Marketing Planning & Marketing Oriented Strategic Planning

8/4/2019 Marketing Planning & Marketing Oriented Strategic Planning

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Marketing is identifying andsatisfying customers needsprofitably.

What is Marketing


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Marketing and innovationproduce results: All the restarecosts.

Peter F. Drucker(19092005)U.S. MANAGEMENT THEORIST


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What is Planning?Everyone plans. We plan which courses wewant to take, which movie we want to see, andwhich outfit to wear to the college. We plan

where we want to live and what career wewant to pursue. Marketers plan as well.


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Planning is the process ofanticipating future events anddetermining strategies to achieveorganizational objectives in thefuture.

Following details needs to beprepared regarding doing things: What,Why, How, When, Who & Where

What is Planning?


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Planning is a continuous process thatincludes identifying objectives andthen determining the actions throughwhich a firm can attain thoseobjectives.

It also defines checkpoints so thatpeople within the organization cancompare actual performance withexpectations to indicate whethercurrent activities are moving theorganization toward its objectives.

What is Planning?


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Marketing Planning Marketing planning - implementingplanning activities devoted to achievingmarketing objectivesestablishes the

basis for any marketing strategy. Issues such as product l ines,distribution channels, marketingcommunications, and pricing are all

detailed in the marketing plan.


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Companies that dontplanplan to failPh i l i p Ko t le r


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Marketing Plan Marketing plan is a writtendocument that acts as aguidebook of marketingactivities for the marketingmanager.


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STRATEGIC PLANNING VERSUSTACTICAL PLANNING Planning often is classified on the basis of itsscope or breadth. Strategic planning can be defined as theprocess of determining an organizations

primary objectives and adopting courses ofaction that will achieve these objectives. Thisprocess includes allocation of necessaryresources. Strategic planning is complemented by tacticalplanning, which guides the implementation ofactivities specified in the strategic plan.


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Strategic Planning versustrategic Planning versusTacticalacticalPlanninglanning

Top management Greater proportions of their time engaged

in planning Usually focus their planning activities onlong-range strategic issues Middle level managers

Focus on operational planning; creating andimplementing tactical plans Supervisors

Developing the specific programs to meetgoals in their areas of responsibility


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Planning at Different Managerial Levels


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Inputs to planning processThe planning process includes inputfrom a wide range of sources: Employees Suppliers Customers


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Steps in the Marketing PlanningProcess The marketing planning process begins at thecorporate level with the definition of a firmsmission. It then determines its objectives, assesses its

resources, and evaluates environmental risksand opportunities. Guided by this information, marketers withineach business unit then formulate a

marketing strategy. Marketers then implement the strategythrough operating plans, and gather feedbackto monitor and adapt strategies when

necessary.


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Elements of a Marketing Plan


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Overview of MarketingStrategy Planning Process


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Marketing Planning Process


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DEFINING THE ORGANIZATIONS MISSION ANDOBJECTIVESThe planning process begins with defining thefirms mission Mission- Essential purpose thatdifferentiates one company from others. An organization lays out its basicobjectives, or goals, in its completemission statement. These objectives guide development of

supporting marketing objectives and plans.Soundly conceived objectives should statespecif ic intentions such as the following: Generate a 12 percent profit over the next 18months. Add 75 new outlets within the next two years.


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ASSESSING ORGANIZATIONAL RESOURCES ANDEVALUATING ENVIRONMENTAL RISKSAND OPPORTUNITIES The third step of the marketing planningprocess is to assess an organizations strengths,weaknesses, and available opportunities. Organizational resources include the capabil itiesof the firms production, marketing, finance,technology, and employees. An organizations planners pinpoint itsstrengths and weaknesses. Strengths help them set objectives, developplans for meeting those objectives, and takeadvantage of marketing opportunities.


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FORMULATING, IMPLEMENTING, AND MONITORINGA MARKETING STRATEGY Once a firms marketers figure out their companysbest opportunities, they can develop a marketingplan designed to meet the overall objectives. A good marketing plan revolves around an efficient,flexible, and adaptable marketing strategy. A marketing strategy is an overall, companywideprogram for selecting a particular target market andthen satisfying consumers in that market through acareful blending of the elements of the marketingmixproduct, distribution, promotion, and priceeach of which is a subset of the overall marketing

strategy. In the two final steps of the planning process,marketers put the marketing strategy into action;then they monitor performance to ensure thatobjectives are achieved. Sometimes strategies need

to be modified if the products or companys actual


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Successful Strategies: Tools andTechniquesMarketing planning tools andtechniques: Porters Five Forces model SWOT analysis First and Second mover

strategies Strategic window


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Porters Five Forces Model


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Potential New Entrants Potential new entrants sometimesare blocked by the cost ordiff iculty of entering a market. It is a lot more costly andcomplicated to begin buildingaircraft than it is to start up anInternet rsum service. TheInternet has reduced the barriersto market entry in many

industries.


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Bargaining Power of Buyers If customers have considerablebargaining power, they cangreatly influence a firms

strategy. The Internet canincrease a customers buyingpower by providing informationthat might not otherwise beeasily accessible such asalternate suppliers and pricecomparisons.


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Bargaining Power of Suppliers The bargaining power of suppliers refersto the abil ity of suppliers to raise inputprices, or to raise the costs of theindustry in other ways, for example, byproviding poor-quality inputs or poorservice. Powerful suppliers squeeze profits out ofan industry by raising the costs ofcompanies in the industry. The number of suppliers available to amanufacturer or retailer affects theirbargaining power.


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Threat of Substitute Products Substitute products the products of differentbusinesses or industries that can satisfy similarcustomer needs. For example, companies in the coffee industrycompete indirectly with those in the tea and softdrink industries because all three serve customerneeds for nonalcoholic drinks. The existence of close substitutes is a strongcompetitive threat because this l imits the price thatcompanies in one industry can charge for theirproduct, and thus indust ry profitabil ity. If the price of coffee rises too much relative to thatof tea or soft drinks, coffee drinkers may switch tothose substitutes.


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SWOT ANALYSIS SWOT analysis, helps plannerscompare internal organizationalstrengths and weaknesses withexternal opportunities and threats. SWOTWOT is an acronym for s trengths,weaknesses, opportunities, andthreats. A SWOT analysisWOT analysis is a method ofstudying organizational resources andcapabilit ies to assess the firmsstrengths and weaknesses and

scanning its environment to identify


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SWOT ANALYSIS A companys strengths reflect its corecompetencieswhat it does well. Core competencies are capabilitiesthat customers value and competitorsfind difficult to duplicate. Leverage-Matching an internal strengthwith an external opportunity produces a

situation known as l e v e r age . Marketers face a problem whenenvironmental threats attack theirorganizations weaknesses.


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SWOT ANALYSIS


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First Mover and Second Moverirst Mover and Second MoverStrategiestrategies First mover strategy: Theoryadvocating that the company that isfirst to offer a product in amarketplace will be the long-termmarket winner. Second mover strategy: Theory thatadvocates observing closely the

innovations of first movers and thenintroducing new products thatimprove on the original offering togain advantage in the marketplace.


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STRATEGIC WINDOW Limited periods during which thekey requirements of a market

and the particular competenciesof a firm best fi t together. The view through a strategic

window shows planners a way torelate potential opportunities tocompany capabil it ies.


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STRATEGIC WINDOW During one recent year, automakers drovethrough a strategic window by dramaticallyincreasing their investment in the Indian

market and doubling their production ofvehicles there. General Motors, Fiat, Honda, Nissan, andHyundai all announced Indian investments

totaling about $1.5 bill ion, with productionto reach nearly 3 mill ion vehicles in oneyear.


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Elements of a MarketingStrategy Success for a product in themarketplace depends on aneffective marketing strategy. An effective marketing strategyreaches the right buyers at theright time, persuades them to

try the product, and develops astrong relationship with themover time.


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Elements of a MarketingStrategyThe basic elements of a marketingstrategy consist of:

(1) the target market(2) the marketing mix variablesof product, distribution,promotion, and price thatcombine to satisfy the needs ofthe target market


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TargetargetMarketarket Group ofpeopletoward

whom thefirmdecides todirect itsmarketingefforts


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Ansoff s Marketing Grid


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Marketing StrategyFigure il lustrates the focus of themarketing mix variables on the centralchoice of the target market. Inaddition, decisions about product,

distribution, promotion, and price areaffected by the environmental factorsin the outer circle of the figure. Theenvironmental variables may play amajor role in the success of amarketing program, and marketersmust consider their probable effects.


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Marketing Mix StrategyProduct strategy involves:1. Deciding what goods orservices the firm should

offer to a group ofconsumers.


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2. Decisions about. Decisions about What goods or services to offer Customer service Package design Brand names Trademarks Warranties Product Life Cycle Positioning New-product development

Product strategy


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Distribution Strategyistribution StrategyPlanning that ensures thatconsumers find their products inthe proper quantit ies at theright times and places. Modes of transportation Warehousing Inventory control Order processing Marketing channels

Marketing Mix Strategy


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Promotional Strategyromotional StrategyPromotion is the communicationslink between sellers andbuyers.The strategy includeshe strategy includes

Blending together the various elementsof promotion to communicate mosteffectively with the target market Informing, persuading, and influencing aconsumers purchase decision.

Integrated Marketing Communications-To coordinate all promotional activitiesso that the consumer receives a unified



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Pricing Strategyricing StrategyPricing strategy deals with:1.The methods of setting profitable andjustifiable prices.2.It is closely regulated and subject toconsiderable public scrutiny.3.One of the many factors that influence a

marketers pricing strategy iscompetition.



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Marketing Environmentarketing Environment Marketers do not make decisionsabout target markets and marketingmix variables in a vacuum. They must take into account thedynamic nature of the fivedimensions of the marketingenvironment shown back in Figure:

competitive, political-legal, economic,technological, and social-cultural factors.


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Marketing Environmentarketing Environment Concerns about the naturalenvironment have led to newregulations concerning air and waterpollution. Automobile engineers have turnedpublic concerns and legal issues intoopportunities by developing hybrid

cars. Note that the marketing environment isferti le ground for innovators andentrepreneurs.


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Technology has changed themarketing environment as well,partly with the advent of theInternet.

Technology now produces a newformulation of diesel fuel thatburns cleaner and is moreefficient than earl ier versions ofdiesel, as well as petrol.

Marketing Environmentarketing Environment


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Marketing Environmentarketing EnvironmentRule of Three-Some experts have coined the phraserule of three, meaning that in anyindustry, the three s trongest, most

efficient companies dominate between70 and 90 percent of the market.e.g Automobiles

FMCG While it may seem like an uphil l battlefor the remaining companies in anygiven industry, they can find a s trategyfor gaining competitive ground.


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Methods for MarketingPlanning

Two methods:The strategic business unitconceptThe market share/market

growth matrix.


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Methods for MarketingPlanning Business Portfolio Analysisusiness Portfolio Analysis

Although a small company may offer only afew items to its customers, a largerorganization frequently offers and marketsmany products to widely diverse markets.

Top managers at these larger firms need amethod for spotting product lines thatdeserve more investment as well as linesthat arent living up to expectations. Sothey conduct a portfolio analysis, in whichthey evaluate their companys products anddivisions to determine the strongest andweakest.


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Methods for Marketing Planning Business Portfolio Analysisusiness Portfolio Analysis

Marketing planners must assess their products,the regions in which they operate, and othermarketing mix variables. This is where theconcept of an SBU comes in. Strategic Business Unitstrategic Business Units (SBUs) arekey business units within diversifiedfirms

A division, product l ine, or single product maydefine an SBU

Firms redesign their SBUs as market conditionsdictate Each SBU pursues its own distinct mission andoften develops its own plans independently ofother units in the organization.


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THE BCG MATRIX To evaluate each of thei rorganizations strategic businessunits, marketers need some type ofportfol io performance framework. A widely used framework wasdeveloped by the Boston ConsultingGroup.


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The BCG Matrixhe BCG Matrix Market Share/ Market Growth Matrixarket Share/ Market Growth Matrix:a marketing planning tool thatclassifies a firms SBUs or productsaccording to industry growth rates

and market shares relative tocompeting products Stars Cash Cows Dogs Question Marks


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BCG Matrix


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BCG Matrix This market share/market growthmatrix places SBUs in a fourquadrant chart that plots market

share against market growthpotential. Market share is the percentage of

a market that a firm currentlycontrols (or company sales dividedby total market sales).


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BCG Matrix The position of an SBU along thehorizontal axis indicates its marketshare relative to those of competitorsin the industry. Its position along the vertical axisindicates the annual growth rate ofthe market. After plotting all of a firms businessunits, planners divide them accordingto the matrixs four quadrants.


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BCG MatrixFirms in each quadrant require a unique

marketing strategy: Stars represent units with high market sharesin high-growth markets:

These products or businessesare high-growth market leaders.

They generate considerable income butthey need inflows of even more cash tofinance further growth. Apples popular iPod is the number oneselling portable digital music player in theworld, but Apple has already introducedupgrades and new models to remaincompetitive.


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BCG Matrix Cash cows command high market

shares in low-growth markets: Marketers for such an SBU want tomaintain this status for as long aspossible. The business produces strong cash flows,but instead of investing heavily in theunits own promotions and productioncapacity, the firm can use this cash tofinance the growth of other SBUs withhigher growth potentials. For instance, Microsoft uses the profitsfrom sales of its Windows operating systemto finance research and development fornew Internet-based technologies.


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BCG Matrix Dogs manage only low market shares

in low-growth markets. SBUs in this category promise poor futureprospects, and marketers should withdrawfrom these businesses or product lines as

quickly as possible. In some cases, theseproducts can be sold to other firms, wherethey are a better fit. IBM sold its PC business to Chinese firmLenovo so that it could concentrate on itsbusiness services. Eicher Motors sold off their Tractor division(Eicher Tractors) to TAFE, as they were

Marketing Planning & Marketing Oriented Strategic Planning

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