Marketing Strategy Planning

1. Marketing Strategy Planning Dr. Richard Kao November 1, 2011

2. Introduction • Developing an insightful and creative marketing strategy requires a clear understanding of how marketing works.

3. How does marketing affects customer value? • Marketing involves satisfying customer’s needs and wants. • Customer’s satisfaction comes from customervalue. • The task of any business is to deliver customer value at a profit. • In a hypercompetitive economy, a company can win only by fine-tuning the value deliveryprocess, and providing, & communicating superior value.

4. The Value Delivery Process • The smart company must design and deliver offerings for well-defined targetmarkets. • Instead of emphasizing making and selling, these companies see themselves as part of value delivery process.

5. The Value Creation and Deliver Process • The Process consists of three parts: The first phase: choosing the value– segment the market, select the target market, and develop the offering’s value positioning. Cont.

6. The second phase is providing the value– Marketing must determine specific product features, prices, and distribution. • The third phase is communicating the value–by utilizing the sales forces, sales promotion, advertising, and other communication tools to announce and promote the product.

7. The Value Chain • Michael Porter of Harvard has proposed the value chain as a tool for identifying ways to create more customer value. • Every firm is a synthesis of activities perform to design, produce, market, deliver, and support its product. Cont.

8. s • The value chain identifies nine strategically relevant activities that create value and cost in a specific business. • It consists of five primary activities and four support activities. Cont.

9. The primary activities cover the sequence of bringing materials into the business, converting them into final products, shipping them, and marketing them, and servicing them. • The support activities are procurement, technology development, human resource management and firm’s infrastructure. Cont.

10. The firm’s task is to examine its costs and performance in each value-creating activity and look for ways to improve it. • The firm should estimate its competitors’ costs and performances as benchmarks against which to compare its own.

11. The firm’s 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. • To be successful, a firm also needs to look for competitive advantages beyond its own operations, into the

12. value chains of suppliers, distributors, and customers. . Today many companies have partnered with specific suppliers, and distributors to create a superior value deliverynetwork also called a supply chain.

13. Core Competencies • Many firms today outsource less criticalresources if they can be obtained at better quality or lower cost. • The key is to own and nurture the resources and competencies that make up the essence of the business.

14. Core Competencies vs. Distinctive Capabilities • Core competencies tend to refer to areas of special technical and production expertise. • Distinctive capabilities tend to describe excellence in broaderbusiness processes. • Competitive advantage derives from how well the company has fitted its core competencies and distinctive capabilities into tightly interlocking “activity systems”, such as Apple, Southwest, Amazon.

15. A Holistic Marketing and Customer Value • A holistic marketing views it as “integrating the value exploration, value creation, and value delivery activities with the purpose of building long-term mutually satisfying relationships and co-prosperity among key stakeholders”. ( See Fig. 3.)

16. Strategic Marketing Planning • Creating, providing, and communicating value requires many different marketing activities. • Strategic marketing planning is necessary to ensure that the proper activities are selected and executed. Cont.

17. Three key areas are called for action: • The first is managing a company’s businesses as an investment portfolio. • The second involves assessing each business’s strength by considering the market’s growth rate and the company’s position and fit in that market. Cont.

18. The third is establishing a strategy. • For each business, the company must develop a game plan for achieving its long-term objectives.

19. Strategic marketing planning process • GE’s strategic planning grid • Four basic types of opportunities