Chapter Six

Business
Marketing
Planning:
Strategic
Perspectives

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 Market-Driven Organizations

• Centered on customers
• Take an outside-in view of strategy
• Demonstrate an ability to sense market
trends ahead of their competitors

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 Hierarchy of Strategies
 Corporate Strategy
 What businesses are we in?
 What are our core competencies?
 How should we allocate resources?
 What businesses should we be in?
 Business-Level Strategy
 How do we compete in a given industry?
 How should we position ourselves against
competitors?
 Functional Strategy
 How can we allocate resources to most efficiently
and effectively support business-level strategies?
 Marketing manages organization-customer
connections.
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Marketing: Perhaps Best Understood as:

1. Customer-product connection—linking the

customer to the focal offering.
2. Customer-service delivery connection—design and
delivery actions involved in providing firm’s goods and
services.
3. Customer-financial accountability connection--
Activities and processes that link customers to
financial outcomes.

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 Marketing’s Role in Managing Three Customer Connections

Customer

Marketing, Operations
Human Resources,
Operations Accounting
Product Service Delivery Financial Accountability

Accounting, Management
Human Resources

Information Systems

Top Management

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 Collective Action Perspective of Strategy Formulation Process

This approach applies to

strategic decisions that:
• Cut across
functional areas
• Involve firm’s long-
term objectives
• Involve resource
allocation

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 Cross-Functional Connections Explore Interrelationships
Between Marketing and Four Business Functions
Formulating Business Marketing Strategy:
Vital Cross-Functional Connections

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 CUSTOMER INTERFACE CORE STRATEGY STRATEGIC RESOURCES VALUE NETWORK

Fulfillment & Support Business Mission Core Competencies Suppliers

Information & Insight Product/Market Scope Strategic Assets Partners
Relationship Dynamics Basis for Differentiation Core Processes Coalitions
Pricing Structure

EFFICIENT / UNIQUE / FIT / PROFIT BOOSTERS

Major business concept components tied together

by three important “bridge” elements: customer
benefits, configuration, and company boundaries.

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 Fulfillment Information
and support and insight

Customer Interface

Pricing Relationship
structure dynamics

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 Core Strategy—Three Elements

• The business mission describes overall objective of

strategy, sets course of direction, and defines
performance criteria to measure progress.

• Product/market scope defines where firm

competes.

• Basis for differentiation captures essence of how

firm competes differently than its rivals do.

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 Strategic Resources

• Core competencies are set of skills, systems, and

technologies that creates uniquely high value for
customers.
• Strategic assets are more tangible requirements for
advantage. Strategic assets include brands, customer
data, distribution coverage, patents.
• Core processes are methodologies and routines that
companies use to transform competencies, assets, and
other inputs into value for customers.

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 The Balanced Scorecard - Translating Strategy Into Operational Terms

Financial Perspective
Cause-and-Effect Relationships
Long-Term
Shareholder Defines the chain of logic by which
Value
Productivity
Revenue
Growth
intangible assets will be
transformed to tangible value.

Customer Perspective

Product/Service Attributes Relationship Image

Customer Value Proposition
Clarifies conditions that create
Price Quality Time Function Partnership Brand
value for the customer.

Internal Process Perspective Value-Creating Processes

Manage Defines processes that transform
Manage
Operations
Manage
Customers
Manage
Innovation
Regulatory
and Social
intangible assets into customer
Processes and financial outcomes.

Clustering Assets and Activities

Learning and Growth Perspective
Defines intangible assets to be
aligned and integrated to create
Human Information Organization
Capital + Capital + Capital value
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 Aligning Internal Business Processes to the Customer Strategy

Customer Strategy The Focus of Internal Business Processes

Operations Management Customer Relationship Management Innovation Management

Low Total Cost Strategy Highly Efficient Operating Ease of Customer Access Seek Process Innovations
Processes Superb Post-Sales Service Gain Scale Economies
Efficient, Timely Distribution

Product Leadership Flexible Manufacturing Capture Customer Ideas for Disciplined, High-Performance
Strategy Processes New Offering Product Development
Rapid Introduction of Educate Customers about Complex First-to-Market
New Products New Products/Services

Complete Customer Deliver Broad Product/ Create Customized Solutions Identify New Opportunities
Solutions Strategy Service Line for Customers to Serve Customers
Create Network of Suppliers Build Strong Customer Anticipate Future Customer
for Extended Product/ Relationships Needs
Service Capabilities Develop Customer Knowledge
Lock-in Provide Capacity for Create Awareness Develop and Enhance
Strategies Proprietary Product/ Influence Switching Costs of Proprietary Product
Service Existing and Potential Increase Breadth/
Reliable Access and Customers Applications of Standard
Ease of Use

Source: Adapted from Robert S. Kaplan and David P. Norton, Strategy Maps: Converting Intangible Assets into Tangible Outcomes (Boston: Harvard
Business School Publishing Corporation, 2004), pp. 322-344.
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 Strategy Map Template: Product Leadership

Long-Term Shareholder Value

Financial
Perspective Productivity Strategy Revenue Growth Strategy

Manage Total Life-Cycle Revenues from Gross Margins:

Product Costs New Products New Products

“Products and Services That Expand Existing Performance Boundaries into the Highly Desirable”
Customer
Perspective
High-Performance Products: Smaller,
Faster, Lighter, Cooler, More New Customer
First to market Segments
Accurate, More Storage, Brighter…

Operations Management Customer Management Innovation Regulatory and Social

Rapid Educate Disciplined, Minimize

Flexible Product Liability
Introduction Customers about High-Performance
Robust And
of New Complex New Product
Internal Processes
Products Products/Services Development Environmental
Perspective Impact

Supply In-line Product

Experimentation Capture Customer
Capacity Development Contribute to
and Ideas for New
for Rapid Improvement Time: From Idea Communities
Products/Services
Growth to Market

“Find, Motivate, Grow, and Retain the Best Talent”

A Capable, Motivated and Technologically Enabled Workforce
Learning and Human Capital Information Capital Organization Capital
Growth
Perspective Computer-Aided
Deep Creative, Versatile Virtual Product Design and
Functional Employees: Cross- Prototyping and Manufacturing
Creativity,
Expertise functional Teamwork Simulation (CAD/CAM) Innovation

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