2-27
  • Success Probability for each of the 4 basic
  • Diversification strategy 1 in 20
  • Market-development Strategy is 1 in 4
  • Product-development strategy 50-50
  • Market-penetration is the highest

Business Unit Strategic Planning
  • Strategic planning
  • Developing a strategic fit between
  • organizational goals and capabilities, and
  • changing marketing opportunities

Ben Jerrys a SWOT analysis to get it growing
Slide 2-34
Business Portfolio Analysis
  • Cash Cows SBUs that have a high market share
    of a low sales growth market.
  • Stars SBUs that have a high market share of a
    high sales growth market.
  • Question marks SBUs that have a low market
    share of a high sales growth market.
  • Dogs SBUs that have a low market share of a
    low sales growth market.

IV. Strategic Marketing Process
  • Process whereby an organization allocates it
    marketing mix resources to reach its target
  • Planning
  • Implementation
  • Evaluation

Planning Phase Situation Analysis
  • This is a complete analysis of the firms
    situation which assesses internal strengths and
    weaknesses and external threats and opportunities
  • Internal analysis (controllable factors) assess
    the firm itself to identify strengths and
  • External analysis (uncontrollable factors)
    assess the firms external environment to
    identify opportunities and threats

Planning Phase Marketing Objectives
  • Specific levels of performance desired for a
    product or product line to be achieved by a given
  • Stated in terms of market share, sales, profit
  • Should be measureable, attainable, specific, and
    consistent with organizational objectives

Planning Phase Product Positioning
  • The process where marketers try to create a
    product image or identity in the minds of their
    target market relative to competitive products.

Implementation Phase
  • Process of putting the marketing plan into
  • Involves great attention to detail

  • Involves measuring the results of the actions
    from the implementation phase and comparing them
    with goals set in the planning phase.
  • sales analysis
  • market share analysis
  • expense to sales analysis

Establishing Strategic Business Units A business
can be defined in terms of three dimensions
customer groups, customer needs, and technology.
  • It is a company within a company
  • The business is differentiated from the rest of
    the company
  • It has its own set of competitors
  • It is a separate profit centre

Assigning Resources to SBUs
  • The purpose of identifying the companys
    strategic business units is to develop separate
    strategies and assign appropriate funding to the
    entire business portfolio.
  • Senior managers generally apply analytical tools
    to classify all of their SBUs according to profit
    potential. Two of the best-known business
    portfolio evaluation models are the Boston
    Consulting Group model and the General Electric

SWOT Analysis
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

The Mission
  • Mission the organizations reason for existing.
  • Mission Statement
  • states the basic business scope and operations
  • may include the market and customers
  • some may describe company values, product
    quality, attitudes toward employees

Corporate Headquarters Planning Activities
  • Define the corporate mission
  • Establish strategic business units (SBUs)
  • Assign resources to each SBU
  • Assess growth opportunities

Good Mission Statements
  • Focus on a limited number of goals
  • Stress major policies and values
  • Define major competitive spheres
  • Take a long-term view
  • Short, memorable, meaningful

Characteristics of SBUs
  • It is a single business or collection of related
  • It has its own set of competitors
  • It has a leader responsible for strategic
    planning and profitability

Ansoffs Product-Market Expansion Grid
  • Market penetration strategy
  • Market development strategy
  • Product development strategy
  • Diversification strategy

Ansoffs Product-Market Grid
Current products
New products
Product development strategy
Mkt penetration strategy
Current Mkts
Mkt development strategy
Diversification strategy
New Mkts
The Planning Process
  • Analysing Market opportunities
  • Developing Marketing strategies
  • Planning Marketing Programs
  • Managing the Marketing Effort

Marketing Control
  • Annual Plan control
  • Profitability control
  • Strategic Control

Market-oriented strategic planning
  • Market-oriented strategic is the managerial
    process of developing and maintaining a viable
    fit among the organizations objectives, skills,
    and resources and its changing market
  • The aim of strategic planning is to shape the
    companys businesses and products so that they
    yield target profits and growth and keep the
    company healthy despite any unexpected threats
    that may arise.

What is Corporate Culture?
  • Corporate culture is the shared experiences,
    stories, beliefs, and norms that characterize an

SWOT Analysis
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

Goal Formulation
Once the company has performed a SWOT analysis,
it can proceed to develop specific goals for the
planning period.
  • Units objectives must be hierarchical
  • Objectives should be quantitative
  • Goals should be realistic
  • Objectives must be consistent

Market Opportunity Analysis (MOA)
  • Can the benefits involved in the opportunity be
    articulated convincingly to a defined target
  • 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?

1) Porters Generic Strategies
Strategic Formulation
  • Overall cost leadership
  • Differentiation
  • Focus
  • 2) Strategic Alliances
  • There are four forms of MDS.
  • Exporting
  • Licensing
  • Joint Venture
  • Direct Investment

Marketing Plan Contents
  • Executive summary
  • Table of contents
  • Situation analysis
  • Marketing strategy
  • Financial projections
  • Implementation controls

Evaluating a Marketing Plan
  • Is the plan simple?
  • Is the plan specific?
  • Is the plan realistic?
  • Is the plan complete?