Developing Marketing Strategies and Plans

Siemens AG has grown through new product innovation and strategic acquisitions

Nike Creates Value

Improving Value Delivery the Japanese Way

0 customer feedback time 0 product improvement time

0 purchasing time
0 setup time

0 defects

Three Vs Approach to Marketing

Define the value segment

Define the value proposition

Define the value network

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.

Cisco Systems Taps into Partner Expertise to Create Value

Benchmarks

Organizational costs and performance measures

Competitor costs and performance measures

Characteristics of Core Competencies

A source of competitive advantage

Applications in a wide variety of

markets
Difficult to imitate

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.

Levels of a Marketing Plan

Strategic
Target marketing

Tactical
Product features Promotion Merchandising

decisions Value proposition Analysis of marketing opportunities

Pricing
Sales channels Service

Strategic Planning (Corporate Headquarters)

Define Corporate Mission (Vision) Establishment of SBU s

Resource allocation to SBU s

Assess growth opportunities Planning new businesses Downsizing old businesses

THE PLANNING PROCESS

Company Mission What is our business Objectives/Goals Support the mission Strategies (Marketing)

Who are our customers

What value are we offering Market Oriented Direction for next 10-20 years AN IMPOSSIBLE DREAM

at different levels
specific Business/Marketing.

VISION

The Strategic Planning, Implementation, and Control Processes

Good Mission Statements

Focus on limited number of goals Stress major policies and values

Define major competitive spheres

Take a long-term view Short, memorable, meaningful

Major Competitive Spheres

Industry
Geographical Vertical channels Products

Competence Market segment

Infosys Technologies Limited

To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors, and society at large.

Biocon
To be an integrated biotechnology enterprise of global distinction.

eBay
We help people trade anything on earth. We will continue to enhance the online trading experiences of allcollectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.

Motorola
The purpose of Motorola is to honorably
serve the needs of the community by providing products and services of superior quality at a fair price to our customers; to do this so as to earn an adequate profit which is required for the total enterprise to grow; and by doing so, provide the opportunity for our employees and shareholders to achieve their personal objectives.

Product Orientation vs. Market Orientation

Company
Xerox
Columbia Pictures Encyclopedia Britannica Carrier

Product
We make copying equipment
We make movies We sell encyclopedias We make air conditioners and furnaces

Market
We improve office productivity
We entertain people We distribute information We provide climate control inside homes

Dimensions That Define a Business

Customer groups

Customer needs

Technology

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

RESOURCE ALLOCATION

RMS : Market share relative to its largest competitor in segment; 0.1 = 10% of leader 10x = Market leader with 10 times the sales of its competitor : Drawn by Log Scale

Stars
Market Growth Rate

Question Marks

?
Cash Cow
0% 10X 1x

Dog
0.5x 0.1x

Relative Market Share

Requires a lot of cash since company needs to spend money on plant, equipment

Strategy : Build
Market leader in high growth market : but not necessarily positive cash flow, because company has to keep money to keep up high growth & fight off competitors CC Stars with falling growth rate : Since it is market leader, so economies of scale & high profit; is not growing Strategy : Hold (strong cc) Harvest (weak cc)

Dog Strategy : Divest

Market Attractiveness
Overall size Annual growth Historical Profit Margin Competitive Intensity Technological Requirements Government Controls Inflationary Impacts Entry Barriers

Business Strength
Market Share Share growth Product Quality Brand Reputation Distribution Network Costs Productive Efficiency Raw Materials Strengths

Environment (Labour, Pollution)

Research & design

Human Resources

THE GENERAL ELECTRIC MODEL

BCG - Growth Share Matrix GE - Multifactor Matrix BUSINESS STRENGTH

The Strategic Planning Gap

3 options for company to fill gap a) Intensive Growth : Whether any opportunities exist for improving existing business performance
Current Product New Product

Current Market

New Market

ANSOFFs PRODUCT-MARKET EXPANSION GRID

ANSOFFs PRODUCT-MARKET EXPANSION GRID

Current Product New Product

Current Market

Market Penetration Strategy

Product Development Strategy

New Market

Market Development Strategy

Diversification Strategy

b) Integrative growth : Integrating with other business

Backward : Forward : Acquiring suppliers ( IBS Travel, Alchemist) Acquiring Distribution/Retail (IBS March) Acquiring Competitor

Horizontal :

c) Diversification Growth When better opportunities exist outside present business: Industry attractive & company has synergy (TIL) 3 Types Concentric Diversification : New business has technology/marketing synergies with current business through customer group may be different (e.g. Coke Water Kinley) Horizontal Diversification : Products that are different technology, but same customers (IBS : ) Conglomerate Diversification : New business with no relation to current technology, product, market ( ITC : matchbox, condoms, sweets)

Developing the Peoples Car TATA Nano

What is Corporate Culture?

Corporate culture is the shared
experiences, stories, beliefs, and norms that characterize an organization.

The Business Unit Strategic Planning Process

SWOT Analysis
Strengths Weaknesses Opportunities Threats

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?

Market Opportunity Analysis (MOA) (cont.)

Can the company deliver the benefits

better than any competitors?

actual

or

potential

Will the financial rate of return meet or

exceed the companys required threshold for investment?

FedEx
FedEx added Sunday deliveries based on customer requests and market demand

Opportunity Matrix

Threat Matrix

Goal Formulation and MBO

Units

objectives

must

be

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

Porters Generic Strategies

Overall Cost Leadership

Differentiation
Focus

Categories of Marketing Alliances

Product or Service Alliances

Promotional Alliances
Logistics Alliances Pricing Collaborations

MARKET PLANNING
Analyze Marketing opportunities : select target market Developing Marketing Strategy Planning Marketing Program Managing Marketing Effort : control after organizing and implementation in turn achieving goals (sales, profits) is marketing strategy appropriate

Marketing Plan Contents

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

Evaluating a Marketing Plan

Is the plan simple? Is the plan specific? Is the plan realistic? Is the plan complete?