Marketing Management Arab World Edition Kotler Keller Hassan

Marketing Management Arab World Edition Kotler, Keller, Hassan, Baalbaki, and Shamma Chapter 2 Developing Marketing Strategies and Plans

Chapter Questions 1. How does marketing affect customer value? 2. How is strategic planning carried out at different levels of the organization? 3. What does a marketing plan include? Copyright © 2012 Pearson Education 2 -2

Chapter Question 1: Marketing and Customer Value How does marketing affect customer value? The task of any business is to deliver customer value at a profit. In a competitive market, a company can win only by finetuning the value delivery process and choosing, providing, and communicating superior value. Copyright © 2012 Pearson Education 2 -3

Chapter Question 1: The Value Delivery Process How does marketing affect customer value? The value creation and delivery sequence can be divided into three phases. 1. Choosing the value. 2. Providing the value. 3. Communicating the value. Copyright © 2012 Pearson Education 2 -4

Chapter Question 1: How does marketing affect customer value? The Value Chain The value chain is a tool for identifying ways to create more customer value. In the value chain model, every firm is a synthesis of primary and support activities. Copyright © 2012 Pearson Education 2 -5

Chapter Question 1: How does marketing affect customer value? The Value Chain Copyright © 2012 Pearson Education 2 -6

Chapter Question 1: How does marketing affect customer value? Core business processes • Market-sensing process • New-offering realization process • Customer acquisition process • Customer relationship management process • Fulfillment management process Saudi Aramco manages business operations through cross-functional teams. Copyright © 2012 Pearson Education 2 -7

Chapter Question 1: How does marketing affect customer value? Core Competencies Three characteristics of core competencies: 1. A source of competitive advantage. 2. Applications in a wide variety of markets. 3. Difficult for competitors to imitate. Competitive advantage Copyright © 2012 Pearson Education 2 -8

Chapter Question 1: How does marketing affect customer value? Box 2. 1: Becoming a Vigilant Organization Copyright © 2012 Pearson Education 2 -9

Chapter Question 4: The Holistic Marketing Concept Copyright © 2012 Pearson Education 1 -10 How has marketing management changed?

Chapter Question 1: A Holistic Marketing Orientation and Customer Value How does marketing affect customer value? 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 prosperity among key stakeholders. Copyright © 2012 Pearson Education 2 -11

Chapter Question 1: How does marketing affect customer value? Fig 2. 2: A Holistic Marketing Framework Copyright © 2012 Pearson Education 2 -12

Chapter Question 1: How does marketing affect customer value? Strategic Planning Copyright © 2012 Pearson Education 2 -13

Chapter Question 1: How does marketing affect customer value? The Central Role of Strategic Planning Fig 2. 3: The Strategic Planning, Implementation, and Control Process Copyright © 2012 Pearson Education 2 -14

Chapter Question 2: Corporate and Division Strategic Planning How is strategic planning done at different levels of the organization? All corporate headquarters undertake four planning activities: 1. Defining the corporate mission. 2. Establishing strategic business units (SBUs). 3. Assigning resources to each SBU. 4. Assessing growth opportunities. We’ll look at each process. Copyright © 2012 Pearson Education 2 -15

Chapter Question 2: Defining the Corporate Mission Good mission statements: • Focus on a limited number of goals • Stress major policies and values • Define major competitive spheres • Take a long-term view • Are short, memorable and meaningful Copyright © 2012 Pearson Education 2 -16 How is strategic planning done at different levels of the organization?

Chapter Question 2: How is strategic planning done at different levels of the organization? Defining the Corporate Mission statements define the major competitive spheres in which the company will operate: • Industry • Market segment • Products • Geographic • Competence • Vertical channels Copyright © 2012 Pearson Education Who we are? Whom we serve? 2 -17 What we offer?

Chapter Question 2: Example Mission Statement How is strategic planning done at different levels of the organization? Mayo Clinic: To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research. (24) Sabic: Our mission is to responsibly provide quality products and services through innovation, learning and operational excellence while sustaining maximum value for our stakeholders. Copyright © 2012 Pearson Education 2 -18

Chapter Question 2: Vision vs. Mission How is strategic planning done at different levels of the organization? Mission Statements Vision Statements Ø Communicates the organization’s reason for being, and how it aims to serve its key stakeholders Ø Often integrates a summation of the firm’s values Ø Mission statements tend to be longer than vision statements Ø A future-oriented declaration of the organization’s purpose and aspirations. Ø Addresses what a firm wants to become Ø Vision statements tend to be relatively brief Copyright © 2012 Pearson Education 2 -19

Chapter Question 2: Business Vision Statement How is strategic planning done at different levels of the organization? A statement that clearly defines the firm’s “reason” for being in business – Should significantly stretch the resources and capabilities of the farm – Should inspire people in the organization to achieve things they never thought possible – Should unite people in the organization toward the pursuit of one common goal Copyright © 2012 Pearson Education 2 -20

Chapter Question 2: Business Vision Statement How is strategic planning done at different levels of the organization? • A guiding philosophy • Consistent with organizational value • Influenced by the strengths and weaknesses of the business Copyright © 2012 Pearson Education 2 -21

Chapter Question 2: How is strategic planning done at different levels of the organization? Table 2. 1: Product-Oriented versus Market-Oriented Definitions of a Business Copyright © 2012 Pearson Education 2 -22

Chapter Question 2: Establishing Strategic Business Units How is strategic planning done at different levels of the organization? A single business or collection of related businesses that can be planned separately from the rest of the company, with its own set of competitors and a manager who is responsible for strategic planning and profit performance. Copyright © 2012 Pearson Education 2 -23

Chapter Question 2: Establishing Strategic Business Units How is strategic planning done at different levels of the organization? An SBU has three characteristics, as follows. 1. It is a single business, or 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. Copyright © 2012 Pearson Education 2 -24

Chapter Question 2: Assigning Resources to Each SBU Boston Consulting Group’s Growth-Share Matrix can be used to make investment decisions. Defines four types of SBUs: 1. Stars: high-growth market, high-share product. 2. Cash cows: low-growth market, high-share product. 3. Question marks: low-share product, high-growth market. 4. Dogs: low-share product, low-growth market. Copyright © 2012 Pearson Education 2 -25 How is strategic planning done at different levels of the organization?

Chapter Question 2: Assessing Growth Opportunities How is strategic planning done at different levels of the organization? Fig 2. 5: Three Intensive Growth Strategies: Ansoff’s Product–Market Expansion Grid Copyright © 2012 Pearson Education 2 -26

Chapter Question 2: Assessing Growth Opportunities How is strategic planning done at different levels of the organization? Fig 2. 5: Three Intensive Growth Strategies: Ansoff’s Product–Market Expansion Grid • Concentric Diversification – leveraging a company’s core technical know-how to diversify its current products into new markets • Horizontal Diversification – the introduction of products that are unrelated to a company’s core products to existing markets • Conglomerate Diversification – the purchasing of another company in order to diversify Copyright © 2012 Pearson Education 2 -27

Chapter Question 2: 3: Business Unit Strategic Planning Howdoes is strategic planning What a marketing plan done at different include? levels of the organization? Business unit strategic-planning involves the steps shown in Fig 2. 6: The Business Unit Strategic-Planning Process Copyright © 2012 Pearson Education 2 -28

Chapter Question 2: Step 1: The Business Mission How is strategic planning done at different levels of the organization? Each business unit needs to define its specific mission within the broader company mission. Step 2: SWOT Analysis Strengths, Weaknesses, Opportunities, Threats - For monitoring the external and internal marketing environment Copyright © 2012 Pearson Education 2 -29

Chapter Question 2: SWOT Analysis How is strategic planning done at different levels of the organization? Albert S. Humphrey in the 1960 s Copyright © 2012 Pearson Education 2 -30

Chapter Question 2: Step 1: The Business Mission Copyright © 2012 Pearson Education 2 -31 How is strategic planning done at different levels of the organization?

Chapter Question 2: Step 3: Goal Formulation • Unit’s objectives must be hierarchical • Objectives should be quantitative • Goals should be realistic • Objectives must be consistent Copyright © 2012 Pearson Education 2 -32 How is strategic planning done at different levels of the organization?

Chapter Question 2: Step 4: Strategic Formulation Porter’s Generic Strategies Copyright © 2012 Pearson Education 2 -33 How is strategic planning done at different levels of the organization?

Chapter Question 2: (Step 4: Strategic Formulation) How is strategic planning done at different levels of the organization? Strategic Alliances There are four major categories of marketing alliances: • Product or service alliances • Promotional alliances • Logistics alliances • Pricing collaborations Copyright © 2012 Pearson Education 2 -34

Chapter Question 2: Step 5: Program Formulation and Implementation How is strategic planning done at different levels of the organization? Depends on: • Clear formulation of marketing programs • Accurate cost planning • Competent implementation Step 6: Feedback and Control The key to organizational health is willingness to examine the changing environment and adopt new goals and behaviors. Copyright © 2012 Pearson Education 2 -35

Chapter Question 3: Marketing Plan What does a marketing plan include? A marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tactical level. Copyright © 2012 Pearson Education 2 -36

Chapter Question 3: What does a marketing plan include? Levels of a Marketing Plan Strategic Tactical • Target marketing decisions • Product features • Value proposition • Promotion • Analysis of marketing opportunities • Merchandising • Pricing • Sales channels • Service Copyright © 2012 Pearson Education 2 -37

Chapter Question 3: Marketing Plan Contents ü Executive summary ü Table of contents ü Situation analysis ü Marketing strategy ü Financial projections ü Implementation controls Copyright © 2012 Pearson Education 2 -38 What does a marketing plan include?

Chapter Question 3: Evaluating a Marketing Plan Copyright © 2012 Pearson Education 2 -39 What does a marketing plan include?

Credits • • • Slide 6 Alamy Images: Barry Iverson Slide 8 George S. Day and Paul J. H. Schoemaker, Peripheral Vision: Detecting the Weak Signals That Will Make or Break Your Company (Boston: Harvard Business School Press, 2006) Slide 10 P. Kotler, D. C. Jain, and S. Maesincee, “Formulating a Market Renewal Strategy, ” in Marketing Moves (Part 1), Fig. 1 -1 (Boston: Harvard Business School Press, 2002), p. 29. Copyright © 2002 by President and Fellows of Harvard College. All rights reserved Slide 15 Orbit Company website, www. orbit-iq. com; Mobily Saudi Arabia company website, www. mobily. com. sa; e. Bay company website, www. ebay. com • • Slide 1 Corbis: Ali Haider / epa Slide 20 Salem Alforaih Photography, photographersdirect. com Slide 21 Adapted and reprinted by permission, Harvard Business Review. From “Strategies for Diversification, ” by Igor Ansoff, September–October 1957. Copyright © 1957 by the President and Fellows of Harvard College. All rights reserved • Slide 23 Getty Images: Justin Sullivan