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Ch apter Questions
How does marketing affect customer value?
How is strategic planning carried out atdifferent levels of the organization?What does a marketing plan include?
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Siemens AG h as grown t h roug h newproduct innovation and strategic
acquisitions
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N ike C reates Value
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T h ree Vs Approac h to Marketing
Define the value segment
Define the value proposition
Define the value network
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W h at is t h e Value Ch ain?
The value c h ain is a tool for identifyingways to create more customer value
because every firm is a synthesis of primary and support activitiesperformed to design, produce, market,
deliver, and support its product.
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C isco Systems T aps into Partner Expertise to C reate Value
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C ore Business Processes
Market-sensing processNew-offering realization process
Customer acquisition processCustomer relationship managementprocess
Fulfillment management process
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Ch aracteristics of C ore C ompetencies
A source of competitive advantageApplications in a wide variety of markets
Difficult to imitate
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N etflixs Distinctive C apabilities
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F irms S h ould C onsider Key Questions
Can we learn from the past?How should the present be evaluated?
What do we envision for the future?
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W h at is Holistic Marketing?
Holistic marketing sees itself asintegrating the value exploration,value creation, and value delivery
activities with the purpose of buildinglong-term, mutually satisfying
relationships and coprosperity amongkey stakeholders.
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Intels N ew Brand Identity:Leap A h ead
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W h at is a Marketing Plan?
A marketing plan is the centralinstrument for directing and
coordinating the marketing effort.It operates at a
strategic and tactical level.
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Levels of a Marketing Plan
StrategicTarget marketing
decisionsValue propositionAnalysis of marketingopportunities
T acticalProduct features
PromotionMerchandisingPricingSales channels
Service
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F igure 2.4 T h e Strategic Planning,Implementation,
and C ontrol Processes
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C orporate HeadquartersPlanning Activities
Define the corporate missionEstablish strategic business units
(SBUs)Assign resources to each SBUAssess growth opportunities
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Ch aracteristics of SBUs
It is a single business or collection of related businesses
It has its own set of competitorsIt has a leader responsible for strategicplanning and profitability
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ITC - OVERVIEW
Products Awarded as:
1. Most respected company by BUSINESSWORLD
2. First company in India to voluntarily seekcorporate governance rating.
Vision of t h e company : Enduring value for the nation. For theShareholders.
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S TR AT EG IC BUS IN ESS U NIT SF MC G
1. Cigarettes2. Foods3. Lifestyle retailing
4. Greeting, Gifting and stationery5. Safety matches6. Agarbattis
HO T ELS
PAPERBOARDS AND PACKAGING1. Paperboard and speciality papers2. Packaging
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AGRI-BUSINESSES1. Agri exports : E-choupal2. Leaf Tobacco
Information Technologies
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MARKETING PLANNING
B usiness Portfolio AnalysisStrategic Business Units (SBUs) are keybusiness units within diversified firms
A division, product line, or singleproduct may define an SBUFirms redesign their SBUs as market
conditions
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T HE B C G MA TRIX
The BCG Matrix method is the most well-known portfolio management tool . It isbased on product life cycle theory. It wasdeveloped in the early 70s by the BostonConsulting Group.
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T HE B C G MA TRIX
The BCG Matrix can be used todetermine what priorities should begiven in the product portfolio of abusiness unit. To ensure long-termvalue creation, a company should havea portfolio of products that contains
both high-growth products in need of cash inputs and low-growth productsthat generate a lot of cash.
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T HE B C G MA TRIX
The Boston ConsultingGroup Matrix has 2 dimensions:market s h are and market growt h .
The basic idea behind it is: if a producthas a bigger market share, or if theproduct's market grows faster, it isbetter for the company
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FOUR SEGMENTS OF BCG MATRIX
Market S h are/ Market Growt h Matrix :
A marketing planning tool that classifies a
firms SBUs or products according toindustry growth rates and market sharesrelative to competing products
Stars
C as h C ows
Dogs
Question Mark
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FOUR SEGMENTS OF BCG MATRIX
Stars (high growth, high market share)C as h C ows (low growth, high market
share)Dogs (low growth, low market share)Question Mark (high growth, low
market share)
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BCG Chart
SBUT
urnover (incrores)
Competitorsturnover
RMS AGM
R
FMCG 11330 HUL - 9954 1.14 13
Paperboardandpackaging
1150 East Indiaboard andpaper mill -4800
0.24 16
Agribusiness
1955 Reliance -750
2.6 60
Hotels 777 TATA 491 1.58 36
IT 3724 TATA -13250 0.28 60
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Good Mission Statements
Focus on limited number of goals
Stress major policies and values
Define major competitive spheres
Take a long-term view
Short, memorable, meaningful
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Infosys T ec h nologies Limited
To achieve our objectives in an environmentof fairness, honesty, and courtesy towardsour clients, employees, vendors, and societyat large.
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Biocon
To be an integrated biotechnology enterpriseof global distinction.
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T able 2.3Product Orientation vs. Market Orientation
C ompany Product Market
Xerox We make copyingequipment
We improve officeproductivity
ColumbiaPictures
We make movies We entertainpeople
Encyclopedia
Britannica
We sell encyclopedias We distribute
information
Carrier We make air conditionersand furnaces
We provide climatecontrol insidehomes
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Dimensions T h at Define a Business
Customer groups
TechnologyCustomer needs
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F igure 2.5 T h e Strategic Planning Gap
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Strategies Suggested by AnsoffsProduct-Market Expansion Grid
Market penetrationMarket developmentProduct developmentDiversification
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Developing t h e Peoples C ar T AT A N ano
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W h at is C orporate C ulture?
C orporate culture is the sharedexperiences, stories, beliefs, and norms
that characterize an organization.
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T actics for Managing Ch ange
Avoid the innovation title for the teamUse the buddy system
Set the metrics in advanceAim for quick hits firstGet data to back up your gut
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F igure 2.7 T h e Business UnitStrategic Planning Process
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S W OT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Market Opportunity Analysis (MOA)
Can the benefits involved in the opportunitybe articulated convincingly to a defined targetmarket?
Can the target market be located andreached with cost-effective media and tradechannels?Does the company possess or have accessto the critical capabilities and resourcesneeded to deliver the customer benefits?
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Market Opportunity Analysis (MOA)(cont.)
Can the company deliver the benefitsbetter than any actual or potentialcompetitors?Will the financial rate of return meet or exceed the companys requiredthreshold for investment?
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FedEx addedSunday deliveriesbased on customer requests andmarket demand
F edEx
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F igure 2.8 Opportunity Matrix
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F igure 2.8 T h reat Matrix
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Goal F ormulation and MBO
Units objectives must be hierarchicalObjectives should be quantitative
Goals should be realisticObjectives must be consistent
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Porters Generic Strategies
Overall Cost Leadership
Differentiation
Focus
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C ategories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
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Marketing Plan C ontents
Executive summaryTable of contentsSituation analysisMarketing strategyFinancial projections
Implementation controls
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Evaluating a Marketing Plan
Is the plan simple?Is the plan specific?Is the plan realistic?Is the plan complete?
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Marketing Debate
What good is a mission statement?
Take a position:1. Mission statements are critical to asuccessful marketing organization.or 2. Mission statements rarely provideuseful marketing value.
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Marketing Discussion
What implications do Porters valuechain and the holistic marketingorientation model have for marketing planning?