Friday Nights Schedule

1
Friday Nights Schedule

• Group introductions
• Unit Outline questions?
• Finish Ch 1
• Ch 2
• Closing
• Vals ltwww.sric-bi.com/VALS/gt
• Group contract

2
Thursday

• What is marketing?
• Organizations primary task?
• Orientations to the market?
• Why focus on customers?
• The marketing mix

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A FRAMEWORK for MARKETING MANAGEMENT
Chapter 2 Developing and Implementing
Marketing Strategies and Plans
Kotler Keller
4
Chapter Questions

• How does marketing affect customer value?
• How is strategic planning carried out at
  different levels of the organization?
• What does a marketing plan include?
• How can management assess marketing performance?

5
Two Views of the Value Delivery Process

• Traditional Process Sequence
• Make product
• Sell product

• Value Creation and Delivery Sequence
• Choose the value
• Provide the value
• Communicate the value

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Five Core Business Processes

• Market sensing
• Customer relationship management
• New offering realization
• Fulfillment management
• Customer acquisition

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The Generic Value Chain

• Support Activities
• Firm infrastructure
• Human resource management
• Technology development
• Procurement

• Primary Activities
• Inbound logistics
• Operations
• Outbound logistics
• Marketing and sales
• Service

8
Porters value chain
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Characteristics of Core Competencies

• A source of competitive advantage
• Applications in a wide variety of markets
• Difficult to imitate

10
Holistic Marketing Framework

• How can a company identify new value
  opportunities?
• How can a company efficiently create more
  promising new value offerings?
• How can a company use its capabilities and
  infrastructure to deliver the new value offerings
  more efficiently?

11
Major Competitive Spheres

• Industry
• Products
• Competence

• Market segment
• Vertical
• Geographical

12
Corporate Planning Activities

• Defining the corporate mission
• Establishing SBUs
• Assigning resources to SBUs
• Assessing growth opportunities

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Dimensions that Define a Business

• Customer groups
• Customer needs
• Technology

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Characteristics of an SBU

• 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
• Profitability
• Efficiency

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Marketing Plan Contents

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

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The Business Unit Strategic-Planning Process

• Business mission
• SWOT analysis
• Goal formulation
• Strategy formulation
• Program formulation
• Implementation
• Feedback and control

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Good Mission Statements

• Focus on limited number of goals
• Stress major policies and values
• Define major competitive spheres

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Rubbermaid Commercial Products, Inc.
Our vision is to be the Global Market
Share Leader in each of the markets we serve. We
will earn this leadership position by providing
to our distributor and end-user customers
innovative, high-quality, cost- Effective, and
environmentally responsible products. We will
add value to these products by providing
legendary customer service through our
uncompromising Commitment to Customer
Satisfaction.
19
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.
20
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.
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The strategic marketingplanning process

• Situation analysis
• business definition
• external environment review
• macro (or remote) environment
• industry (or near) environment
• critical success factors
• internal capabilities review

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Market Opportunity Analysis (MOA)

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

23
Market Opportunity Analysis (MOA)

• Can the company deliver the benefits better than
  any actual or potential competitors?
• Will the financial rate of return meet or exceed
  the companys required threshold for investment?

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SWOT Analysis

• Strengths
• Weaknesses
• Opportunities
• Threats

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External macro forces impacting on the industry
and the firm
Macro (remote)
Industry(near)
The firm
environment
environment
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External environment the industry or near
environment
Macro (remote)
Industry (near)
The firm
environment
environment
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The industry or near environment

• Aim to determine
• where the market or industry is going and the
  degree of market attractiveness
• the dynamics of the market
• what is going on
• who are the movers and shakers
• where the power lies in the distribution channels

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Industry-level analysis

• Undertake
• market/industry review
• competitive review
• review of distribution channels and buyers
• customer review
• supplier review

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The product life cycle (PLC)
Life-cycle extension
Competitive turbulence
Introduction
Growth
Maturity
Decline or extension
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Distribution channels and buyers

• Review distribution structure, key players, and
  trends.
• Determine the power base of buyers.
• Powerful buyers can force industry prices and
  profits down.

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Customers

• Review buyer behaviour and market segments to
  determine
• the needs of the market
• the perception of the market concerning each
  competitor

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Suppliers

• Is there likely to be any future supply problem
  that will impact on our marketing strategies?
• E.g., product shortages, difficulty in obtaining
  raw materials, future price hikes, currency
  fluctuations, etc.

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Determining CSFs

• Determine critical success factors (CSFs)/key
  success factors (KSFs).
• Three to five factors that are critical for any
  organisation pursuing its strategic approach to
  its market.

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How to determine CSFs

• Intuitive/experience approaches
• Ad hoc judgements of visionary leader, industry
  experts and/or management
• Analytical approaches attempts to determine
  antecedents of superior performance
• Discover what distinguishes winners from losers.
• The value chain is a useful tool.

35
CSFs

• Nominate 3 CSFs for one of the following
• A beautician
• Qantas
• Dominos Pizza
• WOW Philippines

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Situation analysis internal capabilities
Macro (remote)
Industry (near)
The firm
environment
environment
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Internal capabilities review

• Determine organisations capabilities (core
  competencies) to meet external challenges.
• Two-phase review
• overview of the non-marketing functional areas of
  the business
• in-depth review of the marketing capabilities of
  the organisation a marketing audit.

38
Internal capabilities review cont.

• Non-marketing capabilities
• financial position
• management and leadership
• human resources
• RD
• operations production capabilities and supply
• inter-functional coordination and responsiveness
• competitive position sustainable competitive
  advantage

39
Marketing capabilities

• Marketing management
• Marketing organisation Review the
  organisational structure to what extent is
  marketing practiced throughout the organisation?
  Are internal marketing practices in place?
• Marketing intelligence, generation
  dissemination Is the information timely and
  insightful. Does it reach decision makers
  throughout the organisation?
• Marketing planning How effective is the
  marketing planning process?
• Marketing control Does the monitoring system
  provide insightful and timely information in time
  to take corrective action? Is an adaptive control
  system in place?

40
Marketing capabilities cont.

• Marketing strategies and performance
• Marketing strategies. How clearly are the
  marketing strategies stated, and are the core
  marketing strategies soundly based? Evaluate the
  marketing mix (4/7Ps).
• Marketing performance. How quickly does the
  organisation respond to emerging opportunities?
  How successful is it in meeting marketing
  objectives?

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The strategic marketingplanning process
Situationanalysis
Problems opportunities
Problems and opportunities statement A synthesis
or summary of the situation analysis highlighting
the really important items that must be addressed
in the strategy formation process.
Marketing objectives
Marketing strategies
Budget
Implementation
Evaluation control
42
The strategic marketingplanning process
Situationanalysis
Problems opportunities

• Marketing objectives
• The performance requirements to be achieved over
  the timeframe of the SMP.
• A balancing act between meeting financial
  imperatives (corporate objectives) and the
  reality of the business units strategic position
  and product-market opportunities.

Marketing objectives
Marketing strategies
Budget
Implementation
Evaluation control
43
Goal Formulation

• To be effective, goals must be
• Ordered in terms of priority (hierarchical)
• Stated quantitatively
• Realistic
• Consistent

44
The strategic marketingplanning process
Situationanalysis
Problems opportunities
Marketing strategies The identification and
targeting of existing and new market segments,
the determination of product/brand positioning
and the appropriate marketing mix strategies for
each targeted segment 4Ps (product, price,
place and promotional strategies) for
manufacturers, and 7Ps (the additional 3Ps being
people, process management and physical assets)
for service providers.
Marketing objectives
Marketing strategies
Budget
Implementation
Evaluation control
45
Porters Generic Strategies

• Overall cost leadership
• Differentiation
• Focus

46
The strategic marketingplanning process
Situationanalysis
Problems opportunities
Marketing objectives
Marketing strategies

• Budget
• Resource allocation and approval
• Market and sales forecasts
• Profitability/ROI projections
• Presentation to, and approval by, senior
  management.

Budget
Implementation
Evaluation control
47
The strategic marketingplanning process
Situationanalysis
Problems opportunities
Marketing objectives
Marketing strategies

• Implementation
• action planning
• assignment of responsibilities and tasks
• setting and monitoring deadlines (who, what
  when)

Budget
Implementation
Evaluation control
48
The strategic marketingplanning process
Situation analysis
Problems opportunities

• Evaluation and control
• Establish adaptive control system
• Track environmental factors
• Monitor performance
• Evaluate performance
• Modify objectives and/or strategies
• Take corrective action

Marketing objectives
Marketing strategies
Budget
Implementation
Evaluation control
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Control

• Traditional metrics
• Sales revenues
• Net profits
• Return on sales
• Return on assets
• Market share
• Performance relative to competition (price,
  brand, SQ)

• Customer metrics
• Customer satisfaction
• Customer retention
• Customer loyalty
• Customer value
• Intentions to purchase
• Customer perceptions of quality

50
Methods of Improving Return on Assets

• Method 1 Increase the profit margin by
  increasing sales or cutting costs
• Method 2 Boost the asset turnover by increasing
  sales or reducing assets that are held against
  sales levels

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Other issues

• Involvement
• Goals down plan up
• Shared understanding of challenges
• Commitment to selected course of action
• Emergent strategies
• Dynamic strategy development process
• Creative and iterative rather than rigid and
  sequential
• Learn from mistakes
• Plans as vehicles
• Presented to management to request resources

52
The Balanced Scorecard

• Kaplan Norton (1992)
• financial measures backward-looking
• what you measure is what you get
• balanced scorecard financial measures (e.g.,
  ROI) operational measures (e.g., customer
  satisfaction, innovation)
• 4 questions customer perceptions, KSF, how to
  improve, shareholder perceptions.
• Possibility that improved operations dont result
  in increased profitability.

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Marketing Malpractice

• Christensen, Cook and Hall 2005
• Jobs customers need done
• Social, functional and emotional dimensions of
  jobs
• Avoid attempting to meet phantom needs
• Focus on markets, not products
• See what your customers do with your product
• Purpose brands
• Advertising is no replacement for marketing

54
Lofty Missions

• Rangan 2004
• Importance of mission statement
• Mission stickiness
• Mission stretchiness
• Tendency for N4P to lack strategy
• Need to evolve