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Chapter – 2 Learning Objectives
1. How does marketing affect customervalue?
Developing Marketing Strategies and
How is strategic planning carried out at the corporate and
Plans
2.
divisional levels?
3. How is strategic planning carried out at the business unit
level?
4. What does a marketing planinclude?
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The Marketing Plan
Marketing and customer Value
Executive Summary & Table of Contents
The value delivery process
Current Marketing Situation
Opportunity & Issue Analysis
The value chain
Objectives
Marketing Strategy Core competencies
Action Programs
Projected Profit-and-loss
The central role of strategic planning
Controls
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The value delivery process 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
CHOOSINGTHEVALUE primary and support activities performed to design, produce,
market, deliver, and support its product.
PROVIDINGTHE VALUE
COMMUNICATINGTHEVALUE
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How do Firms Build CA? Core Competencies
Using Value Chain Analysis in Identifying and Building CA
Core competencies are those capabilities that are critical to a
a diagramatic representation of the Value Chainidea
business achieving competitive advantage.
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Core business processes Characteristics of Core Competencies
Market-sensing process
A source of competitive advantage
New-offering realization process
Applications in a wide variety of markets
Customer acquisition process
Difficult to imitate
Customer relationship management process
Fulfillment management process
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Maximizing Core Competencies Central role of strategic planning
Managing the businesses as an investment portfolio
(Re)define the business concept
(Re)shaping the business scope
(Re)positioning the company’s brand identity Assessing the market’s growth rate and the company’s
position in that market
Establishing a strategy
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Figure 2.1
Marketing plan Strategic Planning, Implementation, and
The central instrument for directing and coordinating the
Control Processes
marketing effort
Strategic
Tactical
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Good Mission Statements Characteristics of SBUs
Focus on limited number of goals It is a single business or collection of related businesses
It has its own set of competitors
Stress major policies and values It has a leader responsible for strategic planning and
profitability
Define major competitive spheres
Take a long-term view
Short, memorable, meaningful
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Tasks Involved in Strategic Planning..
Tasks Involved in Strategic Planning..
Analytical Models Used in Appraising Businesses Models Used in Appraising Businesses - Ansoff Grid (Ansoff
Product-Market Expansion Grid)
(i) BCG Model (The Boston Consulting Group’s Growth-
Share Matrix)
(ii) Ansoff Grid (Ansoff Product-Market Expansion Grid)
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Strategies Suggested by Ansoff’s Product- Developing the People’s Car
Market Expansion Grid ‘TATA Nano’
Market penetration
Market development
Product development
Diversification
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Resource allocation to SBUs BCG Market Growth / Market Share Matrix
Resource allocation to strategic business units is done
by differentiating the company’s businesses according to their
Market Growth %
potential and identifying whether they are profitable. L H
BCG competitive advantage matrix
H
This model helps multi-business or single-business Market
organizations allocate organizational resources efficiently Share
and effectively.
L
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Tasks Involved in Strategic Planning..
Goal formulation (MBO)
Setting Corporate Objectives
Unit’s objectives must be arranged hierarchically
Deciding the extent of growth the firm should aim at
Objectives should be quantitative
Formulating the Corporate Strategy
Goals should be realistic
o What should be done with each of the businesses?
❖ Build? Maintain? Harvest? Divest? Objectives must be consistent
Resource Allocation
Objective- Strategy Design Completes Corporate Strategy
formulation
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SWOT Analysis Market Opportunity Analysis (MOA)
Can the benefits involved in the opportunity be
articulated convincingly to a defined target market?
Strengths
Can the target market be located and reached with cost-
effective media and trade channels?
Weaknesses
Does the company possess or have access to the critical
capabilities and resources needed to deliver the customer
Opportunities benefits?
Threats
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Market Opportunity Analysis (MOA) (cont.)
FedEx
Can the company deliver the benefits better than any actual
or potential competitors?
FedEx added Sunday
Will the financial rate of return meet or exceed the
deliveries
company’s required threshold for investment?
based on customer
requests and
market demand
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Competitive Advantage
Porter’s Generic Strategies
➢ Competitive Strategies
Overall Cost Leadership ➢ Differentiation
➢ Cost leadership
➢ Strategy – Differentiation Focus
Differentiation Cost Focus
Focus
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Analyzing Competition
The Forces Shaping Competition in an Industry
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What is a Marketing Plan? Levels of a Marketing Plan
A marketing plan is the central instrument for directing
and coordinating the marketing effort. Strategic Tactical
It operates at a strategic and tactical level. Target marketing decisions Product features
Value proposition Promotion
Analysis of marketing Merchandising
opportunities Pricing
Sales channels
Service
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Tasks in Marketing Planning..
Marketing Planning
Analysing the Environment Specific to the Business
o Developing the O-T Profile
Concerns of Marketing Planning
Internal Appraisal of the Unit
o Assessing Strengths and Weaknesses of the unit
Difference between Corporate Level Planning and
Business Level Marketing Planning o Assessing the Status of product Lines, Products, andBrands
o Assessing the Competitive Advantage Available
o SWOT Profile
35 36
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Designing an overall marketing plan
Marketing planning
Analyse the environment
Consider capabilities
Decide on target markets
Adapt marketing mix
Meet customer needs
Gain competitive advantage
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Program Formulation and
Planning stages Implementation
Where are we now?
McKinsey’s Elements of Success
How did we get there?
Where are we going? Skills Strategy
Where would we like to be?
How might we get there? Choose a way? Staff Structure
What will it be like? Will it be worth it?
How will we know when we’re there? Style Systems
Are we on course?
Shared values
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The Marketing Plan
Evaluating a Marketing Plan
Executive Summary & Table of Contents
Current Marketing Situation
Opportunity & Issue Analysis ✓ Is the plan simple?
Objectives ✓ Is the plan specific?
Marketing Strategy & tactics
✓ Is the plan realistic?
✓ Is the plan complete?
Action Programs
Financial projections
Implementation & Controls
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ThankYou
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