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113 Cards in this Set
- Front
- Back
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Phasesof Value Creation and Delivery
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Choosing the value Communicating the value Providing the value |
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What is the value chain |
The value chain is a tool for identifying was to createmore customer value because every firm is a synthesis of primary and support activities performed to design, produce, market,deliver, and support its product |
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CoreBusiness Processes |
Market-sensing process New-offering realization process Customer acquisition process Customer relationship management process Fulfillment management process |
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Characteristicsof Core Competencies
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A source of competitive advantage
Applications in a wide variety of markets Difficult to imitate |
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Maximizing Core Competencies
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(Re)define the business concept (Re)shaping the business scope (Re)positioning the company’s brand identity |
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What is Holistic Marketing?
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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 co-prosperity among key stakeholders
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Questions to Address in Holistic Marketing |
1. Value exploration—How a company identifies new value opportunities 2. Value creation—How a company efficiently creates more promising new value offerings 3. Value delivery—How a company uses its capabilities and infrastructure to deliver the new value offerings more efficiently |
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what is a marketing plan? |
A marketingplan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tacticallevel. |
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Levels of a Marketing Plan |
1. strategic Target market decisions value proposition Analysis of Marketing opportunities 2. Tactical Product features Promotion Merchandising Pricing Sales Channels Service |
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Corporate Headquarter's planning activities |
Define the corporate mission Establish strategic business units (SBU's) Assign resources to each SBU Asses growth opportunities |
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Good mission statements |
focus on a 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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Dimensions that define a business |
customer groups customer needs technology |
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characteristics of sbu's |
single business unit or collection of related businesses has its own set of competitors has a leader responsible for strategic planning and profitability. |
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SWOT Analysis |
Strengths Weaknesses Opportunities Threats |
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Market Opportunity Analysis (MOA) |
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 posses or have access to the critical capabilities and resources needed to deliver the customer benefits Can the company deliver the benefitsbetter than any actual or potential competitors? Will the financial rate of return meet orexceed the company’s required threshold for investment? |
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GoalFormulation and MBO |
Unit’s objectives must be hierarchical Objectives should be quantitative Goals should be realistic Objectives must be consistent |
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Porter's generic strategies |
Overall cost leadership Differentiation Focus |
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Categories of marketing alliances |
Product or service alliance Promotional alliance logistics allilances pricing collaborations |
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McKinsleys Elements of Success |
1. .Skills 2. Strategy 3. Staff 4. Style 5. Structure 6. Systems 7.Shared Values. |
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Marketing plan Contents |
Executive summary table of contents situation analysis marketing strategy financial projections implementations control |
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Evaluating a marketing plan |
is the plan simple is it specific is it realistic is it complete |
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Marketing and Customer Value
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deliver customer value at a profit. In a hypercompetitive economy with increasingly informed buyers faced with abundant choices, a company can win only by fine-tuning the value delivery process and choosing, providing, and communicating superior value.
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The Value Delivery Process
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We can divide the value creation and delivery sequence into three phases.2 First, choosing the value represents the “homework” marketing must do before any product exists. Marketers must segment the market, select the appropriate target, and develop the offering’s value positioning. The formula “segmentation, targeting, positioning (STP)” is the essence of strategic marketing. The second phase is providing the value. Marketing must determine specific product features, prices, and distribution. The task in the third phase is communicating the value by utilizing the sales force, Internet, advertising, and any other communication tools to announce and promote the product. The value delivery process begins before there is a product and continues through development and after launch. Each phase has cost implications.
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The Value Chain
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Developed by Harvard’s Michael Porter 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 value chain identifies nine strategically relevant activities—five primary and four support activities—that create value and cost in a specific business. The firm’s task is to examine its costs and performance in each value-creating activity and look for ways to improve it. |
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Value Chain Primary Activities |
(1) inbound logistics, or bringing materials into the business; (2) operations, or converting materials into final products; (3) outbound logistics, or shipping out final products; (4) marketing, which includes sales; and (5) service |
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Value Chain Support Activities |
(1) procurement, (2) technology development, (3) human resource management, and (4) firm infrastructure. (Infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs.) |
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Core business processes |
• 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 |
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Value Delivery Network |
Also known as a supply chain The supply chain are the suppliers, distributors, and customers the company goes with. |
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Three Characteristics of a Core Competency |
(1) It is a source of competitive advantage and makes a significant contribution to perceived customer benefits.
(2) It has applications in a wide variety of markets. (3) It is difficult for competitors to imitate. |
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Competitive advantage
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a condition or circumstance that puts a company in a favorable or superior business position.
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Wharton’s George Day sees market-driven organizations as excelling in three distinctive capabilities:
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market sensing, customer linking, and channel bonding
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Business realignment
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has three steps:
(1) (re)defining the business concept or “big idea”, (2) (re)shaping the business scope, and (3) (re)positioning the company’s brand identity. |
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The Central Role of Strategic Planning
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(1) managing a company’s businesses as an investment portfolio,
(2) assessing each business’s strength by considering the market’s growth rate and the company’s position and fit in that market, and (3) establishing a strategy. The company must develop a game plan for achieving each business’s long-run objectives. |
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four organizational levels of companies
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(1) corporate (2) division (3) business unit (4) product |
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Marketing Plan |
is the central instrument for directing and coordinating the marketing effort. It operates at two levels: strategic and tactical. |
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strategic marketing plan |
lays out the target markets and the firm’s value proposition, based on an analysis of the best market opportunities.
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tactical marketing plan |
specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service |
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Corporate and Division Strategic Planning |
1. Defining the corporate mission 2. Establishing strategic business units 3. Assigning resources to each strategic business unit 4. Assessing growth opportunities |
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Defining the Corporate Mission |
An organization exists to accomplish something Over time, the mission may change, to take advantage of new opportunities or respond to new market conditions |
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Peter Drucker's Classic Questions |
Used to define company 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? |
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mission statements
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clear, thoughtful mission statement provides a shared sense of purpose, direction, and opportunity.
Mission statements are at their best when they reflect a vision, an almost “impossible dream” that provides direction for the next 10 to 20 years. |
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Five Characteristics of missions statements |
1. They focus on a limited number of goals. The statement “We want to produce the highest-quality products, offer the most service, achieve the widest distribution, and sell at the lowest prices” claims too much. 2. They stress the company’s major policies and values. They narrow the range of individual discretion so employees act consistently on important issues. 3. They define the major competitive spheres within which the company will operate. some key competitive dimensions for mission statements. 4. They take a long-term view. Management should change the mission only when it ceases to be relevant. 5. They are as short, memorable, and meaningful as possible. Marketing consultant Guy Kawasaki advocates developing three- to four-word corporate mantras rather than mission statements, like “Enriching Women’s Lives” for Mary Kay.14 |
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Industry
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Some companies operate in only one industry; some only in a set of related industries; some only in industrial goods, consumer goods, or services; and some in any industry.
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Products and applications |
Firms define the range of products and applications they will supply. |
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Competence |
The firm identifies the range of technological and other core competencies it will master and leverage. |
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Market segment |
The type of market or customers a company will serve is the market segment. |
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Vertical |
The vertical sphere is the number of channel levels, from raw material to final product and distribution, in which a company will participate.
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Geographical. |
The range of regions, countries, or country groups in which a company will operate defines its geographical sphere. |
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Target Market Definition |
tends to focus on selling a product or service to a current market.
Pepsi could define its target market as everyone who drinks carbonated soft drinks, and competitors would therefore be other carbonated soft drink companies |
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Strategic Market Definition |
In addition to selling the product to a current market, strategic market definition also focuses on the potential market. If Pepsi considered everyone who might drink something to quench their thirst, its competition would include noncarbonated soft drinks, bottled water, fruit juices, tea, and coffee. To better compete, Pepsi might decide to sell additional beverages with promising growth rates. |
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Three dimensions business can define itself by |
customer groups
customer needs technology |
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Characteristics of a SBU |
1. It is a single business, or a collection of 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, who controls most of the factors affecting profit. |
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Purpose of identifying SBU's |
develop separate strategies and assign appropriate funding
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The GE/McKinsey Matrix
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A way to allocate company resources to SBA's. The GE/McKinsey Matrix classifies each SBU by the extent of its competitive advantage and the attractiveness of its industry. Management can decide to grow, “harvest” or draw cash from, or hold on to the business. fallen out of favor as oversimplified and subjective |
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BCG’s Growth-Share Matrix
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A way to allocate company resources to SBA's
uses relative market share and annual rate of market growth as criteria to make investment decisions, classifying SBUs as dogs, cash cows, question marks, and stars. fallen out of favor as oversimplified and subjective |
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Newer methods of assigning resources to SBU's |
rely on shareholder value analysis, and on whether the market value of a company is greater with an SBU or without it (whether it is sold or spun off). These value calculations assess the potential of a business based on growth opportunities from global expansion, repositioning or retargeting, and strategic outsourcing. |
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Assessing Growth Opportunities |
includes planning new businesses, downsizing, and terminating older businesses. |
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Intensive Growth |
The company first considers whether it could gain more market share with its current products in their current markets, using a market-penetration strategy. Next it considers whether it can find or develop new markets for its current products, in a market-development strategy. Then it considers whether it can develop new products of potential interest to its current markets with a product-development strategy. Later the firm will also review opportunities to develop new products for new markets in a diversification strategy. |
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Intesnsive Growth First Course Of Action
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should be a review of opportunities for improving existing businesses. One useful framework for detecting new intensive-growth opportunities is a “product-market expansion grid.” It considers the strategic growth opportunities for a firm in terms of current and new products and markets.
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Integrative Growth |
A business can increase sales and profits through backward, forward, or horizontal integration within its industry. Integrative growth is where a firm acquires some other element of the chain of distribution of which it is a member. New sources may still not deliver the desired sales volume. In that case, the company must consider diversification. |
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Diversification Growth |
Makes sense when good opportunities exist outside the present businesses—the industry is highly attractive and the company has the right mix of business strengths to succeed. |
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Downsizing and Diversifying Old Businesses |
Companies must carefully prune, harvest, or divest tired old businesses to release needed resources for other uses and reduce costs. |
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Company Organization |
consists of its structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly changing business environment |
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Company Culture is |
Very hard to change |
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Corporate Culture |
"the shared experiences, stories, beliefs, and norms that characterize an organization.” Walk into any company and the first thing that strikes you is the corporate culture—the way people dress, talk to one another, and greet customers |
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Marketing Innovation |
Is critical. Senior management should identify and encourage fresh ideas from three underrepresented groups: employees with youthful or diverse perspectives, employees far removed from company headquarters, and employees new to the industry. Each group can challenge company orthodoxy and stimulate new ideas. |
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Scenario Analysis |
Develops plausible representations of a firm’s possible future using assumptions about forces driving the market and different uncertainties. Managers think through each scenario with the question, “What will we do if it happens?” adopt one scenario as the most probable, and watch for signposts that might confirm or disconfirm it. |
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Business Unit Strategic Planning |
1. Business Mission 2. SWOT Analysis (Internal/External) 4. Goal Formulation 5. Strategic Formulation 6. Program Formulation 7. Implementation 8. Feedback & Control |
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Business Mission |
Each business unit needs to define its specific mission within the broader company mission |
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SWOT Analysis |
Strengths, Weaknesses, Opportunities, and Threats. Consists of Internal Environment Analysis ( Strengths/Weaknesses) And External Environment Analysis (Opportunities/Threats). |
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External Environment Analysis |
Consists of threats and opportunities. A marketing opportunity is an area of buyer need and interest that a company has a high probability of profitably satisfying. An environmental threat is a challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit. |
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A business unit must monitor key... |
macroenvironment forces and significant microenvironment factors that affect its ability to earn profits. It should set up a marketing intelligence system to track trends and important developments and any related opportunities and threats.
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Three main sources of marketing opportunities |
The first is to offer something that is in short supply. The second is to supply an existing product or service in a new or superior way. How? The problem detection method asks consumers for their suggestions, the ideal method has them imagine an ideal version of the product or service, and the consumption chain method asks them to chart their steps in acquiring, using, and disposing of a product The consumption chain method often ends in the third way- a new product or service being made. |
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Spotting Opportunities |
benefit from converging industry trends and introduce hybrid products or services that are new to the market. make a buying process more convenient or efficient. meet the need for more information and advice customize a product or service introduce a new capability. be able to deliver a product or service faster may be able to offer a product at a much lower price. |
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Market opportunities analysis |
Used to evaluate opportunities 1.Can we articulate the benefits convincingly to a defined target market(s)? 2.Can we locate the target market(s) and reach them with cost-effective media and trade channels? 3.Does our company possess or have access to the critical capabilities and resources we need to deliver the customer benefits? 4.Can we deliver the benefits better than any actual or potential competitors? 5.Will the financial rate of return meet or exceed our required threshold for investment? |
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Environmental Threat |
challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit |
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Internal Environment Analysis |
Consists of Weaknesses and Strengths
Company can evaluate their weaknesses and strengths using a form. The big question is whether it should limit itself to those opportunities for which it possesses the required strengths, or consider those that might require it to find or develop new strengths |
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Goal Formulation |
developing specific goals for the planning period. Goals are objectives that are specific with respect to magnitude and time. Goals in sales, growth, market share, risk containment etc are set and then manages by objectives. |
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Manages by objective (MBO) |
For MBO to work SBU's objectives must meet these 1. They must be arranged hierarchically, from most to least important. 2. Objectives should be quantitative whenever possible. 3. Goals should be realistic. 4. Objectives must be consistent |
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Strategic Formulation |
Goals= What a business wants to achieve Strategy= Game plan (marketing strategy,compatible technology strategy & sourcing strategy.) |
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Porters Generic Strategies |
Three generic strategies that provide a good starting place for thinking. 1.overall cost leadership 2. differentiation 3.focus |
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Overall Cost Leadership |
Firms work to achieve the lowest production and distribution costs so they can underprice competitors and win market share. They need less skill in marketing. The problem is that other firms will usually compete with still-lower costs and hurt the firm that rested its whole future on cost. |
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differentiation strategy |
The business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. The firm seeking quality leadership, for example, must make products with the best components, put them together expertly, inspect them carefully, and effectively communicate their quality. |
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Focus Strategy |
The business focuses on one or more narrow market segments, gets to know them intimately, and pursues either cost leadership or differentiation within the target segment. |
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Strategic Group |
According to Porter, Firms using the same strategy to the same target market. The firm that carries out the strategy best will make more profit. |
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Porter defines strategy |
as “the creation of a unique and valuable position involving a different set of activities.” A company can claim it has a strategy when it “performs different activities from rivals or performs similar activities in different ways.”
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Strategic Alliances |
firms often can't develop leadership, either nationally or globally, without forming alliances with domestic or multinational companies that complement or leverage their capabilities and resources. Well-managed alliances allow companies to obtain a greater sales impact at lower cost. |
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marketing alliances |
1. Product or service alliance 2. Promotional alliance 3. logistics alliance 4. pricing collaborations |
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partner relationship management |
organizational structure developed to support strategic alliances. |
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According to McKinsey & Company, strategy is only one of |
seven strategies. 1. strategy 2. structure 3. systems 4. style 5. skills 6. staff 7. Shared Values When these elements are present, companies are usually more successful at strategy implementation |
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Feedback and Control is needed because |
The environment will eventually erode because of changing market. When a company fails to respond to a changing enviroment it can be hard, if not impossible to recapture its lost position. |
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inertia |
Organizations- especially larger ones are subject to inertia-a tendency to do nothing and remain unchanged. Yet, organizations can be changed through strong leadership, preferably in advance of a crisis. |
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The key to organizational health in terms of feedback and control is |
a willingness to examine the changing enviroment and adopt new goals and ideas.
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each product level- line, brand etc |
must develop a marketing plan to each its goals. |
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Marketing Plan |
is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. It contains tactical guidelines for the marketing programs and financial allocations over the planning period |
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One of the most important outputs of the marketing process is |
the marketing plan It provides direction and focus for a brand, product, or company. |
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Nonprofit organizations use marketing plans |
to guide their fund-raising and outreach efforts |
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Government agencies use marketing plans |
to build public awareness of nutrition and stimulate tourism. |
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Which is more limited in scope a business plan or marketing plan? |
Marketing plan. The marketing plan the marketing plan documents how the organization will achieve its strategic objectives through specific marketing strategies and tactics, with the customer as the starting point. It is also linked to the plans of other departments. |
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a marketing plan can no succeed without... |
the appropriate level of organizational support and resources |
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The most frequent shortcomings of current marketing plans are... |
1. lack of realism 2. insufficient competitive analysis 3. short-run focus |
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A marketing plan usually contains |
1. Executive summary and table of contents 2. Situation analysis. 3. Marketing strategy 4. Financial projections 5. Implementation controls. |
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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.
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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.
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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.
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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. A more complex method of estimating profit is risk analysis. Here we obtain three estimates (optimistic, pessimistic, and most likely) for each uncertain variable affecting profitability, under an assumed marketing environment and marketing strategy for the planning period. The computer simulates possible outcomes and computes a distribution showing the range of possible rates of returns and their probabilities. |
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Implementation controls. |
The last section of the marketing plan outlines the controls for monitoring and adjusting implementation of the plan. Typically, it spells out the goals and budget for each month or quarter, so management can review each period’s results and take corrective action as needed. Some organizations include contingency plans.
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The role of research in marketing plan |
is used to make innovative products, successful strategies, and action programs. to keep current on the environment, the competition, and the selected market segments. As the plan is put into effect, marketers use research to measure progress toward objectives and identify areas for improvement. Finally, marketing research helps marketers learn more about their customers’ requirements, expectations, perceptions, satisfaction, and loyalty |
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When doing marketing plan researching it analysis often starts... |
of internal data which helps to asses the current marketing situation. |
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How are relationships effected by marketing plan? |
1. it influences how marketing personnel work with each other and with other departments to deliver value and satisfy customers 2. it affects how the company works with suppliers, distributors, and partners 3. it influences the company’s dealings with other stakeholders, including government regulators, the media, and the community at large |
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How often do most companies create marketing plans? |
Yearly |
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The marketing plan should define how progress towards objectives should be measured they can use |
budgets, schedules, and marketing metrics for monitoring and evaluating results |
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With budgets marketers can compare |
planned expenditure with actual expenditure |
