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Prof.

Zakir Hossain PhD


Marketing Management
2
e r
p t
a
Ch

Developing
Marketing
Strategies and
Plans
Discussion Questions

1. How does marketing affect


customer value?

2. How is strategic planning


carried out at different levels
of the organization?

3. What does a marketing plan


include?

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Strategy over
1. Key ingredients of the marketing management
process are insightful, creative strategies and
plans that can guide marketing activities.
2. Founded in 1994 by Web-surfing Stanford University
grad students, Yahoo! grew from a tiny upstart to a
powerful force in Internet media.
3. The company proudly proclaims it is The only place
anyone needs to go to find anything, communicate
with anyone, or buy anything.
4. Its range of services includes e-mail, news, weather,
music, photos, games, shopping, auctions, and travel.
5. Challenge from Google
6. 10-year deal in June 2009 that gave Microsoft
7. Was this enough by Yahoo???

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The Value Delivery
Approach

Successful marketers must focus on delivering value to customers. This


is accomplished by:
Choosing the value Here marketers do their homework to segment the
market, select the appropriate target, and develop the offerings value
proposition.

Providing the value Entails selecting specific product features, prices,


and distribution.

Communicate the value The third phase, communicating the value,Slide


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is5 of 38
The Value Chain

Primary Inbound Outboun


Operation Marketin Service
Activitie Logistic d
s g

Margin
s
s Logistics
Procurement
Support Human Resource management
Activitie
Technological Development
s
Infrastructure

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Core Business
Processes Customer
relationship
management
Fulfillment
managemen
t Customer
acquisition

New-
offering
realization
Market-
sensing
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Core Business
Processes
A firms success depends in part on how well each
department performs its role. However, firms must also
coordinate departmental activities to conduct these core
business processes.
Market-sensing Activities involved in gathering and
acting upon information about the market.
New-offering realization Research, development, and
launch of new high-quality product offerings quickly and
within budgets.
Customer acquisition All the activities in defining target
markets and prospecting for new customers.
Customer-relationship management Activities involved
in in building deeper understanding, relationships, and
offerings to individual customers.
Fulfillment management process The activities that
related to receiving and approving orders, shipping the
goods on time, and collecting payments.
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Core Competencies
Firms must focus on what they do well;
things that are the essence of the
business. A core competency must
hold the below characteristics.

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Holistic Marketing
Holistic marketers
addresses three key
management questions:

Value Exploration How


the firm identifies new
value opportunities.

Value Creation How


efficiently a company
creates more promising
new value offerings

Value Delivery How a


company uses its
capabilities and
infrastructure to deliver
the new value offering
more efficiently

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Strategic Planning
Strategic planning must focus
on three key areas:
1) managing a companys
businesses as an investment
Businesses as portfolio,
2) assessing each businesss
investment strength by considering the
markets growth rate and the
portfolio companys position and fit in
that market, and
Assessing each 3) establishing a strategy.

businesss
strength
Establish a
strategy
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.1
2
re
g u
Fi Strategic Planning,
Implementation, and Control
Processes

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Marketing Plan

Directs and coordinates


the marketing effort
Product Line or Brand
Level
Strategic and Tactical
levels
A marketing plan is used to
direct and coordinate the
marketing effort and is
created at the strategic and
tactical level.

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

Strategic marketing plans begin with


an analysis of market opportunities Tactical marketing plans focus
and based on whats learned leads to on specific tactics such as
an identification of target markets product features, promotion,
and the firms value propositions. merchandising, pricing, sales
channels, and service.
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Corporate Strategic
Planning

1 Define corporate mission

2 Establish SBUs

Assign resources to
3 SBUs
Assess growth
4 opportunities

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Defining the Corporate
Mission
Who is What is of
the value to the
customer customer?
What is ?
our
business
?

What
should What will
our our
business
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business Slide 16 of 38
Mission Statements

Characteristics of good mission


statements:
1. Focus on a limited number of
goals
2. Stress major policies and values
3. Define major competitive
spheres
4. Take a long-term view
5. Short, memorable, meaningful

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Vague Mission Statement

To build total brand value by innovating


to deliver customer value and customer
leadership faster, better, and more
completely than our competition

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GOOGLES Mission
Statement
To organize the worlds
information and make it
universally accessible and
useful.

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Mission Supported By
Vision
Mission statements are at their best when they
reflect a vision, an almost impossible dream that
provides direction for the next 10 to 20 years.

1) Sonys former president, Akio Morita, wanted


everyone to have access to personal portable
sound, so his company created the Walkman and
portable CD player.

2) Fred Smith wanted to deliver mail anywhere in the


United States before 10:30 AM the next day, so he
created FedEx.

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Vague Philosophy

We build brands and make


the world a little happier by
bringing our best to you.

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GOOGLEs Philosophy
Never settle for the best.
1. Focus on the user and all else will follow.
2. Its best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You dont need to be at your desk to need an
answer.
6. You can make money without doing evil.
7. There is always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10.Great just isnt good enough.
Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 22 of 38
Strategic Business Units
(SBU)
Three Characteristics of an SBU:

Unique
competitors

A single business
or collection of
related Leader
businesses responsible for
planning and
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Defining Strategic Business
Units
Companies often define themselves in
terms of the products it produces. This Customer
view often limits a company. A market groups
definition on the other hand describe the
business as a customer-satisfying
process. For example, if Xerox defined
itself from only a product perspective (We
make copying equipment) it would limit
its ability to market products and services
other than copiers.
SBUs can be defined
by:
1)Customer needs;
2)Customer groups;
and
3) Technology

Customer needs Technology


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Strategic Business Units

Company Product Definition Market Definition


We are a people-and-goods
Union Pacific We run a railroad.
mover.
We make copying We help improve office
Xerox
equipment. productivity.
Hess
We sell gasoline. We supply energy.
Corporation
Paramount
We make movies. We market entertainment.
Pictures
Encyclopaed
We sell encyclopedias We distribute information.
ia Britannica
We make air
We provide climate control
Carrier conditioners and
in the home.
furnaces.
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Assigning Resources
Portfolio-planning models such as the GE/McKinsey Matrix and the BCG
Matrix were used in the past to assist managers in making resource
allocation decisions. But they have been replaced with newer models that
consider shareholder value analysis. The newer models consider growth
from global expansion, repositioning, retargeting, and strategic
outsourcing.
GE/McKinsey Matrix
Boston Consulting Group
HIGH

Matrix
Business Position

MED
LOW

LOW MED HIGH


Industry
Attractiveness
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Assessing Growth
Opportunities To achieve growth,
firms can look
toward new
business, downsize,
or the elimination of
older businesses.

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.2
2 The lowest curve projects expected sales over the next five
re years from the companys current business portfolio. The top
g u curve is the desired sales over this period. As the company
Fi wishes to grow faster than its current businesses will allow,
the company must seek new opportunities.
The Strategic-Planning
Gap

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Intensive Growth

Product-Market Expansion Grid


New

Market
Diversificat
Developme
ion
Markets

nt
Current

Market Product
Penetration Developme
nt

Current New
Products

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Intensive Growth
Intensive growth looks for opportunities within current businesses.
The product-market expansion grid looks at growth possibilities from
the perspective of current and new products and markets.

Market Penetration gaining market share with current products


and current customers. The company can achieve growth by having
current customers purchase more, attract competitors customers, or
bring non-buyers into the market.

Market Development Finding new markets for existing products.


The firm can find new buyer groups (business customers rather than
consumers), new distribution channels (online), or expand
distribution to other regions or countries.

Product Development Develop new products to the current


market. As the firm already has a relationship with current
customers, they can develop new products to meet other, related
needs of its customers.

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Integrative Growth
A business can achieve growth through backward (buy supplier),
forward (buy wholesaler), or horizontal (competitor) integration.

Business Wholesal
er

Competitor

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Diversification Growth
Firms can often discover opportunities
outside its present business. However, the
new industry should be highly attractive
(grow potential) and the company should
have (or acquire) the right capabilities to
ity succeed.
un
o rt
p
Op
ew
N

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Corporate Culture

is the shared experiences, stories,


beliefs, and norms that characterize an
organization.

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Marketing Innovation
Companies looking for
innovative marketing ideas
should look to three
underrepresented employee
groups such as: employees
with youthful or diverse
perspectives, employees far
away from corporate
headquarters, and
Identify and encourage new ideas employees new to the
industry.

Scenario analysis looks at future


possibilities by asking What if
questions about customers,
competitors, markets.

Scenario
Analysis
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.3
2
re
g u
Fi
Business Unit Strategic
Planning

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.4
2
re
u
Fi Opportunity and Threat
g

Matrices

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SWOT Analysis

Internal
SW
Strength Weakness

OT
External

Opportunit Threat
y

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Goal Formulation
After completing a SWOT analysis the
firm can proceed to goal formulation
whereby it develops specific goals for
the planning period. Goals are
Ranked objectives that are specific with
respect to magnitude and time.
Managing these objectives effectively
requires these four criteria to be met.

Consisten Quantifie
t d

Realistic
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Strategy Formulation
Porter outlines three generic strategies that
Porters Generic businesses can follow. They can focus on
Strategies Cost Leadership, where they are seeking
to achieve the lowest production and
distribution costs to underpriced
competitors and gain market share; they
can select a Differentiation strategy, where
they focus on achieving better performance
on a important customer benefit (such as
quality or speed); or third, businesses can
take a Focus approach where they
concentrate on a narrow market segment,
gaining as much insight about the segment
Oftentimes, companies cannot as achieve
possible, and then pursue either a cost
objectives without the use of partners. leadership or differentiation strategy.
Strategic Alliances can be used to compliment
or leverage current capabilities and resources
to the benefit of both parties. Alliances fall into
four categories:
1.Product or service alliance, 2. Promotional Strategic
alliances
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Program Formulation and
Implementation

Great strategies can lead to failure


unless they are implemented
properly. Proper formulation ensures
that all the pieces fit together. But
firms must also examine the cost of
the marketing programs to ensure
that the expense is justified.

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Feedback and Control
Changes in the market are inevitable.
Companies must be aware of pending
changes and also have the will to
change course.

Strong
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leadership Slide 41 of 38
Product Planning
Marketing
Plans

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