Marketing Management: Developing Marketing Strategies and Plans

Marketing Management
Fifteenth Edition
Chapter 2
Developing
Marketing
Strategies and
Plans
Copyright © 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Learning Objectives
2.1 How does marketing affect
customer value?
2.2 How is strategic planning
carried out at the corporate and
divisional levels?
2.3 How is strategic planning
carried out at the business unit
level?
2.4 What does a marketing plan
include?
Marketing and Customer Value
• The value delivery process
• The value chain
• Core competencies
• The central role of strategic planning
The Value Delivery Process
• Choosing the value
• Providing the value
• Communicating the value
The Value Chain
• A tool for identifying ways to create more customer
value
– Every firm is a synthesis of activities performed to
design, produce, market, deliver, and support its
product
Value chain
• Primary activities:
1. Inbound logistics
2. Operations
3. Outbound logistics
4. Marketing
5. Service
• Support activities:
1. Procurement
2. Technology development
3. Human resource management
4. Firm infrastructure
Central Role of Strategic Planning
• Managing the businesses as an investment portfolio
• Assessing the market’s growth rate and the
company’s position in that market
• Establishing a strategy
Marketing Plan
• The central instrument for
directing and coordinating the
marketing effort
– Strategic
– Tactical
Corporate and Division Strategic
Planning
• Defining the corporate mission
• Establishing strategic business units
• Assigning resources to each strategic business unit
• Assessing growth opportunities
Defining the Corporate Mission
• 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?
Product Orientation vs. Market
Orientation
Company Product Market
Missouri-Pacific We run a railroad We are a people-
Railroad and-goods mover
Xerox We make copying We improve office
equipment productivity
Standard Oil We sell gasoline We supply energy
Columbia We make movies We market
Pictures entertainment
Good Mission Statements
• Focus on a limited number of goals
• Stress the company’s major policies and values
• Define the major competitive spheres within which the
company will operate
• Take a long-term view
• Are as short, memorable, and meaningful as possible
Mission statement
• We want to be the world-class food products manufacturer in
Bangladesh by ensuring intrinsic quality products and customer
services with state-of-the-art technology and motivated
employees. (Square food & beverage ltd.)
• Our Mission is to produce and provide quality & innovative
healthcare relief for people, maintain stringently ethical standard
in business operation also ensuring benefit to the shareholders,
stakeholders and the society at large. (Square pharmaceuticals
ltd. Bangladesh)
• ACI’s mission is to enrich the quality of life of people through
responsible application of knowledge, skills and technology. ACI
is committed to the pursuit of excellence through world-class
products, innovative processes and empowered employees to
provide the highest level of satisfaction to its customers. (ACI
Ltd.)
Establishing Strategic Business Units
• A single business or collection of related businesses
• Has its own set of competitors
• Has a leader responsible for strategic planning and
profitability
Assigning Resources to Each SBU
• Management must decide how to allocate corporate
resources to each SBU
– Portfolio-planning models
– Shareholder/market value analysis
16
Designing the Business Portfolio
• The business portfolio is the collection of

businesses and products that make up the
company.
• Business Portfolio Planning Involves Two Steps:
– analyze its current business portfolio and decide which
businesses should receive more, less, or no investment.
– Shape the future portfolio by developing strategies for
growth and downsizing.
17
Analyzing Current SBU’s:

Boston Consulting Group Approach
Relative Market Share
High Low
Stars Question
QuestionMarks
Marks ?
High
Market Growth Rate
• High growth & share ••High

Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Buildinto
intoStars
Starsor
orphase
phaseout
out
• May need heavy ••Require cash to hold
Require cash to hold
investment to grow market
marketshare
share
Cash
CashCows
Cows Dogs
Dogs
••Low ••Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare
share share
Low
••Established, successful ••Low profit potential

Low profit potential
Established, successful
SBU’s
SBU’s
••Produce
Producecash
cash
Assessing Growth Opportunities (1 of 2)
Figure 2.2 The Strategic- Planning Gap
Assessing Growth Opportunities (2 of 2)
• Intensive Growth
• Integrative Growth
• Diversification Growth
• Downsizing and Divesting Older Businesses
Intensive Growth
• Corporate management
should first review
opportunities for improving
existing businesses
Integrative Growth
• A business can increase sales and profits through
backward, forward, or horizontal integration within its
industry
Diversification Growth
• Diversification growth makes sense when good
opportunities exist outside the present businesses
– The industry is highly attractive and the company has
the right mix of business strengths to succeed
Downsizing and Divesting Older
Businesses
• Companies must carefully prune, harvest, or divest
tired old businesses to release needed resources for
other uses and reduce costs
Figure 2.4 The Business Unit
Strategic-Planning Process
SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
External Environment
• Marketing opportunity: an area of buyer need and
interest that a company has a high probability of
profitably satisfying.
• Environmental threat: challenge posed by an
unfavorable trend or development that, in the absence
of defensive marketing action, would lead to lower
sales or profit
Market Opportunity Analysis (MOA) (1 of 2)
• Can we articulate the benefits convincingly to a
defined target market(s)?
• Can we locate the target market(s) and reach them
with cost-effective media and trade channels?
• Does our company possess or have access to the
critical capabilities and resources we need to deliver
the customer benefits?
Market Opportunity Analysis (MOA) (2 of 2)
• Can we deliver the benefits better than any actual or
potential competitors?
• Will the financial rate of return meet or exceed our
required threshold for investment?
Internal Environment
• Strengths
• Weaknesses
Marketing Plan Contents
• Distributed in the class
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Marketing Management

3. Human resource management

Designing the Business Portfolio

• The business portfolio is the collection of

Analyzing Current SBU’s:

• High growth & share ••High

••Established, successful ••Low profit potential

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