1. CHAPTER 2 DEVELOPING MARKETING STRATEGIES AND PLANS

2. MARKETING & CUSTOMER VALUE

3. THE VALUE DELIVERY PROCESS Design Procure Make Price Sell Advertise/ Distribute Service Product promote Make the productSell the product Traditional physical process sequence

4. Customer MarketValue Segmentation selection/positioning focus Choose the value Product Service Sourcing Distributing Develop- develop- Pricing Ment ment Making Servicing Provide the value Sales force SalesAdvertising promotionpositioning Communicate the value Strategic marketing Tactical marketing

5. THE VALUE CHAIN The value chain is a tool for identifying ways to create more customer value. The value chain identifies nine strategically relevant activities (5 primary activities and 4 support activities) that create value and cost in a specific business.

6. Firm infrastructure Human resource management Technology development Procurement Inbound logistics Opera- -tions Outbound logistics Marketing And sales Service Primary activities Support activities Porter’s generic value chain

7. CORPORATE AND DIVISION STRATEGIC PLANNING

8. 1.DEFINING THE CORPORATE MISSION Organizations develop clear, thoughtful mission statements to share with managers, employees and customers which provide employees with a shared sense of purpose, direction and opportunity.

9. 2.DEFINING THE BUSINESS A business must be viewed as a customer- satisfying process, not a goods-producing process. The purpose of identifying the company’s SBU is to develop separate strategies and assign appropriate funding.

10. An SBU has three characteristics – –It is a single business or collection of businesses that can be planned separately. –It has its own set of competitors. –It has a manager who is responsible for strategic planning, profit performance and controlling the factors affecting profits.

11. 3. ASSESSING GROWTH OPPORTUNITIES Time (years) Sales ($ millions) Desired sales Current portfolio Intensive growth Integrative growth Diversification growth 0 1 2 3 4 5 Strategic- planning gap

12. a.Intensive Growth The first option is to identify opportunities to achieve further growth within current businesses. Market penetration Product development Market development Diversification Current products New products Current markets New markets Product-market expansion grid

13. Three intensive growth strategies Market- penetration strategy Try to encourage its current customers to buy more Try to attract competitors’ customers Try to convince nonusers to start using them Market- development strategy Try to identify potential user groups in the current sales area Seek additional distribution channels in its present locations Consider selling in new locations in its home country or abroad Product- development strategy Develop new features Offer the product at two or more quality levels

14. b.Integrative Growth The company might acquire one or more of its suppliers to gain more control or generate more profit The company might acquire some wholesalers or retailers, especially if they are highly profitable The company might acquire one or more competitors Backward integration Forward integration Horizontal integration

15. c.Diversification Growth New products that have technological or marketing synergies with existing product lines but may appeal to different customers. Concentric strategy New products that could appeal to current customers even though the products are technologically unrelated to its current product line. Horizontal strategy New businesses that have no relationship to its current technology, products or markets. Conglomer- ate strategy

16. BUSINESS UNIT STRATEGIC PLANNING

17. Business mission External env. Goal formulation Internal env. Strategy formulation Program formulation Implementation Feedback & control SWOT analysis

18. 1.THE BUSINESS MISSION Each business unit needs to define its specific mission within the broader company mission.

19. 2.SWOT ANALYSIS External environment (opportunity - threat) analysis A marketing opportunity is an area of buyer need and interest in which there is a high probability that a company can profitably satisfy that need. An environmental threat is a challenge posed by an unfavorable trend or development that would lead to lower sales and profit in the absence of defensive marketing action. Internal environment (strength - weakness) analysis

20. 3.GOAL FORMULATION a.Objectives must be arranged hierarchically, from the most to the least important. b.Objectives should be stated quantitatively whenever possible. c.Goals should be realistic. d.Objectives must be consistent.

21. 4.STRATEGIC FORMULATION Strategy is a game plan for achieving its goals. Overall cost leadership Differentiation (Quality leadership) Focus Porter’s generic strategies

22. 5.PROGRAM FORMULATION The unit must plan programs to strengthen its various departments, gather intelligence, develop products, train the sales force and develop ads to communicate the messages.

23. 6.IMPLEMENTATION Companies are usually more successful at implementation when 7Ss are present – 1.Strategy 2.Structure 3.System 4.Style 5.Skills 6.Staffing 7.Shared values Hardware of success Software of success

24. 7.FEEDBACK AND CONTROL A firm needs to track the results and monitor new developments. The marketplace will change; and when it does, the company will need to review and revise its implementation, programs, strategies or even objectives.

25. PRODUCT PLANNING

26. A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. MARKETING PLAN

27. Contents of the marketing plan – –Executive summary and table of content –Situation analysis –Objectives –Marketing strategy –Action programs –Financial projections –Implementation controls