Kotler Fmm Ce Ppt Ch02
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A FRAMEWORK for MARKETING MANAGEMENT
Kotler Keller Cunningham
Chapter 2Chapter 2Developing and
Implementing
Marketing Strategies and
Plans
2-2
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
2-3
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
2-4
• “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
Profile: Canadian Marketing ExcellenceTIM HORTONS
© Copyright 2008 Pearson Education Canada
2-6
Benchmarks
Organizational costs and
performance measures
Competitorcosts and
performance measures
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2-7
Five Core Business Processes
Market sensing
Customer relationship management
New offering realization
Customer acquisition
Fulfillment management
© Copyright 2008 Pearson Education Canada
2-9
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
• Core Competencies are usually• A source of competitive advantage
• Applicable in a wide variety of markets
• Difficult to imitate
2-10
Characteristics of Core Competencies
© Copyright 2008 Pearson Education Canada
2-11
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
2-13
Corporate Planning Activities
Defining the corporate
mission
Establishing SBUs
Assigning resources to SBUs
Assessing growth
opportunities
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2-14
Figure 2.4 The Strategic Planning, Implementation, and Control Processes
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2-15
Good Mission Statements
Focus on a limited number of goalsFocus on a limited number of goals
Stress major policies and valuesStress major policies and values
Define major competitive spheresDefine major competitive spheres
© Copyright 2008 Pearson Education Canada
2-16
Major Competitive Spheres
Industry
Products
Marketsegment
Geographical
CompetenceVertical
© Copyright 2008 Pearson Education Canada
2-17
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
2-18
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
2-19
eBay
“We help people trade anything on earth.We will continue to enhance the onlinetrading experiences of all–collectors, dealers, small businesses, unique itemseekers, bargain hunters, opportunitysellers, and browsers.”
© Copyright 2008 Pearson Education Canada
2-20
Dimensions that Define a Business
Customer groups
TechnologyCustomer
needs
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2-21
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
2-22
Growth Opportunities
Intensive growth
Integrativegrowth
Diversificationgrowth
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2-24
Figure 2.5 The Business Unit Strategic-Planning Process
© Copyright 2008 Pearson Education Canada
2-26
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
2-27
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
2-28
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
2-29
Goal Formulation
• To be effective, goals must be• Ordered in terms of priority (hierarchical)• Stated quantitatively• Realistic• Consistent
© Copyright 2008 Pearson Education Canada
2-30
Porter’s Generic Strategies
Overall cost leadership
Differentiation
Focus
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2-31
McKinsey’s Seven “S” Elements
StrategyStrategy StructureStructure
SystemsSystems StyleStyle
SkillsSkills StaffStaff
Shared valuesShared values
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2-32
Balancing the Internal & External Environments
ExternalEnvironmental
Internal Environment
Need Balance
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2-33
Marketing Plan Contents
Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls
© Copyright 2008 Pearson Education Canada
2-34
Measuring Marketing Plan Performance
Sales analysis
Marketing expense-to-sales
analysis
Financial analysis
Market share analysis
© Copyright 2008 Pearson Education Canada
2-35
Tracking Market Share
Overall market share
Served market share
Relative market share
© Copyright 2008 Pearson Education Canada
2-37
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
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