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Nike Creates Value
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Improving Value Deliverythe
Japanese Way
0 customer feedback time
0 product improvement time
0 purchasing time
0 setup time 0 defects
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Three Vs Approach to
Marketing
Define the value segment
Define the value proposition
Define the value network
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What is the Value Chain?
The value chain is a tool for identifyingways to create more customer value
because every firm is a synthesis ofprimary and support activitiesperformed to design, produce, market,
deliver, and support its product.
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Cisco Systems Taps into Partner
Expertise to Create Value
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Benchmarks
Organizationalcostsand
performance
measures
Competitorcostsand
performance
measures
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Characteristics of Core Competencies
A source of competitive advantage
Applications in a wide variety ofmarkets
Difficult to imitate
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What is a Marketing Plan?
A marketing plan is the central
instrument for directing and
coordinating the marketing effort.
It operates at a
strategic and tactical level.
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Levels of a Marketing Plan
Strategic Target marketing
decisions
Value proposition
Analysis ofmarketingopportunities
Tactical Product features
Promotion Merchandising
Pricing
Sales channels
Service
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Strategic Planning
(Corporate Headquarters)
Define Corporate Mission (Vision)
Establishment of SBU s
Resource allocation to SBU s
Assess growth opportunities
Planning new businesses
Downsizing old businesses
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THE PLANNING PROCESS
Company Mission Objectives/Goals Strategies (Marketing)
What is our business Support the mission
Who are our customers at different levels
What value are we offering specific
Market Oriented Business/Marketing.
Direction for next
10-20 years
AN IMPOSSIBLE DREAM VISION
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The Strategic Planning,Implementation,
and Control Processes
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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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Major Competitive Spheres
Industry
Products
Market
segment
Geographical
Competence
Vertical
channels
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Infosys Technologies Limited
To achieve our objectives in an environment
of fairness, honesty, and courtesy towardsour clients, employees, vendors, and society
at large.
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Biocon
To be an integrated biotechnology enterpriseof global distinction.
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eBay
We help people trade anything on earth.
We will continue to enhance the onlinetrading experiences of allcollectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.
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Motorola
The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees andshareholders to achieve their personal
objectives.
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Product Orientation vs. MarketOrientation
Company Product Market
Xerox We make copying
equipment
We improve office
productivity
Columbia
Pictures
We make movies We entertain
people
Encyclopedia
Britannica
We sell encyclopedias We distribute
information
Carrier We make air conditioners
and furnaces
We provide climate
control inside
homes
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Dimensions That Define a Business
Customer
groups
TechnologyCustomer
needs
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Characteristics of SBUs
It is a single business or collection of relatedbusinesses
It has its own set of competitors
It has a leader responsible for strategicplanning and profitability
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RESOURCE ALLOCATION
RMS : Market share relative to its largest competitor in segment;
0.1 = 10% of leader 10x = Market leader with 10 times the sales of itscompetitor : Drawn by Log Scale
Market
Growth
Rate
0% 10X 1x 0.5x 0.1x
Relative Market Share
Stars Question
Marks?
Cash
CowDog
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? Requires a lot of cash since company needs to spend money
on plant, equipment
Strategy : Build
Market leader in high growth market : but not necessarily
positive cash flow, because company has to keep money to
keep up high growth & fight off competitors
CC Stars with falling growth rate : Since it is market leader, so
economies of scale & high profit; is not growing
Strategy : Hold (strong cc) Harvest (weak cc)
Dog Strategy : Divest
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Market Attractiveness Business Strength
Overall size Market ShareAnnual growth Share growth
Historical Profit Margin Product Quality
Competitive Intensity Brand Reputation
Technological Requirements Distribution Network
Government Controls Costs
Inflationary Impacts Productive Efficiency
Entry Barriers Raw Materials Strengths
Environment (Labour, Pollution) Research & design
Human Resources
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THE GENERAL ELECTRIC MODEL
BCG - Growth Share Matrix
GE - Multifactor Matrix
BUSINESS STRENGTH
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The Strategic Planning Gap
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3 options for company to fill gap
a) Intensive Growth : Whether any opportunities exist for improving
existing business performance
Current New
Product Product
Current
Market
NewMarket
ANSOFFs PRODUCT-MARKET EXPANSION GRID
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Current New
Product Product
CurrentMarket
NewMarket
Market Penetration
Strategy
Product Development
Strategy
Market Development
Strategy
Diversification
Strategy
ANSOFFs PRODUCT-MARKET EXPANSION GRID
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b) Integrative growth : Integrating with other business
Backward : Acquiring suppliers ( IBS Travel, Alchemist)
Forward : Acquiring Distribution/Retail (IBS March)
Horizontal : Acquiring Competitor
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c) Diversification Growth
When better opportunities exist outside present business:
Industry attractive & company has synergy (TIL)
3 Types
Concentric Diversification : New business has
technology/marketing synergies with current business
through customer group may be different(e.g. Coke Water Kinley)
Horizontal Diversification : Products that are different
technology, but same customers (IBS : )
Conglomerate Diversification : New business with no
relation to current technology, product, market ( ITC :
matchbox, condoms, sweets)
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Developing the Peoples CarTATA Nano
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What is Corporate Culture?
Corporate culture is the shared
experiences, stories, beliefs, and norms
that characterize an organization.
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The Business Unit
Strategic Planning Process
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Market Opportunity Analysis (MOA)
Can the benefits involved in the opportunitybe articulated convincingly to a definedtarget market?
Can the target market be located andreached with cost-effective media and tradechannels?
Does the company possess or have accessto the critical capabilities and resources
needed 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 orexceed the companys required thresholdfor investment?
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FedEx added
Sunday deliveries
based on customerrequests and
market demand
FedEx
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Opportunity Matrix
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Threat Matrix
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Goal Formulation and MBO
Units objectives must be
hierarchical
Objectives should be quantitative
Goals should be realistic
Objectives must be consistent
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Porters Generic
StrategiesOverall Cost Leadership
Differentiation
Focus
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Categories of MarketingAlliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
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MARKET PLANNING
Analyze Marketing opportunities : select target
market
Developing Marketing Strategy
Planning Marketing Program
Managing Marketing Effort : control after organizing
and implementation
in turn achieving goals (sales, profits) is marketing strategy appropriate
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Marketing Plan Contents
Executive summary
Table of contents
Situation analysis Marketing strategy
Financial 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?