Marketing Strategies and Plans

Developing Marketing Strategies and Plans

• The value delivery process involves choosing the value, providing the value, and communicating the value.

The Value Delivery Process

• Choosing the value requires segmenting the market, selecting the appropriate target market, and developing the offering's value positioning.
• "Segmentation, Targeting, Positioning (STP)" is the essence of strategic marketing.
• Providing the value involves determining specific product features, prices, and distribution.
• Communicating the value utilizes the sales force, sales promotion, advertising, and other communication tools to promote the product.

What is a Marketing Plan?

• A marketing plan is the central instrument for directing and coordinating the marketing effort.
• It operates at both strategic and tactical levels.

Levels of a Marketing Plan

• Strategic elements include target marketing decisions, value proposition, and analysis of marketing opportunities.
• Tactical elements include product features, promotion, pricing, sales channels, and service.

Corporate Headquarters' Planning Activities

• Define the corporate mission.
• Establish strategic business units (SBUs).
• Assign resources to each SBU.
• Assess growth opportunities.

Defining The Corporate Mission

• An organization exists to accomplish something.
• Over time, the mission of organizations may change, as illustrated by Amazon (from largest online bookstore to largest online store) and eBay (from running online auctions for collectors to running online auctions of all kinds of goods).
• Mission statements should reflect a vision or "impossible dream" providing direction for the next 10 to 20 years.

Good Mission Statements

• Focus on a limited number of goals.
• Stress major policies and values.
• Define major competitive spheres.
• Take a long-term view.
• Short, memorable, and meaningful.
• Rubbermaid Commercial Products, Inc. aims to be the Global Market Share Leader, add value through legendary customer service, showcasing focus and customer commitment
• Motorola's mission involved honorably serving the community's needs, achieving adequate profit for growth, and providing opportunities for employees and shareholders.
• eBay's is to help people trade anything on earth and enhance the online trading experiences of all users

Establishing Strategic Business Units

• Companies often define their businesses in terms of products.
• Market definitions of business are superior to product definitions, according to Ted Levitt.

Product Orientation vs. Market Orientation

• Product orientation and market orientation are contrasting approaches for business.
• Missouri-Pacific Railroad (product: railroad; market: people-and-goods mover).
• Xerox (product: copying equipment; market: improve office productivity).
• Standard Oil (product: gasoline; market: supply energy).
• Columbia Pictures (product: movies; market: entertain people).

Characteristics of SBUs

• Each SBU is a single business or collection of related businesses.
• Each has its own set of competitors.
• Each has a leader responsible for strategic planning and profitability.

Walt Disney Company

• Includes Studio Entertainment, Media Networks, Parks and Resorts, and Consumer Products.
• Studio Entertainment includes television and movie production companies, a distribution company, and music labels.
• Media Networks includes a broadcast television network, cable networks, radio networks, and the Walt Disney Internet Group.
• Parks and Resorts includes parks, resort hotels, Disney Cruise Line, Disney Vacation Club, and ESPN Zone.
• Consumer Products includes Disney Merchandise Licensing divisions, Disney Publishing divisions, The Baby Einstein Company, retail groups, and Buena Vista Games.

Assessing Growth Opportunity

• Intensive growth strategies: The Product/Market Expansion Grid
• Market penetration: existing products in existing markets.
• Product development: new products in existing markets.
• Market development: existing products in new markets.
• Diversification: new products in new markets.
• Integrative Growth:
• Backward integration: acquire one or more of its suppliers.
• Forward integration: acquire some wholesalers or retailers (distributors).
• Horizontal integration: acquire one or more competitors.

Business Unit Strategic Planning

• SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats.

Goal Formulation and Management by Objectives (MBO)

• Once a company has a SWOT analysis, it can develop specific goals for the planning period.
• Objectives must be hierarchical, from most to least important.
• Objectives should be quantitative whenever possible.
• Goals should be realistic.
• Objectives must be consistent.

Marketing Plan

• Product managers create marketing plans for individual products, lines, brands, channels, or customer groups.
• Most marketing plans cover one year and range from 5 to 50 pages.

Marketing Plan Contents

• Executive summary.
• Table of contents.
• Situation analysis.
• Marketing strategy.
• Financial projections.
• Implementation controls.

Executive Summary and Table of Contents

• The marketing plan should start with a brief summary for senior management.
• A table of contents outlines the plan.

Situation Analysis

• This section presents relevant data on sales, costs, the market, competitors, and the macroenvironment.
• Firms use this information to conduct a SWOT analysis.

Marketing Strategy

• The product manager defines the mission, marketing and financial objectives, and groups and needs that the market offerings are intended to satisfy.
• The manager establishes the product line's competitive positioning.

Financial Projections

• On the revenue side, projections show the forecasted sales volume.
• On the expense side, projections show the expected costs of marketing.
• Break-even analysis shows how many units must be sold monthly to offset fixed and variable costs.

Implementation Control

• The last section outlines the controls for monitoring and adjusting implementation of the plan.
• Goals and budget are specified for each month or quarter.
• Management can review results and take corrective actions.
• Some organizations include contingency plans.