MARKETING MANAGEMENT 12th edition Developing Marketing Strategies and Plans Kotler Keller

Objectives Defining the Business and the Mission Strategic Planning, Implementation and Control Processes Planning Based on Competencies and Competition Relative to Opportunity, Objectives and Performance Opportunity Assessment Model and Marketing Plan Specifics

Defining the Business and the Mission A Market Versus a Product Orientation The Mission eBay: “We help people trade anything on earth. We will continue to enhance the Online trading experiences of all collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.” Company Product Market Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover Xerox We make copying equipment We improve office productivity Standard Oil We sell gasoline We supply energy Columbia Pictures We make movies We entertain people Motorola: “The purpose of Motorola is to honorably serve the needs of the community by providing products and services of superior quality at a fair price to our customers; to do this so as to earn an adequate profit which is required for the total enterprise to grow; and by doing so, provide the opportunity for our employees and shareholders to achieve their personal objectives.” Rubbermaid: “Our vision is to be the Global Market Share Leader in each of the markets we serve. We will earn this leadership position by providing to our distributor and end-user customers innovative, high-quality, cost-effective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.”

The Strategic Planning, Implementation, and Control Processes MARKETING EFFORT DRIVEN BY MARKETING PLANS Strategic marketing plans: Opportunity analysis, target markets and value proposition Tactical marketing plans: Marketing Mix = Product, Price, Promotion and Place by SBU ATTRIBUTES AND PURPOSE OF SBUs Is single or collection of related businesses that can be planned for separately Has its own set of competitors Has dedicated management with authority and responsibility for strategic planning and profitability Created to optimize specific business opportunities that require specialized resources and dedicated funding BASIC PLANNING ACTIVITIES OF HQ Defines Corporate Mission (competency, industry, product, application, vertical, geographic and market scope) Establishes Divisions and Strategic Business Units (SBUs – product vs. market) Assigns resources to each Division and SBU Enters new businesses, downsizes, or terminates older businesses relative to assessment of growth opportunities

Corporate, Division and SBU Strategic Planning The General Electric Model CHARACTERISTICS Assesses SBU opportunity based on current market share of quantifiable market sizes SBUs are rated in terms of business strengths relative to competitive position in markets of varying attractiveness Defines specific business strategies in accordance with SBUs’ competitive business strengths in markets of varying attractiveness Market Attractive-ness Overall market size Annual market growth rate Historical profit margin Competitive intensity Technological requirements Inflationary vulnerability Energy requirements Environmental impact Social-political-legal Weight 0.20 0.15 0.05 Must be acceptable 1.0 Rating = (1-5) 4 5 2 3 Value 0.80 1. 0.60 0.30 0.10 3.70 Business Strength Market share Share growth Product quality Brand reputation Distribution network 0.40 0.50

Corporate and Division Strategic Planning Intensive Growth Strategies: Ansoff’s Product-Market Expansion Grid Need for Incremental Revenue to Meet Objectives 1 INTENSIVE GROWTH STARTEGIES A) Market Penetration Strategy - Encourage current customers to buy more (Programs, Promotions, Incentives)) - Attract competitors' customers (Value Differentiation and PPI) - Motivate non-users of common applications in current geographies to buy (PPI) B) Market development - Develop new (applications) uses for current products (Sales Strategies) - Motivate non-users of common applications in new geographies to buy (PPI & expanded channels) C) Product Development - Develop new features and performance capabilities of current products - Develop new products as better solutions for current applications INTEGRATIVE GROWTH STARETGIES A) Acquire suppliers and their related revenues (backward integration) B) Acquire external sales and fulfillment channels and their related revenues C) Acquire competitors DIVERSIFICATION GROWTH STRATEGIES A) Develop or acquire new products to enter new markets with synergies to existing markets B) Develop new offerings (or services) to existing customers with no synergy to existing products C) Enter new markets with new offerings and no synergy to existing products, markets or customers (Play on Brand) THREE WAYS TO CLOSE THE REVENUE GAP CONSIDERATIONS Revenue / Profit Opportunity Investment Requirements - Ease of Entry – Logistics - Working Capital Availability - Critical Lead Time Availability - Competitive Positions / Strengths 2 3

Strategic and Tactical Planning Direct Control Organization Groups Business Unit Strategic Planning Strategic Tactical COMPANY* BUSINESS PRODUCT MARKETING STRATEGY OBJECTIVES UNITS P V N MARKETS r a i Marketing Plan Contents Executive Summary Current Marketing Situation Opportunity and issue analysis Objectives Marketing strategy Action programs Financial projections Implementation controls i l c PERFORMANCE c u h REQUIREMENTS e e e PRODUCTS SKILLS MANAGEMENT ACCOUNTS / P GEOGRAPHIES e r s A o d P TERRITORY: SALES n v r Plans & Controls a e o PROCESSES l r m t o S i t e s i l i o COMPENSATION RESOURCES l n n INCENTIVES Marketing Alliances Product or service alliances Promotional alliances Logistical alliances Pricing collaborations Type-Mix-Qty i g s n g PERFORMANCE Simple Specific Realistic Complete ORGANIZATION Review & Assess Competitive Philosophy Strategic Planning Process * Profitability, Growth Organization Performance

The Mission, MOA / Threat Analysis and Goal Setting MISSION STATEMENTS Focus on a Limited Number of goals Stress Major Policies and Values Define Major Competitive Spheres MARKET OPPORTUNITY ANALYSIS Can the benefits of the opportunity be credible to a defined target market? Can the target market be located and reached cost-effectively by media and channels? Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits? Can the company deliver the benefits better than any actual or potential competitors? Will the financial ROI meet or exceed the company’s required threshold for investment? GOAL FORMULATION USING MBO Unit’s objectives must be hierarchical Objectives should be quantitative Goals should be realistic Objectives must be consistent