Marketing Management Chapter 2 (Kotler Keller)

The Value Delivery Process
1. Choosing the value
2. Providing the value
3. Communicating the value
The Value Chain
A tool for identifying ways to create more customer value.
What are the five core business processes?
1. Market-sensing process
2. New offering realization process
3. Customer acquisition process
4. CRM process
5. Fulfillment management process
Market-sensing process
Gathering and acting on new information about the market
New offering realization process
Researching, developing, and launching new offerings quickly and within budget
Customer acquisition process
Defining and targeting markets and prospecting for new customers
Customer relationship management process
Building deeper understanding, relationships ,and offerings to individual customers
Fulfillment management process
Receiving and approving orders, shipping and collecting payment
What are the characteristics of a core competency?
1. A source of competitive advantage and makes a significant contribution to perceived customer benefits
2. Has applications in a wide variety of markets
3. Difficult for competitors to imitate
Key areas in strategic planning
1. Managing the business as an investment portfolio
2. Assessing the market’s growth rate and the company’s position in that market
3. Establish a strategy
What is a marketing plan and how does it operate?
The central instrument for directing and coordinating the marketing effort. Operates at two levels: strategic and tactical.
Strategic Marketing Plan
Lays out the target market and the firms value proposition
Tactical Marketing Plan
Specifies the marketing tactics including product features, promotion, merchandising, pricing, sales channels, and service.
Strategic Planning Activities
1. Define corporate mission
2. Establish strategic business units
3. Assign resources to each business unit
4. Assess growth opportunities
Characteristics of a good mission statement
Focus on limited number of goals

Stress company’s major policies and values

Define the major competitive spheres within which the company will operate

Take a long term view

Short, memorable, and meaningful

Characteristics of a Strategic Business Unit
A single business unit, or a collection of related businesses, that can be planned separately from the rest of the company.

Has its own set of competitors

Has a manager responsible for strategic planning and profit performance who controls most of the factors affecting profit

Intensive Growth Strategies
1. Market penetration
2. Market development
3. Product development
4. Diversification
Market Penetration Strategy
Can we gain more market share with current product in our current market?
Market Development Strategy
Ca we find or develop new markets for our current product?
Product Development Strategy
Can we develop new products for current markets?
Integrative Growth
A company can increase sales and profits through backward, forward, or horizontal integration within its industry
Backward Integration
Acquire suppliers
Forward Integration
Acquire wholesalers or retailers
Horizontal Integration
Acquire competitors
Market opportunity – 3 main sources
Offer something that is in short supply

Supply an existing product in a more superior way

Offer a totally need product

Goal formulation
Must be arranged hierarchically, from most to least important

Objectives should be quantitative whenever possible

Goals should be realistic

Objectives should be consistent

Three types of strategies
1. Overall cost leadership
2. Differentiation
3. Focus
Cost Leadership
Achieve the lowest cost to win market share
Differentiation
Achieve superior performance in an area valued by a large part of the market
Focus
Focus on one or more narrow market segments, get to know them intimately, and pursue either cost leadership or differentiation strategy