Business Marketing Planning:

Strategic Perspectives

New Strategies

New strategies come from new ideas

New ideas often come from new voices

To meet both domestic and foreign

competition, B2B firms are recognizing the vital
role of marketing in developing and
implementing successful strategies

Effective Strategies
Effective strategies share a:
A. Responsiveness to market needs
B. Ability to exploit the organizations special
competencies
C. Ability to make valid assumptions about
environmental trends
D. Ability to take advantage of competitive
behavior
E. Realistic basis for securing and sustaining a
competitive advantage

Hierarchy of Strategies 3 parts

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?
How and what is the most efficient way to get to the market?
What are our distinctive skills?

Functional Strategy

How can we allocate resources to most efficiently and effectively support

business-level strategies?
How can we use resources to meet the firms objectives within a specific
product market?

Cross-Functional Connections Explore Interrelationships

between Marketing and Four Business Functions

B2B TOP PERFORMERS

Marketing managers who know how to get the
job done (i.e., facilitate negotiations across
functional areas) possess certain characteristics:
1.Responsive & timely
2.Perspective-taking ability to understand and
anticipate other functional managers priorities
3.Open, frequent and high quality communication
style
4.Their word is their bond and follow through
5.Able to develop a strong network
6

Successful marketing managers know

how to integrate functional areas.
They:
1.
2.
3.

Understand their capabilities

Capitalize on their strengths
Facilitate strategies that are responsive
to customer needs

Successful marketing managers assume

a central role in strategy
implementation.

Strategy Success
For a strategy to succeed:

Each firm needs to have a business

concept that separates them apart
from their competition.

4.

There are 4 components:

Customer Interface
Core Strategy
Strategic Resources
Value Network

Refer to next Figure

1.
2.
3.

Value Network
A value network includes those who complement and
enrich the organization.
Do

we have good relations with suppliers, partners,

vendors and other supporters?
Can we partner with others in such a way that we can
use their assets as if they were our own?
Example: Using UPS as shipping service

Competitive positioning is about being

different and competing in a distinct way
by using a unique mix of customer
values.

Michael Porter states there are six

fundamentals principles that a company
should employ for establishing and
maintaining a distinct strategic position.

Michael Porter Asks: What is Strategic Positioning?

Michael Porter & Strategic

Positioning
Right goal: Superior long term ROI instead of

performance goals (i.e., % share market)

Create and deliver a good customer value proposition
Create a distinctive value chain by offering or
performing similar features but in a different way
Accept trade-offs: You cant be everything to everyone,
therefore give up some things and reinforce others that
enhance the distinctions
Emphasize those element that facilitate the strategic fit
and reinforce them
Continuity of direction means to define a distinctive
value proposition and build strong customer relations by
staying consistent to that plan

Building the Strategic Plan

Companies need to do many things well.
However, underperformance is caused by a breakdown

between strategy and operations.

Kaplan & Norton contend that successful strategic

execution involves two rules:

a. Understand the Management cycle that links
strategy and operations, and
b. Know what tools to apply at each stage of the
cycle.

The Management System

This system allows

management to plan,
coordinate and monitor
the links between
strategy and operations.

The Management System

Involves 5 stages:
1.
2.
3.
4.
5.

Strategy development
Translate strategy into objectives
Design key processes
Monitor performance
Adapt the strategy

2 Key tools for successful strategy implementation are:

Balanced Scorecard
2. Strategy Map
1.

Balanced Scorecard
Developed by Kaplan and Norton.
We know measures are central to any
strategy.
The Balanced Scorecard is a
comprehensive system for converting a
companys vision and strategy into a tightly
connected set of performance measures.

Balanced Scorecard
Examines the performance of a
business unit from four
perspectives:
1.Financial
2.Customer
3.Internal Business
4.Learning and growth

The Balanced Scorecard - Translating Strategy Into

Operational Terms
1. Financial Perspective
Long-Term
Shareholder
Value

Productivity

Revenue
Growth

Cause-and-Effect Relationships
Defines the chain of logic by which
intangible assets will be
transformed to tangible value.

2. Customer Perspective
Product/Service Attributes
Price

Quality

Time

Relationship
Function

Partnership

3. Internal Process Perspective

Manage
Operations

Manage
Customers

Manage
Regulatory
and Social
Processes

Manage
Innovation

4. Learning and Growth Perspective

Human
Capital

Information
Capital

Organization
Capital

Image
Brand

Customer Value Proposition

Clarifies conditions that create
value for the customer.
Value-Creating Processes
Defines processes that transform
intangible assets into customer
and financial outcomes.
Clustering Assets and Activities
Defines intangible assets to be
aligned and integrated to create
value.

Cause & Effect Relationship defines the

logic that transforms intangible assets into
tangible assets.

Consideration is give to:

1. Productivity
2. Long-term shareholder value
3. Revenue growth

Balanced Scorecard seeks to match

financial objectives with business units
growth and other life cycle stages.

Growth stage:
Operation: This stage is where the company
needs to commit resources for new product or
service.
Financial objectives:
Know sales growth rate by segment
Know % of revenue from new product, services and
customers

Sustain Stage:
Operation: This stage represents majority of
business where the strategy is to maintain and
grow slowly.
Financial objectives:
Focus on share of target customers and account
Know customer and product line profitability

Harvest Stage:
Mature SBUs or products
Operations: Provide only enough investment to
maintain product equipment and capabilities.
Financial Objectives:

Goal is payback
Know customer and product-line profitability

The Balanced Scorecard - Translating Strategy Into

Operational Terms
1. Financial Perspective
Long-Term
Shareholder
Value

Productivity

Revenue
Growth

Cause-and-Effect Relationships
Defines the chain of logic by which
intangible assets will be
transformed to tangible value.

2. Customer Perspective
Product/Service Attributes
Price

Quality

Time

Relationship
Function

Partnership

3. Internal Process Perspective

Manage
Operations

Manage
Customers

Manage
Regulatory
and Social
Processes

Manage
Innovation

4. Learning and Growth Perspective

Human
Capital

Information
Capital

Organization
Capital

Image
Brand

Customer Value Proposition

Clarifies conditions that create
value for the customer.
Value-Creating Processes
Defines processes that transform
intangible assets into customer
and financial outcomes.
Clustering Assets and Activities
Defines intangible assets to be
aligned and integrated to create
value.

2. CUSTOMER PERSPECTIVE

Clarifies conditions that create

customer value
Take into consideration:
1.
2.
3.

Product/Service attributes (price, quality,

time & function)
Relationships (partnerships)
Image (brand)

2. CUSTOMER PERSPECTIVE: CORE

MEASURES
Market Share

Customer Acquisition

Proportion of business in a particular market by:

a.% share of market
b.Total number of customers
c.Dollars spent or unit volume sold
Tracks in absolute or relative terms rate at which SBU
attracts and/or wins new customers

Customer Retention

Tracks in absolute or relative terms rate at which SBU

retains new customers

Customer Satisfaction

Matches the satisfaction level of customers on specific

performance criteria such as quality, service, delivery,
reliability, etc.
Assesses the net profit on each customer, or a segment,
after deducting unique expenses allocated to support
25
that customer or segment

Customer Profitability

3. Internal Process Perspective

This highlights the value-creating processes

that define the other processes that will

transform intangible assets into tangible
assets.
It considers:
1.
2.
3.
4.

Operations management
Customer management
Innovation management
Regulatory & social processes management

3. Aligning Internal Business Processes

Key Value Propositions & Customer Strategy

The Focus of Internal Business Processes

Operations Management Customer Relationship Management

Innovation Management

Low Total Cost Strategy

Highly Efficient Operating

Processes
Efficient, Timely Distribution

Ease of Customer Access

Superb Post-Sales Service

Seek Process Innovations

Gain Scale Economies

Product Leadership
Strategy

Flexible Manufacturing
Processes
Rapid Introduction of
New Products

Capture Customer Ideas for

New Offering
Educate Customers about Complex
New Products/Services

Disciplined, High-Performance
Product Development
First-to-Market

Complete Customer
Solutions Strategy

Deliver Broad Product/

Service Line
Create Network of Suppliers
for Extended Product/
Service Capabilities

Create Customized Solutions

for Customers
Build Strong Customer
Relationships
Develop Customer Knowledge

Identify New Opportunities

to Serve Customers
Anticipate Future Customer
Needs

Lock-in
Strategies

Provide Capacity for

Proprietary Product/
Service
Reliable Access and

Create Awareness
Influence Switching Costs of
Existing and Potential
Customers

Develop and Enhance

Proprietary Product
Increase Breadth/
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.

The Balanced Scorecard - Translating Strategy Into

Operational Terms
1. Financial Perspective
Long-Term
Shareholder
Value

Productivity

Revenue
Growth

Cause-and-Effect Relationships
Defines the chain of logic by which
intangible assets will be
transformed to tangible value.

2. Customer Perspective
Product/Service Attributes
Price

Quality

Time

Relationship
Function

Partnership

3. Internal Process Perspective

Manage
Operations

Manage
Customers

Manage
Regulatory
and Social
Processes

Manage
Innovation

4. Learning and Growth Perspective

Human
Capital

Information
Capital

Organization
Capital

Image
Brand

Customer Value Proposition

Clarifies conditions that create
value for the customer.
Value-Creating Processes
Defines processes that transform
intangible assets into customer
and financial outcomes.
Clustering Assets and Activities
Defines intangible assets to be
aligned and integrated to create
value.

4. Learning & Growth

Intangible assets must be aligned to long term

strategy to achieve long term growth.
Intangible assets represent the capabilities of
the companys employees to satisfy customer
needs.
They include:
Human capital
Information capital
Organization capital

4. Learning & Growth (continued)

To implement strategy, the organization needs:
1. Human Capital: Availability of employees
with skills & talent
2. Information Capital: Availability of
information systems and infrastructure
3. Organization Capital: The culture,
leadership, incentives and teamwork

Benefit of the Balanced Scorecard

The

Balanced Scorecard helps align

the firms tangible and intangible
assets with the organizations
strategic goals.

See

next frame:

3. Aligning Internal Business

Processes

3. Aligning Internal Business Processes

Key Value Propositions & Customer Strategy

The Focus of Internal Business Processes

Operations Management Customer Relationship Management

Innovation Management

Low Total Cost Strategy

Highly Efficient Operating

Processes
Efficient, Timely Distribution

Ease of Customer Access

Superb Post-Sales Service

Seek Process Innovations

Gain Scale Economies

Product Leadership
Strategy

Flexible Manufacturing
Processes
Rapid Introduction of
New Products

Capture Customer Ideas for

New Offering
Educate Customers about Complex
New Products/Services

Disciplined, High-Performance
Product Development
First-to-Market

Complete Customer
Solutions Strategy

Deliver Broad Product/

Service Line
Create Network of Suppliers
for Extended Product/
Service Capabilities

Create Customized Solutions

for Customers
Build Strong Customer
Relationships
Develop Customer Knowledge

Identify New Opportunities

to Serve Customers
Anticipate Future Customer
Needs

Lock-in
Strategies

Provide Capacity for

Proprietary Product/
Service
Reliable Access and
Ease of Use

Create Awareness
Influence Switching Costs of
Existing and Potential
Customers

Develop and Enhance

Proprietary Product
Increase Breadth/
Applications of Standard

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.

Strategy Map
The cause & effect components of the

Balanced Scorecard template is

transformed into visual model called the
strategy map.
The strategy map allows the company to

describe and illustrate its:

Objectives, initiatives & targets
Measurements used to assess performance
Linkages which are the foundation of the

strategic direction

Strategy Map
The next frame illustrates a firms strategic map
for pursuing a product leadership strategy.
To start the company emphasize:
Productivity

strategy &
Revenue Growth strategy
Refer to Strategy Map Template

Balanced Scorecard
Strategy Map Template: Product Leadership
Financial
Perspective

Long-Term Shareholder Value

Productivity Strategy

Revenue Growth Strategy

Manage Total Life-Cycle

Product Costs

Revenues from
New Products

Gross Margins:
New Products

Products and Services That Expand Existing Performance Boundaries into the Highly Desirable

Customer
Perspective
High-Performance Products: Smaller,
Faster, Lighter, Cooler, More
Accurate, More Storage, Brighter

First to market

Operations Management

Internal
Perspective

Rapid
Introduction
of New
Products

Flexible
Robust
Processes

Supply
Capacity
for Rapid
Growth

Customer Management

In-line
Experimentation
and
Improvement

New Customer
Segments

Innovation

Regulatory and Social

Educate
Customers about
Complex New
Products/Services

Disciplined,
High-Performance
Product
Development

Minimize
Product Liability
And
Environmental
Impact

Capture Customer
Ideas for New
Products/Services

Product
Development
Time: From Idea
to Market

Contribute to
Communities

Find, Motivate, Grow, and Retain the Best Talent

A Capable, Motivated and Technologically Enabled Workforce

Learning and
Growth
Perspective

Information Capital

Human Capital
Deep
Functional
Expertise

Creative, Versatile
Employees: Crossfunctional Teamwork

Virtual Product
Prototyping and
Simulation

Computer-Aided
Design and
Manufacturing
(CAD/CAM)

Organization Capital

Creativity,
Innovation