CHAPTER

2 MARKETING PLANNING
AND MANAGEMENT

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

2.1 Identify the key tasks required for company and business unit planning.
2.2 Describe the process of developing a market offering.
2.3 Explain the process of marketing planning.
2.4 Describe the key components of an actionable marketing plan.
2.5 Explain how and when to modify the marketing plan.

CHAPTER SUMMARY

1. Market-oriented strategic planning is the managerial process of developing and

maintaining a viable fit between the organization’s objectives, skills, and
resources and its changing market opportunities. The aim of strategic planning is
to shape the company’s businesses and products so that they yield target profits
and growth. Strategic planning takes place on three levels: corporate, business
unit, and market offering.
2. The corporate strategy establishes the framework within which the divisions and
business units prepare their strategic plans. Setting a corporate strategy means
defining the corporate mission, establishing strategic business units (SBUs),
assigning resources to each, and assessing growth opportunities.
3. Strategic planning for individual business units includes defining their mission,
analyzing external opportunities and threats, analyzing internal strengths and
weaknesses, and crafting market offerings that will enable the company to achieve
its mission.
4. Marketing planning and management can occur on two levels. They can focus on
analyzing, planning, and managing the company (or a specific business unit
within the company), or they can focus on analyzing, planning, and managing one
or more of the company’s offerings.
5. From the point of view of designing a particular offering, marketing planning is a
process defined by five main steps: setting a goal, developing the strategy,
designing the tactics, defining the implementation plan, and identifying the
control metrics to measure progress toward the set goal. These five steps
constitute the G-STIC framework, which is the backbone of market planning.
6. The goal identifies the ultimate criterion for success that guides all company
marketing activities. Setting a goal involves identifying the focus of the
company’s actions and defining the specific quantitative and temporal
performance benchmarks to be achieved. A company’s ultimate goal is translated

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 into a series of specific market objectives that stipulate the market changes that
must occur in order for the company to achieve its ultimate goal.
7. The strategy delineates the value created by the company in a particular market; it
is defined by the company’s target market and its value proposition for this
market. The target market defines the offering’s target customers, collaborators,
company, competitors, and context (the Five Cs). The value proposition specifies
the value that an offering aims to create for the relevant market entities— target
customers, the company, and its collaborators.
8. The tactics outline a set of specific activities employed to execute a given
strategy. The tactics define the key attributes of the company’s offering: product,
service, brand, price, incentives, communication, and distribution. These seven
tactics are the means that managers have at their disposal to carry out a
company’s strategy.
9. The implementation plan lays out the logistics of executing the company’s
strategy and tactics. This involves developing the resources necessary to
implement the company’s offering, developing the actual offering that will be
introduced in the market, and deploying the offering in the target market.
10. The control delineates the criteria for evaluating the company’s goal progress and
articulates a process for analyzing the changes in the environment in which the
company operates, in order to align the action plan with market realities.
11. The marketing plan can be formalized as a written document that communicates
the proposed course of action to relevant entities, such as company employees and
stakeholders, and is the G-STIC framework, which is complemented by an
executive summary, a situation overview, and a set of relevant exhibits. To be
effective, the marketing plan must be actionable, relevant, clear, and succinct.
Once developed, marketing plans must be updated to remain relevant.
12. To ensure that its marketing plan is adequately implemented, a company must
periodically conduct a marketing audit to identify overlooked opportunities and
problem areas and to recommend a plan of action to improve the company’s
marketing performance.

OPENING THOUGHT

This introduces several perspectives on planning and describes how to draw up a formal
marketing plan. The formal marketing plan sample is an excellent resource because it
provides an overview of the types of decisions a marketer might make in an effort to
create customer value. Provide sufficient class time covering the distinctions between
strategy and tactics. The development of a marketing plan can be greatly facilitated by
following a logical structure that enables the reader to understand the company’s goals,
the specific activities that the company intends to undertake, and the rationale for the
proposed course of action.

TEACHING STRATEGY AND CLASS ORGANIZATION

PROJECTS
1. For the semester-long project, with this chapter, we continue the formation of groups; first
presentation of “product” to instructor for approval; review of process; and calendar of
“due dates.”
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2. Students should be encouraged to review selected companies’ annual reports to collect
from these reports the corporations’ mission statements, strategy statements, and target
market definitions. The collected material can be discussed in class, comparing the
company’s overall business, marketing, and customer strategies.

ASSIGNMENTS
Each student is in effect a “product.” Like all products, you (they) must be marketed for
success. Have each of your students write their own “mission statement” about their career
and a “goal statement” of where they see themselves in 5 years, 10 years, and after 20 years.
Have students read Jon R. Katzenbach and Douglas K. Smith, The Wisdom of Teams:
Creating the High-Performance Organization (Boston: Harvard Business School Press,
1993); Hammer and Champy, Reengineering the Corporation, and report on their
findings in a written and/or oral presentation.

Select a local firm or have the students select firms with which they are familiar (current
employers or past employers, for example) and have them answer the questions posed in
Figure 2.8 regarding the organization of the marketing plan. Make sure the students are
specific in their answers.
As a group presentation project, have the students read: Peter Lorange and Johan Roos,
Strategic Alliances: Formation, Implementation and Evolution (Cambridge, MA: Blackwell,
1992); Jordan D. Lewis, Partnerships for Profit: Structuring and Managing Strategic
Alliances (New York: The Free Press, 1990); and John R. Harbison and Peter Pekar, Smart
Alliances: A Practical Guide to Repeatable Success, (San Francisco, CA: Jossey-Bass, 1998);
then have each group present their findings.

END-OF-CHAPTER SUPPORT
Marketing Spotlight: Google

1. What is Google’s core business? What are the pros and cons of managing a diverse
portfolio of businesses?

Suggested answer: Google came to dominate search and online advertising thanks to its
ability to collect and process enormous amounts of data from the internet and make them
useful. It used this capability to provide consumers and businesses alike with the
information they needed. By applying its computer science and design skills to new
problems, Google helped users get things done more efficiently and effectively. Google
has grown into a multinational company with almost $100 billion in revenue, almost 90
percent of which is from advertising. So far, though, Google’s dependence on advertising
revenue hasn’t hurt growth; however, Google, like other big tech companies, faces
scrutiny and lawsuits worldwide over privacy issues and censorship questions. Is Google
beholden to the views of its advertisers? Doing internet research, students can update this
issue.

2. With a portfolio as diverse as Google’s, what are the company’s core brand values?

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Suggested answer: Google’s brand values are stated in its corporate mission statement:
“To organize the world’s information and make it universally accessible and useful.” By
applying its computer science and design skills to new problems, Google helps users get
things done more efficiently and effectively. Google applies its expertise to existing
categories to create a superior product offering. Google has moved into many categories
over its short lifetime, but all of its products are drawn together by the company’s desire
to harness the power of data to create better customer experiences.

3. What’s next for Google? Where should the company focus its resources?

Suggested answer: In an effort to continue innovating, Google has invested heavily in

machine learning and artificial intelligence. These rapidly developing technologies offer
the company a way to automatically sift through ever-increasing amounts of data to
extract useful information. Google sees the further development of AI capabilities as
pivotal to its future growth. Google aims to create a more varied range of income streams
from its investments in sectors like cloud computing, hardware, and artificial intelligence.
Students can discuss where Google should focus its resources.

Marketing Spotlight: Careem

1. How does Careem create value for its customers?

Suggested answer: Careem creates value for its customers by offering easy and adaptable
solutions to their everyday needs, like commuting, ordering food, delivering packages,
and easy payment options. By seeking key customer and market insights, Careem has
been able to connect with consumers and make a tangible difference in people’s lives.

2. Discuss the relative strengths of Careem and Uber. Do you think Careem’s services
and brand should be integrated with Uber in the Middle East region?

Suggested answer: The students’ answers will vary. Careem’s main strengths are local
knowledge and differentiated services, which meet local needs effectively. Uber’s main
strengths are their high brand equity and financial robustness. Highlight to students the
advantages of retaining the brand essence and brand values that Careem offers to local
markets. Maintaining the separate brands will allow for better market coverage and
positioning strategies.

3. Can a company stay profitable by being customer-centric? Is Zappos’s business model

sustainable?

Suggested answer: Zappos has been able to stay profitable by being customer-centric;
however, its business model has evolved. Since 2009, Zappos has operated as a
subsidiary of Amazon and brings in over $1 billion in revenue every year. Amazon
acquired Zappos because of its one-of-a-kind company culture and its dedication to
customer service, which are both valuable assets. Recognizing this, Amazon has allowed
Zappos to operate as an independent entity and to maintain its customer-centric culture.

DETAILED CHAPTER OUTLINE

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Opening Vignette: Slack offers an unstructured environment where employees can share,
collaborate, and see what everyone else is working on. It makes conversation threads
easy to search, and customized notifications let users concentrate on tasks without
missing something relevant. The features that set Slack apart from similar apps are its
speed, functionality, and user-friendly interface. Marketers must prioritize strategic
planning in three key areas: managing the company’s businesses as an investment
portfolio, assessing the market’s growth rate and the company’s position, and developing
a viable business model.

I. Corporate Business Unit Planning and Management (See Fig. 2.1)

A. Defining the Corporate Mission
i. The company must develop a game plan for achieving the long-run
objectives of each business unit.
ii. Marketing planning and management can occur on three different levels:
corporate, business unit, and specific market offering.
iii. A mission is a clear, concise, and enduring statement of the reasons for an
organization’s existence. Often called its core purpose, a company’s mission
is a long-term goal with a shared sense of purpose, direction, and
opportunity.
iv. Good mission statements have five major characteristics.
 They focus on a limited number of specific goals.
 They stress the company’s major policies and values.
 They define the major markets that the company aims to serve.
 They take a long-term view.
 They are as short, memorable, and meaningful as possible.
B. Building the Corporate Culture
i. Creating a viable corporate culture is often the key to market success.
ii. Corporate culture is defined as “the shared experiences, stories, beliefs,
and norms that characterize an organization.” Walk into any company
and the first thing that strikes you is the corporate culture—the way
people dress, talk to one another, and greet customers.
C. Defining Strategic Business Units
i. Established using three characteristics
 Single business or collection of related businesses that can be planned
separately from the rest of the company
 Own set of competitors
 Manager responsible for strategic planning and profit performance and
controls most factors affecting profit
ii. A specialized portfolio involves SBUs with fairly narrow assortments
consisting of one or a few product lines.
iii. A diversified portfolio involves SBUs with fairly broad assortments
containing multiple product lines.
iv. The purpose of identifying the company’s strategic business units is to
develop separate strategies and assign appropriate funding.
D. Allocating Resources Across Business Units
i. Once it has defined its SBUs, management decides how to allocate
corporate resources to each unit. This is done by assessing each SBU’s
competitive advantage and the attractiveness of the market in which
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 it operates.
ii. Portfolio management focuses on two types of factors: (1) opportunities
presented by a particular industry or market and (2) the company’s
resources, which determine its ability to take advantage of the identified
opportunities.
iii. A key aspect in developing portfolio models involves identifying the
metrics underlying the performance of a given business unit.
II. Developing Market Offerings
i. Strategy involves choosing a well-defined market in which the company will
compete and determining the value it intends to create in this market.
ii. Tactics, also called the marketing mix, make the company’s strategy come
alive.
A. Developing The Marketing Strategy
i. Identifying the Target Market. The target market in which a company aims
to create and capture value comprises five factors:
 customers whose needs the company intends to fulfill
 competitors that aim to fulfill the same needs of the same target
customers
 collaborators that help the company fulfill the needs of customers
 company that develops and manages the offering
 context that will affect how the company develops and manages the
offering
ii. The 5-C Framework (See Fig.2.2)
B. The 5 Cs and the Five Forces of Competition
i. The Five-C framework is similar to the Five Forces framework originated
by Michael Porter.
ii. The Five Forces framework identifies industry competitiveness according to
five factors: the bargaining power of suppliers, the bargaining power of
buyers, the threat of new entrants, the threat of substitutes, and rivalry
among existing competitors.
iii. The 5-C framework, on the other hand, defines the market based on
customer needs rather than on the industry in which the company competes.
iv. Developing a Value Proposition. A successful offering must create superior
value not only for target customers but also for the company and its
collaborators. See Fig.2.3.
 Customer value is the worth of an offering to its customers and hinges
on customers’ assessment of how well an offering fulfills their needs.
 Collaborator value is the worth of an offering to the company’s
collaborators.
 Company value is the worth of the offering to the company.
v. The term optimal value means that the value of the offering is connected
across the three entities, to create value for target customers and
collaborators and enable the company to achieve its strategic goals.
C. Designing the Marketing Tactics
i. The market offering is the actual good that the company deploys in
order to fulfill a particular customer need.
ii. Marketing managers have seven tactics at their disposal to develop an
offering that creates market value: product, service, brand, price, incentives,
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 communication, and distribution.
iii. Called the marketing mix, these attributes represent the combination of
activities required to transform the market offering’s strategy into reality.
See Fig. 2.4.
iv. The seven marketing tactics can be regarded as a process of designing,
communicating, and delivering customer value. See Fig. 2.5.
D. The Seven Ts and The Four Ps
i. Four decision areas are represented by the Four Ps: product, price,
promotion, and place. Because it is simple, intuitive, and easy to remember,
the 4-P framework enjoys wide popularity.
ii. Because of that very simplicity, the 4-P framework has significantly limited
relevance in the contemporary business environment.
iii. The 7-T marketing mix represents a more refined version of the 4-P
framework, offering a more accurate and actionable approach to designing a
company’s offering.
E. Creating a Market Value Map
i. A market value map can be thought of as a visual representation of the key
components of a company’s business model and the ways in which they are
related to one another.
ii. The value proposition component of the market value map is central to
ensuring the viability of the company’s business model. See Fig. 2.6.
III. Planning and Managing Market Offerings
A. The G-STIC Approach to Action Planning
i. Five key activities guide the development of an action plan. These activities
include setting a goal, developing a strategy, designing the tactics, defining
an implementation plan, and identifying a set of control metrics to measure
the success of the proposed action.
ii. The G-STIC (Goal-Strategy-Tactics-Implementation-Control) framework
comprises these five activities and acts as the lynchpin of marketing
planning and analysis.
B. Setting a Goal (See Fig. 2.7)
i. Defining the Goal Focus. The goal’s focus defines the desired outcome of
the company’s activities, an important criterion of a firm’s success. Based on
their focus, goals can be monetary or strategic.
ii. Defining Performance Benchmarks. Quantitative and temporal performance
benchmarks work in tandem to provide the measurements that track the
progress of the company toward reaching its established goal.
C. Developing the Strategy
i. The strategy denotes the value that the company intends to create in a
particular market and includes the company’s target market and its value
proposition for this market.
D. Designing the Tactics
i. Implementation is a direct outcropping of the company’s strategy and
tactics.
ii. Implementation consists of three key components: development of the
company resources, development of the offering, and commercial
deployment of the offering.
E. Identifying Controls
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 i. Controls have one primary function: to inform the company whether it
should stay with its current course of action, modify the underlying
strategy and tactics, or completely abandon its current course of action
and develop an offering that better reflects the realities of the market.
ii. Controls have two key components: evaluating the company’s
performance and monitoring the market environment.
IV. Developing A Marketing Plan
A. The marketing plan serves three main functions: It describes the company’s
goal and proposed course of action, informs the relevant stakeholders about
the goal and action plan, and persuades the relevant decision makers of the
viability of the goal and the proposed course of action. See Fig. 2.8.
i. Marketing plans typically start with an executive summary followed by a
situation overview.
ii. The core of the marketing plan is contained in the key elements of the G-
STIC framework that delineate the company’s goal and the course of action
it proposes.
V. Modifying the Marketing Plan
A. Updating the Marketing Plan
i. The marketing plan requires updating when the company’s current
course of action is altered.
ii. A common reason for updating a company’s marketing plan is in
response to changes in the target market.
iii. The key to market success is not only to conceive a viable market plan
but also to modify this plan to adapt to market changes.
B. Conducting a Marketing Audit

i. A marketing audit is a comprehensive examination of the marketing

aspect of an offering or a company’s marketing department.
ii. It is intended to identify overlooked opportunities and problem areas
and to recommend a plan of action to improve the company’s
performance.
iii. An effective marketing audit should be comprehensive, systematic,
unbiased, and periodic.
iv. The key difference between the marketing audit and the marketing plan
is that the marketing plan faces forward toward the future and plots a
course of action that the company should undertake.
v. The marketing audit consolidates the company’s past, present, and
future by examining the company’s current and past performance to
determine the right course to ensure its future.

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