1、.pUnderstand how marketing affects customer valuepUnderstand how strategic planning is carried out at different levels of the organizationpUnderstand what is included in a marketing plan Learning issues for Chapter Two:.Key insights for the chapter:pA key ingredient of the marketing management proce
2、ss is insightful,creative marketing strategies and plans that guide marketing activities.pDeveloping the right marketing strategy over time requires a blend of discipline and flexibility.pFirms must stick to a strategy but must also find new ways to constantly improve it.pMarketing strategy also req
3、uires a clear understanding of how marketing works.MARKETING AND CUSTOMER VALUEMarketing involves satisfying consumers needs and wants.The task of any business is to deliver customer value at a profit.The value delivery processNote the differences between the traditional process,value creation&deliv
4、ery process.Value creation and delivery consists of three parts:Choosing the value(segment the market,define target market,develop“offering”).Providing the value(product features,prices,and distribution channels).Communicating the value(sales force,advertising,and promotional tools).The implications
5、 of the value delivery processDiscussion:How would these outcomes contribute to higher levels of customer satisfaction?Give examples to illustrate your points.Three Vs Approach to Marketing(Kumar)Define the value segmentDefine the value propositionDefine the value network.The Value Chain(Porter).Ele
6、ments of the value chainpThe primary activities cover the sequence of bringing materials into the business(inbound logistics),converting them into final products(operations),shipping out final products(outbound logistics),marketing them(marketing and sales),and servicing them(service).pThe support a
7、ctivitiesprocurement,technology development,human resource management,and firm infrastructureare handled in certain specialized departments,as well as elsewhere.pSeveral departments,for example,may do procurement and hiring.The firms infrastructure covers the costs of general management,planning,fin
8、ance,accounting,legal,and government affairs.1-10.What must be done?pThe firms task is to examine its costs and performance in each value-creating activity and look for ways to improve it.pThe firm should estimate its competitors costs and performances as benchmarks against which to compare its own
9、costs and performance.pIt should go further and study the“best of class”practices of the worlds best companies.Core Business ProcessesStrong companies develop superior capabilities in these core business processes.Strong companies also reengineer the workflows and build cross-functional teams respon
10、sible for each process.Many companies have partnered with suppliers and distributors to create a superior value-delivered network.Core competenciespKey is to own or nurture the resources and competencies that make up the essence of the businessoutsource if competency is cheaper and available.pCompet
11、itive advantage accrues to companies that possess distinctive capabilities(excellence in broader business processes).pCompetitive advantage derives from how well the company fits its core competencies&distinctive capabilities into tightly interlocking“activity systems.”.Core competenciespA core comp
12、etency has three characteristics:nMakes a significant contribution to perceived customer benefitsnHas applications in a wide variety of marketsnIt is difficult for competitors to imitatepCompetitive advantage ultimately derives from how well the company“fits”its core competencies and distinctive cap
13、abilities into tightly interlocking“activity systems.”.Core competenciespCompetitors find it hard to imitate companies such as Singapore Airlines,Dell,or IKEA because they are unable to copy their activity systems.pBusiness realignment may be necessary to maximize core competencies.It involves three
14、 steps:(1)(re)defining the business concept(the“big idea”);(2)(re)shaping the business scope(the lines of business);and(3)(re)positioning the companys brand identity(how customers should see the company).Asian business landscapes sometimes are straddled with certain handicapspPoor infrastructural su
15、pportpLess developed marketspFragmented marketspInflexibility.Chinese competitors have certain competitive advantages over MNCspBetter understanding of the local markets;strong networkspLeaner and more flexible;entrepreneurial pOpportunity to catch upnThe open global markets allow Chinese companies
16、to buy much of technology and expertise that they need to catch up.Figure 2.3 A Holistic Marketing Framework.Value ExplorationnCustomers cognitive space(reflects existing and latent needs and includes participation,stability,freedom,and change).nCompanys competence space(broad versus focused scope o
17、f business and depth physical versus knowledge-based capabilities).nThe collaborator resource space(horizontal and vertical partnerships).Value CreationnMarketers need to:pIdentify new customer benefits from the customers view.pUtilize core competencies.pSelect and manage business partners from its
18、collaborative networks.Value DeliverypWhat Companies Must Become?pOften requires an investment in infrastructure and capabilities.nProficient at customer relationship management.Who the customers are,and respond to different customer opportunities.nInternal resource management.Integrate major busine
19、ss processes within a single family of software modules.nBusiness partnership management.Allow the company to handle complex relationships with its trading partners.Breakthrough MarketingpRelates how Intel created history by choosing a trademarkable name Pentium_ and launched the“Intel Inside”market
20、ing campaign to build awareness of the brand to get its name outside the PC and into the minds of the consumer.The central role of Strategic PlanningpCalls for action in three areas:nManaging a companys businesses as an investment portfolio.nAssessing each businesss strength by the markets growth ra
21、te and the companys position and fit in that market.nEstablish strategy.24.The Marketing PlanpThe marketing plan is the central instrument for directing and coordinating the marketing effort.pThe marketing plan operates on two levels:strategic and tactical.nThe strategic marketing plan lays out targ
22、et markets and the value proposition.nThe tactical marketing plan specifies the product,promotion,merchandising,pricing,sales channels,and service.Levels of a Marketing PlanpStrategicnTarget marketing decisionsnValue propositionnAnalysis of marketing opportunitiespTacticalnProduct featuresnPromotion
23、nMerchandisingnPricingnSales channelsnService.Figure 2.4 The Strategic Planning,Implementation,and Control Processes.Corporate and Division Strategic PlanningpAll corporate headquarters usually undertake 4 planning activities:pDefining the corporate mission.pEstablishing strategic business units(SBU
24、s).pAssigning resources to each SBU.pAssessing growth opportunities.Defining the Corporate MissionnKey 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?.Good mission statementspGood mission statements have three
25、 major characteristics:nFocused on a limited number of goals.nStresses the companys major policies and values.1.Defines the major competitive spheres within which the company will operate.Major competitive spheres within which the company will operate:IndustryProductsMarketsegmentGeographicalCompete
26、nceVerticalchannels.Comparing vague and clear mission statements(Google)GoogleVague.Establishing Strategic Business Units pCompanies should be aligned as customer-satisfying processpA target market definition tends to focus on selling a product or service(Pepsi and all who drink cola sodas).pA strat
27、egic market definition is broader and encompasses more.(Pepsi redefines its strategy to everyone who has a“thirst”).Product versus Market Oriented Definitions of a Business.Dimensions That Define a BusinessCustomer groupsTechnologyCustomer needs.pAssigning Resources to Each SBUpMore recent methods u
28、sed by firms to make internal investment decisions are based on shareholder value analysis,and whether the market value of a company is greater with an SBU or without it.pAssessing Growth OpportunitiesnInvolves planning for new businesses.pDownsizing or terminating old businesses1-37Strategic Decisi
29、ons.Figure 2.5 The Strategic Planning Gap.Figure 2.6 Three Intensive Growth Strategies:Ansoffs Product-Market Expansion Grid.Intensive GrowthpCorporate managers first course of action should be a review of opportunities for improving existing businesses.nMarket-penetration strategy(gain more market
30、share).nMarket-development strategy(new markets for current products).nProduct-development strategy(new products for current markets).nDiversification strategy(new products for new markets).Starbucks.Integrative GrowthpSales and profits may be increased through:nBackward integration.nForward integra
31、tion.nHorizontal integration.Diversification GrowthpWhen opportunities are found outside the present business and the company has the right mix of business strengths to be successful.pSeveral types are possible:nNew products that have technological or marketing synergies with existing product lines.
32、nNew products unrelated to the current industry.nNew businesses unrelated.Organization and Organization CulturepOrganization consists of:nStructures.nPolicies.nCorporate culture defined as“the shared experiences,stories,beliefs,and norms that characterize an organization.”nSometimes corporate cultur
33、e develops organically and is transmitted by the CEOs personality.The Internet is transforming the corporate culture of overseas Chinese businesses by enhancing efficiency,lowering barriers to entry,and providing more transparency.Samsung has undergone remarkable changes in corporate culture in resp
34、onse to the changing marketing environment.Today,it is ranked in the top 20 brands by Interbrand.1-46.Marketing InnovationpInnovation in marketing is critical.n5 key strategies for managing change in an organization:1-47.Figure 2.7 The Business Unit Strategic Planning Process.SWOT AnalysispThe evalu
35、ation of a companys strengths,weaknesses,opportunities,and threats is known as SWOT analysis.It involves monitoring the external and internal marketing environment.pUse market opportunity analysis(MOA)n Environmental threat unfavorable trend or development.Opportunities and how to spot them.Evaluati
36、ng OpportunitiespCan the benefits involved in the opportunity be articulated convincingly to a defined target market(s)?pCan the target market(s)be located and reached with cost-effective media and trade channels?pDoes the company possess or have access to the critical capabilities and resources nee
37、ded to deliver customer benefits?pCan the company deliver the benefits better than any actual or potential competitors?pWill the financial rate of return meet or exceed the companys required threshold for investment?.Figure 2.8 Opportunity Matrix.Figure 2.8 Threat Matrix.Internal EnvironmentpStrengt
38、hs and Weaknesses AnalysispIt is one thing to find attractive opportunities and another to be able to take advantage of them.pEach firm must evaluate its internal strengths and weaknesses.pSee Marketing Memo(checklist).Goal FormulationpOnce the company has performed a SWOT analysis,it can proceed to
39、 develop specific goals for the planning period.This stage of the process is called goal formulation.p Managers use the term“goals”to describe objectives that are specific with respect to magnitude and time.Goal FormulationnThe firm sets objectives before managing them into objectives(MBO).For MBOs
40、to work they must meet 4 criteria:pThey must be arranged hierarchically,from the most to least important.pObjectives should be stated quantitatively whenever possible.pGoals should be realistic.pObjectives must be consistent.Porters Generic StrategiesOverall Cost LeadershipDifferentiationFocus.Porte
41、rs Generic Strategies.Categories of Marketing AlliancesProduct or Service AlliancesPromotional AlliancesLogistics AlliancesPricing Collaborations.Marketing AlliancesTo keep strategic alliances thriving,corporations have begun to develop organizational structures for support and have come to view the
42、 ability to form and manage partnerships as core skills(called Partner Relationship Management,PRM).Program Formulation and ImplementationnA great marketing strategy can be sabotaged by poor implementation.nMarketing must estimate its costs.nIn implementing strategy,companies must not lose sight of
43、the multiple stakeholders involved and their needs.McKinseys 7-S Framework The first threestrategy,structure,and systems are considered the“hardware”of success.The next fourstyle,skills,staff,and shared values are the“software”“Style”means that company employees share a common way of thinking and be
44、having.“Skills”means that the employees have the skills necessary to carry out the companys strategy.“Staffing”means that the company has hired able people,trained them well,and assigned them to the right jobs.“Shared values,”means that the employees share the same guiding value.The Marketing PlannE
45、ach product level(product line,brand)must develop a marketing plan for achieving its goals.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.nMarketing plans are becoming more
46、customer and competitor orientated.The plan draws more input from all the business functions and is team developed.Marketing Plan Contents Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controlsSample Marketing Plan:Pegasus Sports Inter
47、national (see text).Marketing MemopIs the plan simple?Is the plan specific?Is the plan realistic?Is the plan complete?.Summary of learning issuespUnderstand how marketing affects customer valuepUnderstand how strategic planning is carried out at different levels of the organizationpUnderstand what is included in a marketing plan 68.
