Rotman Marketing Presentation

8/6/2019 Rotman Marketing Presentation

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MGT 252

Winter 2007Maggie Wenjing Liu

Lecture 2:

Dynamics of Marketing Environmentand Marketing Planning


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Todays Agenda

In-class debate: Demographic orTechnology?

Environmental factors that influence

marketing activities Developing a marketing plan (term

project)


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Class Debate

Which environmental factor is the mostimportant for marketing: demographicchange or technology change?

What forces have influence oncompanys marketing?

How much influence?How to react to the influence?


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Demographic Change

Know who are going to buy your product

most obvious change is the aging population;impact of seniors, boomers and their kids

smaller families; more single-person households smaller, non-traditional households

more part-time workers, dual-income households

changing patterns of immigration; ethnic mix


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Technology

Consumers tech skills, your own tech level. launches entirely new industries, such as

multimedia, digital communications and

electronic commerce alters or virtually destroys existing

industries, such as the effect of e-mail onregular mail and even fax

stimulates other markets and industries,such as the effect of the debit card andInternet shopping on the retailing industry


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The ExternalEnvironment macro forces are factors over which the

company has no short-term control micro forces operate at the firm level

the external macroenvironment affectsdifferent firms in different ways

the better we understand the changingmarketing environment and its effects, the

better we can develop effective marketingprograms


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Figure 2-1 Relationship-InsensitiveExternal Environmental Forces


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Economic ConditionsHow many people can afford your product

How will consumers react to each of thefollowing economic factors?

Recession/Boom Inflation Interest Rates

Unemployment Rates

Marketing Environment


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Competition

Whos your competitor, what are theydoing?

competition takes place at three levels:

directly at the brand or store level at the level of substitute

products/services

other demands upon our buying power Could be from international (e.g.

outsourcing).


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Social and CulturalForces

Lifestyles, values and beliefs greater emphasis on quality of life immigration brings changing values

rapidly changing gender roles different attitudes toward physical activity,

exercise, and diet among certainsegments

increased emphasis on service quality andvalue


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Identifying greencustomers True-Blue Greens Will change their

behaviour and purchases in order to aidthe environment.

Greenback Greens Not as willing tochange as much of their actualbehaviour, but will support causes andcandidates who support the cause.

Sprouts Make some environmentalefforts and purchases. Grousers Grudgingly acknowledge

environmental mandates

Basic Browns Most apathetic


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Political and LegalForces

Are your products and marketing methodslegal?

government and laws affect marketing at

many levels legislation often has implications for

marketing; some more direct than others

many industries are directly affected bylegislation; packaging, labeling, advertising


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ControllableEnvironmental Forces external to the firm, but part of its marketing

system because of its close relationship

these can be influenced by the firm to greater

or lesser degrees; they are not entirelyuncontrollable

these forces may be considered relationship-sensitive, as it is of considerable importance

for the firm to establish solid relationships withthese partners in its success


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Figure 2-2 Relationship-SensitiveExternal Environmental Forces


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Internal EnvironmentalForces

internal factors influence the firmsmarketing strategies, programs andactivities, and have the potential to affectcustomer satisfaction

R&D Production facilities Financial

Human resources Location


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Developing aMarketing Plan


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What is Marketing?

Product vs. Marketing

OrientationStartingPoint Focus Means Ends

Factory QualityCost

Mass productionMass selling

Profits through

Sales Volume

Product Orientation

Target

Market

Customer

Needs

Integrated

Marketing

Profits through

Customer Satisfactio

Marketing Orientation


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Mission

COMPANY

PRODUCT-ORIENTED

VISION/MISSION

STATEMENTS

MARKET-ORIENTED

VISION/MISSIONSTATEMENTS

Revlon We make cosmetics.

Disney We run theme parks.

Wal-Mart We run discount stores.

We sell lifestyle and self expression;

success and status;memories, hopes and dreams.

We provide fantasies andentertainment -- a place where

America still works the way it issupposed to.

We offer products and services that

deliver value to middle Americans.


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Marketers tasks in planning

Look for

Opportunities

ConsumerCompetition

Company

(Uncontrollable

3Cs)

SegmentingTargeting

Positioning

(STP)

Implement

Positioning

ProductPrice

Promotion

Place

(Controllable 4Ps)


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Strategic Company Planning

PLANNING

Analyze situation (3 Cs)

Set goals (STP)

Select strategies

and tactics (4 Ps)

IMPLEMENTATION

Organize

Staff

Direct

EVALUATION

Compare

performance

with goals

Feedback, so management can adapt future plans and their

implementation to the changing environment

The Management Process


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Key Planning Concepts

1. Mission: The statement that indicates theboundaries of an organizations activities.

2. Objective: A desired outcome. Should be

clear, specific, stated in writing, ambitious,realistic, consistent, measurable, and tiedto a particular period.

3. Strategy: A broad plan of action by which

an organization intends to reach itsobjective(s).

4. Tactic: A means by which a strategy isimplemented. They generally cover a

shorter time period than strategies.


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Types of Planning

Strategic Company PlanningDefine missionSet long-range goals

Strategic Marketing PlanningGoals and strategies for the

marketing effort

Annual Marketing PlanningShort-term plans describing

marketing functions

IMPLEMENTATION AND EVALUATION


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Strategic Company Planning

1. Define the organizational mission.

2. Analyze the situation.

Situation Analysis: get informationabout the company & its businessenvironment from accessible sources,e.g. library, employees.

1. Set organizations objectives.2. Select strategies to achieve these

objectives.


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McDonalds Canada

1. Mission: To provide cheap, tasty foodquickly to our customers.

2. Objective: To recapture the #1 position inCanadian restaurant revenue from Tim

Hortons.3. Strategies:

(a) Improve product selection to havehealthy alternatives.

(b) Increase the number of restaurants.4. Tactics: (a) Develop a line of soups.

(b) Open up restaurants in non-conventionallocations such as subway stations.


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Strategic Business Units: smaller planning unitswithin a larger company.

Be a separately identifiable business.

Have a distinct mission

Have its own competitors.

Have its own executive group with profitresponsibility.

Have its own strategic plan.

Analyzing SBU Situation

h h


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Stars

Cash cows Dogs

Question marks

High Low

High

Low

Companys Market Share

Indus

tryGrowth

Rate

BCG Growth Share Matrix


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St t i M k ti


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Strategic MarketingPlanning

Conduct situation analysis.

Environmental scan and SWOT (Strengths,

Weaknesses, Opportunities and Threats.) Develop marketing objectives. Determine positioning & differential

advantage

Select target markets and measure marketdemand.

Design a strategic marketing mix.


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Recall: Marketers tasks

Look for

Opportunities

ConsumerCompetition

Company

(Uncontrollable

3Cs)

SegmentingTargeting

Positioning

(STP)

Implement

Positioning

ProductPrice

Promotion

Place

(Controllable 4Ps)

1. Situation analysis

2. Develop marketing

objectives

3. Determine positioning

& differential advantage

4. Select target markets &

measure market demand

5. Design the strategic

marketing mix


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WestJet Facts

Canadas #2 airline at 7% market shareof passenger miles. Air Canada has80%.

Serve 22 Canadian cities. Airplanes were 80.3% full in July 2002compared to 82.6% in July 2001.

Operating revenue is $300 million Jan-

June 2002. Up 47% from year earlier. Only fly domestically. Profitable. Lower costs than Air Canada.


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1. Situation Analysis

SWOT assessment: Strengths, Weaknesses, Opportunities,

Threats

WestJet: StrengthsWeaknessesOpportunities Threats


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2. Marketing Objectives

Determine a marketing goal.

WestJet: 10% share?

50% increase in revenue?

10% decrease in marketing costs?

20% rise in revenue per

customer?


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4 Target Markets & Market


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4. Target Markets & MarketDemand

Target Markets: Segment your customers,and develop strategies for each segment.

Market Demand: How many customers in

total? How many for your company?

WestJet?


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5. Marketing Mix

Price (base, coupons, discounts, etc.)

Product (or service)

Promotion (marketing communications)

Placement (Distribution)

Plus customer service.

WestJet?


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1. Executive Summary (one page)

2. Situation Analysis (two to three pages)

3. STP, Objectives

4. Strategies5. Tactics

6. Financial Schedule

7. Timetable8. Evaluation Procedures (one page)

Annual Marketing Planning

Example


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ExampleCase: McDonalds


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1. Executive Summary

Intended for executives who need anoverview, but wont be doing the nitty-

gritty. Summarize the next seven sections.

McDonalds

The #1 fast food chain in the world.

Growth slowing in core product.


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2. Situation Analysis

Analyze past, present, and future conditionsbased on easily accessible sources.

SWOT Describe human resource constraints.

Much of this section is in the StrategicMarketing Plan.

McDonalds #1 fast food chain in the world, but slipping. Competition: local and healthier alternatives. Restaurants in 120 countries. Demand for beef worldwide falling due to Mad

Cow.


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3. Objectives

Specific Annual Objectives: this factorincrease by x% over y months.

Explain why these are good objectives.

McDonalds

1. Increase worldwide fast food market shareby 5%.

2. Maintain worldwide restaurantmarketshare.

3. Maintain per-store sales while expanding.

4. Increase profits 10%.


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4. Strategies

Price, product, promotion, and placement ideasfor each target market.

McDonalds Product: New healthy alternativesLikely hurts

short run profits. Price: Maintain low prices with daily specials. Promotion: Use sweepstakes and advertising to

encourage consumption of health alternatives.

Placement: Expand into areas that do notcannibalize current sales. Should help profitsand maintain per-store sales.


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5. Tactics

Specific action plans for each strategy. Who, how, and when.

McDonalds Product: Add salads and soups to menu. Buy

healthier chains and expand them (Boston Market). Price: Keep current prices the same. Price healthy

alternatives at a slight premium. Promotion: Give extra Monopoly pieces to people

who try the healthy alternatives. Advertise newchains heavily. Placement: Open more Boston Markets and

Chipotle Grills and fewer McDonalds.


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6. Financial Schedules

Projected sales, expenses, and profits

McDonalds

Annual Revenue

Existing McDonalds Restaurants: $14 billionNew McDonalds Restaurants: $200 million

Existing Other Restaurants: $500 million

New Other Restaurants: $100 million

Annual CostsAdministrative Costs $10 billion

Marketing Costs $2 billion

Other Costs $1.1 billion

Annual Profit $1.7 billion


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6. Financial Schedules

In your project, these will obviously be fiction. But educated fiction.

Do some research with annual reports (availableon any companys website) to get a big picture.

Get stats to find market size. Guess market share for your product.

Choose price.

This gives revenue (or sales).

Guess expenses (variable and fixed).

Then you have profits too (revenue minus costs).

Dont worry about accounting format unless you

want


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Term Project

Use outside sources for secondarymarket research and for ideas

Quote all sources except the text andlectures. Use the ideas from the textand lectures though!


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Good sources include:

The Wall Street Journal, The Globe and Mailand other newspapers

Business Week and other magazines Statistics Canada Harvard Business Review Sloan Management Review Library books on marketing or your product Financial Post. Canadian Demographics 2002 Canadian Media Directors Council. Media

Digest 2001-2002 Many, many, many others


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Summary

Marketing needs to be carefully plannedand managed.

This takes place on three levels

Strategic Company Planning Strategic Marketing Planning

Annual Marketing Planning


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Next Class: Chapter 3+4

Understanding the Customer

Segmentation and Positioning

Case Analysis: Case 2-1 and questionsp187 (relevant to Chapter 4)

Rotman Marketing Presentation

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