Phillip

Kevin Lane

Kotler Keller
Marketing Management

h
C

p
a

r
e
t
2

Developing
Marketing
Strategies and
Plans

Discussion Questions
1. How does marketing affect
customer value?
2. How is strategic planning
carried out at different levels
of the organization?
3. What does a marketing plan
include?
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Three Vs Approach to
Marketing
Define
Define the
the value
value segment
segment

Define
Define the
the value
value
proposition
proposition

Define
Define the
the value
value network
network

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Slide 4 of 38

 Value based segmentation techniques

talks about defining segmentation based
on value placed by customers on the
product.
Value proposition (VP) is a statement
that clearly identifies what benefits a
customer will receive by purchasing a
particular product or service from a
particular vendor.
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Slide 5 of 38

 Value network allows members to

buy and sell products as well as
share information

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Slide 6 of 38

Three Vs Approach to
Market Offering
VALUE CREATION How can a company
efficiently create more promising new value
offerings?
Value communication is based on relevant and
timely information. Without such information,
there can be no effective communication.
Value Delivery How can a company use its
capabilities and infrastructure to deliver the new
value offerings more efficiently?
Eg: advertising and managing distribution
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Slide 7 of 38

What is the Value Chain?

The value chain is a tool for
identifying ways to create more
customer value because every firm is
a synthesis of primary and support
activities performed to design,
produce, market, deliver, and
support its product.
OR
Value chain is a tool for identifying
ways to create more customers value

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

Slide 8 of 38

Core Business
Processes
Fulfillment
managemen
t

Customer
relationship
management
Customer
acquisition

Newoffering
realization
Marketsensing
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Slide 9 of 38

Core Business Processes

Market-sensing process All the
activities in gathering market
intelligence, spreading it within the
organization, and acting on the
information
New-offering realization process All
the activities in researching, developing,
and launching new high-quality offerings
quickly and within budget
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Slide 10 of 38

 Customer acquisition process All

the activities in defining target
markets and prospecting for new
customers
Customer relationship
management process All the
activities in building deeper
understanding, relationships, and
offerings to individual customers
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 Fulfillment management process

All the activities in receiving and
approving orders, shipping the goods
on time, and collecting payment

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Slide 12 of 38

Core Competencies

Useful in a
wide
variety of
Contributes to
markets
perceived
customer
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Difficult to
imitate

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Holistic Marketing

Value
Value
Value
Exploration
Creation
Delivery

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Slide 14 of 38

Marketing Plan
Directs and
coordinates the
marketing effort
Product Line or Brand
Level
Strategic and Tactical
levels

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Slide 15 of 38

Levels of a Marketing Plan

Strategic
Analysis of
marketing
opportunities
Target marketing
decisions
Value proposition

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Tactical

Product features
Promotion
Merchandising
Pricing
Sales channels
Service

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Corporate Strategic
Planning
1

Define corporate mission

Establish SBUs

Assign resources to
SBUs

Assess growth
opportunities

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Slide 17 of 38

Defining the Corporate

Mission

What is
our
business
?
What
should
our
business

Who is
the
customer
?

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

What is of
value to the
customer?

What will
our
business

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Good Mission Statements

Focus
Focus on
on limited
limited number
number of
of goals
goals
Stress
Stress major
major policies
policies and
and values
values
Define
Define major
major competitive
competitive
spheres
spheres
Take
Take aa long-term
long-term view
view
Short,
Short, memorable,
memorable,
meaningful
meaningful

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Slide 19 of 38

Vague Mission Statement

To build total brand value by
innovating to deliver customer
value and customer leadership
faster, better, and more
completely than our competition

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Slide 20 of 38

GOOGLES Mission
Statement
To organize the worlds
information and make it
universally accessible and
useful.

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Vague Philosophy
We build brands and make
the world a little happier by
bringing our best to you.

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Slide 22 of 38

GOOGLEs Philosophy
Never settle for the best.
1.
2.
3.
4.
5.

Focus on the user and all else will follow.

Its best to do one thing really, really well.
Fast is better than slow.
Democracy on the web works.
You dont need to be at your desk to need an
answer.
6. You can make money without doing evil.
7. There is always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10.Great just isnt good enough.
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Major Competitive Spheres

Industry
Geographical

Products

Vertical
channels

Competence
Market
segment

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Slide 24 of 38

Major Competitive Spheres

Industry Some companies will
operate in only one industry; some
only in a set of related industries;
some only in industrial goods,
consumer goods, or services; and
some in any industry.
Products the range of products
Competence technological and
other core competencies
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Slide 25 of 38

 Market segment The type of market

or customers a company will serve is
the market segment.
Vertical channels from raw material
to final product and distribution
Geographic regions, cities, countries
etc
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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

2-26
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 A market orientated company is

one that organizes its activities,
products and services around the
wants and needs of its customers.
A product-orientated firm has its
primary focus on its product and on
the skills, knowledge and
systems that support that product.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
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2-27
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Market orientation gets the right product: product

orientation get the product right

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Table 2.3
Product Orientation vs. Market Orientation
Company

Product

Market

Missouri-Pacific
Railroad

We run a railroad

We are a peopleand-goods mover

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

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2-29
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Defining Strategic Business

Units
Customer
groups

Customer needs
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Technology
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Strategic Business Units

Company

Product Definition

Union Pacific We run a railroad.

Market Definition

We are a people-and-goods
mover.

Xerox

We make copying
equipment.

We help improve office

productivity.

Hess
Corporation

We sell gasoline.

We supply energy.

Paramount
Pictures

We make movies.

We market entertainment.

Encyclopaed
We sell encyclopedias
ia Britannica
Carrier

We make air
conditioners and
furnaces.

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

We distribute information.
We provide climate control
in the home.
Slide 31 of 38

Strategies Suggested by Ansoffs

Product-Market Expansion Grid

Market penetration
Market development
Product development
Diversification

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Slide 32 of 38

 The company first considers whether it could gain

more market share with its current products in
their current markets, using a marketpenetration strategy. Next it considers whether
it can find or develop new markets for its current
products, in a market-development strategy.
Then it considers whether it can develop new
products of potential interest to its current
markets with a product-development strategy.
Later the firm will also review opportunities to
develop new products for new markets in a
diversification strategy.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

2-33
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Product-Market
Growth Matrix
Present
Market
s
New
Market
s

Present
products

Market
Penetratio
n
Market
Developme
nt

New Products

Product
Developm
ent
Diversificati
on

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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

2-34
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Intensive Growth

New
Current

Markets

Product-Market Expansion Grid

Market
Developme
nt

Diversificat
ion

Market
Penetration

Product
Developme
nt

Current

New

Products
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Integrative Growth

Suppli
er

Business

Wholesal
er

Competitor

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Diversification Growth

w
e
N

p
p
O

tu
r
o

ty
i
n

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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Market Opportunity Analysis (MOA)

Can the benefits involved in the

opportunity be articulated convincingly to
a defined target market?
Can the target market be located and
reached with cost-effective media and
trade channels?
Does the company possess or have access
to the critical capabilities and resources
needed to deliver the customer benefits?
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2-39
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Market Opportunity Analysis (MOA)

(cont.)
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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2-40
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Strategy Formulation
Porters Generic
Strategies

Strategic
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Porters Generic
Strategies
Overall Cost Leadership
Differentiation
Focus

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Porters Generic Strategies

Overall cost leadership aiming to be

the lowest cost producer and/or
distributor within their industry.
Differentiation Creating a product or
service that is perceived as being
unique through out the industry
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Slide 43 of 38

Focus concentrating on the limited part of the

market . (offering a specialized service in a
niche market). He then subdivided the Focus
strategy into two parts: "Cost Focus" and
"Differentiation Focus.
Cost Focus means emphasizing costminimization within a focused market, and
Differentiation Focus means pursuing strategic
differentiation within a focused market.
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