developing - · pdf filefig 2.2 the generic value chain © kotler, ... analysis (moa) to...

2-1© Kotler, Keller, Ang, Leong & TanMarketing Management

An Asian Perspective

DevelopingMarketing Strategies

and Plans

Chapter

2

Dr.Pusanisa [email protected]

mailto:[email protected]



How does marketing affect customer value?

How is strategic planning carried out at

different levels of the organization?

What does a marketing plan include?

In this chapter, we

address the following

questions:



Opening Case Study - ZARA

Known for trendy affordable

clothes

Zara’s secret?

Total control of business

Design > production > distribution

Lead-time advantage - lower inventory levels

Frequent line changes - exclusivity for customers



Opening Case Study - ZARA

Zara’s “democratication of fashion”

Advertising approach - its shop windows

Expansion plans - 4,000 stores worldwide



Two Views of the Value Delivery

Process

Figure 2.1



Examine costs & performance in

each activity and improve it

Fig 2.2 The Generic Value Chain



Marketing and Customer Value

core competencies

Eg Volvo’s core competency is safety

Eg Nike does not manufacture own shoes

Asian firms more competent

Nike’s 2 core competencies

-shoe design & merchandising

http://en.wikipedia.org/wiki/Volvo_Cars




core competencies

3 characteristics:

1. competitive advantage

2. applications in many markets

3. difficult for competitors to

imitate

is something that a firm can do well and that meets the following three conditions




core competencies

Expand quickly to capture global

market opportunities

Become atomizers

Become asset light by using intangibles

Asian companies - core competence:




The Central Role of Strategic Planning

Strategic planning ensure correct marketing

activities are selected & executed




The Central Role of Strategic Planning

Figure 2.4 The Strategic Planning, Implementation, and Control Processes



Corporate & Division Strategic

Planning

4 corporate planning activities:

1. Define corporate mission

2. Establish strategic business units (SBUs)

3. Assign resources to each SBU

4. Assess growth opportunities




Planning

1. Define the Corporate Mission

What is our business?

Who is the customer?

What is of value to the customer?

What will our business be? 1st ?

What should our business be?



Table 2.1 Sample Mission Statement



Mission statements are the vision direction

for company for next 10 to 20 years

3 major characteristics:

1. Focus on limited number of goals

2. Stress company’s major policies & values

3. Define competitive sphere/area company will operate in


Planning

1. Define the Corporate Mission



Defining Business

Table 2.2

Product-Oriented Versus Market-Oriented Definitions of a Business

market definitions better than product definitions

Customer-satisfying NOT goods-producing



2. Establish strategic business units

(SBUs)

An SBU has 3 characteristics:

1. SBU plan separate from company

2. its own set of competitors

3. has a manager for strategic

planning and profit matters



3. Assign resources to each SBU

The purpose of identifying the

company’s strategic business units is

to develop separate strategies and

assign appropriate funding



4. Assess growth opportunities

plan new business, downsize or terminate old business

How to fill the strategic-planning gap? Figure 2.5

the strategic planning gap



INTENSIVE GROWTH

related to a company's current operations

The company first considers…

– more market share with current products &

markets (market-penetration strategy)?

– find new markets for current products

(market-development strategy)?

– develop new products to current markets

(product-development strategy)?

– develop new products for new markets

(diversification strategy)?



diversification strategyFrappuccino® bottled drinks, Starbucks brand ice cream & purchase

of tea retailer Tazo® Tea into grocery store aisles

market-development strategy

same as above throughout North America & worldwide

market-penetration strategycafés serving gourmet coffee directly to customers in Seattle

product development strategyIncrease customers’ purchases with new in-store merchandise (CDs)

1

3

11

4

2



INTEGRATIVE GROWTHa firm acquires some other element of the chain of

distribution of which it is a member.

INTEGRATIVE GROWTH: backward, forward or horizontal integration within its industry

acquire suppliers -backward integration

acquire retailer-forward integration

acquire competitors-horizontal integration

If unsuccessful, diversification

2-23

Integrative Growth II

© Kotler, Keller, Ang, Leong & TanMarketing Management


LVMH (Luis

Vuitton

+Moet

Hennessy)

Christian Dior

(CD)

Gucci

Channel

Givenchy

Marc Jacobs

Prada

Fendi

Kenzo

DKNY



DIVERSIFICATION GROWTH

When good opportunities are

found outside present

businesses

Good opportunity is when

industry is attractive &

company has strengths to be

successful

2-25

Diversification Growth

© Kotler, Keller, Ang, Leong & TanMarketing Management


Richemont

Group

(Cartier,

Dunhill,

Chloe)

Stationary:

Monblanc

5 billion Euros

(2006)



Organization and Organizational

Culture

Corporate culture

“the shared experiences, stories, beliefs

& norms that characterize an

organization”

corporate culture, structure

& policies are key when

implement new strategy




Culture

What drive successful Asian businesses?

4 organizational factors

1. Market orientation/direction

2. Innovativeness

3. Corporate culture

4. Organizational climate




Culture

How to adopt new view of crafting strategies?

Get fresh ideas from:

– employees with youthful perspectives

– employees who are out stationed

– employees who are new to industry

Choose among different views of the future



Business Unit Strategic

Planning - the business mission

Each business unit needs to define its

specific mission within the broader

company mission




Planning – SWOT Analysis

monitor

external & internal

environment

SWOTAnalysisOverall evaluation of a company’s strengths weaknesses opportunities & threats

threats

weaknesses

strengths

opportunities

SWOT

Analysis



Business Unit Strategic Planning –

EXTERNAL ENVIRONMENT (OPPORTUNITY & THREAT) ANALYSIS

threats

weaknesses

strengths

opportunities

SWOT

Analysis

A business unit has to identify opportunities and threats. How?

By monitoring key macroenvironment & microenvironment factors that affect ability to earn profits




Planning – SWOT Analysis

3 main sources of market opportunities

1. Supply something that is in short supply

2. Supply existing product in new way

3. Totally new product or service



Market Opportunity Analysis (MOA)

To evaluate opportunities

To determine attractiveness & probability of success


Planning – Market Opportunity Analysis (MOA)

1. Can benefits

convince

target markets?

4. Are benefits

better than

competitors?

5. Is it profitable?

2. Can target markets be reached with cost-effective

media & trade channels?3. Possess

resources to

deliver benefits?



Go for opportunities where it has required strengths?

Go for opportunities where it has to develop certain strengths?

Business Unit Strategic Planning –

INTERNAL ENVIRONMENT (STRENGTHS/WEAKNESSES) ANALYSIS

threats

weaknesses

strengths

opportunities

SWOT

Analysis

Checklist to evaluate

INTERNAL strengths & weaknesses



Goals

objectives specific to

magnitude/greatness & time

Goal formulation

goals for planning period done after

doing SWOT analysis


Planning – goal formulation



Managing by Objectives (MBO) is successful if:

1.Objectives arranged hierarchically

2.Objectives are quantitative where possible

3.Goals are realistic

4.Objectives are consistent


Planning – goal formulation



Goals indicate what business wants

to achieve

Strategy is a game plan for getting

there

marketing strategy

compatible technology strategy

sourcing strategy


Planning – strategic formulation





Overall cost

leadership

achieve lowest

costs to price lower

than competitors &

win large market

share

Focus

focuses on

narrow market

segments

Differentiation

superior

performance in

area valued by

large part of

market

PORTER’S GENERIC STRATEGIES



STRATEGIC ALLIANCES

Companies need strategic

partners to be effective.

Many strategic alliances take the

form of marketing alliances.

4 major categories:

1. Product or service alliances

2. Promotional alliances

3. Logistics alliances

4. Pricing collaborations



A celebration at a Star Alliance brings

together 16 airlines that cover most of

the globe





STRATEGIC ALLIANCES

4 major categories:

1. Product or service alliances

2. Promotional alliances

3. Logistics alliances

4. Pricing collaborations

Visa has promotional alliance

with Hong Kong Disneyland



Business Unit Strategic Planning -Program Formulation & Implementation

STEP ONE

Once strategies

developedwork out detailed programs

STEP TWO

Once marketing

programs

formulated

marketing must estimate costs

STEP THREE

Activity-based

cost (ABC)

accounting applied

whether results to justify the cost

STEP FOUR

Implementing

strategynot lose sight of stakeholders & their needs



Marketplace will change –

review & revise implementation,

programs, strategies or

objectives


Planning – feedback and control

HAIER is a good example:

Started with inferior-quality products

Later, sales went up

China’s leading maker of washing machines

Faces competition in Chinese market

Partner with Sanyo in production alliances

Makes digital TVs with LG Electronics

Diversify into finance, computers, cell phones



1. Is the plan simple?

2. Is the plan specific?

3. Is the plan realistic?

4. Is the plan complete?


Planning - Contents of a Marketing Plan

marketing plan

A summarized

written

document about

marketplace &

plans to reach

marketing

objectives



Executive summary & table of contents

Situation analysis

Marketing strategy

Financial projections

Implementation controls


Planning - Contents of a Marketing Plan



Marketing Debate — What Good is a Mission Statement?

Virtually all firms have mission statements to help guide and inspire

employees as well as signal what is important to the firm to those outside the

firm. Mission statements are often the product of much deliberation and

discussion. At the same time, some critics claim that mission statements

Sometimes lack “teeth” and specificity. Moreover, critics also maintain that

in many cases, mission statements do not vary much from firm to firm and

make the same empty promises.

Take a position: Mission statements are critical to a successful marketing

organization, or Mission statements rarely provide useful marketing value.

Marketing Discussion

Consider Porter’s value chain and the holistic marketing orientation model.

What implications do they have for marketing planning?

How would you structure a marketing plan to incorporate some of their

concepts?

Final discussion

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