2. Arab World Edition Kotler, Keller, Hassan, Baalbaki, and Shamma
Marketing Management
Arab World Edition
Kotler, Keller, Hassan, Baalbaki, and Shamma
Chapter 2
Developing Marketing
Strategies and Plans

3. Chapter Questions How does marketing affect customer value?
How is strategic planning carried out at different levels of the organization?
What does a marketing plan include?
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4. Marketing and Customer Value
Chapter Question 1:
How does marketing affect customer value?
Marketing and Customer Value
The task of any business is to deliver customer value at a profit. In a competitive market, a company can win only by fine-tuning the value delivery process and choosing, providing, and communicating superior value.
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5. The Value Delivery Process
Chapter Question 1:
How does marketing affect customer value?
The Value Delivery Process
The value creation and delivery sequence can be divided into three phases.
Choosing the value.
Providing the value.
Communicating the value.
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6. How does marketing affect customer value?
Chapter Question 1:
How does marketing affect customer value?
The Value Chain
The value chain is a tool for identifying ways to create more customer value. In the value chain model, every firm is a synthesis of primary and support activities.
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7. How does marketing affect customer value?
Chapter Question 1:
How does marketing affect customer value?
Core business processes
Market-sensing process
New-offering realization process
Customer acquisition process
Customer relationship management process
Fulfillment management process
Saudi Aramco manages business operations through cross-functional teams.
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8. How does marketing affect customer value?
Chapter Question 1:
How does marketing affect customer value?
Core Competencies
Three characteristics of core competencies:
A source of competitive advantage.
Applications in a wide variety of markets.
Difficult for competitors to imitate.
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9. Box 2.1: Becoming a Vigilant Organization
Chapter Question 1:
How does marketing affect customer value?
Box 2.1: Becoming a Vigilant Organization
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10. A Holistic Marketing Orientation and Customer Value
Chapter Question 1:
How does marketing affect customer value?
A Holistic Marketing Orientation and Customer Value
Holistic marketing sees itself as integrating
the value exploration,
value creation,
and value delivery activities
with the purpose of building long-term, mutually satisfying relationships and prosperity among key stakeholders.
The holistic marketing framework is designed to address three key management questions, as follows.
1. Value exploration. How can a company identify new value opportunities?
2. Value creation. How can a company efficiently create more promising new value offerings?
3. Value delivery. How can a company use its capabilities and infrastructure to deliver the new value offerings more efficiently?
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11. Fig 2.2: A Holistic Marketing Framework
Chapter Question 1:
How does marketing affect customer value?
Fig 2.2: A Holistic Marketing Framework
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12. The Central Role of Strategic Planning
Chapter Question 1:
How does marketing affect customer value?
The Central Role of Strategic Planning
Fig 2.3: The Strategic Planning, Implementation, and Control Process
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13. Corporate and Division Strategic Planning
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Corporate and Division Strategic Planning
All corporate headquarters undertake four planning activities: 1. Defining the corporate mission. 2. Establishing strategic business units (SBUs). 3. Assigning resources to each SBU. 4. Assessing growth opportunities. We’ll look at each process.
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14. Defining the Corporate Mission
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Defining the Corporate Mission
Good mission statements:
Focus on a limited number of goals
Stress major policies and values
Define major competitive spheres
Take a long-term view
Are short, memorable and meaningful
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15. Defining the Corporate Mission
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Defining the Corporate Mission
Mission statements define the major competitive spheres in which the company will operate:
Industry
Products
Competence
Market segment
Vertical channels
Geographic
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16. Example Mission Statement
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Example Mission Statement
Orbit Company, Iraq
“Orbit Company aims to be the
preferred local partner or service
provider of international companies
as it combines the trading expertise
of the Middle East with the best
products, technology and business
practices of the West to accelerate
Iraq’s economic growth.”
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17. Chapter Question 2:
How is strategic planning done at different levels of the organization?
Table 2.1: Product-Oriented versus Market-Oriented Definitions of a Business
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18. Establishing Strategic Business Units
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Establishing Strategic Business Units
An SBU has three characteristics, as follows. 1. It is a single business, or related businesses, that can be planned separately from the rest of the company. 2. It has its own set of competitors. 3. It has a manager responsible for strategic planning and profit performance.
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19. Assigning Resources to Each SBU
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Assigning Resources to Each SBU
Managers decide how to allocate resources.
Boston Consulting Group’s Growth-Share Matrix can be used to make investment decisions. Defines four types of SBUs:
1. Stars: high-growth market, high-share product.
2. Cash cows: low-growth market, high-share product.
3. Question marks: low-share product, high-growth market.
4. Dogs: low-share product, low-growth market.
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20. Assessing Growth Opportunities
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Assessing Growth Opportunities
Fig 2.4: The Strategic Planning Gap
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21. Assessing Growth Opportunities
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Assessing Growth Opportunities
How to fill the strategic planning gap?
Intensive growth
Integrative growth
Diversification growth
Downsizing and divesting older businesses
Almaria diversified its product range when it expanded into bakery products
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22. Assessing Growth Opportunities
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Assessing Growth Opportunities
Fig 2.5: Three Intensive Growth Strategies:
Ansoff’s Product–Market Expansion Grid
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23. Organization and Organizational Culture
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Organization and Organizational Culture
Strategic planning happens within the context of the organization. Corporate culture is the shared experiences, stories, beliefs, and norms that characterize an organization. Key question: is the culture customer-centric?
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24. Research in Motion fosters a culture of innovation
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Marketing Innovation
Innovation in marketing is critical.
Five key strategies for managing change:
Avoid the innovation title for the team.
Use the buddy system.
Set the metrics in advance.
Aim for quick hits first.
Get data to back up your gut.
Research in Motion fosters a culture of innovation
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25. Business Unit Strategic Planning
Chapter Question 3:
What does a marketing plan include?
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Business Unit Strategic Planning
Business unit strategic-planning involves the steps shown in Fig 2.6
Fig 2.6: The Business Unit Strategic-Planning Process
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26. Step 1: The Business Mission
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Step 1: The Business Mission
Each business unit needs to define its specific mission within the broader company mission.
Step 2: SWOT Analysis
Strengths, Weaknesses, Opportunities, Threats
- For monitoring the external and internal marketing environment
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27. (Step 2: SWOT Analysis) Market Opportunity Analysis
Chapter Question 2:
How is strategic planning done at different levels of the organization?
(Step 2: SWOT Analysis)
Market Opportunity Analysis
Can the benefits involved in the opportunity be articulated convincingly to a defined target market?
Can the target market be located and reached with cost-effective media and trade 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 rate of return meet or exceed the company’s required threshold for investment?
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28. Fig 2.7: Opportunity and Threat Matrices
Chapter Question 2:
How is strategic planning done at different levels of the organization?
(Step 2: SWOT Analysis)
Fig 2.7: Opportunity and Threat Matrices
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29. Step 3: Goal Formulation
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Step 3: Goal Formulation
Unit’s objectives must be hierarchical
Objectives should be quantitative
Goals should be realistic
Objectives must be consistent
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30. Step 4: Strategic Formulation
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Step 4: Strategic Formulation
Porter’s Generic Strategies
Overall cost leadership
Differentiation
Focus
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31. (Step 4: Strategic Formulation)
Chapter Question 2:
How is strategic planning done at different levels of the organization?
(Step 4: Strategic Formulation)
Strategic Alliances
There are four major categories of marketing alliances:
Product or service alliances
Promotional alliances
Logistics alliances
Pricing collaborations
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32. Step 5: Program Formulation and Implementation
Chapter Question 2:
How is strategic planning done at different levels of the organization?
Step 5: Program Formulation and Implementation
Depends on:
Clear formulation of marketing programs
Accurate cost planning
Competent implementation
Step 6: Feedback and Control
The key to organizational health is willingness to examine the changing environment and adopt new goals and behaviors.
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33. Product Planning: The Nature and Contents of a Marketing Plan
Chapter Question 3:
What does a marketing plan include?
Product Planning: The Nature and Contents of a Marketing Plan
A marketing plan is the central instrument for directing
and coordinating the marketing effort. It operates at a
strategic and tactical level.
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34. Levels of a Marketing Plan
Chapter Question 3:
What does a marketing plan include?
Levels of a Marketing Plan
Strategic
Target marketing decisions
Value proposition
Analysis of marketing opportunities
Tactical
Product features
Promotion
Merchandising
Pricing
Sales channels
Service
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35. Marketing Plan Contents
Chapter Question 3:
What does a marketing plan include?
Marketing Plan Contents
Executive summary
Table of contents
Situation analysis
Marketing strategy
Financial projections
Implementation controls
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36. Evaluating a Marketing Plan
Chapter Question 3:
What does a marketing plan include?
Evaluating a Marketing Plan
Is the plan simple?
Is the plan specific?
Is the plan realistic?
Is the plan complete?
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37. Credits Slide 1 Corbis: Ali Haider / epa
Slide 6 Alamy Images: Barry Iverson
Slide 8 George S. Day and Paul J. H. Schoemaker, Peripheral Vision: Detecting the Weak Signals That Will Make or Break Your Company (Boston: Harvard Business School Press, 2006)
Slide 10 P. Kotler, D. C. Jain, and S. Maesincee, “Formulating a Market Renewal Strategy,” in Marketing Moves (Part 1), Fig. 1-1 (Boston: Harvard Business School Press, 2002), p. 29. Copyright © 2002 by President and Fellows of Harvard College. All rights reserved
Slide 15 Orbit Company website, Mobily Saudi Arabia company website, eBay company website,
Slide 20 Salem Alforaih Photography, photographersdirect.com
Slide 21 Adapted and reprinted by permission, Harvard Business Review. From “Strategies for Diversification,” by Igor Ansoff, September–October Copyright © 1957 by the President and Fellows of Harvard College. All rights reserved
Slide 23 Getty Images: Justin Sullivan