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Developing Marketing Strategies and
Plans
 The value delivery process
 STP
 Providing the value
 Communicating the value
 Harvard’s Michael Porter has
proposed the value chain as a tool
for identifying ways to create more
customer value. According to this
model, every firm is a synthesis of
activities performed to design,
produce, market, deliver, and
support its product.
 The market-sensing process. All the activities in gathering and acting upon
information about the market
 The new-offering realization process. All the activities in researching,
developing, and launching new high-quality offerings quickly and within
budget
 The customer acquisition process. All the activities in defining target markets
and prospecting for new customers
 The customer relationship management process. All the activities in building
deeper understanding, relationships, and offerings to individual customers
 The fulfillment management process. All the activities in receiving and
approving orders, shipping the goods on time, and collecting payment
 Core competencies have 3 characteristics
 It is a source of competitive advantage and makes a significant contribution to perceived
customer benefits.
 It has application in a wide variety of markets.
 It is difficult for competitors to imitate.
 Competitive advantage posses distinctive capabilities
 Market sensing
 Customer linking
 Channel bonding
 integrating the value exploration, value creation, and value delivery activities with
the purpose of building long-term, mutually satisfying relationships and coprosperity among key stakeholders
 Value exploration—How a company identifies new value opportunities
 Value creation—How a company efficiently creates more promising new value
offerings
 Value delivery—How a company uses its capabilities and infrastructure to
deliver the new value offerings more efficiently
 Managing company’s businesses as an investment portfolio
 assessing each business’s strength by considering the market’s growth rate and the
company’s position and fit in that market
 establishing a strategy
 The Marketing plan
 Strategic and Tactical
 Strategic marketing plan lays out the target markets and the firm’s value proposition,
based on an analysis of the best marketing opportunities.
 The tactical marketing plan specifies the marketing tactics, including product features,
promotion, merchandising, pricing, sales channels, and service.
 Defining the corporate mission
 Establishing strategic business units
 Assigning resources to each strategic business unit
 Assessing growth opportunities
 Same Purpose, changing mission
 What is our business? Who is the customer? What is of value to the customer? What
will our business be? What should our business be?
 Managers, employees and customers (in many cases)
 Good Mission statements have five major characteristics
 The focus on a limited number of goals
 They stress the company’s major policies and values.
 They define the major competitive spheres within which the company will operate
 They take a long-term view
 They are as short, memorable and meaningful as possible.
 View business in terms of customer needs.
 A target market definition
 A strategic market definition
 It is a single business, or a collection of related businesses, that can be planned
separately from the rest of the company
 It has its own set of competitors
 It has a manager responsible for strategic planning and profit performance, who
controls most of the factors affecting profit
 Planning new businesses,
downsizing, and terminating
older businesses.
 The objective is to exploit
potential gap in the market by
planning for it.
 Intensive growth – improving existing business, product development, market
penetration, market development
 Integrative growth – Increasing profit or sales through backward, forward or
horizontal integration within its industry.
 Diversification Growth – capture the growth opportunity that exists outside the
current business.
 Disney channels, resort properties, offering cruise.
 The shared experiences, stories, beliefs, and norms that characterise an
organisation.
 Its embedded in the way people communicate in the company, the way people dress and
the way people greet customers.
 Critical. Imaginative ideas.
 Young employees, employees away from headquarters, employees new to the industry.
 The Business mission: it needs to define its specific mission within the broader
company mission.
 SWOT analysis
 External Environment (Opportunity and threat) Aka macro-environment forces.
 Internal environment (Strength/weaknesses)
 Marketing Opportunity
 Short of supply
 Supplying existing products in a superior way.
 The problem detection method: asks consumers for their suggestions
 Ideal method: has them imagine an ideal version of the product or service,
 Consumption chain method: asks them to chart their steps in acquiring, using, and disposing of a
product. This last method often leads to a totally new product or service.
 A company may benefit from converging industry trends and introduce hybrid
products or services that are new to the market.
 A company may make a buying process more convenient or efficient.
 A company can meet the need for more information and advice.
 A company can customize a product or service.
 A company can introduce a new capability.
 A company may be able to deliver a product or service faster.
 A company may be able to offer a product at a much lower price.
 Company capabilities
 Core competency
 Management systems
 Financial backing
 They must be arranged hierarchically, from most to least important.
 Objectives should be quantitative whenever possible.
 Goals should be realistic.
 Objectives must be consistent.
 S.M.A.R.T
 Goals indicate what a business unit wants to achieve; strategy is a game plan for
getting there.
 Every business must design a strategy for achieving its goals, consisting of a
marketing strategy and a compatible technology strategy and sourcing strategy.
Porter’s Generic Strategies
 Overall cost leadership
 Differentiation
 Focus
 According to Porter, firms directing the same strategy to the same target market
constitute a strategic group
 Product or service alliances : One company licenses another to produce its product, or two companies
jointly market their complementary products or a new product.
 Promotional alliances: One company agrees to carry a promotion for another company’s product or
service. McDonald’s teamed up with Disney for 10 years to offer products related to current Disney films
as part of its meals for children.
 Logistics alliances : One company offers logistical services for another company’s product. Warner
Music Group and Sub Pop Records created the Alternative Distribution Alliance (ADA) in 1993 as a joint
venture to distribute and manufacture records owned by independ- ent labels. ADA is the leading
“indie” distribution company in the United States for both physical and digital product.
 Pricing collaborations : One or more companies join in a special pricing collaboration. Hotel and rental
car companies often offer mutual price discounts.
 A company’s strategic fit with the environment will inevitably erode, because the
market environment changes faster than the company’s seven Ss. Thus, a company
might remain efficient yet lose effective- ness. Peter Drucker pointed out that it is
more important to “do the right thing”—to be effective—than “to do things right”—
to be efficient. The most successful companies, however, excel at both.
 Executive summary and table of contents. The marketing plan should open with a
table of contents and brief summary for senior management of the main goals and
recommendations.
 Situation analysis. This section presents relevant background data on sales, costs, the
market, competitors, and the various forces in the macroenvironment. How do we define
the market, how big is it, and how fast is it growing? What are the relevant trends and
critical issues? Firms will use all this information to carry out a SWOT analysis.
 Marketing strategy. Here the marketing manager defines the mission, marketing and
financial objectives, and needs the market offering is intended to satisfy as well as its
competitive positioning. All this requires inputs from other areas, such as purchasing,
manufacturing, sales, finance, and human resources.
 Financial projections. Financial projections include a sales forecast, an expense
forecast, and a break-even analysis. On the revenue side is forecasted sales volume by
month and product category, and on the expense side the expected costs of marketing,
broken down into finer categories. The break-even analysis estimates how many units
the firm must sell monthly (or how many years it will take) to offset its monthly fixed
costs and average per-unit variable costs.