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Chapter – 2 Learning Objectives

1. How does marketing affect customervalue?
Developing Marketing Strategies and
How is strategic planning carried out at the corporate and
Plans
2.
divisional levels?
3. How is strategic planning carried out at the business unit
level?
4. What does a marketing planinclude?

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The Marketing Plan

Marketing and customer Value
Executive Summary & Table of Contents
 The value delivery process
Current Marketing Situation

Opportunity & Issue Analysis

 The value chain
Objectives

Marketing Strategy  Core competencies

Action Programs

Projected Profit-and-loss
 The central role of strategic planning

Controls

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The value delivery process 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
CHOOSINGTHEVALUE primary and support activities performed to design, produce,
market, deliver, and support its product.
PROVIDINGTHE VALUE

COMMUNICATINGTHEVALUE

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How do Firms Build CA? Core Competencies

 Using Value Chain Analysis in Identifying and Building CA

Core competencies are those capabilities that are critical to a
 a diagramatic representation of the Value Chainidea
business achieving competitive advantage.

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Core business processes Characteristics of Core Competencies

 Market-sensing process
 A source of competitive advantage
 New-offering realization process
 Applications in a wide variety of markets
 Customer acquisition process
 Difficult to imitate
 Customer relationship management process
 Fulfillment management process

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Maximizing Core Competencies Central role of strategic planning

 Managing the businesses as an investment portfolio
 (Re)define the business concept
 (Re)shaping the business scope
 (Re)positioning the company’s brand identity  Assessing the market’s growth rate and the company’s
position in that market

 Establishing a strategy

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Figure 2.1
Marketing plan Strategic Planning, Implementation, and
 The central instrument for directing and coordinating the
Control Processes
marketing effort

 Strategic

 Tactical

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Good Mission Statements Characteristics of SBUs

Focus on limited number of goals  It is a single business or collection of related businesses
 It has its own set of competitors

Stress major policies and values  It has a leader responsible for strategic planning and
profitability

Define major competitive spheres

Take a long-term view

Short, memorable, meaningful

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Tasks Involved in Strategic Planning..

Tasks Involved in Strategic Planning..

 Analytical Models Used in Appraising Businesses Models Used in Appraising Businesses - Ansoff Grid (Ansoff
Product-Market Expansion Grid)
(i) BCG Model (The Boston Consulting Group’s Growth-
Share Matrix)
(ii) Ansoff Grid (Ansoff Product-Market Expansion Grid)

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Strategies Suggested by Ansoff’s Product- Developing the People’s Car

Market Expansion Grid ‘TATA Nano’

 Market penetration
 Market development
 Product development
 Diversification

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Resource allocation to SBUs BCG Market Growth / Market Share Matrix

Resource allocation to strategic business units is done
by differentiating the company’s businesses according to their
Market Growth %
potential and identifying whether they are profitable. L H

BCG competitive advantage matrix

H

This model helps multi-business or single-business Market

organizations allocate organizational resources efficiently Share
and effectively.
L

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Tasks Involved in Strategic Planning..

Goal formulation (MBO)
 Setting Corporate Objectives
 Unit’s objectives must be arranged hierarchically
 Deciding the extent of growth the firm should aim at
 Objectives should be quantitative
 Formulating the Corporate Strategy
 Goals should be realistic
o What should be done with each of the businesses?
❖ Build? Maintain? Harvest? Divest?  Objectives must be consistent

 Resource Allocation

 Objective- Strategy Design Completes Corporate Strategy

formulation

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SWOT Analysis Market Opportunity Analysis (MOA)

 Can the benefits involved in the opportunity be
articulated convincingly to a defined target market?
Strengths
 Can the target market be located and reached with cost-
effective media and trade channels?
Weaknesses
 Does the company possess or have access to the critical
capabilities and resources needed to deliver the customer
Opportunities benefits?

Threats

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Market Opportunity Analysis (MOA) (cont.)

FedEx
 Can the company deliver the benefits better than any actual
or potential competitors?
FedEx added Sunday
 Will the financial rate of return meet or exceed the
deliveries
company’s required threshold for investment?
based on customer
requests and
market demand

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Competitive Advantage
Porter’s Generic Strategies
➢ Competitive Strategies
Overall Cost Leadership ➢ Differentiation
➢ Cost leadership
➢ Strategy – Differentiation Focus
Differentiation Cost Focus

Focus

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Analyzing Competition

The Forces Shaping Competition in an Industry

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What is a Marketing Plan? Levels of a Marketing Plan

A marketing plan is the central instrument for directing
and coordinating the marketing effort.  Strategic  Tactical
It operates at a strategic and tactical level.  Target marketing decisions  Product features
 Value proposition  Promotion
 Analysis of marketing  Merchandising
opportunities  Pricing
 Sales channels
 Service

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Tasks in Marketing Planning..

Marketing Planning
 Analysing the Environment Specific to the Business
o Developing the O-T Profile
 Concerns of Marketing Planning
 Internal Appraisal of the Unit
o Assessing Strengths and Weaknesses of the unit
 Difference between Corporate Level Planning and
Business Level Marketing Planning o Assessing the Status of product Lines, Products, andBrands
o Assessing the Competitive Advantage Available
o SWOT Profile

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Designing an overall marketing plan

Marketing planning
 Analyse the environment
 Consider capabilities
 Decide on target markets
 Adapt marketing mix
 Meet customer needs
 Gain competitive advantage

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Program Formulation and

Planning stages Implementation
 Where are we now?
 McKinsey’s Elements of Success
 How did we get there?
 Where are we going? Skills Strategy
 Where would we like to be?
 How might we get there? Choose a way? Staff Structure
 What will it be like? Will it be worth it?
 How will we know when we’re there? Style Systems
 Are we on course?

Shared values

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The Marketing Plan

Evaluating a Marketing Plan
Executive Summary & Table of Contents

Current Marketing Situation

Opportunity & Issue Analysis ✓ Is the plan simple?

Objectives ✓ Is the plan specific?
Marketing Strategy & tactics
✓ Is the plan realistic?
✓ Is the plan complete?
Action Programs

Financial projections

Implementation & Controls

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ThankYou

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