2

Developing Marketing
Strategies and Plans

Marketing Management
A South Asian Perspective, 13th ed
 Chapter Questions

• How does marketing affect customer

value?
• How is strategic planning carried out at
different levels of the organization?
• What does a marketing plan include?

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 Siemens AG has grown through new
product innovation and strategic
acquisitions

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 Nike Creates Value

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 Three V’s Approach to Marketing

Define
Define the
the value
value segment
segment

Define
Define the
the value
value proposition
proposition

Define
Define the
the value
value network
network

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 What is the Value Chain?

The value chain is a tool for identifying

ways to create more customer value
because every firm is a synthesis of
primary and support activities
performed to design, produce, market,
deliver, and support its product.

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 Cisco Systems Taps into Partner
Expertise to Create Value

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 Core Business Processes

• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship management
process
• Fulfillment management process

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 Characteristics of Core Competencies

• A source of competitive advantage

• Applications in a wide variety of markets
• Difficult to imitate

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 Netflix’s Distinctive Capabilities

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 Firms Should Consider Key Questions

• Can we learn from the past?

• How should the present be evaluated?
• What do we envision for the future?

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 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 coprosperity among
key stakeholders.

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 Intel’s New Brand Identity:
Leap Ahead

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 What is a Marketing Plan?

A marketing plan is the central

instrument for directing and
coordinating the marketing effort.
It operates at a
strategic and tactical level.

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 Levels of a Marketing Plan

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

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 Figure 2.4 The Strategic Planning,
Implementation,
and Control Processes

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 Corporate Headquarters’
Planning Activities

• Define the corporate mission

• Establish strategic business units
(SBUs)
• Assign resources to each SBU
• Assess growth opportunities

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 Characteristics of SBUs

• It is a single business or collection of

related businesses
• It has its own set of competitors
• It has a leader responsible for strategic
planning and profitability

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 ITC - OVERVIEW
 Products
 Awarded as:
1. Most respected company by BUSINESS
WORLD
2. First company in India to voluntarily seek
corporate governance rating.
 Vision of the company :
“Enduring value for the nation. For the
Shareholders.”
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 STRATEGIC BUSINESS UNITS
• FMCG
1. Cigarettes
2. Foods
3. Lifestyle retailing
4. Greeting, Gifting and stationery
5. Safety matches
6. Agarbattis

• HOTELS

• PAPERBOARDS AND PACKAGING

1. Paperboard and speciality papers
2. Packaging
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• AGRI-BUSINESSES
1. Agri exports : E-choupal
2. Leaf Tobacco

• Information Technologies

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 MARKETING PLANNING

• Business Portfolio Analysis

• Strategic Business Units (SBUs) are key
business units within diversified firms
• A division, product line, or single
product may define an SBU
• Firms redesign their SBUs as market
conditions

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 THE BCG MATRIX

• The BCG Matrix method is the most well-

known portfolio management tool. It is
based on product life cycle theory. It was
developed in the early 70s by the Boston
Consulting Group.

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 THE BCG MATRIX

• The BCG Matrix can be used to

determine what priorities should be
given in the product portfolio of a
business unit. To ensure long-term
value creation, a company should have
a portfolio of products that contains
both high-growth products in need of
cash inputs and low-growth products
that generate a lot of cash.
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 THE BCG MATRIX

• The Boston Consulting

Group Matrix has 2 dimensions:
market share and market growth.
• The basic idea behind it is: if a product
has a bigger market share, or if the
product's market grows faster, it is
better for the company

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 FOUR SEGMENTS OF BCG MATRIX
Market Share/ Market Growth Matrix:
A marketing planning tool that classifies a
firm’s SBU’s or products according to
industry growth rates and market shares
relative to competing products
• Stars
• Cash Cows
• Dogs
• Question Mark

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 FOUR SEGMENTS OF BCG MATRIX

• Stars (high growth, high market share)

• Cash Cows (low growth, high market
share)
• Dogs (low growth, low market share)
• Question Mark (high growth, low
market share)

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 BCG Chart
SBU Turnover Competitors RMS AGMR
(in turnover
crores)
FMCG 11330 HUL - 9954 1.14 13
Paperboard 1150 East India 0.24 16
and board and
packaging paper mill -
4800
Agribusines 1955 Reliance - 2.6 60
s 750
Hotels 777 TATA – 491 1.58 36
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IT 3724 TATA -13250 0.28 60
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 Good Mission Statements

Focus
Focus on
on limited
limited number
number of
of goals
goals

Stress
Stress major
major policies
policies and
and values
values

Define
Define major
major competitive
competitive spheres
spheres

Take
Take aa long-term
long-term view
view

Short,
Short, memorable,
memorable, meaningful
meaningful

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 Infosys Technologies Limited

“To achieve our objectives in an environment

of fairness, honesty, and courtesy towards
our clients, employees, vendors, and society
at large.”

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 Biocon

“To be an integrated biotechnology enterprise

of global distinction.”

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 eBay

“We help people trade anything on earth.

We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”

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 Table 2.3
Product Orientation vs. Market Orientation

Company Product Market

Xerox We make copying We improve office
equipment productivity
Columbia We make movies We entertain
Pictures people
Encyclopedia We sell encyclopedias We distribute
Britannica information
Carrier We make air conditioners We provide climate
and furnaces control inside
homes
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 Dimensions That Define a Business

Customer
groups

Customer
Technology
needs

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Figure 2.5 The Strategic Planning Gap

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 Strategies Suggested by Ansoff’s
Product-Market Expansion Grid

• Market penetration
• Market development
• Product development
• Diversification

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 Developing the People’s Car
‘TATA Nano’

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 What is Corporate Culture?

Corporate culture is the shared

experiences, stories, beliefs, and norms
that characterize an organization.

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 Tactics for Managing Change

• Avoid the innovation title for the team

• Use the buddy system
• Set the metrics in advance
• Aim for quick hits first
• Get data to back up your gut

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 Figure 2.7 The Business Unit
Strategic Planning Process

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 SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats
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 Market Opportunity Analysis (MOA)

• Can the benefits involved in the opportunity

be articulated convincingly to a defined target
market?
• 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?

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 Market Opportunity Analysis (MOA)
(cont.)
• Can the company deliver the benefits
better than any actual or potential
competitors?
• Will the financial rate of return meet or
exceed the company’s required
threshold for investment?

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 FedEx

FedEx added
Sunday deliveries
based on customer
requests and
market demand

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 Figure 2.8 Opportunity Matrix

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 Figure 2.8 Threat Matrix

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 Goal Formulation and MBO

• Unit’s objectives must be hierarchical

• Objectives should be quantitative
• Goals should be realistic
• Objectives must be consistent

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 Porter’s Generic Strategies

Overall Cost Leadership

Differentiation

Focus

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 Categories of Marketing Alliances

Product
Product or
or Service
Service Alliances
Alliances

Promotional
Promotional Alliances
Alliances

Logistics
Logistics Alliances
Alliances

Pricing
Pricing Collaborations
Collaborations

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 Marketing Plan Contents

 Executive summary
 Table of contents
 Situation analysis
 Marketing strategy
 Financial projections
 Implementation controls

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 Evaluating a Marketing Plan

 Is the plan simple?

 Is the plan specific?
 Is the plan realistic?
 Is the plan complete?

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 Marketing Debate

 What good is a mission statement?

Take a position:
1. Mission statements are critical to a
successful marketing organization.
or
2. Mission statements rarely provide
useful marketing value.
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 Marketing Discussion

 What implications do Porter’s value

chain and the holistic marketing
orientation model have for
marketing planning?

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