Session 6

CHAPTER 2:
DEVELOPING MARKETING STRATEGIES AND PLANS
SESSION 6
GROUP 6
SESSION 6 LEARNING
OBJECTIVES
In this chapter, we will address the following
questions:
How does marketing affect customer value?
How is strategic planning carried out at the corporate and

divisional levels?
How is strategic planning carried out at the business unit level?
CORPORATE STRATEGIC PLANNING
What does a marketing plan include?
Define the corporate
Four Planning Activities mission
Whether they let their business units set
their own goals and strategies or collaborate
Establish strategic
in doing so, all corporate headquarters
business units
Assign resources to
each strategic business
Unit
Assess growth
opportunities
Defining the Corporate Mission
What is our business? Who is the customer?
Over time, the mission may change to respond to new
opportunities or market conditions.
These simple-sounding questions are among the most
difficult a company will ever face.
Successful companies continuously ask and answer them. What is of value to the
What will our business
From these answers the organization can develop a good customer?
be?
mission statement.
What should out

business be?
Product Definition vs. Market Definition
Market definitions of a business describe the business as a

customer-satisfying process, which is preferred because
products are transient (product definitions) but basic needs
and customer groups endure forever.
A target market definition tends to focus on selling a product or service to a

current market.
Crafting a Mission Statement
A clear, thoughtful mission statement,

developed collaboratively with and shared with
managers, employees, and often customers,
provide a shared sense of purpose, direction,
and opportunity.
At its best it reflects a vision, an almost
“impossible dream,” that provides direction for
the next 20 to 20 years.
A GOOD MISSION STATEMENTS HAVE FIVE MAJOR

CHARACTERISTICS.
They focus on a limited number of goals.
They define the major competitive spheres within which the
company will operate.
They stress the company’s major policies and values.
They take a long-term view
They are short, memorable and meaningful as possible
VAGUE MISSION STATEMENT CLEAR MISSION STATEMENT
To build total brand value by

To organized the world’s information
innovating to deliver customer value
and make it universally accessible and
and customer leadership faster,
useful (Google Mission Statement)
better, and more completely than
our competition.
VAGUE PHILOSOPHY CLEAR PHILOSOPHY
We build brands and make the world Never settle for the best (Google Corporation
Philosophy)
a little happier by bringing our best
Focus on the user and all else will follow.
to you. Its best to do one thing really, really well.
Fast is better than slow.
Democracy on the web works.
You don’t need to be at your desk to need an
answer.
You can make money without doing evil.
There is always more information out there.
Strategic Business Units
It is relatively autonomous division of a
large company that operates as an
independent enterprise with THREE CHARACTERISTICS OF AN SBU:
responsibility for a particular range of
products or activities. Single business or collection of related
Large companies normally manage quite businesses that can be planned separately
different businesses, each requiring its from the rest of the company.
own strategy. The purpose of identifying Own set of competitors
the company’s strategic business unit it to Manager responsible for strategic planning
develop a separate strategies and assign
and profit performance and controls most
appropriate funding.
factors affecting profit.
Senior management knows its portfolio of
businesses usually includes a number of
“yesterday's has-beens” as well as
“tomorrow’s winners.”
Management must decide how to allocate corporate sources to each
SBU.
Portfolio-planning model such as the GE/McKinsey Matrix and the
BCG Matrix were used in the past to assist managers in making
resource allocation decisions. But they have been replaced with
newer models that consider shareholder value analysis.
The GE-McKinsey Matrix is a GE/McKinsey Matrix business
portfolio analysis that provides a structured way to evaluate
business units on two key dimensions:
STRATEGIC BUSINESS UNITS
The attractiveness of the market involved and
the strength of the firm’s position in that
market.
The result is graphical portrayal of the various
business units on these key dimensions and
gives insight to a resource allocation decision.
The BCG Matrix is comprised of four
quadrants that show high and low market
share and high and and low growth potential.
Each quadrant has a name and specific
characteristics.
According to the logic of the BCG matrix, as an
industry grows, all investments become cows
or dogs. The intent of the matrix is to help
companies make good portfolio-management
decisions, focusing investment in the areas
that are likely to provide returns and fund
future growth.
What is Shareholder Value Analysis (SVA)?
SVA determines the financial value of a company by looking at the
returns it gives its stockholders (ie. with and without an SBU). It is based
on the view that the objective of company directors is to maximize the
wealth of the company stockholders.
These value calculations assess the potential of a business based on
growth opportunities from global expansion, repositioning or retargeting,
and strategic outsourcing.
GROWTH OPPORTUNITIES ASSESSMENT
MAY RESULT IN THE FOLLOWING:
New Business Terminating
Downsizing Older Businesses

FIRMS CAN FILL A GAP BETWEEN FUTURE
DESIRED SALES AND PROJECTED SALES
VIA:
Assessing Growth Opportunities
intensive growth
integrative growth
Diversification Growth
Intensive growth: looks for opportunities
within current businesses. The product-market
expansion grid looks at growth possibilities
from the perspective of current and new
products and markets.
Market Penetration
Market Development
Product Development
Diversification
The Strategic Planning Gap
Marketing Penetration – gaining market share with current
products and current customers. The company can achieve
growth by having current customers purchase more, attract
competitors, attract customers, or bring non-buyers into the
market
Market Development – finding new markets for existing
products. The firm can find new buyer groups (business
customers rather than consumers), new distribution
channels (online), or expend distribution to other regions or
countries.
Product Development – Develop new products to the current
market. As the firm already has a relationship with current
customers, they can develop new products to meet other,
related needs of it’s customers.
Diversification– Develop new products for new markets.
Integrative growth: acquire related businesses use backward, forward or
horizontal integrations within the industry. May not reach desired sales
volume; challenges with integration. A business can achieve growth
backward (buy supplier), forward (buy wholesaler), or horizontal
(competitor) integration.
•Business
•Competitor
•Wholesaler
•Supplier
Diversification growth: identify opportunities for growth from adding
attractive, unrelated businesses. Firms can often discover opportunities
outside its present business. However, the new industry should be highly
attractive (grow potential) and the company should have (or acquire) the
right capabilities to succeed.
DOWNSIZING AND DIVESTING
OLDER BUSINESSES
Companies must carefully
prune, harvest, or divest tired
old businesses to release
needed resources for other
uses such as for growth
strategy and reduce costs.
ORGANIZATION AND
WHAT IS ORGANIZATIONAL
ORGANIZATIONAL CULTURE CULTURE?
WHAT IS ORGANIZATION?
A company’s organization is •Corporate culture is “the shared experiences, stories, beliefs, and norms
that characterize an organization.”
its structures, policies, and
•Customer-centric culture can affect all aspects of an organization
corporate culture, all of •Walk into any company and the first thing that strikes you is the
which can become corporate culture – the way people dress, talk to one another, and greet
dysfunctional in a rapidly customers.
•Whereas managers can change structures and policies (though with
changing business
difficulty), the company’s culture is very hard to change.
environment. •Yet adapting the culture is often the key to successfully implementing a
new strategy.
Marketing Innovation
Innovation in marketing is critical – imaginative ideas on strategy exist in
many places within a company.
Employees can challenge company standard and stimulate new ideas.
Senior management should identify and encourage fresh ideas from three
generally underrepresented groups: - employees with youthful or diverse
perspectives, - employees far removed from company headquarters, and
- Employees new to the industry.
Firms developed strategy by choosing their view of the future via
Scenario Analysis.
THANK
YOU

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CHAPTER 2:

DEVELOPING MARKETING STRATEGIES AND PLANS

How is strategic planning carried out at the corporate and

What should out

Market definitions of a business describe the business as a

A target market definition tends to focus on selling a product or service to a

A clear, thoughtful mission statement,

A GOOD MISSION STATEMENTS HAVE FIVE MAJOR

VAGUE MISSION STATEMENT CLEAR MISSION STATEMENT

To build total brand value by

New Business Terminating

Downsizing Older Businesses

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