A FRAMEWORK for MARKETING MANAGEMENT

1. A FRAMEWORK for MARKETING MANAGEMENT Chapter 2 Developing and Implementing Marketing Strategies and Plans Kotler Keller Cunningham

2. 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? © Copyright 2008 Pearson Education Canada

3. Profile: Canadian Marketing ExcellenceTIM 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 © Copyright 2008 Pearson Education Canada

4. Profile: Canadian Marketing ExcellenceTIM 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 © Copyright 2008 Pearson Education Canada

5. Figure 2.1 Two Views of the Value Delivery Process © Copyright 2008 Pearson Education Canada

6. Benchmarks Organizational costs and performance measures Competitor costs and performance measures © Copyright 2008 Pearson Education Canada

7. Five Core Business Processes Market sensing Customer relationship management New offering realization Fulfillment management Customer acquisition © Copyright 2008 Pearson Education Canada

8. Figure 2.2 The Generic Value Chain © Copyright 2008 Pearson Education Canada

9. 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 © Copyright 2008 Pearson Education Canada

10. Characteristics of Core Competencies • Core Competencies are usually • A source of competitive advantage • Applicable in a wide variety of markets • Difficult to imitate © Copyright 2008 Pearson Education Canada

11. 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? © Copyright 2008 Pearson Education Canada

12. Figure 2.3 A Holistic Marketing Framework © Copyright 2008 Pearson Education Canada

13. Corporate Planning Activities Defining the corporate mission Establishing SBUs Assigning resources to SBUs Assessing growth opportunities © Copyright 2008 Pearson Education Canada

14. Figure 2.4 The Strategic Planning, Implementation, and Control Processes © Copyright 2008 Pearson Education Canada

15. Good Mission Statements Focus on a limited number of goals Stress major policies and values Define major competitive spheres © Copyright 2008 Pearson Education Canada

16. Major Competitive Spheres Industry Geographical Products Vertical Competence Market segment © Copyright 2008 Pearson Education Canada

17. 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.” © Copyright 2008 Pearson Education Canada

18. 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.” © Copyright 2008 Pearson Education Canada

19. 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.” © Copyright 2008 Pearson Education Canada

20. Dimensions that Define a Business Customer groups Customer needs Technology © Copyright 2008 Pearson Education Canada

21. 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 © Copyright 2008 Pearson Education Canada

22. Growth Opportunities Intensive growth Integrative growth Diversification growth © Copyright 2008 Pearson Education Canada

23. Organizations Culture Policies Structure © Copyright 2008 Pearson Education Canada

24. Figure 2.5 The Business Unit Strategic-Planning Process © Copyright 2008 Pearson Education Canada

25. SWOT Analysis © Copyright 2008 Pearson Education Canada

26. 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 © Copyright 2008 Pearson Education Canada

27. 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 © Copyright 2008 Pearson Education Canada

28. 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? © Copyright 2008 Pearson Education Canada

29. Goal Formulation • To be effective, goals must be • Ordered in terms of priority (hierarchical) • Stated quantitatively • Realistic • Consistent © Copyright 2008 Pearson Education Canada

30. Porter’s Generic Strategies Overall cost leadership Differentiation Focus © Copyright 2008 Pearson Education Canada

31. McKinsey’s Seven “S” Elements Strategy Structure Systems Style Skills Staff Shared values © Copyright 2008 Pearson Education Canada

32. Balancing the Internal & External Environments External Environmental Need Balance Internal Environment © Copyright 2008 Pearson Education Canada

33. Marketing Plan Contents • Executive summary • Table of contents • Situation analysis • Marketing strategy • Financial projections • Implementation controls © Copyright 2008 Pearson Education Canada

34. Measuring Marketing Plan Performance Sales analysis Market share analysis Marketing expense-to-sales analysis Financial analysis © Copyright 2008 Pearson Education Canada

35. Tracking Market Share Overall market share Served market share Relative market share © Copyright 2008 Pearson Education Canada

36. Figure 2.6 Financial Model of Return on Net Worth © Copyright 2008 Pearson Education Canada

37. 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 © Copyright 2008 Pearson Education Canada

38. For Discussion What implications do Porter’s value chain and the holistic marketing orientation model have for marketing planning? © Copyright 2008 Pearson Education Canada