Chapter 2

Developing Marketing Strategies and

Plans
Lecture: Dr. Widya Paramita, S.E., M.Sc.
How does marketing affect customer value?

• Marketing is the activity, set of

institutions, and process for Quality
creating, communicating,
delivering, and exchanging
offerings that have value for
customers, clients, partners and
society at large.
• Value is the sum of the tangible Price Service
and intangible benefits and costs.
Figure 1. Customer value triad
 • Quality is the totality of features and characteristics of a
Which one, ACER product that bear on its ability to satisfy customer’s stated
or APPLE, deliver or implied needs.
• Performance (relative) or conformance (as promised)
higher quality? quality?
Marketers are responsible for value delivery
process
• Value delivery process is divided into three sequences:

Choosing the value Providing the value Communicating the value

• Segmenting • Product • Promotion
• Targeting • Price • Advertising
• Positioning • Place • Sales
The Michael Porter’s Value Chain
• The value chain represents a set of activities performed to design, produce,
market, deliver and support its product.
• The value chain consists of primary and support activities
• The primary activities are depicted below:
Inbound logistics Outbound logistics Service

Operations Marketing

• The support activities are depicted below:

Procurement HR department

Technology development Firm infrastructure

(finance, accounting, legal,
government affairs)
Factors affecting the success of value delivery
process:
• Marketing department must coordinate with other to conduct the core business
processes that determine the success of value delivery process.

The market-sensing process

• Gathering and acting upon information about the market

The new-offering realization process

• Researching, developing, and launching new high-quality offerings quickly and within
budget. “Cross-functional teams and superior
value delivery network are the key
The customer acquisition process
success factors.”
• Defining target markets and prospecting for new customers.

The customer relationship management process

• Building deeper understanding, relationships, and offerings to individual customers

The fulfillment management process

• Receiving and approving orders, shipping goods on time, and collecting payment
Company must identify their core
competence, own and nurture it…
Companies outsource less-critical resources if they can obtain better quality or lower cost; own
and nurture the core competencies that make up the essence of the business.

Three characteristics of core competence:

• It is a source competitive advantage and makes a significant contribution to perceived customer benefits
• It has applications in a wide variety of markets
• It is difficult for competitors to imitate

Business need to realign themselves to maximize their core competencies:

• (re)defining the business concept
• (re)shaping the business scope, sometimes geographically.
• (re) positioning the company’s brand identity.
Strategic Planning
• Four organizational level planning
Marketers must prioritize strategic planning
Corporate
in three key areas: •Corporate strategic plan

• Managing the businesses as an investment portfolio

• Assessing the market’s growth rate and the company’s Division
position in that market •Fund allocation to each business unit
• Establishing a strategy
Business unit
Marketing plan is the central instrument for •Strategic plan to carry the business
unit into profitable future
directing and coordinating the marketing
efforts:
• Strategic: firm’s value proposition and market
opportunities
• Tactical: specific marketing tactics Product
•Marketing plan
Corporate and Division Strategic
Planning Activities
Defining the corporate mission
Mission statement
(i.e., focus on a
limited number of
Business
goals, reflect the
definition (i.e.,
company’s major
market definition,
policies and
target market
values, define
definition,
major competitive
strategic market
spheres, take a
definition)
long-term view,
short memorable
and meaningful).
Establishing strategic business units
• Characteristics of SBU:
• SBU is a single business or a
collection of related businesses that
can be planned separately from the
rest of the company.
• It has its own set of competitors
• It has a manager responsible for
strategic planning and profit
performance who controls most of
the factors affecting profit.
• Assigning SBU is important to
develop strategies and assign
appropriate fund.
Assessing growth opportunities
Assessing growth opportunities includes planning new businesses, downsizing, and terminating
older business if there is a gap between future desired sales and projected sales and developing
a plan to fill the gap.

Options to fill the gap:

• Intensive opportunities represent opportunities for growth within current businesses (i.e., market-penetration
strategy, market-development strategy, product-development strategy, diversification strategy).
• Integrative opportunities represent opportunities to build or acquire businesses related to current businesses (i.e.,
backward, forward, horizontal integration).
• Diversification opportunities represent opportunities to add attractive unrelated businesses.

Companies must carefully prune, harvest, or divest tired old businesses to release needed
resources for other uses and reduce costs.
 Organization &
Organizational Culture

• Strategic planning happens within the

context of the organization, structures,
policies, and corporate culture.
• Corporate culture is the shared experiences,
stories, beliefs, and norms that characterize
an organization.
Business Unit Strategic Planning
The business-unit strategic planning process
 SWOT Analysis
External environment (opportunity & threat)
analysis.

Three main sources of marketing opportunities.

• Something that is short supply.

• Supply an existing product or service in a new or superior way.
• Problem detecting method: asks consumers for their
suggestions.
• Ideal method: asks consumers to imagine an ideal version of
the product or service.
• The consumption chain method: asks them to chart their steps
in acquiring, using, and disposing of a product.

Company needs contingency plans to handle

identified threats.
 Goal Formulation

Goal formulation Companies usually pursue The SBU’s objectives must

represents a process of multiple goals or meet four criteria to apply
developing specific goals objectives, such as: MBO:
or objectives for the
planning period.
Profitability Arranged hierarchically
Sales growth Objective should be quantitative if
Market share improvement possible
Risk containment Goals should be realistic.
Objectives must be consistent. It is
not possible to maximize sales and
profit simultaneously!
 Strategic Formulation
Goals indicate what a business unit wants to
achieve, strategy is a game plan for getting
there.

Porter’s Generic Strategy

• Overall cost leadership: Firms work to achieve the lowest

production and distribution costs
• Differentiation: The business concentrates on achieving
superior performance in an important customer benefit area
valued by a large part of the market.
• Focus: Focus on one or more narrow market segments.

A strategic group consists of competing firms

directing the same strategy to the same target
market.

Strategy ≠ operational effectiveness, because

operational effectiveness cannot be controlled.
Strategic alliance is a key
factor for a successful
strategy
Product or service alliance, by licensing another to produce
its product, or jointly market their complementary products
or new products.

Promotional alliance, by carrying a promotion for another

company’s product or service.

Logistic alliances, by offering logistical services for another

company’s product.

Pricing collaborations, one or more companies joining a

special pricing collaboration
Collection of Louis Vuitton bags made to
pair with the BMW i8 sports car
Program formulation, implementation,
feedback and control

the implementation (what it takes to pursue the strategy)

After a firm decides on the competitive the cost
the stakeholders involved in the business (i.e., a company might earn
strategy, it must then consider: huge profit for their customers when they pursue a high level of
employee satisfaction)

“It is important to do the right thing (to be effective) than to do the thing
right (to be efficient). Excel companies do both”-Peter Drucker
 Marketing Plan
Executive summary and table of content

• Marketing plan is a Situation analysis

written document that •Background data on sales, costs, the market, competitors, etc.

summarizes what the Marketing strategy

marketer has learned •Defining mission, marketing and financial objectives, target market, etc.

about the marketplace Marketing tactics

and indicates how the •Marketing activities undertaken to execute the marketing strategy; 4Ps

firm plans to reach its Financial projections

•Sales projections, expense forecast, BEP analysis, risk analysis.
marketing objectives.
Implementation control
•Monitoring and adjusting implementation of the plan.
Discussion Session
Questions and Answers