CHAPTER 2: MARKETING STRATEGIES AND PLANS

Marketing Strategy – is an explanation of the goals needed by a company to accomplish its marketing
efforts.

Marketing Plan – is how the company is going to attain those marketing strategy should go hand in
hand.

Strategy - is the thinking and planning is the doing

Strategy – is derived from the ancient Greek word “strategos”. Its plain translation meant “the general’s
art.

A strategy is fundamental pattern of present and planned objectives, resource deployments, and
interactions of organization with markets.

 It says that a strategy should always be able to specify:

1. What - objectives to be accomplished
2. Where – as in, on which industries and product markets to focus
3. How - to allocate resources and activities, so as to meet environment opportunities and threats
in each product market.
4. Component of Strategy

Strategy- is a design or plan for achieving a company’s policy goal and objectives.

 There are five components or sets of issues within a well-developed strategy:

1. Scope – the scope of the company is the extensiveness of its strategic sphere such a number of
types of industries, product lines, and market segments.
- This common line among its different activities and product-markets describes the
fundamental nature of what its business is all about and what it should be.
2. Goals and objectives - strategies need also to specify preferred levels of accomplishment on one
or more facets of performance such as volume growth, profit contribution, roi.
3. Resource deployments – every organization has restricted financial and human resources.
Formulating strategy – a strategy also entails coming to a decision hoe those resources are to
be acquired and apportioned, across businesses, product markets and so on.
4. Identification of a sustainable competitive advantage - one vital part of strategy is a plan of
how the company will participate in each business and product-market within its industry.
5. Synergy – is present when the company’s businesses, product markets, resource deployments,
and competencies balance and strengthen one another.
 Hierarchy of Strategies
1. Corporate strategy - are managed by the corporate level, which is the top level on any or
organization.
Corporate managers- are concerned with the issues f entire company, and their decisions or
actions influence all other organizations level.
 2. Business level strategy – the business level consists of smaller units within the whole
organization that are commonly administered as self-contained businesses.
3. Functional strategy – the functional level comprises all the different functional areas within
a business unit.
Marketing – form a vital part of this level and strategy, as a functional strategy, can be
subdivided into promotion, sales, distribution, pricing strategies with each sub-function
strategy.

What is corporate strategy?

Corporate strategy- focuses primarily on profitability.

Corporate strategies - include creating an organizational structure, debt reduction to improve the
company’s balance sheet, diversifying the product or service line to increase profits or decreased
dependence.

Creating a company strategy – is the final step in this process.

Corporate mission- traditionally acted as a way to tell potential shareholders and investors more about
a company and its purpose.

Mission- should be concrete and include goal-oriented.

Example Mission statement of Philippines Companies

 Philippine Long Distance Telephone Co. (PLDT) – PLDT will be preferred full-service provider of
voice, video and data at the most attractive level of price, service quality, content and coverage.
 Cebuana Lhuillier- to enable more Filipinos to have access to final solutions.
 Philippine National Bank – we are leading, dynamic Filipino financial services group with a
global presence committed to delivering a whole range of quality product and service
 Bench - when create, we inspire, when we make, we innovate, when we lead, we serve.
 Meralco - Our mission is to provide our customer the best value in energy products or services.

Defining the Corporate Mission

Mission Statement- is a statement of the organization’s reason for being, its purpose or what it wants to
achieve in the larger environment.

An effective mission statement clearly defines who the customer is and what services and products the
business intends to offer.

Good mission statement have three major characteristics:

1. Mission statement focus on a limited number of goals

2. Mission statement highlights the company’s major policies and values.
 3. Mission statement highlights define the major competitive spheres within which the company
will operate.

Ethics Principles and Social Responsibility

Ethics – in the broadest sense of the word, is rising to the top of the corporate agenda.

Companies must have to develop corporate marketing ethics policies, because not all managers have
fine moral understanding.

A philosophy of socially responsible and ethical behavior should be worked out by every company and
marketing manager.

 Elements of the Mission statement

Mintzberg - according to him “a mission statement describes the organization’s basic function in society,
in terms of the products and services it produces for its customers.

1. A purpose – why does the business exist? It is create wealth for shareholders?
2. A strategy and strategic scope – a company’s strategic scope defines the boundaries of its
operations.
3. Policies and standards of behavior – a mission needs to be converted into everyday actions.
4. Values and culture- the values of a business are fundamental, frequently implicit, beliefs of the
people who working in the business.

 Characteristics of Mission
1. It should be feasible to - a mission should always aim high, but it should not be an
impossible statement.
2. It should be precise - a mission stamen should not be so narrow as to restrict the company’s
activities.
3. It should be clear - a mission should be clear enough to lead to action.
4. It should be motivating - a mission stamen should be motivating for members of the
organization and of society, and they should feel it meaningful working for a such company
or beings its customers.
5. It should be distinctive - a mission statement, which is indiscriminate, is likely to have little
impact on.
6. It should be indicate major components of strategy – a mission statement along with the
organizational purpose should indicate the major components of the strategy to be
adopted.
7. It should be indicate how objectives are to be accomplished- a mission statement should
indicate the broad strategies to be adopted.

Corporate vision
Company vision – seeks to outline where the company is headed and what values are guiding that
journey.

The vision statements should not need revising often.

A vision statement can be written as simple as a single sentence or can be lengthy as a short paragraph.

Corporate objectives – setting up the objectives is the first task done by the marketing managers.

Marketing Objectives- set out what a business wants to achieve from its marketing activities.

 SMART objectives
S – details exactly what needs to be done
M – achievement or progress can be measured
A – objective is accepted by those responsible
R – objective is possible to attain (important for motivational effect)
T - time period for achievement is clearly stated

Competitive advantage – is a gain over competitions achieved by offering consumers greater value,
either by means of lower prices or by providing greater benefits and service that justifies higher prices.

There are different types of competitive advantage that companies can actually use, which could be in
the form of:

1. Cost competitive advantage - it is when a company is able to utilize its skilled workforce,
inexpensive raw materials, controlled cost, and efficient operations to create maximum value to
consumers.
 There are few other important ways used by technical companies that cost can be kept lower
to use as cost competitive advantage, such as:
a. Product Design - this is important to companies that utilize advanced technology.
b. Reengineering – this is used by companies that are capable to slash costs by means of
redesigning and creating improvements to their products, for instance Apple.
c. New delivery method – this is created by some companies for their product or service,
resulting in great cost savings that they are able to share with their customers.
2. Product/service differentiation - this is another way that companies can have a competitive
advantage in the marketplace.

Corporate Growth Strategies

All companies have plans to grow their business and increase sales and profits.

 Some common growth strategies in business include the following:

1. Intensive Growth Strategies - Intensive growth is when a company grows by expanding its
product line or it’s market reach.
 a. Market Penetration - one growth strategy is market penetration. A company uses a
market penetration strategy when it decides to market current products within the
same market it has been using.
b. Market Development – this strategy is to devise a way to sell more of current product
to an adjacent market.
c. Alternative channels - this growth strategy involves pursuing customers in a different
way such as selling products online.
d. Product development – a classic strategy, it involves developing new products to sell to
both current and new customers.
e. Diversification - intensive growth strategies in business also include diversification,
where a company will sell new products to new markets.
Marketing research - is essential because a company will need to determine if
consumers in the new market will potentially like the new products.
2. Integrative Growth Strategies – Integrative growth strategy is used for growth in which a
company acquires some other element of the chain of distribution pf which it is a member.
a. Horizontal - Horizontal growth strategy would involve buying a competing business or
businesses.
b. Backward - a backward integrative growth strategy would involve buying one of the
company’s suppliers as a way to better control its supply chain.
c. Forward – a company performs forward integration strategy when it merges with or
purchasers an organization involved in the distribution of its products.
d. Complete or Balanced - this strategy means a company controls all components from
raw materials to final delivery.

Strategic Corporate Resources

These are the corporate resources that a business needs to put in place to pursue its chosen strategy.
Business resources can usefully be grouped under several categories:

1. Financial Resources - financial resources concerns the ability of the business to finance its
chosen strategy.

An audit of financial resources would include assessment of the following:

a. Existing finance funds

i. Cash balances
ii. Bank overdraft
iii. Bank and other loans
iv. Shareholder’s capital
v. Working (e.g. stocks, debtors) already invested in the business
vi. Creditors (suppliers, governments)
b. Ability to raise new funds
2. Human resources- the heart if the issue with human resources is the skills-base of the business.
 An audit of financial resources would include assessment of the following:
a. Existing staffing resources
b. Changes to resources
3. Physical resources- the category of physical resources covers wide range of operational
resources concerned with the physical capability to deliver a strategy. Thes includes:
a. Production facilities
b. Marketing facilities
c. Information technology

BUSINESS STRATEGIES AND MARKETING

The decision a company make on its way to creating, maintaining and using its competitive advantage
are business-level strategies.

COST LEADERSHIP

Using the cost leadership as strategy, the objective is to become the lowest-cost producer in the
industry.

Cost leadership - potentially is so important.

A strategy of cost leadership needs close cooperation between all the functional areas of a business.

COST FOCUS

Cost focus – exploits differences in cost behavior in some segments.

Differentiation Leadership - using the differentiation leadership, the business the targets much larger
markets aim to attain competitive advantage across the whole of an industry.

Differentiation - is about charging a premium price that more than covers the additional production
costs and about providing customers obvious reasons to desire the product over other, less
differentiated products.

Differentiation Focus - is the classic niche marketing strategy.

Defender Strategy - organization applying a defender strategy endeavor to shield their market from new
competitors.

Defenders - are less pro-active, and can be seen as being protection oriented, seeking stability by
maintaining current position.

Prospector strategy – organization implementing a prospector strategy are innovative, seek out new
opportunities take risks and grow.

Prospectors- maintain an entrepreneurial attitude and explore the competitive environments with the
aim of developing new products and market opportunities.
Analyzer Strategy – organization implementing analyzer strategies attempt to maintain their current
business and to be somewhat innovative in new business.

Analyzers – are somewhere between prospectors and defenders, balancing the opportunity seeking
nature of prospect against the risk aversion of defenders.

Analyzers – are corporations that operate in at least two different product- market areas, one stable
and one variable.

Reactor Strategy

Reactors – are organizations in which top management often identify change and uncertainty taking
place in their organizational environment but are incapable to respond effectively.

The Marketing Strategy

A marketing strategy can serve as the foundation of a marketing plan.

 Barriers to Effective Implementation of a Marketing Strategy

1. External pressures of the company - these are pressures originating from the company’s
external environmental such as social, legal, economic, political and technological
2. Internal pressures on the marketing function - these are pressures from inside the
company.
a. Leadership - the ultimate success of implementation of any strategic plan will depend
on the degree to which top management buys into the process.
b. Organization culture - there many forms of organization culture and in reality, few of
these are customers or market focused.
c. organizational process – In numerous organizations, the current company processes are
basically not intended to be able to convey the planned marketing strategy as is
proposed.
d. Functional policies - how the companies staff manages daily business activities is
determined by functional policies and procedures.
e. Resources – the proposed marketing strategy may necessitate the distribution of major
supplementary resources of some functions.
f. Evaluation and control procedures - short of fitting monitoring and evaluation and
procedures in a company will be considerable lump to the success implementation of
any strategy.
3. Pressures contained in the marketing function itself – these are a number of aspects of the
marketing department or function which can also work as likely obstruction to the progress
and implementation of marketing strategy such as:
a. Marketing interference with other functions – How marketing interrelates with other
functions will decide the successful implementation of the strategy.
b. The role of marketers – the responsibility played by marketers in their company
establishes the intensity of implementation of strategy.
 c. Marketing feedback – successful implementation of marketing strategy relies on how
much; how applicable and how good information is and how well it is unified and acted
upon.

BUILDING IMPLEMETATION EFFECTIVENESS

Managers are essential facilitators in the implementation process.

Organizational structure – some types of organizational structure support implementation

Incentives – a variety of rewards may facilitate in accomplishing successful implementation.

Communications – speedy and correct movement of information through the organization is essential in
implementation.

STRATEGY CONTROL

Control – means attempting to make certain that behavior and system match and support
predetermined corporate objectives and policies.

 The control process entails the following steps:

1. Set targets – ideally this is incorporated into overall marketing planning
2. Predetermining the method of measurements – performance assessment
3. Measured - results are contrasted with the predetermined targets and corrective action if
necessary is carried out.
 Typical inputs include the following:
1. Finance - such as investments, working capital and cash.
2. Operatives – such as capacity, usage efficiency and application of machines, systems and
other assets.
3. People – such as numbers, quality and skills of staff.

Output – is considered in terms of general system performance,

Performance – is resultant from the blend of efficiency and effectiveness.

Efficiency- this is about how well inputs are utilized.

Effectiveness – this is about doing the right things.

 Six principles to ensure effective control are here:

a. Involvement - it is attained through promoting participation int the process.
b. Target setting – the target criteria should be objective and quantifiable.
c. Focus – it is recognizing the disparity between the symptoms and the cause of the problem.
d. Effectiveness – the tendency exists to appraise efficiency in contrast to effectiveness.

Efficiency – is the usage and productivity of assets.

 Effectiveness- is about doing the right things.

e. Management by exception - management interest is directed to areas of need.

Problems of control

 Three problems are commonly connected with the control system.

1. The system can be expensive - the benefits of control and succeeding improvements are
overshadowed by the cost of the control mechanism.
2. Control promotes an outlook of inspection as opposed to developments- systems
frequently take care of the symptom rathe than the cause of the problem.
3. Control systems repress effort and creativity- such system endorse consistency and
conformance to pre-set targets

The marketing plan

Marketing plan - is a business document outlining the marketing strategy and tactics.

A marketing plan is not a static document.

 15 key sections that must be included in a marketing plan:

1. Executive summary - this section merely summarizes each of the other sections of
marketing plan.
2. Target customers - this section describes the customers a company is targeting/
3. Unique selling proposition (USP) – having a strong unique selling proposition is of serious
importance importance as it distinguishes a company from competitors.
4. Pricing & positioning strategy – the pricing and positioning strategy must be aligned.
5. Distribution plan – the distribution plan specifies how customers will purchase from a
company.
6. Offers of the company – offers are special deals a company put together to secure more
new customers and drive past customers back to it.
7. Marketing materials - marketing materials are the collateral used to promote a business to
current and prospective customers.
8. Promotions strategy – the promotion section is one of the most key sections of a marketing
strategy plan and details how company will reach new customers.
9. Online marketing strategy – like it or not, most customers go online these days to find and
or appraise ne products or services to purchase.
The four components to a company’s online marketing strategy are as follows:
a. Keyword strategy – identify what keywords to optimize the website for
b. Search engine optimization strategy – document updates will make one’s website so it
shows up more notably for top keywords.
c. Paid online advertising strategy – write down the online advertising programs that will
be used to reach target customers.
 d. Social media strategy – document how social media will be used as websites to attract
customers.
10. Conversion strategy - conversion strategies are the techniques as company employs to turn
prospective customers into paying customers.
11. Joint ventures & partnership - joint ventures and partnership are agreements better
monetize existing customers.
12. Referral strategy - a strong customer referral program could revolutionize a company’s
success.
13. Strategy for increasing transaction prices - while a company primary goal when conversing
with prospective customers is often to secure the sale.
14. Retention strategy - too many organizations spend too much tine and energy trying to
secure new customers versus investing in getting existing customers to buy more often.
15. Financial projections - the concluding part of a marketing plan is to construct financial
projections.