Chapter 2 – Developing Marketing Strategies & Plans

Marketing Management

Md Afnan Hossain – Lecturer SouthEast UniversityCourse Code: Mkt 3123 (D,E)

Contents Source: Kotlar, Keller, Koshy, Jha (2014) Marketing Management.

Forbes, The Economist, Wall Street Journal, Financial Times, Business Week, CNN Business

Developing Marketing Strategies and Plans

A strategy is a theory about how to gain competitive advantages. A good strategy is a strategy that actually generates such advantages.

Strategic management is the process of specifying an Strategic management is the process of specifying an organizations objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans.

Strategic Goals and Plans

Strategic Goals

Where the organization wants to be in the future

Strategic Plans Strategic Plans Action Steps used to attain strategic goals

Blueprint that defines the organizational activities and resource allocations

Tends to be long term

Levels of a Marketing Plan

Strategic Target marketing

decisions

Value proposition

Tactical(A tactic is a conceptual action implemented as

one or more specific tasks.)

Product features

Promotion Value proposition

Analysis of marketing opportunities

Promotion

Merchandising

Pricing

Sales channels

Service

Developing Marketing Strategies and PlansPart 1: Marketing Value and Customer Value1) The value delivery process2) The value chain3) Core competencies4) A holistic marketing orientation and customer valueA holistic marketing orientation and customer value5) The central role of strategic planningPart 2: Corporate and Division Strategic Planning1) Defining the corporate mission2) Defining the business3) Assessing growth opportunities4) Organization and organizational culture

Part 3: Business Unit Strategic Planning1) The business Mission2) SWOT analysis3) Goal Formulation4) Strategic Formulation5) Program Formulation and Implementation

Feedback and Control6) Feedback and Control

Part 4: Product Planning: the Nature and Contents of a Marketing Plan

H&MWalk into a trendy Soho boutique in New York City and you might see high-

fashion Tshirts selling for $250. Go into an H&M clothing store and you can see a version of the same style for

$25. Founded 55 years ago as a provincial Swedish clothing company, H&M (Hennes

and Mauritz) has morphed into a clothing colossus with 950 stores in 19 countries and an ambitious plan to expand by 100 stores a year.

The reason H&M has reached this point while so many other stores—such as The reason H&M has reached this point while so many other stores—such as once-hot Italian retailer Benetton—have floundered is that the company has a clear mission and the creative marketing strategies and concrete plans with which to carry it out.

"Our business concept is to give the customer unbeatable value by offering fashion and quality at the best price," is the H&M mission as expressed on the company's Web site.

Nothing could sound simpler. Yet, fulfilling that mission requires a well-coordinated set of marketing activities.

H&MFor instance, it takes H&M an average of three months to go

from a designer's idea to a product on a store shelf, and that "time to market" falls to three weeks for "high-fashion" products. H&M is able to put products out quickly and inexpensively by:

1- having few middlemen and owning no factories 1- having few middlemen and owning no factories 2-buying large volumes 3- having extensive experience in the clothing industry 4- having a great knowledge of which goods should be

bought from which markets5- having efficient distribution systems 6- being cost-conscious at every stage

NikeCritics of Nike often complain that its shoes cost almost nothing to make yet

cost the consumer so much.True, the raw materials and manufacturing costs involved in the making of

a sneaker are relatively cheap, but marketing the product to the consumer is expensive.

Materials, labor, shipping, equipment, import duties, and suppliers' costs generally total less than $25 a pair.

Compensating its sales team, its distributors, its administration, and its endorsers, as well as paying for advertising and R&D, adds $15 or so to the total.

Nike sells its product to retailers to make a profit of $7. The retailer therefore pays roughly $47 to put a pair of Nikes on the shelf. When the retailer's overhead (typically $30 covering personnel, lease, and equipment) is factored in along with • a $10 profit, the shoe costs the consumer over $80.

Part 1-Marketing and Customer Value

The value delivery process

The Value Chain

Core Competencies

To carry out its core business processes, a company needs resources—labor power, materials, machines, information, and energy.

Traditionally, companies owned and controlled most of the resources that entered their businesses, but this situation is changing. changing.

Many companies today outsource less critical resources if they can be obtained at better quality or lower cost.

Frequently, outsourced resources include cleaning services, landscaping etc. Kodak even turned over the management of its data processing department to IBM.

What is Holistic Marketing?

Holistic marketing sees itself as integrating the value exploration, value creation, and value

delivery activities with the purpose of building long-term, mutually satisfying relationships and long-term, mutually satisfying relationships and

co prosperity among key stakeholders.

A Holistic Marketing Orientation And Customer Value

Part 2: Corporate and Division StrategicPlanning

A marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tactical operates at a strategic and tactical level.

planning, implementation, and control cycle

Defining the Corporate MissionAccording to Peter Drucker, it is time to ask some fundamental questions. What is our business? Who is the customer? What is of value to the

customer? What will our business be? What should our business be? Successful companies continuously raise business be? Successful companies continuously raise these questions and answer them thoughtfully and thoroughly.

Mission statements are at their best when they reflect a vision, an almost "impossible dream" that provides a direction for the company for the next 10 to 20 years.

Good mission Statements

next 10 to 20 years.

Fred Smith wanted to deliver mail anywhere in the United States before 10:30 A.M. the next day, so he created FedEx.

eBay

“We help people trade anything on earth.We will continue to enhance the onlinetrading experiences of all—collectors,trading experiences of all—collectors,dealers, small businesses, unique itemseekers, bargain hunters, opportunitysellers, and browsers.”

Product Orientation vs. Market Orientation

Company Product Market

Missouri-Pacific Railroad

We run a railroad We are a people-and-goods mover

Xerox We make copying We improve office Xerox We make copying equipment

We improve office productivity

Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We entertain people

Strategic Business Units

The purpose of identifying the company's strategic business units is to develop separate strategies and assign appropriate funding. strategies and assign appropriate funding.

SBU has three characteristics:

1. It is a single business or collection of related businesses that can be planned separately from the rest of the company.

2. It has its own set of competitors. 2. It has its own set of competitors. 3.It has a manager who is responsible for

strategic planning and profit performance and who controls most of the factors affecting profit.

Assessing Growth Opportunities

Assessing Growth Opportunities

market-penetration strategy The company first considers whether it could gain more market share with its current products in their current markets .

market-development strategy the company considers whether it can find or develop new markets for its current products. can find or develop new markets for its current products.

product-development strategy the company considers whether it can develop new products of potential interest to its current markets

diversification strategy the company will also review opportunities to develop new products for new markets.

Ansoff’s Product-MarketGrid

Current products New products

Current Mkts Mkt penetrationstrategy

Product developmentstrategy

Current Mkts

New Mkts

strategy

Mkt developmentstrategy

strategy

Diversificationstrategy

Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s

Business Unit Strategic Planning

Strategic planning:Strategic planning:

Developing a strategic fit betweenDeveloping a strategic fit between

organizational goals and capabilities, andorganizational goals and capabilities, and

changing marketing opportunitieschanging marketing opportunities

The Mission

Mission; the organization’s reason for existing.

Mission Statement; Mission Statement; states the basic business scope and

operations

may include the market and customers

some may describe company values, product quality, attitudes toward employees

Ben & Jerry’s: a SWOT analysis to get it growing again

Business Portfolio Analysis

Cash Cows – SBU’s that have a high market share of a low sales growth market.

Stars – SBU’s that have a high market share of a high sales growth market.

Question marks – SBU’s that have a low market share of a Question marks – SBU’s that have a low market share of a high sales growth market.

Dogs – SBU’s that have a low market share of a low sales growth market.

Goal Formulation

Unit’s objectives must be hierarchical

Objectives should be quantitative

Once the company has performed a SWOT analysis, it can proceed to develop specific goals for the planning period.

Objectives should be quantitative

Goals should be realistic

Objectives must be consistent

1) Porter’s Generic Strategies Overall cost leadership

Differentiation

Focus

Strategic Formulation

2) Strategic Alliances2) Strategic Alliances

There are four forms of MDS.1) Exporting2) Licensing3) Joint Venture4) Direct Investment

Part 4 Marketing Plan Contents

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

Evaluating a Marketing Plan

Is the plan simple? Is the plan specific? Is the plan specific? Is the plan realistic? Is the plan complete?

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