Page 59 - Marketing Management

36 PART 1 UNDERSTANDING MARKETING MANAGEMENT
Kodak has installed thousands of quality, service, and speed. They achieve profitable growth by expanding customer share, building
its Picture Kiosks to allow
customers to print digital photos
or scan existing photos when, 1. Value exploration—How a company identifies new value opportunities
where, and how they want.
Business realignment may be necessary to maximize core competencies. It has three steps:
(1) (re)defining the business concept or “big idea”, (2) (re)shaping the business scope, and (3) (re)posi-
tioning the company’s brand identity. Consider what Kodak is doing to realign its business.
Kodak With the advent of the digital era and the capacity to store, share, and print pho-
tos using PCs, Kodak faces more competition than ever, in-store and online. In 2004, after being
bumped from the Dow Jones Industrial Average where it had held a spot for more than 70 years,
the company started the painful process of transformation. It began by expanding its line of
digital cameras, printers, and other equipment, and it also set out to increase market share in the
lucrative medical imaging business. Making shifts is not without challenges, however. The company
eliminated almost 30,000 jobs between 2004 and 2007 and acquired a string of companies for its graphics
communications unit. In 2006, Kodak announced it would outsource the
making of its digital cameras. Not only must Kodak convince consumers to
buy its digital cameras and home printers, but it also must become known
as the most convenient and affordable way to process digital images. So far,
it faces steep competition from Sony, Canon, and Hewlett-Packard. 11
A Holistic Marketing Orientation
and Customer Value
One view of holistic marketing sees it as “integrating the value explo-
ration, value creation, and value delivery activities with the purpose
of building long-term, mutually satisfying relationships and copros-
12
perity among key stakeholders.” Holistic marketers thus succeed by
managing a superior value chain that delivers a high level of product
customer loyalty, and capturing customer lifetime value. Holistic marketers address three key
management questions:
2. Value creation—How a company efficiently creates more promising new value offerings
3. Value delivery—How a company uses its capabilities and infrastructure to deliver the new
value offerings more efficiently
The Central Role of Strategic Planning
Successful marketing thus requires capabilities such as understanding, creating, delivering, captur-
ing, and sustaining customer value. Only a select group of companies have historically stood out as
master marketers (see Table 2.1). These companies focus on the customer and are organized to
respond effectively to changing customer needs. They all have well-staffed marketing departments,
and their other departments accept that the customer is king.
To ensure they select and execute the right activities, marketers must give priority to strategic
planning in three key areas: (1) managing a company’s businesses as an investment portfolio,
(2) assessing each business’s strength by considering the market’s growth rate and the company’s
position and fit in that market, and (3) establishing a strategy. The company must develop a game
plan for achieving each business’s long-run objectives.
Most large companies consist of four organizational levels: (1) corporate, (2) division, (3) busi-
ness unit, and (4) product. Corporate headquarters is responsible for designing a corporate
strategic plan to guide the whole enterprise; it makes decisions on the amount of resources to allo-
cate to each division, as well as on which businesses to start or eliminate. Each division establishes
a plan covering the allocation of funds to each business unit within the division. Each business unit
develops a strategic plan to carry that business unit into a profitable future. Finally, each product
level (product line, brand) develops a marketing plan for achieving its objectives.
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