Value Delivery Process
The smart competition must design and deliver offerings for well-defined target markets. The sequence
of value creation and delivery can be divided into three phases.
1) Choosing the value
Marketing must channel a formulation of segmentation, targeting, positioning, is the essence of
Michael Porter of Harvard has proposed the value chain as a tool for identifying ways to create more
The primary activities
1) inbound logistics
2) Operating , or converting materials into final products
3) Outbound logistics or shipping
4) Sales, which includes sales
5) Service. Specialized departments handle the support activities
8) Human resource management
9) Firm infrastructure
Firm’s task is to examine cost and performance in each value-creating activity and look for ways of
innovation. The firm should estimate its competitors cost and performances as benchmarks against
which to compare its own costs and performance.
The firm’s success depends not only on how well each department performs its work, but also on how
well the various departmental activities are coordinates to conduct core business processes.
Core business processes:
1) The market-sensing process. All the activities involved in gathering market intelligence,
disseminating it within the organization, and acting on the information.
2) The new offering-realization process. All the activities involved in researching, developing, and
launching new high quality offerings quickly and within budget
3) The customer-acquisition in process. All activities involved in defining target markets and
prospecting for new customers
4) The customer relationship management process.
5) The fulfillment management process. MKT 702
Value Delivery Network (supply chain) – Many companies who have partnered with specific suppliers
and distributors to create a superior value supply chain
Core competencies – Three characteristics
1) It is a source of competitive advantage in that is makes a significant application in a wide variety of
2) It is difficult for competitors to imitate
3) Competitive advantage also accrues to companies that possess distinctive capabilities or
excellence in broader business processes.
Competitive advantage ultimately derives how well the company has fitted its core competencies
and distinctive capabilities into tightly interlocking “activity systems”
1) Redefining the business concept or big idea
2) Reshaping the business scope
3) Repositioning the company’s identity
1) Value exploration. How can a company identify new value opportunities
2) Value Creating. How can a company efficiently create more promising new value offerings
3) Value Delivery. How can a company use its capabilities and infrastructure to deliver the new
value offerings more efficiently
The Central Role of Strategic Planning
Successful marketing requires having capabilities such as understanding customer value, creating
customer value, delivering customer value, capturing customer value, and sustaining customer
To ensure that the proper activities are selected and executed, strategic planning is paramount.
Strategic planning calls for action in three key areas:
1) The first is managing a company’s a businesses as an investment portfolio.
2) Involves assessing each businesses strength by considering the market’s growth
Marketing Plan – The central instrument for directing and coordinating the marketing effort.
Strategic Marketing Plan – Lays out the target markets and the value proposition that will be offered.
The tactical marketing plan – The marketing tactics, including product features, promotion,
merchandising, pricing, sales channels and service MKT 702
Corporate and Division Strategic Planning
1) Defining the corporate mission
2) Establishing strategic business units
3) Assigning resources to each SBU
Defining the Corporate Mission:
1) What is our business
2) Who is our customer
3) What is the value of our customer
4) What will our business be
5) What should our business be
Mission Statements – Managers, employees, and (in many cases) customers. A clear, thoughtful
mission statement provides employees with a shared sense of purpose, direction, and opportunity.
Mission statements area at their best when they are guided by a vision, an almost “ impossible-
dream” that provides a direction for the company for the next 10 to 20 years.
1) They focus on a limited number of goals.
2) They stress the company’s major policies and values
3) They define the major competitive spheres within which the company will operate.
4) They take a long-term view:
5) They are as short, memorable, and meaningful as possible.
Establishing Strategic Business Units
Companies often decline their businesses in terms of products.
A target market definition tends to focus on selling a product or service to a current market. A
strategic market decision: Large companies normally manage quite different businesses, each requiring
its own strategy MKT 702
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 manager who is responsible for strategic planning and profit performance and who
controls most of the factors affecting profit.
Assigning Resources to Each SBU
Management must decide how to allocate corporate resources to each separate portfolio- planning
models to provide ways to make investment decisions.
Portfolio Planning models like these have fallen out of favour as oversimplified are subjective.
Newer methods rely of shareholder value analysis. These value calculations assess the potential of a
business based on growth opportunities from global expansion, repositioning or retargeting, and
Assessing Growth Opportunities
SBU’s management must decide how to allocate corporate resources to each. If there is a gap
between future desired sales and projected sales, corporate management will have to develop or
acquire new businesses to fill it.
Corporate management first course of action should be a review of opportunities for improving
existing businesses. It considers the strategic growth opportunities for a firm in terms of current and
new products and markets.
A business sales and profits may be increased through backward, forward, or horizontal integration
within its industry.
Horizontal mergers and alliances don’t always work out. The merger between sears and Kmart
didn’t solve either retailer’s problems.
Strategic planning is done within the context of the organization. A company’s organization consists
of structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly
changing business environment.
Corporate Culture MKT 702
Businesspeople would be hard pressed to find words to describe this elusive concept, which some
define as the “ the shared experiences, stories, beliefs, and norms that characterize and
A customer-centric culture can affect all aspects of an organization. Sometimes corporate culture
develops organically and is transmitted directly from the CEO’s personality and habits to company
Innovation in marketing is critical. The traditional view is that senior management hammers out of
the strategy and hands it down. Senior management seems t under identify younger personalities
and insight as communication channels are deterred.
Develops plausible representations of a firms possible future using assumptions about forces driving
the market and different uncertainties.
Business Unit Strategic Planning
The Business Mission
Each business unit needs to define its specific missio