Copyright © 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 1.

1Copyright © 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.Developed by Cool Pictures and MultiMedia Presentations

Chapter Six

Business Marketing Planning: Strategic Perspectives


• Centered on customers• Take an outside-in view of strategy • Demonstrate an ability to sense market trends ahead of their competitors

Market-Driven Organizations


Hierarchy of Strategies

Corporate Strategy What businesses are we in? What are our core competencies? How should we allocate resources? What businesses should we be in?

Business-Level Strategy How do we compete in a given industry? How should we position ourselves against

competitors? Functional Strategy

How can we allocate resources to most efficiently and effectively support business-level strategies?

Marketing manages organization-customer connections.


Marketing: Perhaps Best Understood as:

1. Customer-product connection—linking the customer to the focal offering.

2. Customer-service delivery connection—design and delivery actions involved in providing firm’s goods and services.

3. Customer-financial accountability connection-- Activities and processes that link customers to financial outcomes.


Marketing’s Role in Managing Three Customer Connections

Customer

Product Service Delivery Financial Accountability

Top Management

OperationsHuman Resources,

Accounting

Accounting, Management Information Systems

Marketin

g, Operatio

ns,

Research

and Deve

lopment

Marketing, Accounting,

Management Information Systems

Corporate Strategy

Accou

nting

, Finan

ce

Ma

rke

ting

, O

pera

tion

sH

uma

n R

eso

urc

es


This approach applies to strategic decisions that:

• Cut across functional areas

• Involve firm’s long-term objectives

• Involve resource allocation

Collective Action Perspective of Strategy Formulation Process


Cross-Functional Connections Explore Interrelationships Between Marketing and Four Business Functions

Formulating Business Marketing Strategy:Vital Cross-Functional Connections


Major business concept components tied together by three important “bridge” elements: customer benefits, configuration, and company boundaries.

CUSTOMER INTERFACE

Fulfillment & SupportInformation & InsightRelationship DynamicsPricing Structure

CORE STRATEGY

Business MissionProduct/Market ScopeBasis for Differentiation

STRATEGIC RESOURCES

Core CompetenciesStrategic AssetsCore Processes

VALUE NETWORK

SuppliersPartnersCoalitions

EFFICIENT / UNIQUE / FIT / PROFIT BOOSTERS


Customer Interface

Fulfillment and support

Information and insight

Relationship dynamics

Pricing structure


Core Strategy—Three Elements

• The business mission describes overall objective of strategy, sets course of direction, and defines performance criteria to measure progress.

• Product/market scope defines where firm competes.

• Basis for differentiation captures essence of how firm competes differently than its rivals do.


Strategic Resources

• Core competencies are set of skills, systems, and technologies that creates uniquely high value for customers.

• Strategic assets are more tangible requirements for advantage. Strategic assets include brands, customer data, distribution coverage, patents.

• Core processes are methodologies and routines that companies use to transform competencies, assets, and other inputs into value for customers.


The Balanced Scorecard - Translating Strategy Into Operational Terms

Learning and Growth Perspective

Internal Process Perspective

Financial Perspective

Productivity

Long-TermShareholder

Value RevenueGrowth

Customer Perspective

Product/Service Attributes Relationship Image

Price Quality Time Function Partnership Brand

ManageOperations

ManageCustomers

ManageInnovation

ManageRegulatoryand SocialProcesses

HumanCapital

InformationCapital

OrganizationCapital+ +

Cause-and-Effect RelationshipsDefines the chain of logic by which intangible assets will be transformed to tangible value.

Customer Value PropositionClarifies conditions that create value for the customer.

Value-Creating ProcessesDefines processes that transform intangible assets into customer and financial outcomes.

Clustering Assets and ActivitiesDefines intangible assets to be aligned and integrated to create value


Aligning Internal Business Processes to the Customer Strategy

Customer Strategy The Focus of Internal Business Processes

Operations Management Customer Relationship Management Innovation Management

Low Total Cost Strategy Highly Efficient Operating Ease of Customer Access Seek Process Innovations Processes Superb Post-Sales Service Gain Scale EconomiesEfficient, Timely Distribution

Product Leadership Flexible Manufacturing Capture Customer Ideas for Disciplined, High-Performance Strategy Processes New Offering Product Development

Rapid Introduction of Educate Customers about Complex First-to-Market New Products New Products/Services

Complete Customer Deliver Broad Product/ Create Customized Solutions Identify New Opportunities Solutions Strategy Service Line for Customers to Serve Customers

Create Network of Suppliers Build Strong Customer Anticipate Future Customer for Extended Product/ Relationships Needs Service Capabilities Develop Customer Knowledge

Lock-in Provide Capacity for Create Awareness Develop and Enhance Strategies Proprietary Product/ Influence Switching Costs of Proprietary Product

Service Existing and Potential Increase Breadth/Reliable Access and Customers Applications of

Standard Ease of Use

Source: Adapted from Robert S. Kaplan and David P. Norton, Strategy Maps: Converting Intangible Assets into Tangible Outcomes (Boston: Harvard Business School Publishing Corporation, 2004), pp. 322-344.


Strategy Map Template: Product Leadership

Financial Perspective

CustomerPerspective

InternalPerspective

Learning andGrowthPerspective

“Products and Services That Expand Existing Performance Boundaries into the Highly Desirable”

A Capable, Motivated and Technologically Enabled Workforce

Long-Term Shareholder Value

Manage Total Life-CycleProduct Costs

Revenues fromNew Products

Gross Margins:New Products

Productivity Strategy Revenue Growth Strategy

High-Performance Products: Smaller,Faster, Lighter, Cooler, More

Accurate, More Storage, Brighter…First to market

New CustomerSegments

Operations Management Customer Management Innovation Regulatory and Social

FlexibleRobust

Processes

RapidIntroduction

of NewProducts

SupplyCapacityfor RapidGrowth

In-lineExperimentation

andImprovement

EducateCustomers about

Complex NewProducts/Services

Capture CustomerIdeas for New

Products/Services

Disciplined,High-Performance

ProductDevelopment

ProductDevelopment

Time: From Ideato Market

MinimizeProduct Liability

AndEnvironmental

Impact

Contribute toCommunities

“Find, Motivate, Grow, and Retain the Best Talent”

Human Capital Information Capital Organization Capital

DeepFunctionalExpertise

Creative, VersatileEmployees: Cross-

functional Teamwork

Virtual ProductPrototyping and

Simulation

Computer-AidedDesign and

Manufacturing(CAD/CAM)

Creativity,Innovation

Copyright © 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 1.

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