MARKETING MANAGEMENT12th edition

2 Developing

Marketing Strategies and Plans

Kotler Keller

2-2

Objectives

Defining the Business and the Mission

Strategic Planning, Implementation and Control Processes

Planning Based on Competencies and Competition Relative to Opportunity, Objectives and Performance

Opportunity Assessment Model and Marketing Plan Specifics

2-3

Defining the Business and the Mission

Company Product Market

Missouri-Pacific Railroad

We run a railroad

We are a people-and-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

Defining the BusinessA Market Versus a Product Orientation

eBay: “We help people trade anything on earth.We will continue to enhance the Online trading experiences of all collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.”

Motorola: “The purpose of Motorola is to honorablyserve the needs of the community by providingproducts and services of superior quality at a fair price to our customers; to do this so as toearn an adequate profit which is required forthe total enterprise to grow; and by doing so, provide the opportunity for our employees andshareholders to achieve their personal objectives.”

Rubbermaid: “Our vision is to be the Global Market Share Leader in each of the markets we serve. We will earn this leadership position by providing to our distributor and end-user customers innovative, high-quality, cost-effective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.”

The Mission

2-4

The Strategic Planning, Implementation, and Control Processes

MARKETING EFFORTDRIVEN BY MARKETING PLANS

• Strategic marketing plans:

Opportunity analysis, target markets

and value proposition• Tactical marketing plans:

Marketing Mix = Product, Price,

Promotion and Place

by SBU

BASIC PLANNING ACTIVITIES OF HQ Defines Corporate Mission (competency,Defines Corporate Mission (competency,

industry, product, application, vertical,industry, product, application, vertical,

geographic and market scope)geographic and market scope) Establishes Divisions and Strategic BusinessEstablishes Divisions and Strategic Business

Units (SBUs – product vs. market)Units (SBUs – product vs. market) Assigns resources to each Division and SBUAssigns resources to each Division and SBU Enters new businesses, downsizes, or Enters new businesses, downsizes, or

terminates older businesses relative toterminates older businesses relative to

assessment of growth opportunitiesassessment of growth opportunities

ATTRIBUTES AND PURPOSE OF SBUs

Is single or collection of related businessesIs single or collection of related businesses

that can be planned for separatelythat can be planned for separately

Has its own set of competitorsHas its own set of competitors

Has dedicated management with authority Has dedicated management with authority

and responsibility for strategic planning and responsibility for strategic planning

and profitabilityand profitability

Created to optimize specific business Created to optimize specific business

opportunities that require specialized opportunities that require specialized

resources and dedicated fundingresources and dedicated funding

2-5

Market Attractive-ness

Overall market size

Annual market growth rate

Historical profit margin

Competitive intensity

Technological requirements

Inflationary vulnerability

Energy requirements

Environmental impact

Social-political-legal

Weight

0.20

0.20

0.15

0.15

0.15

0.05

0.05

0.05

Must be acceptable

1.0

Rating =

(1-5)

4

5

4

2

4

3

2

3

Value

0.80

1.

0.60

0.30

0.60

0.15

0.10

0.15

3.70

Business Strength

Market share

Share growth

Product quality

Brand reputation

Distribution network

0.10

0.15

0.10

0.10

0.05

4

2

4

5

4

0.40

0.30

0.40

0.50

0.20

Corporate, Division and SBU Strategic Planning

The General Electric Model The General Electric Model CHARACTERISTICS

Assesses SBU opportunity based on current market share of quantifiable market sizes SBUs are rated in terms of business strengths relative to competitive position in markets

of varying attractiveness Defines specific business strategies in accordance with SBUs’ competitive business

strengths in markets of varying attractiveness

2-6

Corporate and Division Strategic Planning

Intensive Growth Strategies: Ansoff’s Product-Market Expansion Grid Need for Incremental Revenue to Meet Objectives

1 INTENSIVE GROWTH STARTEGIES A) Market Penetration Strategy - Encourage current customers to buy more (Programs, Promotions, Incentives)) - Attract competitors' customers (Value Differentiation and PPI) - Motivate non-users of common applications in current geographies to buy (PPI) B) Market development - Develop new (applications) uses for current products (Sales Strategies) - Motivate non-users of common applications in new geographies to buy (PPI & expanded channels) C) Product Development - Develop new features and performance capabilities of current products - Develop new products as better solutions for current applications

INTEGRATIVE GROWTH STARETGIES A) Acquire suppliers and their related revenues (backward integration) B) Acquire external sales and fulfillment channels and their related revenues C) Acquire competitors

DIVERSIFICATION GROWTH STRATEGIES A) Develop or acquire new products to enter new markets with synergies to existing markets B) Develop new offerings (or services) to existing customers with no synergy to existing products C) Enter new markets with new offerings and no synergy to existing products, markets or customers (Play on Brand)

2

3

THREE WAYS TO CLOSE THE

REVENUE GAP

CONSIDERATIONS- Revenue / Profit Opportunity- Investment Requirements- Ease of Entry – Logistics- Working Capital Availability- Critical Lead Time Availability- Competitive Positions / Strengths

2-7

Strategic and Tactical Planning

Marketing Plan ContentsMarketing Plan Contents Executive SummaryExecutive Summary Current Marketing Current Marketing

SituationSituation Opportunity and issue Opportunity and issue

analysisanalysis ObjectivesObjectives Marketing strategyMarketing strategy Action programsAction programs Financial projectionsFinancial projections Implementation controlsImplementation controlsMarketing AlliancesMarketing Alliances

Product or service Product or service alliancesalliances

Promotional alliancesPromotional alliances

Logistical alliancesLogistical alliances

Pricing collaborationsPricing collaborations

PRODUCT MARKETING STRATEGY

Strategic Planning Process

Business UnitStrategic Planning

SimpleSpecificRealisticComplete

Direct Control Organization Groups

COMPANY*

OBJECTIVES

MARKETS

PRODUCTS

ACCOUNTS /

GEOGRAPHIES

SALES

PROCESSES

RESOURCES

Type-Mix-Qty

ORGANIZATION

BUSINESS

UNITS

PERFORMANCE

REQUIREMENTS

SKILLS

MANAGEMENT

TERRITORY:

Plans & Controls

COMPENSATION

INCENTIVES

PERFORMANCE

Review & Assess

P V N

r a i

i l c

c u h

e e e

P

e

r

s A

o d P

n v r

a e o

l r m

t oS i t

e s i

l i o

l n n

i g s

n

g

Strategic Tactical

Organization Performance* Profitability, GrowthCompetitive Philosophy

2-8

The Mission, MOA / Threat Analysis and Goal Setting

• Can the benefits of the opportunity be credible to a defined target market?

• Can the target market be located and reached cost-effectively by media and channels?

• Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits?

• Can the company deliver the benefits better than any actual or potential competitors?

• Will the financial ROI meet or exceed the company’s required threshold for investment?

MARKET OPPORTUNITY ANALYSIS

GOAL FORMULATION USING MBOUnit’s objectives must be hierarchicalObjectives should be quantitativeGoals should be realisticObjectives must be consistent

MISSION STATEMENTSFocus on a Limited Number of goalsStress Major Policies and ValuesDefine Major Competitive Spheres