POSTGRADUATE INSTITUTE OF MANAGEMENT

University of Sri Jayewardenepura

Master of Business Administration
MBA 504: Marketing Management

1. Defining Marketing for the New Realities – Chapter 1

2. Marketing Planning & Management – Chapter 2
3. Consumer Buying Behavior & Profiling The Sri Lankan Consumer – Chapter 3 & PIM Publication
4. Conducting Market Research – Chapter 5
5. Identifying Market Segments & Target Customers & Crafting the Brand Positioning – Chapters 6 & 7
6. Designing & Managing Services – Chapter 9
7. Building Strong Brands – Chapter 10
8. Managing Marketing Communication & Designing an IBC in the Digital Age – Chapter 12 & 13
9. Channels & Distribution Strategies – Chapter 15 & 16
10. Revision & Discussion
Dr Asanga Ranasinghe
Strategic Planning & Management
• To ensure that the right activities are executed, marketers must prioritize strategic planning in 3 key
areas:
1. Managing the company’s businesses as an investment portfolio
2. Assessing the market’s growth rate & the company’s position in that market
3. Developing a viable business model.

• Strategic planning & management occur on 3 different levels:

1. Corporate planning - corporate headquarters is responsible for designing a corporate strategic plan to
guide the whole enterprise
2. Business unit planning - each business unit develops a plan to carry that business unit into a profitable
future
3. Developing specific market offerings - each market offering involves a marketing plan for achieving its
objectives.

The Strategic Planning Processes Dr Asanga Ranasinghe

Corporate & Business Unit Planning & Management
• Companies undertake 5 planning activities:

1. Defining the corporate mission

2. Building the corporate culture
3. Establishing strategic business units
4. Assigning resources to each strategic business unit
5. Assessing growth opportunities

Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Defining the Corporate Mission
• To define its mission a company must address Peter Drucker’s 5 classic questions
o What is our business?
o What will our business be?
o What should our business be?
o Who is the customer?
o What is of value to the customer?
• Companies must view their businesses from satisfying a customer need as opposed to selling a product.

Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Defining the Corporate Mission
• A clear thoughtful mission statement provides employees with a shared sense of core purpose,
direction & opportunity
• Good mission statements have 5 major characteristics

1. They focus on a limited number of specific goals

2. They stress the company’s major policies & values
3. They define the major markets that the company aims to serve
4. They take a long-term view
5. They are short, memorable & meaningful as possible
Microsoft’s
mission is to
Google’s mission is to empower every
organize the world’s Tesla’s mission is to person & every Facebook’s mission is to give
information & make it accelerate the world’s organization on people the power to build
universally accessible & transition to the planet to community & bring the world
useful. sustainable energy. achieve more closer together.
Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Building a Corporate Culture
• Strategic planning happens within the context of the organization.
• A company’s organization consists of its structures, policies & corporate culture - which can become dysfunctional in
a rapidly changing business environment.
• Unlike changing structures & policies, culture is very hard to change.
• Yet creating a strategy supportive, customer centric corporate culture is often the key to market success.
• A corporate culture is the shared experiences, stories, beliefs & norms that characterize an organization.
• A customer-centric culture can affect all aspects of an organization.
Established in 1967, Southwest Airlines continues to differentiate itself from other airlines
with outstanding customer service. At the core of this service is the company’s culture,
which inspires its more than 58,000 employees to delight the airline’s passengers. By
creating an inclusive & fun culture where every team member feels responsible for the
success of company, Southwest motivates employees to take pride in their work, which
often translates into a superior customer experience. Southwest ranks its employees first in
importance, followed by customers & shareholders. The airline explains its company
culture: “We believe that if we treat our employees right, they will treat our customers
right, and in turn that results in increased business & profits that make everyone happy.”
This supportive environment has helped Southwest create a loyal customer base &
become the nation’s largest domestic air carrier—a ranking it has maintained since 2003.
Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Establishing Strategic Business Units (SBUs)
-

• Companies often define their businesses in terms of products

o “auto business” or the “clothing business”
• Theodore Levitt argues that market definition of business is superior to product
definitions
• According to Levitt a business must be viewed as a customer-satisfying process not as a goods-
producing process
o transportation is a need & a bicycle, automobile, rail, airline are products that meet this need
• Levitt encourage companies to redefine their businesses in terms of needs not products
o IBM a “hardware & software manufacturer” to a “builder of networks”
• Moving from product to market definition.
o Focusing on selling a product or service to focusing on the need to satisfy

✓ Pepsi could define its target market as everyone who drinks a cola beverage - competitors are other colas
✓ A strategic market definition could be everyone who might drink something to quench his/ her thirst –
competitors are other non-cola soft drinks, bottled water, fruit juices, tea & coffee
Dr Asanga Ranasinghe
 Every year, a large majority of product launches fail & there is a lot of time & energy go into
marketing products that will no longer exist in a year. Why is this? Some of the failure is
likely attributable to the fact that many company leaders, including executives, have what’s
called marketing myopia—a nearsighted focus on selling products and services, rather than
seeing the “big picture” of what consumers really want.
Marketing Myopia The term was coined by the late Harvard Business School marketing professor, Theodore
Levitt in 1960. The heart of the article is that companies are too focused on producing goods
Levitt reminded CEOs that or services & don’t spend enough time understanding what customers want or need – need
marketing is part of their job switch from a production orientation to a consumer orientation.
as you in business because
you have a customer - think The industry a company is in today may not be Organizations invest so much time,
about marketing. the same one in the future as disruptions are energy & money in what they currently
challenging the stability of industries. do that they’re often blind to the future -
There are many companies “growth industry” vs “growth
Marketing myopia remains an important
that suffering from marketing opportunities”.
reminder of the risks a company runs if close
myopia - the publishing
attention is not given to consumers’ needs. Questions
industry. What business are
Levitt believed that executives couldn’t predict
we really in? ‘Publish’ is
the future—& shouldn’t try. Instead, by [Link] did this concept originate from?
production-oriented. “Only a
concentrating on meeting customer needs [Link] is marketing myopia?
production-oriented publisher
rather than on selling products—by always [Link] relevant is it today?
would defend the form of
keeping in mind the business that they’re really [Link] has marketing myopia evolved?
delivery over the value of the
in—companies could be better prepared for
experience it delivers.”
whatever the future would bring. Elaborate through examples.
Corporate & Business Unit Planning & Management
Establishing Strategic Business Units (SBUs)
• Large companies define SBUs in terms of 3 dimensions
1. customer groups
2. customer needs
3. technology

• The purpose of identifying SBUs is to develop separate strategies

& assign appropriate funding to grow businesses profitably

• An SBU has 3 characteristics

1. It is a single business or collection of related businesses that can be
planned separately from the rest of the company
2. It has its own set of competitors
3. It has a business head who is responsible for strategic planning/ profit
performance.
Corporate & Business Unit Planning & Management
Assigning Resources to Each SBU
Stars Question Marks
BCG Matrix
• High growth & high share business • Low share business in high
• Often need heavy investment to grow & gain growth markets
share • Need a lot of cash to hold let
• Eventually growth will slow alone grow share
down & become cash cows High Star Question • Either build to Stars or phased
Market
Mark out
growth
rate
?
Cash Cows Cash Dog Dogs
Low Cow
• Low growth &
• Low growth & low
high share $ share business
established
• May generate enough
business High Low cash to maintain
• Need less
Relative themselves but do not
investment to hold share
market promise large sources of cash
• Cash generators to pay share
the company bills & support Stars
Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Assessing Growth Opportunities
• Involves planning new businesses & downsizing/ terminating older businesses
• If there is a gap between future desired sales & projected sales, businesses have to be developed or
acquire new businesses to fill the gap

The Strategic Planning Gap

Dr Asanga Ranasinghe
 Corporate & Business Unit Planning & Management
Assessing Growth Opportunities
• Intensive growth: identify opportunities to achieve further growth within current business (intensive
opportunities)
o 3 intensive growth strategies as per the Ansoff Product Market Expansion Grid

Market Penetration Product Development

A growth strategy that increase A growth strategy that offer
sales of modified or new product portfolio
Current product portfolio to current market segments
in the current market
Segment by creating new
customers

Market Development Diversification

A growth strategy that A growth strategy that start up or
identify & develop new acquire businesses outside the
market segments for current current product portfolio &
product portfolio market segments
Dr Asanga Ranasinghe
 Corporate & Business Unit Planning & Management Extended Reading
Assessing Growth Opportunities Through its singular focus on sports programming &
news, ESPN grew from a small regional broadcaster into
• Intensive growth the biggest name in sports. The strategy was to make
sure that ESPN is there wherever sports fans watched,
read & discussed sports.
Market Penetration ESPN is now owned by Walt Disney with a revenue of
close to $ 10 B.
Television penetration
into many markets
through its 10 cable
channels Product Development
A web site, a magazine,
more than 600 local radio
Market Development affiliates, original movies
ESPN International partly & television series, book
or wholly owns 47 publishing, a sports
television networks merchandize, catalog &
outside US, reaching online store, music &
sports fans in more than Diversification
video games
200 countries &
Restaurants (ESPN Zone)
territories across all 7
continents Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Assessing Growth Opportunities
• Integrative growth: identify opportunities to build or acquire businesses that are related to current
businesses (integrative opportunities)
o a business can increase sales & profits through backward, forward or horizontal
integration within its industry
o sometimes these new sources of integrative growth may still not deliver the
desired sales volume forcing companies to consider diversification &/ or
divestment..

Gillette’s $54bn (£27bn) sale to Procter & Gamble (P&G) is the largest
consumer products takeover to date & makes P&G the world’s biggest
consumer goods company, with a combined annual revenue of over $63bn
(£32bn), having added the Gillette, Duracell, Braun & Oral-B brands to its
stable.
With this acquisition, P&G has integrated two complementary businesses
while taking advantage of their different strengths. P&G excels at innovation
& marketing, while Gillette is strong on technology & speed to market. This
acquisition helps P&G to enter the fast growing male grooming segment while
Gillette gains P&G’s channel & distribution strength.
Corporate & Business Unit Planning & Management
Assessing Growth Opportunities
• Diversification growth: identify opportunities to add attractive businesses that are unrelated to
current businesses (diversification opportunities)
o concentric strategy: seek new products that have technological or marketing
synergies
o horizontal strategy: seek for new products that could appeal to current
customers even though they are technologically unrelated
o conglomerate strategy: seek new businesses that have no relationship in
technology, product or market to the existing portfolio

• Samsung best known for its smartphones, tablets &

televisions.
• The electronics giant also makes military hardware,
apartments, ships & operates a Korean amusement
park!
• The business currently has around 350,000 employees
& in 2011 reported revenues of $220 billion &
economists estimate that Samsung's revenues account
for about 20% of the value of South Korea's economy!

Dr Asanga Ranasinghe
Corporate & Business Unit Planning & Management
Assessing Growth Opportunities
• Downsizing & divesting older businesses: must carefully prune, harvest or divest tired old
businesses to release needed resources & reduce costs.
o week businesses require a disproportionate amount of managerial attention
o managers should focus on growth opportunities not trying to salvage
hemorrhaging businesses

P&G sells Pringles for $1.5bn

Diamond Foods to buy US consumer group’s last food
business
Diamond Foods to Merge P&G's Pringles Business
into the Company
Accretive combination makes Diamond the number two
global player in savory snack category

Dr Asanga Ranasinghe
Developing Market Offerings
• To create value, it is necessary to have the right strategy supported by right tactics to design & deliver
specific offerings with a meaningful set of benefits to target customers.
Strategy involves choosing a well-defined market Tactics (marketing mix), make the strategy come alive in
segment to compete by creating value. the chosen market segment through the key aspects of
the offering to design, communicate & deliver value.

Identifying the Target Market: The 5-C Framework Developing the Marketing Tactics: The 7 Tactics (7Ts) of
Defining the Market Offering
Planning & 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.
• Market success typically results from diligent market analysis, planning & management.
• Succeeding in the market requires a company to develop a viable marketing plan for its brand
portfolio.

• G-STIC approach to developing a marketing plan - 5 key activities:

1. Setting a Goal - describing the company’s ultimate criterion for success

2. Developing a Strategy - providing the basis for the company’s business model
based to serve the chosen target market & the value proposition.

3. Designing the Tactics – defining the key attributes of the company’s offering – 7 Ts.

4. Defining an Implementation plan - readying the company’s offering for sale by

developing & deploying the offering in the target market.
G-STIC Marketing Framework
5. Identifying a set of Control metrics - monitoring the company’s performance &
the changes in the market environment. Dr Asanga Ranasinghe
 The Nature and Contents of a Marketing Plan
The Organization
of the Marketing Plan

SWOT/ PEST/ Core Competencies

MMOs – Financial & Strategic

STP/ Growth Strategy/ 5-C framework

4Ps or 7Ps/ 7Ts

NPD/ Channel & Customer Strategies

Marketing Matrices – KPIs & Milestones

Dr Asanga Ranasinghe
 Summary
• Market-oriented strategic planning is the managerial process of developing & maintaining a viable
fit between the organization’s objectives, skills & resources & its changing market opportunities.
• Strategic planning takes place on three levels: corporate, business unit, and market offering.
• Corporate & Business Unit Planning & Management means defining the corporate mission, building a corporate
culture, establishing SBUs, assigning resources to each & assessing growth opportunities.
• Strategic planning for individual business units includes defining their mission, analyzing external opportunities &
threats, analyzing internal strengths and weaknesses & crafting market offerings that will enable the company to
achieve its mission.
• Marketing planning is a process defined by five main steps: setting a goal, developing the strategy, design- ing 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.
• 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.
Dr Asanga Ranasinghe