Chapter 2 Somu

8/9/2019 Chapter 2 Somu

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Ch apter Questions

How does marketing affect customer value?

How is strategic planning carried out atdifferent levels of the organization?What does a marketing plan include?


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Siemens AG h as grown t h roug h newproduct innovation and strategic

acquisitions


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N ike C reates Value


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T h ree Vs Approac h to Marketing

Define the value segment

Define the value proposition

Define the value network


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W h at is t h e Value Ch ain?

The value c h ain is a tool for identifyingways to create more customer value

because every firm is a synthesis of primary and support activitiesperformed to design, produce, market,

deliver, and support its product.


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C isco Systems T aps into Partner Expertise to C reate Value


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C ore Business Processes

Market-sensing processNew-offering realization process

Customer acquisition processCustomer relationship managementprocess

Fulfillment management process


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Ch aracteristics of C ore C ompetencies

A source of competitive advantageApplications in a wide variety of markets

Difficult to imitate


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N etflixs Distinctive C apabilities


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F irms S h ould C onsider Key Questions

Can we learn from the past?How should the present be evaluated?

What do we envision for the future?


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W h at is Holistic Marketing?

Holistic marketing sees itself asintegrating the value exploration,value creation, and value delivery

activities with the purpose of buildinglong-term, mutually satisfying

relationships and coprosperity amongkey stakeholders.


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Intels N ew Brand Identity:Leap A h ead


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W h at is a Marketing Plan?

A marketing plan is the centralinstrument for directing and

coordinating the marketing effort.It operates at a

strategic and tactical level.


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Levels of a Marketing Plan

StrategicTarget marketing

decisionsValue propositionAnalysis of marketingopportunities

T acticalProduct features

PromotionMerchandisingPricingSales channels

Service


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F igure 2.4 T h e Strategic Planning,Implementation,

and C ontrol Processes


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C orporate HeadquartersPlanning Activities

Define the corporate missionEstablish strategic business units

(SBUs)Assign resources to each SBUAssess growth opportunities


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Ch aracteristics of SBUs

It is a single business or collection of related businesses

It has its own set of competitorsIt has a leader responsible for strategicplanning and profitability


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ITC - OVERVIEW

Products Awarded as:

1. Most respected company by BUSINESSWORLD

2. First company in India to voluntarily seekcorporate governance rating.

Vision of t h e company : Enduring value for the nation. For theShareholders.


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S TR AT EG IC BUS IN ESS U NIT SF MC G

1. Cigarettes2. Foods3. Lifestyle retailing

4. Greeting, Gifting and stationery5. Safety matches6. Agarbattis

HO T ELS

PAPERBOARDS AND PACKAGING1. Paperboard and speciality papers2. Packaging


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AGRI-BUSINESSES1. Agri exports : E-choupal2. Leaf Tobacco

Information Technologies


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MARKETING PLANNING

B usiness Portfolio AnalysisStrategic Business Units (SBUs) are keybusiness units within diversified firms

A division, product line, or singleproduct may define an SBUFirms redesign their SBUs as market

conditions


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T HE B C G MA TRIX

The BCG Matrix method is the most well-known portfolio management tool . It isbased on product life cycle theory. It wasdeveloped in the early 70s by the BostonConsulting Group.


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T HE B C G MA TRIX

The BCG Matrix can be used todetermine what priorities should begiven in the product portfolio of abusiness unit. To ensure long-termvalue creation, a company should havea portfolio of products that contains

both high-growth products in need of cash inputs and low-growth productsthat generate a lot of cash.


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T HE B C G MA TRIX

The Boston ConsultingGroup Matrix has 2 dimensions:market s h are and market growt h .

The basic idea behind it is: if a producthas a bigger market share, or if theproduct's market grows faster, it isbetter for the company


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FOUR SEGMENTS OF BCG MATRIX

Market S h are/ Market Growt h Matrix :

A marketing planning tool that classifies a

firms SBUs or products according toindustry growth rates and market sharesrelative to competing products

Stars

C as h C ows

Dogs

Question Mark


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FOUR SEGMENTS OF BCG MATRIX

Stars (high growth, high market share)C as h C ows (low growth, high market

share)Dogs (low growth, low market share)Question Mark (high growth, low

market share)


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BCG Chart

SBUT

urnover (incrores)

Competitorsturnover

RMS AGM

R

FMCG 11330 HUL - 9954 1.14 13

Paperboardandpackaging

1150 East Indiaboard andpaper mill -4800

0.24 16

Agribusiness

1955 Reliance -750

2.6 60

Hotels 777 TATA 491 1.58 36

IT 3724 TATA -13250 0.28 60


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Good Mission Statements

Focus on limited number of goals

Stress major policies and values

Define major competitive spheres

Take a long-term view

Short, memorable, meaningful


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Infosys T ec h nologies Limited

To achieve our objectives in an environmentof fairness, honesty, and courtesy towardsour clients, employees, vendors, and societyat large.


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Biocon

To be an integrated biotechnology enterpriseof global distinction.


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T able 2.3Product Orientation vs. Market Orientation

C ompany Product Market

Xerox We make copyingequipment

We improve officeproductivity

ColumbiaPictures

We make movies We entertainpeople

Encyclopedia

Britannica

We sell encyclopedias We distribute

information

Carrier We make air conditionersand furnaces

We provide climatecontrol insidehomes


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Dimensions T h at Define a Business

Customer groups

TechnologyCustomer needs


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F igure 2.5 T h e Strategic Planning Gap


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Strategies Suggested by AnsoffsProduct-Market Expansion Grid

Market penetrationMarket developmentProduct developmentDiversification


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Developing t h e Peoples C ar T AT A N ano


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W h at is C orporate C ulture?

C orporate culture is the sharedexperiences, stories, beliefs, and norms

that characterize an organization.


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T actics for Managing Ch ange

Avoid the innovation title for the teamUse the buddy system

Set the metrics in advanceAim for quick hits firstGet data to back up your gut


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F igure 2.7 T h e Business UnitStrategic Planning Process


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S W OT Analysis

Strengths

Weaknesses

Opportunities

Threats


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Market Opportunity Analysis (MOA)

Can the benefits involved in the opportunitybe articulated convincingly to a defined targetmarket?

Can the target market be located andreached with cost-effective media and tradechannels?Does the company possess or have accessto the critical capabilities and resourcesneeded to deliver the customer benefits?


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Market Opportunity Analysis (MOA)(cont.)

Can the company deliver the benefitsbetter than any actual or potentialcompetitors?Will the financial rate of return meet or exceed the companys requiredthreshold for investment?


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FedEx addedSunday deliveriesbased on customer requests andmarket demand

F edEx


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F igure 2.8 Opportunity Matrix


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F igure 2.8 T h reat Matrix


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Goal F ormulation and MBO

Units objectives must be hierarchicalObjectives should be quantitative

Goals should be realisticObjectives must be consistent


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Porters Generic Strategies

Overall Cost Leadership

Differentiation

Focus


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C ategories of Marketing Alliances

Product or Service Alliances

Promotional Alliances

Logistics Alliances

Pricing Collaborations


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Marketing Plan C ontents

Executive summaryTable of contentsSituation analysisMarketing strategyFinancial projections

Implementation controls


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Evaluating a Marketing Plan

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


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Marketing Debate

What good is a mission statement?

Take a position:1. Mission statements are critical to asuccessful marketing organization.or 2. Mission statements rarely provideuseful marketing value.


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Marketing Discussion

What implications do Porters valuechain and the holistic marketingorientation model have for marketing planning?

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Chapter 2 Somu