Developing and Implementing Marketing Strategies & Plans

1. Developing and Implementing Marketing Strategies & Plans

2. Chapter Questions • How does marketing affect customer value? • How is strategic planning carried out at different levels of the organization? • What does a marketing plan include? • How can management assess marketing performance?

3. Profile: Canadian Marketing Excellence TIM HORTONS • Tim Hortons started out as a single donut shop in 1964 growing to 2,527 (including 184 U.S. stores) in 2006, demonstrating its skill in marketing planning and execution • The brand exemplifies the idealized Canadian national character: • “That friendly, unpretentious, good neighbour you’d want living down the block from you” (Cathy Whelan Molloy, VP Advertising and Merchandising) • Franchisees ensure that all products, services and communications fit the company’s ideals

4. Tim Hortons started out as a single donut shop in 1964 growing to 2,527 (including 184 U.S. stores) in 2006, demonstrating its skill in marketing planning and execution • The brand exemplifies the idealized Canadian a character: • “That friendly, unpretentious, good neighbour you’d want living down the block from you” (Cathy Whelan Molloy, VP Advertising and Merchandising) . • Franchisees ensure that all products, services and communications fit the company’s ideals

5. “Roll Up the Rim to Win” and Timbits • Far ahead of rivals such as Starbucks and Second Cup in “most often” coffee purchases • Nonprofit children’s foundation sponsors an estimated 33,000 children in Timbit hockey leagues annually • 2004 winner of Canadian Business poll of Canada’s best brands

6. Figure 2.1 Two Views of the Value Delivery Process

7. Benchmarks Organizational costs and performance measures Competitor costs and performance measures

8. Five Core Business Processes Market sensing Customer relationship management New offering realization Fulfillment management Customer acquisition

9. Figure 2.2 The Generic Value Chain

10. Characteristics of Core Competencies • Important difference between core competencies and competitive advantage: • Competitive advantages accrue due to companies that possess distinctive capabilities • Core competencies tend to refer to areas of special technical and production expertise • Competitive advantage derives from its “activity systems” • Companies with activity systems that are difficult to imitate include WestJet Airlines, Dell, and Magna International

11. Characteristics of Core Competencies • Core Competencies are usually • A source of competitive advantage • Applicable in a wide variety of markets • Difficult to imitate

12. Holistic Marketing Framework • How can a company identify new value opportunities? • How can a company efficiently create more promising new value offerings? • How can a company use its capabilities and infrastructure to deliver the new value offerings more efficiently?

13. Holistic Marketing Framework

14. Corporate Planning Activities Defining the corporate mission Establishing SBUs Assigning resources to SBUs Assessing growth opportunities

15. Figure 2.4 The Strategic Planning, Implementation, and Control Processes

16. Figure 2.4 The Strategic Planning, Implementation, and Control Processes Focus on a limited number of goals Stress major policies and values Define major competitive spheres

17. Major Competitive Spheres Industry Geographical Products Vertical Competence Market segment

18. Mountain Equipment Co-op “Mountain Equipment Co-op provides quality products and services for self-propelled wilderness-oriented recreation, such as hiking and mountaineering, at the lowest reasonable price in an informative, respectful manner. “We are a member-owned co-operative striving for social and environmental leadership.”

19. eBay Idea about eBay: little information required “We help people trade anything on earth. We will continue to enhance the online trading experiences of all–collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.”

20. Dimensions that Define a Business Customer groups Customer needs Technology

21. Characteristics of an SBU • It is a single business or collection of related businesses • It has its own set of competitors • It has a leader responsible for • Strategic planning • Profitability • Efficiency

22. Growth Opportunities Intensive growth Integrative growth Diversification growth

23. Organizations Culture Policies Structure

24. Figure 2.5 The Business Unit Strategic-Planning Process

25. SWOT Analysis

26. Toolkit Productions Inc. • Toolkit Productions Inc. originated in Toronto (2001) • Offered a new kind of theatre in a saturated marketplace • Gap identified was the 20-30 year demographic • Flashy productions in bars and nightclubs • Since expanded into corporate publicity and film production

27. Market Opportunity Analysis (MOA) • Can the benefits involved in the opportunity be articulated to a defined target market? • Can the target market be located and reached with cost-effective media and trade channels? • Does the company have access to the critical capabilities and resources needed to deliver the customer benefits? • Includes the assessment of interdepartmental working relationships • Honeywell gets all internal departments to conduct a strengths and weaknesses analysis of each other • Each department is seen as both a supplier and customer to one other

28. Market Opportunity Analysis (MOA) • Can the company deliver the benefits better than any actual or potential competitors? • Will the financial rate of return meet or exceed the company’s required threshold for investment?

29. Goal Formulation • To be effective, goals must be • Ordered in terms of priority (hierarchical) • Stated quantitatively • Realistic • Consistent

30. Porter’s Generic Strategies Overall cost leadership Differentiation Focus

31. McKinsey’s Seven “S” Elements Strategy Structure Systems Style Skills Staff Shared values

32. Balancing the Internal & External Environments External Environmental Need Balance Internal Environment

33. Marketing Plan Contents • Executive summary • Table of contents • Situation analysis • Marketing strategy • Financial projections • Implementation controls

34. Measuring Marketing Plan Performance Sales analysis Market share analysis Marketing expense-to-sales analysis Financial analysis

35. Tracking Market Share Overall market share Served market share Relative market share

36. Figure 2.6 Financial Model of Return on Net Worth

37. Methods of Improving Return on Assets • Method 1: Increase the profit margin by increasing sales or cutting costs • Method 2: Boost the asset turnover by increasing sales or reducing assets that are held against sales levels

38. For Discussion What implications do Porter’s value chain and the holistic marketing orientation model have for marketing planning?