LECTURE2

Marketing Management

Dr. Mohamed Hesham Mansour

MARKETING MANAGEMENT 12th edition

2 Developing Marketing Strategies and Plans

Kotler

Keller

Chapter Questions
How

does marketing affect customer value? How is strategic planning carried out at different levels of the organization? What does a marketing plan include?

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Improving Value Delivery the Japanese Way

0 customer feedback time 0 product improvement time 0 purchasing time 0 setup time 0 defects

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3 Vs Approach to Marketing
Define the value segment Define the value proposition Define the value network

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The Value Delivery process

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Corporate Value Chain

Benchmarks & Best of Class

Organizational costs and performance measures

Competitor costs and performance measures

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The Value Chain& The Core Business Processes

The firms success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct Core Business processes

The market sensing process (market Intelligence) The new offering realization process The customer acquisition process (targeting& prospecting) The customer relationship management process The fulfillment management process (receiving, approving& shipping goods and A/R)

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Characteristics of Core Competencies

A source of competitive advantage Applications in a wide variety of markets Difficult to imitate

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Exercise
Select a core competency & develop its related competitive advantage

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A Holistic Marketing Framework& Customer Value

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Challenges Facing CMOs

Doing more with less Driving new business development Becoming a full business partner

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Levels of a Marketing Plan

Strategic
Target

Tactical
Product

marketing decisions Value proposition Analysis of marketing opportunities

features Promotion Merchandising Pricing Sales channels Service

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The complete strategic model

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Corporate Headquarters Planning Activities

Define the corporate mission Establish SBUs Assign resources to each SBU Assess growth opportunities

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Strategic Management Model

Environmenta l Scanning Strategy Formulation Strategy Implementation Evaluatio n and Control

External
Societal Environment
General forces

Mission
Reason for existence

Objectives
What results to accomplish by when

Task Environment
Industry analysis

Strategies
Plan to achieve the mission & objectives

Policies
Broad guidelines for decision making

Internal
Structure
Chain of command

Programs
Activities needs to accomplish a plan

Budgets
Cost of the programs

Culture
Beliefs, expectations, values

Process to monitor performanc e and take corrective action

Procedures
Sequence of steps needed to do the job

Resources
Assets, skills competencies, knowledge

Performance

Environmental Variables
Societal Environment
Scio cultural Forces Shareholders Governments

Task Environment (Industry)

Suppliers

Economic Forces

Special Interest Groups

Customers

Internal Environment
Structure Culture Resources

Employees/ Labor Unions Competitors

Trade Associations Creditors communities Political-Legal Forces Technological Forces

Scanning the External Environment

Analysis of Societal Environment Economic, Socio-cultural, Technological, Political-Legal Factors

Community Analysis

Market Analysis

Competitor Analysis

Interest Group Analysis

Selection of Strategic Factors Opportunities Threats

Supplier Analysis

Governmental Analysis
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Strategy Formulation
Strategy formulation is the development of long-range plans for the effective management of environmental opportunities and threats, in light of corporate strength and weaknesses. It includes defining the corporate mission, specifying achievable objectives, developing strategies, and setting policy guidelines.

Strategy Formulation
Mission

An organizations mission is the purpose or reason for the organizations existence. It tells what the company is providing to society either a service like housecleaning or a product like automobiles. A well-conceived mission statement defines the fundamental, unique purpose that sets a company apart from other firms of its type and identifies the scope of the companys operations in terms of products (including services) offered and markets served. It may also include the firms philosophy about how it does business and treats its employees.

Mission
It puts into words not only what the company is now, but what it wants to become managements strategic vision of the firms future. (some people like to consider vision and mission as two different concepts: a mission statement describes what the organization is now; a vision statement describes what the organization would like to become. We prefer to combine these ideas into a single mission statement.) the mission statement promotes a sense of shared expectations in employees and communicates a public image to important stakeholder groups in the companys task environment. It tells who we are and what we do as well as what wed like to become.
.

Strategy Formulation
Objectives

Objectives are the end results of planned activity. They state what is to be accomplished by when and should be quantified if possible. The achievement of corporate objectives should result in the fulfillment of a corporations mission.

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Strategy Formulation
Strategies

A strategy of a corporation forms a comprehensive master plan stating how the corporation will achieve its mission and objectives. It maximizes competitive advantage and minimizes competitive disadvantage.

The typical business firm usually considers three types of strategy: corporate, business, and functional.

Strategy Formulation
1. Corporate strategy describes a companys overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines. Corporate strategies typically fit within the three main categories of stability, growth, and retrenchment.

Strategy Formulation
2. Business strategy usually occurs at the business unit or product level, and it emphasizes improvement of the competitive position of a corporations products or services in the specific industry or market segment served by that business unit.
Business strategies may fit within the two overall categories of competitive or cooperative strategies.

Strategy Formulation
3. Functional strategy is the approach taken by a functional area to achieve corporate and business unit objectives and strategies by maximizing resources productivity. It is concerned with developing and nurturing a distinctive competence to provide a company or business unit with a competitive advantage..

Corporate Strategy
Business (Division Level) Strategy
Functional

Strategy

Strategy Formulation
Policies

A policy is a broad guidelines for decision making that links the formulation of strategy with its implementation. Companies use polices to make sure that employees throughout the firm make decisions and take actions that support the corporation's mission, objectives, and strategies.

Strategy Implementation
Strategy implementation is the process by which strategies and polices are put into action through the development of programs, budgets, and procedures. This process might involve changes within the overall culture, structure, and/or management system of the entire organization. Except when such drastic corporate wide changes are needed, however, the implementation of strategy is typically conducted by middle and lower level managers with review by top management. Sometimes referred to as operational planning, strategy implementation often involves day-to-day decisions in resource allocation. .

Strategy Implementation
A program is a statement of the activities or steps needed to accomplish a single-use plan. It makes the strategy actionoriented. It may involve restructuring the corporation, changing the companys internal culture, or beginning a new research effort.

Strategy Implementation
Procedures, sometimes termed Standard Operating Procedures (SOP), are a system of sequential steps or techniques that describe in detail how a particular task or job is to be done. They typically detail the various activities that must be carried out in order to complete the corporations program.

Strategy Implementation
Evaluation and control is the process in which corporate activities and performance results are monitored so that actual performance an be compared with desired performance. Managers at all levels use the resulting information to take corrective action and resolve problems. Although evaluation and control is the final major element of strategic management, it also can pinpoint weaknesses in previously implemented strategic plans and thus stimulate the entire process to begin again.

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Good Mission Statements

Focus on limited number of goals Stress major policies and values Define major competitive spheres

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Major Competitive Spheres

Industry Products Competence

Market segment Vertical channels Geographical

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Rubbermaid Commercial Products, Inc.

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, costeffective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.
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Motorola The purpose of Motorola is to honorably

serve the needs of the community by providing products and services of superior quality at a fair price to our customers; to do this so as to earn an adequate profit which is required for the total enterprise to grow; and by doing so, provide the opportunity for our employees and shareholders to achieve their personal objectives.
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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.

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Dimensions That Define A Business

Transient Products or Enduring Needs

Customer groups

Customer needs

Technology

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Characteristics of SBUs
It is a single business or collection of related businesses It has its own set of competitors It has a leader responsible for:

Strategic

planning Profitability Efficiency

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The Strategic Planning Gap

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Intensive Growth Strategies

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Organizations
Culture Policies Structure

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Culture
The set of key values, beliefs, understanding and norms that members of an organization share
How we do things around here

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Levels of Corporate Culture

Culture that can be seen at the surface level

Visible
1. Artifacts, such as dress, office layout, symbols, slogans, ceremonies

Invisible
2. Expressed values, such as The Penney Idea, The HP Way 3. Underlying assumptions and deep beliefs, such as people are lazy and cant be trusted Deeper values and shared understandings held by organization members

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Visible Manifestations
Symbols Stories

Heroes
Slogans

Ceremonies

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Environment and Culture

A big influence on internal corporate culture is the external environment

Cultures can vary widely across organizations Organizations within same industry reveal similar cultural characteristics

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Four Types of Corporate Cultures

Needs of the Environment
Flexibility External Stability

Strategic Focus

Adaptability Culture

Achievement Culture

Internal

Involvement Culture

Consistency Culture

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The business unit strategic planning process

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SWOT Analysis

Internal
Strengths Weaknesses

External
Opportunities Threats

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Checklist for Analyzing Organizational Strengths and Weaknesses

Management and Organization Management quality Staff quality Degree of centralization Organization charts Planning, information, control systems Finance Marketing Human Resources

Distribution channels Market share

Advertising efficiency Customer satisfaction Product quality Service reputation Sales force turnover Production

Employee experience, education

Union status Turnover, absenteeism Work satisfaction Grievances Research and Development Basic applied research

Profit margin
Debt-equity ratio Inventory ratio Return on investment Credit rating

Plant location Machinery obsolescence Laboratory capabilities Research programs Purchasing system New-product innovations Quality control
Productivity/efficiency Technology innovations

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Issues Priority Matrix

Probable Impact on Corporation High Medium Low Medium Priority

High

Probability of Occurrence

High Priority

High Priority

Medium

High Priority

Medium Priority

Low Priority

Medium Priority

Low Priority

Low Priority

Low

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TOWS Matrix
External Factors (EFAS) Internal factors (IFAS) Strengths (S) List 5 --- 10 internal strengths here
SO Strategies
Generate strategies here that use Strengths to take the advantage of opportunities

Weaknesses (W) List 5 --- 10 internal weaknesses here

WO Strategies
Generate strategies here that take advantage of opportunities by overcoming weaknesses

Opportunities (O) List 5 --- 10 external opportunities here

Threats (T) List 5 --- 10 external threats here

ST Strategies
Generate strategies here that use strengths to avoid threats

WT Strategies
Generate strategies here that minimize weaknesses and avoid 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 costeffective media and trade 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 rate of return meet or exceed the companys required threshold for investment?
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MOA

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MOA

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Goal Formulation and MBO

Requirements for using MBO

Units

objectives must be hierarchical Objectives should be quantitative Goals should be realistic Objectives must be consistent

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Effective Goals Have Five Parts

1. Intentions

2. Outcomes
3. Methods/Resources 4. Deadlines 5. Action Plan

How to Set Goals

Intentions Outcomes
Methods/Resources

Deadlines

To: - Develop - Evaluate - Increase - Choose - Decrease - Purchase - Install - Test - Inform - Produce - Complete - Prevent

Having: - A product - An increased profit - An approach - A reduced cost - A more efficient way - Fewer mistakes - Higher performance - A system

Through: - Equipment - Personal action - Technology - Delegation - Staffing - Training - Task forces - Analysis - Research

How to Insure Success with Goals?

(AIR)

A I R

Alignment Have you aligned this goal with your organizations mission? Have you aligned this goal with your departmental mission? Have you aligned this goal with your bosss mission and vision?
Impact What difference will it make to the organization?

Rewards Whats in it for everybody? Remember that people repeat the behavior for which they are rewarded.

Goals Alignment
Company Vision Company core values Company mission

Company goals
Critical Success Factors Division objectives Critical success factors

Individuals objectives

Priority Management
Priority Definition
A priority is any task or item that is important and has relative urgency

Priority Setting Matrix

Urgent Important Not Urgent

Less Important

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Strategic Formulation Porters Generic Strategies

Overall cost leadership Differentiation Focus

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Porters Generic Competitive Strategies

Competitive Advantage
Lower Cost Differentiation

Narrow Target Broad Target

Completive Scope

Cost Leadership

Differentiation

Cost Focus

Focused Differentiation
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Categories of Marketing Alliances

Product or Service Alliances Promotional Alliances Logistics Alliances Pricing collaborations

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Marketing Plan Contents

Executive summary Table of contents Situation analysis Marketing strategy Financial 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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Assignment # 2 (Groups)
(16/11/2008)

Marketing spotlight (NIKE) p.68

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THANK YOU

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