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DEVELOPING MARKETING
STRATEGIES AND PLANS
CHAPTER 2
The value delivery process
MARKETING
AND
The value chain
CUSTOMER
VALUE
Core competencies
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THE VALUE DELIVERY PROCESS
CHOOSING THE VALUE
PROVIDING THE VALUE
COMMUNICATING THE VALUE
THE VALUE CHAIN
• A tool for identifying ways
to create more customer
value
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CORE COMPETENCIES
• A source of competitive advantage and makes a significant contribution to perceived customer
benefits
• Applications in a wide variety of markets
• Difficult for competitors to imitate
Rolex: building brand equity through a customer-driven marketing mix
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CENTRAL ROLE OF STRATEGIC PLANNING
A company must develop a game plan for achieving business’s long-run objectives.
Most large companies consist of following organizational levels:
• (1) corporate & (2) division,
• (3) business unit, and
• (4) product.
Strategic Planning process
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CORPORATE & DIVISION
STRATEGIC PLANNING
CORPORATE & DIVISION STRATEGIC PLANNING
1. Defining the corporate mission
2. Establishing strategic business units
3. Assigning resources to each strategic business unit
4. Assessing growth opportunities
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1. DEFINING THE CORPORATE MISSION
• A mission is a clear, concise, and enduring statement of the reasons for an organization’s
existence.
• To define its mission, a company should address Peter Drucker’s classic questions:
• 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?
GOOD MISSION STATEMENTS
• Focus on a limited number of goals
• Stress the company’s major policies and values
• Define the major competitive spheres within which the company will operate
• Take a long-term view
• Are as short, memorable, and meaningful as possible
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• TED: Spread ideas
• Tesla: To accelerate the world's transition to
sustainable energy.
• Prezi: To reinvent how people share knowledge, tell
stories, and inspire their audiences to act.
• IKEA: To create a better everyday life for the many
people.
PRODUCT ORIENTATION VS. MARKET ORIENTATION
Company Product Definition Market Definition
Michelin We make tyres. We provide service to people and their
transport.
Xerox We make copying equipment We improve office productivity
Starbucks We sell coffee and snacks. We sell ‘The Starbucks Experience’, one that
enriches people’s lives one moment, one
human being, one extraordinary cup of
coffee at a time.
Facebook We are an online social network We connect people around the world and
help them share important moments in their
lives
Walmart We run discount stores We deliver low prices every day and give
ordinary folks the chance to buy the same
things as rich people. “Save Money. Live
Better”
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2. ESTABLISHING STRATEGIC BUSINESS UNITS
• Guided by the company’s mission statement and objectives, management now must plan its
business portfolio – the collection of businesses and products that make up the company. The
best business portfolio is the one that best fits the company’s strengths and weaknesses to
opportunities in the environment.
• Strategic Business Unit (SBU) – is either a single business or collection of related businesses,
has its own set of competitors, and has a leader responsible for strategic planning and
profitability.
• An SBU can be a company division, a product line within a division, or sometimes a single
product or brand.
3. ASSIGNING RESOURCES TO EACH SBU
• Management must decide how to allocate corporate resources to each SBU.
• The major activity in strategic planning is business portfolio analysis, whereby management
evaluates the products and businesses that make up the company. The company will want to
put strong resources into its more profitable businesses and phase down or drop its weaker ones.
• Portfolio-planning models
• Shareholder/market value analysis
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3. ASSIGNING RESOURCES TO EACH SBU
• Management must decide how to allocate corporate resources to each SBU.
• The major activity in strategic planning is business portfolio analysis, whereby management
evaluates the products and businesses that make up the company. The company will want to
put strong resources into its more profitable businesses and phase down or drop its weaker ones.
• Portfolio-planning models
• Shareholder/market value analysis
BCG Matrix GE/Mckinsey Matrix
Complex business portfolios: You probably know Mars Inc. as the world’s number-one candy maker.
But did you know that it’s also a world- leading pet nutrition and health-care company?
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4. ASSESSING GROWTH OPPORTUNITIES
Figure: Strategic-planning gap for a hypothetical manufacturer
- The lowest curve projects expected sales from the current business portfolio over the next five years. The highest describes desired sales over the same period.
INTENSIVE The Ansoff Matrix
GROWTH
• Corporate management
should first review
opportunities for improving
existing businesses
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EXAMPLE: ESPN GROWTH OPPORTUNITIES
CASE SCENARIO: HEALTHTECHONE – SCALING WITH STRATEGY
HealthTechOne is a mid-sized healthcare technology company based in Singapore, specializing in AI-powered diagnostic tools for
hospitals and clinics. Their flagship product, MediScan AI, can detect early signs of certain chronic diseases (such as diabetes-related
retinal damage, early-stage lung issues, and skin cancers) using advanced image recognition. The company has been operating in
Singapore for the last 6 years, has a solid customer base in the private healthcare sector, and enjoys a reputation for accuracy, user-
friendly design, and reliable customer support.
The Singapore healthcare market is becoming saturated, with most major hospitals already using MediScan AI or similar competing
products. HealthTechOne’s management wants to grow revenue and market share over the next 5 years. They are considering strategies
in line with the Ansoff Product–Market Growth Matrix: Market Penetration, Product Development, Market Development,
Diversification
Budget: Moderate. The company can invest in one major growth strategy at a time.
Regulations: Healthcare technology approvals differ widely between countries; approval processes can take 6–18 months.
Competition: Large multinational companies have begun targeting Southeast Asia with similar products.
Trends: Rapid rise in telemedicine, wearable health devices, and preventive healthcare analytics.
Internal Strengths: Strong R&D team, high brand trust in Singapore, advanced AI capabilities.
Weaknesses: Limited international sales experience, relatively small marketing team.
• Your Task: As a strategy consultant to HealthTechOne, use the Ansoff Matrix to identify its growth strategy
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INTEGRATIVE
GROWTH
• A business can increase sales
and profits through
backward, forward, or
horizontal integration within
its industry
United and Continental found it harder to merge their airlines than just blending their logos on their planes.
DIVERSIFICATION GROWTH
• Diversification growth makes sense when good opportunities exist outside the present
businesses- the industry is highly attractive and the company has the right mix of business
strengths to succeed.
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DOWNSIZING AND DIVESTING OLDER BUSINESSES
• Companies must carefully prune, harvest, or divest tired old businesses to release needed
resources for other uses and reduce costs
BUSINESS UNIT STRATEGIC
PLANNING
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BUSINESS UNIT STRATEGIC PLANNING
The Business Unit Strategic-planning Process
SWOT ANALYSIS
Market Opportunity
• A marketing opportunity is an area of buyer need and interest that a company has a high
probability of profitably satisfying.
• There are three main sources of market opportunities. The first is to offer something that is in
short supply. This requires little marketing talent, as the need is fairly obvious. The second is to
supply an existing product or service in a new or superior way. How? The problem detection
method asks consumers for their suggestions, the ideal method has them imagine an ideal version
of the product or service, and the consumption chain method asks them to chart their steps in
acquiring, using, and disposing of a product. This last method can often lead to a totally new
product or service, which is the third main source of market opportunities.
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SWOT ANALYSIS
External Environment Analysis
• Marketing opportunity: an area of buyer need and interest that a company has a high
probability of profitably satisfying.
• Environmental threat: challenge posed by an unfavorable trend or development that, in the
absence of defensive marketing action, would lead to lower sales or profit
Opportunity Matrix Threat Matrix
SWOT
ANALYSIS
Internal Environment
Analysis
Figure for illustration purposes only
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GOAL FORMULATION
• Goals are objectives that are specific with respect to magnitude and time. Most
business units pursue a mix of objectives, including profitability, sales growth,
market share improvement, risk containment, innovation, and reputation.
• Unit’s objectives must be arranged hierarchically, , from most to least
important.
• Objectives should be quantitative
• Goals should be realistic
STRATEGY FORMULATION
PORTER’S GENERIC STRATEGIES
OVERALL COST LEADERSHIP
DIFFERENTIATION
FOCUS
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STRATEGY FORMULATION
STRATEGIC ALLIANCES
Categories of marketing alliances
• Product or service alliance
• Promotional alliance
• Logistics alliances
• Pricing collaborations
PROGRAM FORMULATION AND
IMPLEMENTATION
• McKinsey’s Elements of Success
Skills Strategy
Staff Structure
Style Systems
Shared values
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FEEDBACK AND CONTROL
• Peter Drucker: it is more important to “do the right thing”—to be
effective—than “to do things right”—to be efficient
• The most successful companies, however, excel at both
PRODUCT PLANNING
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PRODUCT PLANNING
Nature And Content Of Marketing Plan
Before you begin, you need to establish the following:
• Deadline – When do you plan to complete the plan?
• Roles of parties involved – Who is supposed to complete what sections of the plan?
• Proposed budget – How much do you have to spend on your planned strategy?
MARKETING PLAN
• The marketing plan is the central instrument for directing and coordinating the marketing
effort.
• It operates at two levels: strategic and tactical.
• The strategic marketing plan lays out the target markets and the firm’s value proposition, based
on an analysis of the best market opportunities. The tactical marketing plan specifies the
marketing tactics, including product features, promotion, merchandising, pricing, sales
channels, and service.
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MARKETING PLAN CONTENTS
Situation analysis
MARKETING
• This section contains an overview of your situation as it exists today
PLAN
CONTENTS • Provides a benchmark as you adapt and refine your plan
• 5 C’s analysis – Company, Collaborators, Customers, Competitors,
Context
Marketing strategy & tactics
• Marketing objectives
• Target consumer
• Positioning
STP & 4Ps/7Ps
• Product strategy
• Distribution plan
• Pricing strategy
• Promotions strategy - Conversion strategy , Online marketing
strategy
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Another way to
represent Marketing
Plan
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• Analyse Dyson’s marketing strategy.
• Based on Dyson’s past, predict the outcome of Dyson’s future in the automotive
business.
• Why the EV project failed?
• Strategy for future growth?
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