1. Developing Marketing Strategies and Plans
Chapter : 2
Developing Marketing Strategies and Plans

2. Value delivery process
Traditional:
Make the product: Design-Procure-Make
Sell the product: Price-Sell-Promote-Distribute-Service
Value creation and delivery sequence:
Choose the value: Segmentation-market selection (targeting)-value positioning – essence of strategic marketing
Modern:
Provide the value: Product development-service development-pricing-sourcing/making-distributing
Communicate the value: Sales force-sales promo-advertising
Tactical marketing

3. Value Chain By Michael Porter
It is a tool for identifying ways to create more customer value.
According to this model, every firm is a synthesis of activities performed to design, produce, market, deliver and support its product.

4. Value chain Firm Infrastructure Human Resource Management margin
Technological Development
Procurement – Quality of Material
Inbound Operations Outbound Marketing Service margin
logistics logistics and sales
Primary Activities
Supporting Activities

5. Core Competency
For its core business – firms need labour,materials,machines, information and energy
Firms may outsource less critical resources if they can be obtained at better quality or lower cost
The key is to own and nurture the resources and competencies that make up the essence of the business

6. Core Competency Core competency has three characteristics
1. It is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits
2. It has applications in a wide variety of markets
3. It is difficult to imitate

7. Holistic market orientation and customer value
“It is integrating the value exploration, value creation and value delivery activities with the purpose of building long term mutually satisfying relationships and co-prosperity among key stakeholders”

8. Holistic marketing framework
It is designed to address key management questions
1. Value exploration: How can a company identify new value opportunities
2. Value creation: How can a company efficiently create more promising new value offerings
3. Value delivery: How can a company use its capabilities and infrastructure to deliver new value offerings more efficiently

9. Value Exploration
Firms need to have a well defined strategy and interaction between three spaces
1. Customer’s cognitive space – which reflects existing and latent needs and includes dimensions such as need for participation, stability, freedom and change
2. Company’s competency: which is the breadth – broad v/s focused scope of business and depth-physical v/s knowledge based capabilities
3. Collaborator’s resource space: involves horizontal partnership where firms choose partners based on their ability to exploit related market opportunities and vertical partnerships

10. Value Creation
Firms need to identify new customer benefits from the customer’s point of view, utilize core competencies and select and manage business partners from its collaborative networks
Has three steps:
Redefine the business concept
Reshape business scope-lines of business
Reposition the company’s identity

11. Value delivery
It involves customer relationship management, internal resource management and business partnership management

12. Strategic Planning
Creating, providing and communicating value requires different marketing activities – and for them to be executed – Strategic planning is required !
Strategic planning calls for actions in three areas
Managing a firm’s business as an investment portfolio
Assessing each business strength by considering the market growth rate and the company’s position and fit in that market
Establishing a strategy

13. Understanding strategic planning
Large firms have four organisational levels
Corporate level
Divisional level
Business unit level
Product level

14. Corporate and Divisional strategic planning
Defining the corporate mission
Establishing strategic business units
Assigning resources to each SBU
Assessing growth opportunities

15. Defining the corporate mission
It can be understood by answering Management Guru Peter Drucker’s questions
1. What is our business
2. Who is the customer
` 3. What is of value to the customer
4. What will our business be

16. Mission Statements
It is something that provides employees with a shared sense of purpose, direction and opportunity
It guides geographically dispersed employees to work independently and yet collectively toward realizing the organizational goals
Mission statements are best when they reflect a ‘vision’ – an almost impossible dream that provides direction for the company for the next 10 to 20 years
Good mission statements have three things
1. Focus on limited number of goals
2. Stress on company’s values and policies
3. Define major competitive spheres within which the firm will operate – industry, product and applications, competence, market segment, vertical and geographical

17. Defining business Business is defined as a customer satisfying process
Has three important parameters – customer groups, customer needs and technology
Large firms manage different businesses which are known as SBUs – Strategic Business Units

18. What is a Strategic Business Unit
It is a single business or collection of related businesses that can be planned separately from the rest of the company
It has its own set of rivals
It has a manager who is responsible for strategic planning and profit performance and who controls most of the factors affecting profit

19. Assessing growth opportunities
Diversification growth
Integrative growth
Sales Intensive growth
Time in years

20. Igor Ansoff’s product market expansion grid
Three intensive growth strategies
Current products New products
Current
Markets
New
Market penetration strategy Product development strategy
Market development Diversification strategy
Strategy

21. Intensive growth Penetrating current markets with current products
Develop new markets for its current products
Develop new products for current markets

22. Integrative growth Forward integration Backward integration
Horizontal integration

23. Diversification
Concentric diversi. – new products that have technological or marketing synergies with existing product lines for new group of customers
Horizontal diversification: Develop product that are technologically unrelated to existing products but will appeal to existing consumers
Conglomerate divers.: Seeking new opportunities having no relation to existing products or existing customers

24. Business Unit planning
Business mission  SWOT  Goal formulation  Strategy formulation 
Program formulation  Implementation  Feedback and control

25. S.W.O.T. Strength and Weakness – Internal analysis
Opportunity and threat – External analysis

26. Goal formulation
Goals should be arranged hierarchically, from most to least important
Objectives should be stated quantitatively
Objectives should be realistic
Objectives should be consistent

27. Strategy formulation Porter’s generic strategies:
Overall cost leadership : Firms achieve lowest production and distribution costs so that they can price lower than its competitors and win large market share
Differentiation: Firms concentrate on achieving superior performance in an important customer benefit area valued by a large part of the market
Focus: Firms focus on one or more narrow market segments and pursue cost leadership or differentiation within it

28. Strategic alliances
Product or service alliance – one company licenses its product manufacturing to another firm
Promotional alliance: One firm agrees to promote another firm’s product or service
Logistics: One company offers logistical services for another company’s product
Pricing collaboration: One firm joining other firms in a special pricing collaboration