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A FRAMEWORK for
MARKETING MANAGEMENT
Chapter 2
Developing and
Implementing
Marketing
Strategies and
Plans
Kotler
Keller
Cunningham
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?
• How can management assess
marketing performance?
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Profile: Canadian Marketing Excellence
TIM HORTONS
• Tim Hortons started out as a single donut shop
in 1964 growing to 2,527 (including 184 U.S.
stores) in 2006, demonstrating its skill in
marketing planning and execution
• The brand exemplifies the idealized Canadian
national character:
“That friendly, unpretentious, good neighbour you’d
want living down the block from you”
(Cathy Whelan Molloy, VP Advertising and Merchandising)
• Franchisees ensure that all products, services
and communications fit the company’s ideals
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Profile: Canadian Marketing Excellence
TIM HORTONS
• “Roll Up the Rim to Win” and Timbits
• Far ahead of rivals such as Starbucks and
Second Cup in “most often” coffee purchases
• Nonprofit children’s foundation sponsors an
estimated 33,000 children in Timbit hockey
leagues annually
• 2004 winner of Canadian Business poll of
Canada’s best brands
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Figure 2.1 Two Views of the
Value Delivery Process
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Benchmarks
Organizational
costs
and
performance
measures
Competitor
costs
and
performance
measures
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Five Core Business Processes
Market sensing
Customer
relationship
management
New offering
realization
Fulfillment
management
Customer
acquisition
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Figure 2.2 The Generic Value Chain
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Characteristics of Core Competencies
• Important difference between core
competencies and competitive advantage:
• Competitive advantages accrue due to companies
that possess distinctive capabilities
• Core competencies tend to refer to areas of special
technical and production expertise
• Competitive advantage derives from its “activity
systems”
• Companies with activity systems that are
difficult to imitate include WestJet Airlines, Dell,
and Magna International
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Characteristics of Core Competencies
• Core Competencies are usually
• A source of competitive advantage
• Applicable in a wide variety of markets
• Difficult to imitate
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Holistic Marketing Framework
• How can a company identify new value
opportunities?
• How can a company efficiently create
more promising new value offerings?
• How can a company use its capabilities
and infrastructure to deliver the new value
offerings more efficiently?
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Figure 2.3 A Holistic Marketing Framework
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Corporate Planning Activities
Defining the
corporate
mission
Establishing
SBUs
Assigning
resources
to SBUs
Assessing
growth
opportunities
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Figure 2.4 The Strategic Planning,
Implementation, and Control Processes
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Good Mission Statements
Focus on a limited number of goals
Stress major policies and values
Define major competitive spheres
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Major Competitive Spheres
Industry
Geographical
Products
Vertical
Competence
Market
segment
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Mountain Equipment Co-op
“Mountain Equipment Co-op provides quality
products and services for self-propelled
wilderness-oriented recreation, such as
hiking and mountaineering, at the lowest
reasonable price in an informative, respectful
manner.
“We are a member-owned co-operative
striving for social and environmental leadership.”
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Tim Hortons
“Our guiding mission is to deliver superior
quality products and services for our
customers and communities through leadership,
innovation and partnerships.
“Our vision is to be the quality leader in
everything we do.”
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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.”
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Dimensions that Define a Business
Customer
groups
Customer
needs
Technology
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Characteristics of an SBU
• It is a single business or collection of
related businesses
• It has its own set of competitors
• It has a leader responsible for
• Strategic planning
• Profitability
• Efficiency
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Growth Opportunities
Intensive
growth
Integrative
growth
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Diversification
growth
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Organizations
Culture
Policies
Structure
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Figure 2.5 The Business Unit
Strategic-Planning Process
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Toolkit Productions Inc.
• Toolkit Productions Inc. originated in Toronto
(2001)
• Offered a new kind of theatre in a saturated
marketplace
• Gap identified was the 20-30 year
demographic
• Flashy productions in bars and nightclubs
• Since expanded into corporate publicity and
film production
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Market Opportunity Analysis (MOA)
• Can the benefits involved in the opportunity be
articulated to a defined target market?
• Can the target market be located and reached with
cost-effective media and trade channels?
• Does the company have access to the critical
capabilities and resources needed to deliver the
customer benefits?
• Includes the assessment of interdepartmental working
relationships
• Honeywell gets all internal departments to conduct a strengths and
weaknesses analysis of each other
• Each department is seen as both a supplier and customer to one
other
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Market Opportunity Analysis (MOA)
• 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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Goal Formulation
• To be effective, goals must be
•
•
•
•
Ordered in terms of priority (hierarchical)
Stated quantitatively
Realistic
Consistent
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Porter’s Generic Strategies
Overall cost leadership
Differentiation
Focus
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McKinsey’s Seven “S” Elements
Strategy
Structure
Systems
Style
Skills
Staff
Shared values
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Balancing the Internal & External
Environments
External
Environmental
Need
Balance
Internal
Environment
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Marketing Plan Contents
 Executive summary
 Table of contents
 Situation analysis
 Marketing strategy
 Financial projections
 Implementation controls
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Measuring Marketing Plan Performance
Sales analysis
Market share
analysis
Marketing
expense-to-sales
analysis
Financial
analysis
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Tracking Market Share
Overall market share
Served market share
Relative market share
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Figure 2.6 Financial Model of
Return on Net Worth
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Methods of Improving Return on Assets
• Method 1: Increase the profit margin by
increasing sales or cutting costs
• Method 2: Boost the asset turnover by
increasing sales or reducing assets that
are held against sales levels
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For Discussion
What implications do Porter’s value
chain and the holistic marketing
orientation model have for
marketing planning?
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