CHAPTER 2

Marketing Planning and Management

Enabling brands seamlessly integrate their products into mobile content, InMobi cloud platform provides
mobile marketing solutions for global brands.
Source: ©InMobi, used with permission

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.

InMobi, founded in 2007, is a leading mobile marketing cloud platform that

delivers advertising solutions, mobile app analytics and consumer insights to
global brands. It has partnered with thousands of publishers of mobile
websites and apps, enabling brands and app developers seamlessly integrate
their products into mobile content. Launched initially as an advertising
provider offering text-based local search service that updated subscribers on
information about neighborhood vendors, deals and promotions, the company
pivoted to a mobile ad platform in 2009 for brands to advertise on mobile
versions of websites.1,2 Its cloud-based marketing solutions help businesses
develop market insight and identify target audience while its proprietary
technology to deploy mobile ads, with the click of a button, allows clients to
remotely publish their ads on sites and apps of their choice.3 The platform
offers end-to-end solutions to brands to understand, identify, engage and
acquire customers. Listed among the top innovative and disruptive companies
owing to its distinctive offerings to global clients, InMobi attracted eminent
investors—including Softbank, Sherpaloo and Google—thereby emerging as
India’s first B2B unicorn.4 The unprecedented growth of users and time spent
by over 3 billion gamers on mobile games attracted the company to launch in-
game advertising on InMobi Exchange. The company’s partnerships with all
industry-leading platforms in the native in-game advertising space permits
brands to interact with consumers in an intuitive way through high impact
creatives and non-disruptive ad formats to a very engaged audience. Gaming-
based mobile ads is expected to further consolidate InMobi’s leadership
position in the rapidly growing global mobile advertisement market.5
InMobi’s flagship app ‘Glance’, a consumer facing mobile-first content
platform, serves news, videos and games on the lock screens of Android
phones. Created as a skunkworks project by a few engineers in 2016, Glance
amassed over 115 million daily active users in less than 18 months post its
launch. These users spend approximately 25 minutes every day on the
platform.6 Partnerships with Samsung, Xiomi, Vivo and Gionee to preinstall
the service on mobile devices ensured that Glance is available on over 65%
smartphones sold in India.7 The combined valuation of InMobi and Glance is
 expected to be $15 billion at the end of 2021.8 It is noteworthy that in 2020,
Glance raised $145 million in funding led by Google.

D eveloping the right marketing strategies over time requires a blend of

discipline and flexibility. Firms must stick to a strategy but also constantly
improve it. In today’s fast-changing marketing world, identifying the best long-
term strategies is crucial. At the core of any successful marketing strategy is the
development of an enduring value proposition that addresses a real customer
need. One company that has developed distinct offerings designed to address
unmet customer needs is InMobi. This chapter begins by examining some of the
strategic marketing implications involved in creating customer value. We’ll look
at several perspectives on planning and describe how to draw up a formal
marketing plan.

CORPORATE AND BUSINESS UNIT PLANNING

AND MANAGEMENT
To ensure that they execute the right activities, 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 in that
market, and developing a viable business model. The company must develop a
game plan for achieving the long-run objectives of each business unit.
Generally speaking, marketing planning and management can occur on three
different levels: corporate, business unit, and specific market offering. Corporate
headquarters is responsible for designing a corporate strategic plan to guide the
whole enterprise. It makes decisions on the amount of resources to allocate to
each business unit, as well as on which businesses to start or eliminate. Each
business unit develops a plan to carry that business unit into a profitable future.
Finally, each market offering involves a marketing plan for achieving its
objectives (Figure 2.1).
 FIGURE 2.1
The Strategic Planning Processes

This section addresses the key issues involved in analyzing, planning, and
managing a company or distinct business units. The remainder of the chapter
examines the process of analyzing, planning, and managing a company’s
offerings.
Companies undertake four planning activities: defining the corporate mission,
building the corporate culture, establishing strategic business units, and assigning
resources to each strategic business unit. We’ll briefly look at each process.

DEFINING THE CORPORATE MISSION

An organization exists to accomplish something: make cars, lend money, provide
a night’s lodging. Over time, the mission may change to respond to new
opportunities or market conditions. [Link] changed its mission from being
the world’s largest online bookstore to aspiring to be the world’s largest online
store; eBay changed from running online auctions for collectors to running online
auctions that offer all kinds of goods; and Dunkin’ Donuts switched its emphasis
from doughnuts to coffee.
A mission is a clear, concise, and enduring statement of the reasons for an
organization’s existence. Often referred to as its core purpose, a company’s
mission is a long-term goal that provides company employees and management
with a shared sense of purpose, direction, and opportunity.9
To define its mission, a company should address Peter Drucker’s classic
questions:10 What is our business? Who is the customer? What is of value to the
customer? What will our business be? What should our business be? These
simple-sounding questions are among the most difficult a company will ever face.
Successful companies continuously ask and answer them.
A clear, thoughtful mission statement, developed collaboratively with
managers, employees, and often customers, provides a shared sense of purpose,
direction, and opportunity. At its best, it reflects a vision, an almost “impossible
dream,” that provides direction for the next 10 to 20 years. Sony’s former
president, Akio Morita, wanted everyone to have access to “personal portable
sound,” so his company created the Walkman and the portable CD player. Fred
Smith wanted to deliver mail anywhere in the United States before 10:30 AM the
next day, so he created FedEx.
Consider the following mission statements:
Google’s mission is to organize the world’s information and make it
universally accessible and useful.11
At IKEA our vision is to create a better everyday life for the many people.
Our business idea supports this vision by offering a wide range of well-
designed, functional home furnishing products at prices so low that as many
people as possible will be able to afford them.12
Facebook’s mission is to give people the power to build community and
bring the world closer together.13
Tesla’s mission is to accelerate the world’s transition to sustainable energy.14
To inspire and nurture the human spirit – one person, one cup and one
neighborhood at a time (Starbucks).15
Our mission is to empower every person and every organization on the
planet to achieve more (Microsoft).16
Good mission statements have five major characteristics.
They focus on a limited number of specific goals. Mission statements
containing a laundry list of unrelated activities tend to be less effective than
focused mission statements that clearly articulate their ultimate goals.
They stress the company’s major policies and values. Narrowing the range of individual discretion
lets employees act consistently on important issues.
They define the major markets that the company aims to serve. Because the choice of target
market defines a company’s strategy and tactics, it should be defined by and follow from the
company’s mission statement.
They take a long-term view. The corporate mission defines the ultimate strategic goal of the
company; it should be changed only when it ceases to be relevant.
They are as short, memorable, and meaningful as possible. Three- to four-word corporate mantras
are typically more effective than long-winded mission statements.

BUILDING THE CORPORATE CULTURE

Strategic planning happens within the context of the organization. A company’s
organization consists of its structures, policies, and corporate culture, all of which
can become dysfunctional in a rapidly changing business environment. Whereas
managers can change structures and policies (though with difficulty), the
company’s culture is very hard to change. Yet creating a viable corporate culture
is often the key to market success, as the experience of HDFC Bank shows.

HDFC Bank’s customer-centric approach is backed by the commitment to foster a culture of camaraderie,
fairness, respect, pride, and credibility among its employees
Source: Casimiro / Alamy Stock Photo

HDFC Bank HDFC Bank, incorporated in 1994 with a mission to be a world-

class Indian bank, adopted customer centric innovation and disciplined risk
management to deliver shareholder returns of more than 16,000 per cent in the
next two and half decades.17 The bank has stayed true to its founding
principles of customer focus, risk management and technology-led innovation,
and in 2020, it’s founder-CEO has been rated by the Economist as the world’s
best banker.18 Aditya Puri, the founder-CEO of HDFC Bank, explained the
 consistency in its customer-centric approach as, “The ultimate person we are
here for is the consumer. In everything we do, the only way we’ll succeed is if
you bring your expertise together to provide a differentiated product to the
customer.” The leader’s unwavering commitment motivates the bank’s
employees to deliver the brand promise during every interaction with
customers. The conservative approach to risk meant that the bank finances its
assets through deposits from its retail customers rather than debts. The bank
serves retail and commercial clients in cities and semi-urban centers through
one of the largest networks of branches and ATMs among private banks.
Shunning investments in infrastructure projects as well as foreign ventures
resulted in a steady and profitable growth with low defaults and the lowest
non-performing assets among India’s banks. Interestingly, the bank’s core
values not just include customer focus but also operational excellence, product
leadership, people and sustainability.19 Several awards and accolades
recognizes the bank’s employee-engagement experience, including the ‘Great
Place to Work’ certification for mega employers with more than 50,000
employees.20 The award acknowledges the bank’s commitment to foster a
culture of camaraderie, fairness, respect, pride, and credibility among its
employees.21 By creating and sustaining a culture that empowers employees
and balances the freedom to work with responsibility, HDFC bank is able to
attract the best talent and retain the most competent.22

What exactly is a corporate culture? Some define it 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.
A customer-centric culture can affect all aspects of an organization. Enterprise
Rent-A-Car features its own employees in its latest “The Enterprise Way” ad
campaign. Through its “Making It Right” training program, Enterprise empowers
all employees to make their own decisions. One ad in the campaign, themed “Fix
Any Problem,” reinforces how any local Enterprise outlet has the authority to
take actions that maximize customer satisfaction.23

DEFINING STRATEGIC BUSINESS UNITS

Many large companies manage a portfolio of different businesses often referred to
as strategic business units, each requiring its own strategy. A strategic business
unit (SBU) has three characteristics: (1) It is a single business, or a collection of
related businesses, that can exist separately from the rest of the company; (2) It
has its own set of competitors; and (3) It has a manager responsible for strategic
planning and profit performance, who controls most of the factors affecting
profit.
Strategic business units make up a company’s portfolio. Based on the diversity
of the individual strategic business units within the portfolio, these units can be
defined as specialized or diversified.
A specialized portfolio involves SBUs with fairly narrow assortments
consisting of one or a few product lines. To illustrate, Ferrari (high-performance
sports cars), Glacéau (bottled water), GoPro (action camcorders), and Roku
(digital media streaming) have strategically limited their product mix to a fairly
narrow product line.
In contrast, a diversified portfolio involves SBUs with fairly broad
assortments containing multiple product lines. For example, companies like
Amazon, General Electric, Johnson & Johnson, and Unilever offer a wide variety
of product lines. The primary rationale for a diversified business mix is to take
advantage of growth opportunities in areas in which the company has no
presence.
Each business unit needs to define its specific mission within the broader
company mission. Thus, a company that manufactures and markets lighting
equipment for television studios might define its mission as “To target major
television studios and become their vendor of choice for lighting technologies
that represent the most advanced and reliable studio lighting arrangements.” Note
that this mission statement does not mention winning business from smaller
television studios, offering the lowest price, or venturing into non-lighting
products.
The purpose of identifying the company’s strategic business units is to develop
separate strategies and assign appropriate funding. Senior management knows its
portfolio of businesses usually includes a number of “yesterday’s has-beens” as
well as “tomorrow’s winners.” Liz Claiborne has put more emphasis on some of
its younger businesses, such as Juicy Couture, Lucky Brand Jeans, Mexx, and
Kate Spade, while selling businesses without the same buzz (Ellen Tracy, Sigrid
Olsen, and Laundry).

ALLOCATING RESOURCES ACROSS BUSINESS UNITS

Once it has defined its SBUs, management must decide how to allocate corporate
resources to each unit.24 This is often done by assessing each SBU’s competitive
advantage and the attractiveness of the market in which it operates. When
assessing individual business units, a company might also consider existing
synergies among them. Such synergies can be related to company processes (e.g.,
research and development, manufacturing, and distribution) or to personnel (e.g.,
experienced management, qualified engineers, and knowledgeable sales force).
Based on the assessment of its portfolio of business units, the company could
decide whether to grow, “harvest” (or draw cash from), or hold on to a particular
business.

Biocon’s entrepreneurial approach to strategic management constantly seeks opportunities to make its
offerings affordable and accessible to over a billion
Source: ©Biocon, used with permission

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. Here,
market opportunities are typically defined in terms of overall market/industry
attractiveness factors such as its size, growth, and profitability. A company’s
resources, on the other hand, reflect its competitive position in the marketplace
and are often measured in terms of factors such as strategic assets, core
competencies, and market share.
Because the principles for making resource-allocation decisions across
different business units are very similar across industries, many companies have
developed generalized strategies for making such decisions. These generalized
strategies are often integrated into formal portfolio models that offer guidance on
how to allocate resources across multiple SBUs.

Biocon Biocon, India’s most successful biopharmaceutical company straddles

the entire drug value chain, from pre-clinical discovery to clinical development
and finally commercialization,25 The company has adopted a hybrid model to
manage its four businesses comprising of generics, biosimilars, research
services and novel biologics. Low-hanging revenue-earning, low-risk and
predictable businesses like research services and generics serve as cash cows
that generate surplus to run the higher-risk and longer-stream business of novel
therapeutic programs for oral insulin, cancer vaccines, and autoimmune
diseases, among others.26 Biocon keeps refining its business model to manage
its global business spanning emerging markets in Asia and Africa to the highly
regulated markets in North America, Europe, Japan and Australia. Even in the
generics segment, the company has adopted a differentiated approach of
branded formulations anchored by biologics, unlike its Indian peers who are
largely focused on off-patent small molecule generics. The company has
harnessed the collaborative route to partner with global pharma giants
including Pfizer, Mylan, Novartis and Bristol-Myers Squibb. Such
collaborations allow sharing of risk and reward of drug development while
extending its global footprint through local marketing alliances. The
company’s entrepreneurial approach to strategic management constantly seeks
opportunities to make its offerings affordable and accessible to billions. In July
2020, as part of its global strategy, the company diversified into the rapidly
growing digital therapeutic segment by partnering with Voluntis, a French
healthcare solutions company. The partnership develops and distribute Insulia,
 a digital product, for at-home management of diabetes patients.27 The digital
app allows physicians to remotely monitor patients who receive automated and
customized insulin dose recommendations. The treatment plan based on each
patient’s specific needs will lower treatment costs and improve health
outcomes. Biocon plans to create a comprehensive digital therapeutics
portfolio by extending the Insulia platform to its range of insulin products in its
key global markets. The company believes that tapping into the growing digital
therapeutics solutions will transform patient experiences through
personalization.

As part of the global strategy for its biosimilars business, the company has
diversified into vaccines by partnering with Serum Institute of India, the
world’s largest manufacturer of vaccines. While Biocon Biologics, which
houses Biocon’s biosimilars business, continues to have a broad and robust
pipeline of biosimilars that target non-communicable diseases, it has also made
a strategic move into the communicable disease segment through the
partnership with Serum Institute for vaccines and infectious disease antibodies.
This strategic alliance provides Biocon Biologics an asset-light and accelerated
entry into the vaccines segment. It also complements the strengths and
resources of the two leading players in vaccines and biologics, to address
inequitable access in emerging and developed markets for life saving vaccines
and biologics. The companies aim to make a significant positive impact on
global healthcare through their alliance.

A key aspect in developing portfolio models involves identifying the metrics

underlying the performance of a given business unit. Depending on the
assumptions of the model, these metrics can include factors such as return on
investment, market share, and industry growth rate. One widely used—albeit
somewhat oversimplified and subjective—approach to portfolio analysis is the
BCG matrix developed by the Boston Consulting Group. Newer portfolio-
management methods use a more comprehensive approach to assess the potential
of a business based on growth opportunities from global expansion, repositioning
or retargeting, and strategic outsourcing.

DEVELOPING MARKET OFFERINGS

In order to create value for target customers, collaborators, and company
stakeholders, it is necessary for a company to clearly identify the target market in
which it will compete and to design an offering that will deliver a meaningful set
of benefits to target customers.28 These activities encompass the two key
components of a company’s business model: strategy and tactics.
Strategy involves choosing a well-defined market in which the company will
compete and determining the value it intends to create in this market. Tactics,
also called the marketing mix, make the company’s strategy come alive: They
define the key aspects of the offering developed to create value in a given market.
The tactics logically follow from the company’s strategy and reflect the way the
company will make this strategy a market reality. Tactics shape everything from
the offering’s benefits and costs to the means by which target customers learn
about and buy the offering.
Strategy and tactics are fundamentally intertwined. A company’s strategy
specifies the target market and the value the company aims to create in this
market, while the tactics detail the actual attributes of the offering that will create
value in the chosen market. Deciding on the specific tactical aspects of an
offering—its features, brand image, and pricing, and the means of promoting,
communicating, and distributing the offering—is not possible without
understanding the needs of the target marketing and the competing options that
exist to fulfill these needs.
The key aspects of an offering’s strategy and tactics are discussed in more
detail in the following sections.

DEVELOPING THE MARKETING STRATEGY

Marketing strategy incorporates two key components: the target market in which
the company will compete and the value proposition for the relevant market
entities—the company, its target customers, and its collaborators. A carefully
chosen target market and a well-crafted value proposition provide the foundation
of the company’s business model and serve as the guiding principles for
determining the tactical decisions that define the company’s offering.

Identifying the Target Market. The target market in which a company aims to
create and capture value comprises five factors: the customers whose needs the
company intends to fulfill, the competitors that aim to fulfill the same needs of
the same target customers, the collaborators that help the company fulfill the
needs of customers, the company that develops and manages the offering, and the
context that will affect how the company develops and manages the offering.
These five market factors—the Five Cs—are visually represented in the 5-C
framework as a set of concentric ellipses: Target customers are in the center, with
collaborators, competitors, and the company in the middle and the context on the
outside (Figure 2.2). The central placement of target customers in the 5-C
framework reflects their defining role in the market. The other three market
entities—the company, its collaborators, and its competitors—work to create
value for the target customers. Forming the outer layer of the 5C framework is the
market context, which defines the environment in which customers, the company,
collaborators, and competitors operate.
The Five Cs and the relationships among them are discussed in more detail in
the following sections.
Target customers are the individuals or organizations whose needs the
company plans to fulfill. Target customers in business-to-consumer markets
are typically the end users of the company’s offerings, whereas in business-
to-business markets, target customers are other businesses that use the
company’s offerings. Two key principles determine the choice of target
customers: The company and its collaborators must be able to create
superior value for target customers relative to the competition, and the target
customers chosen should be able to create value for the company and its
collaborators.
Collaborators work with the company to create value for target customers. A company should base
the choice of collaborators on the complementary resources they can offer to help the company fulfill
customer needs. Collaboration involves outsourcing (rather than developing) the resources that the
company lacks but that it requires to create an offering that fulfills the needs of target customers.
Instead of building or acquiring resources that are lacking, a company can gain access to necessary
resources by partnering with entities that have them and can benefit from sharing them. Collaborators
can include suppliers, manufacturers, distributors (i.e., dealers, wholesalers, and retailers), research-
and-development entities, service providers, external sales forces, advertising agencies, and marketing
research companies.
Competitors aim to fulfill the same needs of the same customers that the company is targeting.29
Companies should avoid falling prey to the myopic view of competition that defines their rivals using
traditional category and industry terms.30 A company should examine the main competitors and their
strategies by asking the following questions: What is each competitor seeking in the marketplace?
What drives each competitor’s behavior? This helps clarify the company’s position since many factors
are involved a competitor’s objectives, including its size, history, current management, and financial
situation. For example, it’s important to know whether a competitor that is a division of a larger
 company is being run for growth or for profits, or is just being milked.31

FIGURE 2.2
Identifying the Target Market: The 5-C Framework
Source: Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL:
Cerebellum Press, 2019).

The company develops and manages a given market offering. For organizations with diverse strategic
competencies and market offerings, the term company typically refers to the particular business unit
that manages a specific offering. Each strategic business unit can be viewed as a separate company
that requires its own business model. For example, GE, Alphabet (Google’s parent company), and
Facebook have multiple strategic business units.
The context is the environment in which the company and its collaborators operate. It encompasses
five factors. The sociocultural context is characterized by social and demographic trends, value
systems, religion, language, lifestyles, attitudes, and beliefs. The technological context consists of new
techniques, skills, methods, and processes for developing, communicating, and delivering market
offerings. The regulatory context includes taxes, import tariffs, and embargoes, as well as product
specification and pricing, communication regulations, and intellectual property laws. The economic
context is made up of economic growth, money supply, inflation, and interest rates. The physical
context comprises natural resources, geographic location, topography, climate trends, and health
conditions. Context can have a dramatic impact on a company’s ability to create market value. Many
recent developments—including the advancements in artificial intelligence, the initiation of trade
wars, global warming, and the coronavirus pandemic—have forced many companies to completely
rethink the way they operate and pivot their business models.

The key component of the target market is the selection of target customers,
which determines all other aspects of the market: This includes specifying the
competition, choosing collaborators, defining the company resources needed to
develop a superior offering for customers, and outlining the context in which the
company will create market value. It follows that a change in target customers
typically leads to a change in competitors and collaborators, different resource
requirements, and a change in context factors. Because of its strategic importance,
the choice of the right target customers is the foundation for building a successful
business model.

The Five Cs and the Five Forces of Competition

The Five-C framework is similar to the Five Forces framework originated by
Michael Porter.32 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. These five factors jointly
define the competitive environment in which a firm operates. The Five Forces
framework suggests that competition within an industry increases along with
greater bargaining power of suppliers and buyers, a higher threat of new
competitors and substitute products, and intensified rivalry among existing
competitors.
The Five Forces framework is similar to the 5-C framework in that both are
meant to facilitate analysis of the market in which a company operates. The
difference between these frameworks is the way in which each defines the
market. The Five Forces framework analyzes the competition in the market
from an industry perspective. 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. Accordingly, it defines competitors in terms of their
ability to fulfill customer needs and create market value. The 5-C framework
is not concerned with whether the company and its competitors operate within
the same industry, which makes the concept of substitutes superfluous
because from a customer’s point of view, substitutes are merely cross-
category competitors that aim to fulfill a particular need.
The Five Forces framework’s focus on industry makes it particularly
relevant for marketers analyzing the competitive structure within a given
industry. However, the Five Forces approach has much less relevance when it
comes to analyzing an offering’s ability to create market value. In this case,
the 5-C framework is typically more useful because of its customer focus and
its market perspective based on customer needs rather than on a particular
industry.33
Developing a Value Proposition. A successful offering must create superior
value not only for target customers but also for the company and its collaborators.
Accordingly, when developing market offerings for the relevant entities in the
market exchange, a company needs to consider all three types of value: customer
value, collaborator value, and company value.
Customer value is the worth of an offering to its customers and hinges on
customers’ assessment of how well an offering fulfills their needs. The value
that an offering creates for its customers is based on three main factors: the
needs of the target customers, the benefits customers receive and the costs
they incur when they purchase the company’s offering, and the benefits and
costs of the alternative means—competitive offerings—that target customers
can use to fulfill their needs. Thus, the customer value proposition should be
able to explain why target customers would choose the company’s offering
instead of the available alternatives.

FIGURE 2.3
The 3-V Market Value Principle
Source: Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL:
Cerebellum Press, 2019).

Collaborator value is the worth of an offering to the company’s collaborators. It sums up all benefits
and costs that an offering creates for collaborators and reflects how attractive an offering is to
collaborators. The collaborator value proposition should explain why collaborators would choose the
company’s offering instead of competitive alternatives to achieve their goals.
Company value is the worth of the offering to the company. The value of an offering is defined
relative to all benefits and costs associated with it, its affinity with the company’s goal(s), and the
value of other opportunities that could be pursued by the company—for example, other offerings that
the company could launch. Therefore, the company value proposition determines why the company
would choose this offering instead of selecting alternative options.
 The market value principle is also referred to as the 3-V principle because it
underscores the importance of creating value for the three key market entities—
target customers, collaborators, and the company itself. The market value
principle defines the viability of a business model by posing three sets of
questions that must be addressed:
What value does the offering create for target customers? Why would
target customers choose this offering? What makes this offering superior
to the alternative options?
What value does the offering create for the company’s collaborators
(suppliers, distributors, and co-developers)? Why would collaborators
partner with the company instead of with other entities?
What value does the offering create for the company? Why should the
company invest resources in this offering rather than pursuing other
options?
The need to manage value for all three of these market entities begs the
question of which value to prioritize. This requires the creation of an optimal
value proposition that balances the value for customers, collaborators, and the
company. The term optimal value as used here means that the value of the
offering is connected across the three entities, such that it creates value for target
customers and collaborators in a way that enables the company to achieve its
strategic goals. The market value principle optimizes customer, collaborator, and
company value and is the basis of market success (Figure 2.3). Failure to create
superior value for any of the three market entities inevitably leads to an
unsustainable business model and dooms the business venture.
Consider the means that Starbucks uses to create market value. Customers
receive the functional benefit of a variety of coffee beverages and the
psychological benefit of expressing their personality by choosing a customized
beverage, for which they deliver monetary compensation to Starbucks.
Collaborators (coffee growers) receive monetary payments from Starbucks for the
coffee beans they provide and derive the strategic benefit of having a consistent
demand for their product; in return, they invest resources in growing coffee beans
that conform to Starbucks’ standards. Starbucks receives revenues and profits
from investing company resources in developing and offering its products and
services to consumers, in addition to deriving the strategic benefits of building a
brand and enhancing its market footprint.

DESIGNING THE MARKETING TACTICS

The market offering is the actual good that the company deploys in order to
fulfill a particular customer need. Unlike the target market and the value
proposition, which reflect the company’s strategy, the market offering reflects the
company’s tactics—the specific way the company will create value in the market
in which it competes.
Marketing managers have seven tactics at their disposal to develop an offering
that creates market value: product, service, brand, price, incentives,
communication, and distribution. Also called the marketing mix, these seven
attributes (also referred to as tactics or Ts) represent the combination of activities
required to transform the market offering’s strategy into reality (Figure 2.4).
The seven attributes that delineate the market offering are as follows:
The product is a marketable commodity that aims to create value for target
customers. Products can be tangible (like food, apparel, and furniture) or
intangible (like music and software). Purchase of a product gives customers
ownership rights to the acquired good. For example, with the purchase of a
car or a software program, the owner is granted all rights to the acquired
product.
The service also aims to create value for its customers, but it does so without entitling them to
ownership. Examples of services include appliance repairs, movie rental, medical procedures, and tax
preparation. At times, the same offering can be positioned as a product or a service. This occurs, for
example, when a software program can be offered as a product that gives purchasers the rights to a
copy of the program, or as a service that allows customers to lease the program and temporarily
receive its benefits.
The aim of the brand is to identify the products and services produced by the company and
differentiate them from those of the competition, in the process creating unique value over and above
the product and service aspects of the offering. The Rolls-Royce brand identifies the cars
manufactured by BMW subsidiary Rolls-Royce to differentiate these cars from those made by
Bentley, Maserati, and Bugatti, as well as to evoke a distinct emotional reaction from its customers,
who use the Rolls-Royce brand to call attention to their wealth and socioeconomic status.
The price is the monetary charge that customers and collaborators incur to receive the benefits
provided by the company’s offering.
Incentives are targeted tools designed to enhance the value of the offering by reducing its costs or
increasing its benefits. Incentives are typically offered in the form of volume discounts, price
reductions, coupons, rebates, premiums, bonus offerings, contests, and monetary and recognition
rewards. Incentives can be directed to consumers or to the company’s collaborators—for example, its
channel partners.
 Communication apprises target customers, collaborators, and the company stakeholders of the
specifics of the offering and where to acquire it.
Distribution encompasses the channel(s) used to deliver the offering to target customers and company
collaborators.

Again, a Starbucks example can illustrate these attributes. Starbucks’ product

includes the variety of beverage and food items available. The service consists of
the assistance that Starbucks offers to customers before, during, and after
purchase. The brand consists of the Starbucks name and logo, as well as the
associations it evokes in customers’ minds. The price is the amount of money that
Starbucks charges customers for its offerings. Incentives include promotional
tools such as loyalty programs, coupons, and temporary price reductions that
provide additional benefits for customers. Communication consists of the
information Starbucks disseminates via advertising, social media, and public
relations to inform the public about its offerings. Distribution includes company-
owned stores and company-licensed retail outlets that deliver Starbucks’ offerings
to its customers.
 FIGURE 2.4
Marketing Tactics: The Seven Tactics (7 Ts) Defining the Market Offering
Source: Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL:
Cerebellum Press, 2019).

FIGURE 2.5
Marketing Tactics as a Process of Designing, Communicating, and Delivering Customer Value
Source: Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL:
Cerebellum Press, 2019).
 The seven marketing tactics—product, service, brand, price, incentives,
communication, and distribution—can be regarded as a process of designing,
communicating, and delivering customer value. The value-design aspect of the
offering comprises the product, service, brand, price, and incentives, while
communication and distribution form the information-value and delivery-value
aspects of the process (Figure 2.5). Thus, even though the different tactical
attributes play distinct roles in the value-creation process, they optimize customer
value across all three dimensions.
The value-creation process can be considered from the perspectives of both the
company and the customer. The company regards value creation as a process of
designing, communicating, and delivering value; however, the customer looks at
the value-creation process from a different perspective, viewing it in terms of the
attractiveness, awareness, and availability of the offering.34 Attractiveness
reflects the benefits and costs that target customers associate with the product,
service, brand, price, and incentives aspects of the offering. Awareness highlights
the methods through which target customers are informed about the specifics of
the offering. Availability consists of the ways in which target customers can
acquire the offering.

THE SEVEN Ts AND THE FOUR Ps

The view of marketing tactics as a process of defining the seven key attributes of
an offering can be related to the widely popular 4-P framework. Introduced in the
1960s, the 4-P framework identifies four key decisions that managers must make
when designing an offering: the features to include in the product, the price of the
product, the best way to promote the product, and the retail outlets in which to
place the product. These 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. However, because of that very simplicity, the 4-P
framework has significantly limited relevance in the contemporary business
environment. One of its limitations is that it fails to distinguish between the
product and service aspects of the offering, which is a key drawback in today’s
service-oriented business environment, where a growing number of companies
are switching from a product-based to a service-based business model. Another
important limitation of the 4-P framework is that it does not regard the brand as a
separate factor, instead viewing the brand as part of the product. The product and
brand are two distinct aspects of the offering, and each can exist independently of
the other. In fact, a growing number of companies outsource their product
manufacturing so they can focus their efforts on building and managing their
brands.
Another area in which the 4-P framework comes up short is in its treatment of
the term promotion. Promotion is a broad concept that comprises two distinct
promotional activities: incentives, which include price promotions, coupons, and
trade promotions, and communication, which encompasses advertising, public
relations, social media, and personal selling. Incentives and communication make
disparate contributions to the value-creation process: Incentives enhance an
offering’s value, whereas communication serves to inform customers about the
offering but does not necessarily enhance the offering’s value. The 4-P
framework’s use of the term promotion to refer to both of these discrete activities
can obscure the unique role that each plays in creating market value.
The limitations of the 4-P framework can be avoided by regarding the offering
in terms of seven factors—product, service, brand, price, incentives,
communication, and distribution—instead of four. The four Ps can be easily
mapped onto the seven attributes of the 7-T framework: The first P (product)
comprises product, service, and brand; price remains the second P; the third P
(promotion) is expanded to incentives and communication; and distribution
replaces the fourth P (place). Thus, 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.

CREATING A MARKET VALUE MAP

The two key aspects of a company’s business model—strategy and tactics—can
be represented as a value map that defines the ways in which a company creates
market value. The ultimate purpose of the value map is to facilitate the
development of a viable business model that can enable the company to achieve
market success. Thus, the 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.
The market value map mirrors the structure of the business model and contains
three key components that define the company’s strategy and tactics—the target
market, the value proposition, and the market offering. The target market is, in
turn, defined by the Five Cs—customers, collaborators, company, competitors,
and context—with customers playing the key role in defining the market. The
value proposition then represents the three types of value that the company must
create in the market: customer value, collaborator value, and company value.
Finally, the offering component of the market value map delineates the seven key
attributes—product, service, brand, price, incentives, communication, and
distribution—that represent the tactical aspect of a company’s business model.
The components of the market value map and the key questions defining each
component are shown in Figure 2.6.
The value proposition component of the market value map is central to
ensuring the viability of the company’s business model. The market success of
the company’s offering is determined by its ability to create value for the three
key entities: target customers, the company’s collaborators, and the company
itself. Because these entities have distinct needs and require different value
propositions, the marketing planning process can be better served by developing a
separate value map for each entity. Thus, in addition to having a single value
map, managers might benefit from developing three value maps: a customer value
map, a collaborator value map, and a company value map.
 FIGURE 2.6
The Market Value Map
Source: Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL:
Cerebellum Press, 2019).

These three value maps depict the distinct aspects of the company’s business
model that concern the key entities involved in the value-creation process. The
customer value map captures the ways in which the company’s offering will
create value for its target customers and outlines the strategic and tactical aspects
of the customer-focused aspect of the company’s business model. The
collaborator value map delineates the strategic and tactical aspects of the ways in
which the company’s offering will create value for collaborators. Finally, the
company value map outlines the ways in which the offering will create value for
the company’s stakeholders. Note that these three value maps are intricately
related as they reflect different aspects of the process of creating market value.
Only by creating value for target customers, collaborators, and the company can a
manager ensure the market success of an offering.

PLANNING AND MANAGING MARKET

OFFERINGS
A company’s future depends on its ability to develop successful market offerings
that create superior value for target customers, the company, and its
collaborators.35 Market success typically results from diligent market analysis,
planning, and management; rarely is it a lucky accident. Succeeding in the market
requires a company to develop a viable business model and an action plan that
allows the business model to become a reality. The process of developing such an
action plan is encapsulated in the G-STIC framework described in the following
sections.

THE G-STIC APPROACH TO ACTION PLANNING

The action plan, which articulates the company’s goal and delineates a course of
action to reach this goal, is the backbone of marketing planning. 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. The G-STIC (Goal-Strategy-Tactics-Implementation-Control)
framework comprises these five activities and acts as the lynchpin of marketing
planning and analysis. At the core of the action plan is the business model based
on the offering’s strategy and tactics.
The individual components of the G-STIC approach to marketing planning and
management are as follows:
The goal describes the company’s ultimate criterion for success; it specifies
the end result that the company plans to achieve. The two components of the
 goal are its focus, which defines the metric (such as net income) used to
quantify the intended result of the company’s actions, and the performance
benchmarks that signal movement toward the goal and define the time frame
for achieving the goal.
The strategy provides the basis for the company’s business model by delineating the company’s target
market and describing the offering’s value proposition in this market.
Tactics carry out the strategy by defining the key attributes of the company’s offering. These seven
tactics—product, service, brand, price, incentives, communication, and distribution—are the tools
used to create value in the company’s chosen market.
Implementation consists of the processes involved in readying the company’s offering for sale.
Implementation includes developing the offering and deploying the offering in the target market.
Control measures the success of the company’s activities over time by monitoring the company’s
performance and the changes in the market environment in which the company operates.

The key components of the marketing plan and the key factors describing each
component are outlined in Figure 2.7 and are examined in more detail in the
following sections.

SETTING A GOAL
Defining the goal that the company aims to achieve sets the marketing plan in
motion. The goal can be regarded as the beacon that guides all company
activities. Two key decisions are involved in setting a goal: identifying the focus
of the company’s actions and specifying the performance benchmarks to be
achieved. These decisions are discussed in more detail next.
 FIGURE 2.7
The G-STIC Action-Planning Flowchart
Source: Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL:
Cerebellum Press, 2019).

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.
Monetary goals are based on such outcomes as net income, profit margins,
earnings per share, and return on investment. For-profit firms use monetary
goals as their primary performance metric.
Strategic goals are centered on nonmonetary outcomes that are of strategic importance to the
company. Among the most common strategic goals are increasing sales volume, brand awareness, and
social welfare, as well as enhancing the corporate culture and facilitating employee recruitment and
retention. Nonprofit companies and for-profit companies looking to support items that are bigger
revenue producers than the focal offering have strategic goals as their main performance metric. As an
example, Amazon might only break even or actually take a loss on some of its Kindle devices and yet
view them as a strategically important platform for its retail business.
 Companies are increasingly looking beyond sales revenue and profit to
consider the legal, ethical, social, and environmental effects of their marketing
activities and programs. The concept of a “triple bottom line”—people, planet,
and profits—has gained traction among many companies taking stock of the
societal impact of their activities.36 For example, one of Unilever’s key initiatives
—its Sustainable Living Plan—has three major goals: to improve people’s health
and well-being, to reduce our environmental impact, and to enhance livelihoods.
These goals are underpinned by metrics spanning social, environmental, and
economic performance in the company’s value chain.37

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.
Quantitative benchmarks set out the specific milestones to be achieved as
the company moves toward its ultimate goal. These benchmarks quantify the
company’s focal goal, which might, for example, include increasing market
share by 5 percent, or improving retention rates by 15 percent, or growing
revenues by 10 percent. Quantitative benchmarks can be stated in relative
terms, such as aiming to increase market share by 20 percent, or in absolute
terms, such as aspiring to achieve sales of one million units per year.
Temporal benchmarks identify the time frame for achieving a specific quantitative or qualitative
benchmark—e.g., revamp the company’s website by the end of the first quarter. The timeline set for
achieving a goal is a key decision that can affect the type of strategy used to implement the goal, the
number of people involved, and even costs. For example, the goal of maximizing next quarter’s profits
is likely to require a different strategy and tactics than the goal of ensuring long-term profitability.

Implementing the company goal requires that three main objectives be

specified: what the company aims to achieve (goal focus), how much the
company wants to achieve (quantitative benchmark), and when the company
wants to achieve it (temporal benchmark). Thus, a company might have the goal
of generating net income (goal focus) of $40 million (quantitative benchmark) in
one year (temporal benchmark). Clearly delineating the goal that is to be achieved
and establishing realistic quantitative and temporal benchmarks help fine-tune the
company’s strategy and tactics.

DEVELOPING THE STRATEGY

Because the processes involved in developing a sound marketing strategy were
covered in detail previously in this chapter, this section contains only a brief
mention of strategy in relation to the G-STIC framework. 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.
The target market in which the company aims to create value is defined by
five factors: customers whose needs will be fulfilled by the offering,
competitors whose offerings aim to fulfill the same needs of the same target
customers, collaborators that help the company meet the needs of target
customers, the company managing the offering, and the context in which the
company operates.
The value proposition defines the benefits and costs of the market offering with which the company
plans to meet target customers’ needs. The three components of the value proposition are customer
value, collaborator value, and company value. The value proposition is often complemented by a
positioning statement that highlights the key benefit(s) of the company’s offering in a competitive
context.

DESIGNING THE TACTICS

The development of marketing tactics was also discussed in greater detail earlier
in this chapter, so here we briefly mention tactics as they relate to the G-STIC
framework. Tactics, or the marketing mix, are a logical sequence of components
of the company’s strategy that make this strategy a market reality. They define the
actual offering that the company introduces in the target market through seven
attributes—product, service, brand, price, incentives, communication, and
distribution—that work together to create the market value embodied by the
company’s offering.
Implementation is a direct outcropping of the company’s strategy and tactics.
After the strategy is translated into a set of tactics, it is converted into an
implementation plan that spells out the activities that will give life to the business
model. Implementation consists of three key components: development of the
company resources, development of the offering, and commercial deployment of
the offering.
Resource development entails securing the competencies and assets needed
to implement the company’s offering. Resource development may involve
developing manufacturing, service, and technology infrastructure; securing
reliable suppliers; recruiting, training, and retaining skilled employees;
creating products, services, and brands that serve as a platform for the new
offering; acquiring the skills necessary for development, production, and
management of the offering; developing the communication and distribution
 channels that inform target customers about the company’s offering and
make it available to them; and securing the necessary capital to make
resource development possible.
Development of the offering transforms the company’s strategy and tactics into an actual good that
will be offered to target customers. This involves overseeing the flow of information, materials, labor,
and money that will create the offering the company brings to the market. Offering development
includes designing the product (procurement, inbound logistics, and production) and specifying the
service (installation, support, and repair activities); building the brand; setting retail and wholesale
prices and incentives (coupons, rebates, and price discounts); designing the manner of communication
(message, media, and creative execution); and procuring distribution channels (warehousing, order
fulfillment, and transportation).
Commercial deployment is the logical outcome of offering development and establishes the
company’s offering in the market. Deployment includes setting the timing of the offering’s market
launch, as well as determining the resources involved and the scale of the market launch. Initial
deployment can be selective, focusing on specific segments of the target market to allow the company
to assess market reaction to the offering. Alternatively, deployment can involve a large-scale rollout
across all target markets. Selective commercial deployment calls for the marketing plan to define the
primary market in which the offering will first be introduced and to outline the key activities
associated with the offering’s initial launch. The marketing plan then spells out the timing and the
processes involved in expanding the offering beyond the primary market, allowing it to reach all target
customers and achieve its full market potential.

IDENTIFYING CONTROLS
Because the business environment undergoes constant change, companies must
be agile in order to consistently realign their actions with current market realities.
Controls steer a company in the direction of its ultimate goal by ensuring that
company actions are in line with its strategy and tactics. Furthermore, controls
make marketing operations more effective and cost efficient, and they make it
possible to better assess the return on marketing investment by helping companies
determine whether they are on the right track to achieve their goals.
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. Controls have two key components:
evaluating the company’s performance and monitoring the market environment.

Evaluating Performance. Evaluating a company’s performance means using

benchmarks to track the company’s progress toward its goal. For example,
evaluating a company’s monetary performance might consist of comparing the
desired and actual sales revenue outcomes or assessing desired and actual net
income to identify operational inefficiencies. Here are some common
performance measures:38
Sales metrics such as sales volume, sales growth, and market share
Customer readiness-to-buy metrics such as awareness, preference, purchase intent, trial rate, and
repurchase rate
Customer value metrics such as customer satisfaction, customer acquisition costs, customer churn,
customer lifetime value, customer profitability, and return per customer
Distribution metrics such as number of outlets, average stock volume, out-of-stock frequency, share of
shelf space, and average sales per channel
Communication metrics such as brand awareness, gross rating points (GRP), and response rate

Evaluating the company’s performance can reveal either adequate progress

toward its goal or a performance gap between the desired and the actual
performance. If the progress is deemed adequate, the company can stay the course
with its current action plan. However, when performance evaluation reveals a
discrepancy and shows a gap between company performance and the benchmarks
set, the company’s action plan must be reevaluated and modified to put the
company back on a path that will enable it to achieve its goal.

Monitoring the Environment. Monitoring the environment allows early

identification of changes in the market context that have implications for the
company. It enables the company to take advantage of opportunities such as
favorable government regulations, a decrease in competition, or an increase in
consumer demand. In addition, it alerts a company of impending threats such as
unfavorable government regulations, an increase in competition, or a decline in
customer demand.
When a company is vigilant about identifying opportunities and threats, it can
take corrective measures to modify the current action plan in a timely manner,
taking advantage of available opportunities and counteracting impending threats.
Because keeping a close eye on the market environment helps coordinate
company actions with market conditions, it enhances business agility, which is a
prerequisite for sustainability of the company’s value-creation model.
The importance of controls in marketing management and, specifically, the
significance of monitoring the environment in which the company operates are
perhaps best exemplified by the profound market changes stemming from
advancements in technology. Companies like Amazon, Google, Netflix,
Salesforce, Uber, and Express Scripts were among the first to recognize the
benefits of the various technology-driven innovations and realign their business
models to take advantage of the impending market changes. Thus, they were able
to gain ground on companies that were oblivious to the changes in the
environment around them.

DEVELOPING A MARKETING PLAN

The marketing plan directs and coordinates all company marketing efforts.39 It is
a tangible outcome of a company’s strategic planning process, outlining the
company’s ultimate goal and the means by which it aims to achieve this goal. In
order to serve its ultimate purpose of guiding a company’s actions, the marketing
plan must effectively communicate the company’s goal and its proposed course of
action to relevant stakeholders—company employees, collaborators,
shareholders, and investors.
The scope of the marketing plan is narrower than that of the business plan
because marketing covers only one aspect of a company’s business activities. A
company’s business plan addresses not only the marketing aspect of the
company’s activities but also the financial, operations, human resources, and
technological aspects of the company. The marketing plan may briefly touch on
other aspects of the business plan, but only if they are relevant to the marketing
strategy and tactics.
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.
Marketing plans typically start with an executive summary followed by a
situation overview. The plan then describes the company’s goal, the value-
creation strategy it has devised, the tactical aspects of the offering, and its plan to
implement the offering’s tactics. This is followed by delineation of a set of
control measures that will monitor the company’s progress toward its goals, and
the plan concludes with a roster of relevant exhibits. Figure 2.8 illustrates the key
components of the marketing plan and the main decisions underlying its
individual components.
The executive summary can be regarded as the “elevator pitch” for the
marketing plan. It presents a streamlined and succinct overview of the
company’s goal and the proposed course of action. Typically, the executive
summary consists of one or two pages that outline the pertinent issues faced
by the company—an opportunity, a threat, or a performance gap—and the
proposed action plan.

FIGURE 2.8
The Organization of the Marketing Plan
Source: Alexander Chernev, The Marketing Plan Handbook, 6th ed. (Chicago, IL: Cerebellum Press,
2020).
 The situation overview provides an overall evaluation of the environment in which the company
operates, as well as of the markets in which the company competes and/or will compete. Thus, the
situation overview is composed of two sections: the company overview that outlines the company’s
history, culture, resources (competencies, assets, and offerings, and the market overview that outlines
the markets in which the company currently manages offerings and those that the company could
potentially target for future offerings.
The G-STIC section forms the core of the marketing plan. It includes (1) the goal the company aims
to achieve; (2) the strategy, which defines the offering’s target market and value proposition; (3) the
tactics defining the product, service, brand, price, incentives, communication, and distribution aspects
of the offering; (4) the implementation, which lays out the aspects of executing an offering’s strategy
and tactics; and (5) control procedures that evaluate the performance of the company’s offering and
analyze the environment in which the company operates.
Exhibits streamline the marketing plan by keeping tables, charts, and appendices in a distinct section
to separate the less important and/or more technical aspects of the plan from the essential information.

The ultimate goal of the marketing plan is to guide a company’s actions.

Therefore, 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. The other elements of the marketing plan—the executive summary,
situation overview, and exhibits—elucidate the logic underlying the plan and
provide specifics of the proposed course of action.
In addition to the overall marketing plan, companies often develop more
specialized plans. These can include a product development plan, service
management plan, brand management plan, sales plan, promotion plan, and
communication plan—which, in turn, can breed even more specific plans. The
communication plan, for example, often encompasses activity-specific plans such
as an advertising plan, public relations plan, and social media plan. A company
might also create specialized marketing plans targeting specific customer
segments. For example, McDonald’s develops separate marketing plans targeting
young children and their parents, teenagers, and business customers. The ultimate
success of each of these highly specific individual plans depends on the degree to
which it is aligned with the company’s overall marketing plan.

MODIFYING THE MARKETING PLAN

Marketing plans are not static; they need updating in order to remain relevant.40
The same is true of marketing management, an iterative process that executes the
company’s strategy and tactics while monitoring the outcome and modifying the
management process as needed. Continual monitoring and adjustment allow the
company to assess its progress toward the set goals while tweaking its plan to
reflect the changes in the marketplace. The dynamic nature of marketing
management is inherent in the G-STIC framework’s control section, which is
crafted explicitly to provide the company with feedback on the effectiveness of its
actions and on relevant changes taking place in the target market.

UPDATING THE MARKETING PLAN

The marketing plan requires updating when the company’s current course of
action is altered. This may be based on the need to revise the current goal; rethink
the existing strategy because new target markets have been identified or the
offering’s overall value proposition for customers, collaborators, and the
company needs modification; change the tactics by augmenting or improving the
product, service, brand, price, incentives, communication, and distribution aspects
of the offering; streamline the implementation; and/or develop alternative
controls.
A common reason for updating a company’s marketing plan is in response to
changes in the target market. Market modifications can take place in one or more
of the Five Cs: (1) changes in the demographics, buying power, needs, and
preferences of target customers; (2) changes in the competitive environment, such
as a new competitor, price cuts, an aggressive advertising campaign, or expanded
distribution; (3) changes among company collaborators, such as a threat of
backward integration from distributors, increased trade margins, or retailer
consolidation; (4) changes in the company, such as the loss of strategic assets and
competencies; and (5) changes in the market context that can include economic
recession, development of a new technology, and new or revised regulations.
Some examples of updated marketing plans: In response to the shifting needs
and preferences of their customers, McDonald’s and other fast-food restaurants
have redefined their offerings to include healthier options. In response to
increasing competition from online retailers, many traditional brick-and-mortar
retailers—including Walmart, Macy’s, Barnes & Noble, and Best Buy—have
redefined their business models and become multichannel retailers. Similarly,
many manufacturers have redefined their product lines to include lower-cost
offerings in response to the widespread adoption of private labels by
collaborators’ (retailers). Developing or acquiring company assets, such as
patents and proprietary technologies, can signal the need to redefine the
underlying business models in virtually any industry. And changes in the market
context, such as the ubiquitous spread of mobile communication, e-commerce,
and social media, have disrupted existing value-creation processes, making it
necessary for companies to redefine their business models.
The ways in which a company creates market value must keep up with the
changes in the market in which it operates if a company is to succeed at achieving
its goal. Inattention to changing environments has rendered a number of formerly
successful business models obsolete. Companies that do not adapt their business
models and market plans to the new market conditions tend to be supplanted by
companies with superior business models that are better equipped to create
market value. Ultimately, the key to market success is not only to conceive a
viable market plan but also to modify this plan as often as needed to adapt to
market changes.

CONDUCTING A MARKETING AUDIT

A marketing audit is a comprehensive examination of the marketing aspect of an
offering or a company’s marketing department. It is intended to identify
overlooked opportunities and problems areas and to recommend a plan of action
to improve the company’s performance. An effective marketing audit should be
comprehensive, systematic, unbiased, and periodic.
Comprehensive. A marketing audit should cover all major marketing
activities of a business, not just a few trouble spots (these are covered by
functional audits, which focus on a particular aspect of marketing activity,
such as pricing, communication, or distribution). Although functional audits
can be useful, they may be unable to accurately discern the cause-and-effect
relationships that drive the company’s performance. For example, excessive
turnover in the sales force could result from inferior company products,
inappropriate pricing, and limited distribution, rather than from poor training
or inadequate compensation. A comprehensive marketing audit can locate
the real root of problems and can suggest solutions to effectively address
these problems.
Systematic. The marketing audit should examine the operating environment of the organization in an
orderly manner—from the company’s marketing objectives and strategies to its specific activities. To
achieve this systematic approach, the marketing audit should follow the G-STIC guidelines to analyze
the soundness of the company’s goals, strategy, tactics, implementation, and controls. This enables the
marketing audit to identify problems and opportunities at each step of the design and implementation
of the marketing plan and to integrate them into a meaningful action plan.
Unbiased. It may be more beneficial to have marketing audits conducted by an external entity. Intra-
company audits conducted by managers who rate their own operations tend to be overly subjective,
 making it easier to miss problems that would be readily apparent to a more impartial observer. Even
when managers try their best to be impartial, internal assessments may still be biased because they
reflect the views, theories, and motives of the managers. Third-party auditors can offer the needed
objectivity, cross-category and cross-industry experience, and undivided time and attention to ensure a
thorough look into marketing activities.
Periodic. Many firms consider marketing audits only when they encounter a problem, which often
presents itself in terms of the company’s inability to reach its goals. Waiting until an audit is necessary
has two main drawbacks. First, focusing solely on existing problems precludes early identification of
potential issues. This means problems are detected only when they have already had a negative impact
large enough to be noticed. Second, and more important, concentrating only on problems can cause
the company to overlook promising opportunities that could represent fruitful areas for growth. The
bottom line: A periodic marketing audit can benefit companies in good health as well as those in
trouble.

Because the marketing audit resembles the organization of the marketing plan,
it follows the G-STIC framework and comprises five key components: goal audit,
strategy audit, tactics audit, implementation audit, and controls audit. 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; 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.

marketing INSIGHT
A Template for Writing a Marketing Plan

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. Such an approach to organizing the
marketing plan is outlined in Figure 2.7, and a template for writing a
marketing plan following this organization is outlined below.41
Executive Summary
Provide a brief overview of the situation, the company’s goal, and the
proposed course of action.
Situation Overview
Provide an overview of the situation—current/potential customers,
collaborators, competitors, and context—in which the company operates, and
identify relevant opportunities and threats.
Goal
Identify the company’s primary goal and its market-specific objectives.
Primary Goal. Identify the company’s ultimate goal by defining its focus
and key performance benchmarks.
Market Objectives. Identify the relevant customer, collaborator,
company, competitive, and context objectives that will facilitate
achieving the primary goal. Define the focus and key benchmarks for
each objective.
Strategy: Target Market
Identify the target market in which the company will launch its new offering.
Customers. Define the need(s) to be fulfilled by the offering, and identify
the profile of customers with such needs.
Collaborators. Identify the key collaborators (suppliers, channel
members, and communication partners) and their strategic goals.
Company. Define the business unit responsible for the offering, the
relevant personnel, and key stakeholders. Outline the company’s core
competencies and strategic assets, its current product line, and its market
position.
Competitors. Identify the competitive offerings that provide similar
benefits to the same target customers and collaborators.
Context. Evaluate the relevant economic, technological, sociocultural,
regulatory, and physical contexts.
Strategy: Value Proposition
Define the offering’s value proposition for target customers, collaborators,
and the company.
Customer value proposition. Define the offering’s value proposition,
positioning strategy, and positioning statement for target customers.
Collaborator value proposition. Define the offering’s value proposition,
positioning strategy, and positioning statement for collaborators.
Company value proposition. Outline the offering’s value proposition,
positioning strategy, and positioning statement for company stakeholders
and personnel.
Tactics
Outline the key attributes of the market offering.
Product. Define relevant product attributes.
Service. Identify relevant service attributes.
Brand. Determine the key brand attributes.
Price. Identify the price(s) at which the offering is provided to customers
and collaborators.
Incentives. Define the incentives offered to customers, collaborators, and
company employees.
Communication. Identify the manner in which the key aspects of the
offering are communicated to target customers, collaborators, and
company employees and stakeholders.
Distribution. Describe the manner in which the offering is delivered to
target customers and collaborators.
Implementation
Define the specifics of implementing the company’s offering.
Resource development. Identify the key resources needed to implement
the marketing plan, and outline a process for developing/acquiring
deficient resources.
Offering development. Outline the processes for developing the market
offering.
Commercial deployment. Delineate the process for bringing the offering
to target customers.
Control
Identify the metrics used to assess the offering’s performance and to monitor
the environment in which the company operates.
Performance evaluation. Define the criteria for evaluating the offering’s
performance and progress toward the set goals.
Analysis of the environment. Identify metrics for evaluating the
environment in which the company operates, and outline the processes
for modifying the plan to accommodate changes in the environment.
Exhibits
Provide additional information—market research data, financial analyses,
offering specifics, and implementation details—to support specific aspects of
the marketing plan.
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 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: company
employees, stakeholders, and collaborators. The core of a company’s
marketing plan 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.

marketing INSIGHT

GOOGLE
From smart phones to maps to e-mail to search, today Google is everywhere.
This ubiquity makes it easy to forget that the company was founded in 1998
by two Stanford University PhD students, Larry Page and Sergey Brin. They
named the company Google as a play on “googol,” the term for the number 1
followed by a hundred zeroes. The name expressed the duo’s ambition to help
users sift through the nearly limitless amounts of information on the internet.
Page and Brin further elucidated their goals in Google’s corporate mission
statement: “To organize the world’s information and make it universally
accessible and useful.” To this end, they started by focusing their energy on
the nascent field of internet search. The result of their effort was the
PageRank algorithm, which counted the number and quality of links to a
given website to rate its relevance and importance. This algorithm proved to
be far superior to those used at the time by competing search engines such as
Yahoo, and Google quickly became the dominant company in Web search.
Google’s revenues revolved around advertising early on. It realized that the
information from searches on its website could be used to deliver highly
targeted advertisements to consumers and took advantage of this opportunity
in 2000 by launching AdWords. This service allowed companies to pay
Google to have their text advertisements show up alongside search results to
queries containing specific words. Hundreds of thousands of companies grew
to rely on AdWords by buying these “search ads.” Google also moved into
displaying advertisements beside Web content. In 2003 the company launched
AdSense, which scanned the text on a website and automatically displayed
targeted advertisements relevant to its contents. Website publishers could earn
money every time their visitors clicked on these ads. Prior to this innovation,
most websites were unable to automatically display highly specific ads to
match their content.
Google also provided free tools to better serve advertisers and content
providers. In 2005, the company launched a suite of tools called Google
Analytics that allowed content providers to see custom reports on the way
people behaved on their websites. Among other details, these reports showed
how many people visited the website, how they found it, how long they spent
there, and what ads they responded to while browsing content. Google also
integrated tools into its AdWords platform to help advertisers better
understand the effectiveness of their marketing campaigns. With these tools,
advertisers on Google’s platform could constantly monitor and optimize their
advertisements. Google called this approach “marketing asset management,”
implying that advertisements should be managed like assets in a portfolio
depending on market conditions. Companies could use the real-time data that
Google collected to adjust their campaigns to market conditions, instead of
following marketing plans developed months in advance.
 Source: Valeriya Zankovych/Alamy Stock Photo

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. Despite its early successes, Google never
stopped innovating. It continued to expend significant energy to develop and
refine algorithms that could be used to squeeze more information out of the
internet and keep Google ahead of the competition. In addition to refining
existing products, Google developed a series of free online services for
consumers. By applying its computer science and design skills to new
problems, Google helped users get things done more efficiently and
effectively. In many cases, rather than coming up with novel products, Google
applied its expertise to existing categories to create a superior product
offering. By entering a slew of new categories, Google gave advertisers
access to consumers in an increasing number of contexts. Furthermore, the
company gained access to increasing amounts of information on consumers
that it could further monetize in the future.
Through continuous internal development and a series of acquisitions,
Google rapidly expanded its product offerings. In 2004, Google launched
Gmail, an advertising-supported e-mail service that by 2016 numbered over a
billion active users every month. In 2005, the company launched Google
Maps to compete with existing online mapping services. The company
repeatedly impressed consumers as it upgraded its map service with features
such as Street View, which gave users 360-degree views of map locations. In
2006, Google branched into streaming video when it acquired YouTube and
grew it into a service that generated billions of dollars in advertising revenues.
That same year the company also launched Google Docs, Sheets, and Slides
—free online alternatives to elements of the Microsoft Office suite. Google
continues to expand its online product offerings with everything from
translation tools to calendars to specialized searches.
As Google developed into an internet giant, it realized that to continue
growing, it would need to expand beyond products used only on computers.
Google identified mobile technology as one of the ways forward and
developed the open source Android mobile operating system. Whereas
companies like Apple created proprietary operating systems for their
hardware, Google gave its operating system away free to handset makers. As
part of its strategy, Google partnered with companies like Samsung to
improve and expand Android. These partners were free to modify Android
and use its branding if they stuck to guidelines laid out by Google. In 2008,
one year after Apple introduced the iPhone, Google launched Android on
handsets from a variety of companies. Today Android is used on over 80
percent of smart phones globally. All Android users have access to Google
Play, the official app store for the operating system. Google gets a cut of all
sales. In addition to developing Android, Google became the leader in the
rapidly expanding mobile advertising space, garnering nearly a third of 2017
U.S. mobile ad revenues in a market worth over $50 billion.
Google has also broadened its reach into other growing markets like
hardware and cloud computing. With cloud computing, Google is competing
with the likes of Amazon and Microsoft to provide remote storage capacity,
data processing, and programming tools for enterprises and start-ups alike.
Companies like HSBC have signed on with Google as it has rushed to embed
itself in this rapidly growing sector. Google has also introduced a variety of
hardware products, including the 2016 release of its high-end Pixel phones,
designed to compete directly with the iPhone. In the same year it debuted
Google Home, a smart speaker that not only connects to smart devices but
also responds to voice commands and interacts with home automation
systems.
 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. 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. From translation software to Web search to smart-phone
cameras, artificial intelligence has come to underpin an increasing number of
the company’s product offerings and innovation.
Today 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.
Google continues to dominate the online advertising market, capturing large
share of the increased spending on online ads during the previous year. In
addition, its annual revenue continued to soar by double digits. In the future,
Google aims to create a more varied range of income streams from its
investments in sectors like cloud computing, hardware, and artificial
intelligence.42
Questions
1. What is Google’s core business? What are the pros and cons of managing
a diverse portfolio of businesses?
2. With a portfolio as diverse as Google’s, what are the company’s core
brand values?
3. What’s next for Google? Where should the company focus its resources?

ZAPPOS
The 1999 creation of popular online retailer Zappos was inspired by founder
Nick Swimmurn’s inability to find a specific pair of shoes at his local mall.
What started as an online retailing venture that primarily sold footwear has
diversified to become a leading online vendor of shoes, handbags, clothing,
sunglasses, and accessories.
Zappos has made customer service one of its core competencies. CEO Tony
Hsieh believed that a strong customer-service experience leads to lasting
customer loyalty. In addition, instead of viewing the lifetime value of a
customer as a fixed amount, Zappos’s management believes that the value of
a customer can grow because of excellent customer service.
Zappos places high priority on its customer call team compared to other
retailing companies. Specifically, Zappos takes a uniquely human approach to
customer calls and e-mails to create a memorable and high-quality customer-
service experience. Many online retailers (such as Amazon) use telephone
contact as a last resort, with many clicks required for a customer to find a
service number. However, Zappos invites customers to call by placing a
button with its telephone number right at the top of the homepage. Whereas
some companies are straying from call-based customer service, Zappos
believes that the telephone is a valuable service tool with a powerful ability to
create more intimate human contact.
Zappos management believes that the best candidates for its call and e-mail
team are permanent employees trained in house, rather than lower-cost
temporary or outsourced workers. Permanent employees are more likely to
adopt the corporate culture and company values. Zappos combined its
headquarters in Las Vegas, Nevada, with its call center team to fully integrate
customer service-employees with other departments, creating a more unified
atmosphere.
Zappos identified its biggest problem in creating a strong customer-service
experience as finding the best potential employees to staff the call center.
Zappos’s hiring process is very selective. Unlike other companies, Zappos
bases its successful process largely on its perception of candidates’ “cultural
fit,” which accounts for 50 percent of the hiring decision. Current employees
are encouraged to voice their opinions on whether or not potential hires can fit
within the Zappos family culture and exhibit strong customer-service skills.
 Source: opturadesign/Alamy Stock Photo

The company has created its own style and methodology for training its call
center employees. Once hired, Zappos employees spend their first weeks in
the call center learning how to serve the customer’s needs. During this period,
a training team also instills in each employee Zappos’s 10 core values, which
are expected to be seen in the workplace every day. Many of these values—
which range from “Deliver WOW Through Service” to “Be Adventurous,
Creative, and Open-Minded”—are what makes the service experience
different at Zappos. New and old employees take part in a variety of team-
building and bonding activities throughout the year. These include activities
like scavenger hunts, picnics, and trips to the bowling alley to make all
employees feel comfortable with one another. After the call center training
and scavenger hunt, new employees are celebrated at a graduation ceremony,
accompanied by the strains of Pomp and Circumstance. If new employees feel
they cannot commit fully to the company culture and values, Zappos offers
them $3,000 to leave—no questions asked. Zappos is fully committed to
hiring only dedicated members as part of its service team.
Zappos’s scrupulous hiring process and its approach of teaching the ten
core values to new call and email center employees have resulted in a highly
rated customer service experience. Zappos’ employees do not work from a
script and use their own judgment to determine what is needed to make the
customer satisfied. Employees are not forced to ask supervisors for
permission about delivering the “WOW” factor and are known to go above
and beyond for customers at their own discretion. In the past, Zappos
employees have upgraded shipping speeds for free, sent postcards to travelers,
and even gifted flowers and cookies to customers to provide the “WOW”
factor. The reward for Zappos’s customer-centric mentality is customer
retention: 75 percent of sales are from repeat buyers.
In addition to a uniquely trained call center team, Zappos offers many other
features to ensure that the service experience is satisfying for potential
customers. Shipping is fast and free on all products, and the company offers a
365-day return policy to guarantee that customers are pleased with their
purchases.
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.
Zappos employees are still trained on the same 10 core values and encouraged
to keep putting a human face on the company. With over 1,500 employees, a
majority of them working in the call and e-mail centers, Zappos is considered
one of the top companies in the customer-service domain.43
Questions
1. How does Zappos create value for its customers?
2. What are the key aspects of Zappos’s corporate culture?
3. Can a company stay profitable by being customer-centric? Is Zappos’s
business model sustainable?