MKTG 101 Week 3

MKTG101 Marketing Fundamentals Week 3 Strategic and Marketing Planning MKTG101 2005 Week 3 1 Strategic Marketing Planning • This is a process of setting out the formal plans that are to be followed so that the desired outcomes may be achieved by the corporation in the longer term (1-2 years) • It is a STATEMENT of INTENT on the part of senior management – what steps the corporation intends to take to arrive at their desired end-point. MKTG101 2005 Week 3 2 Strategic choice comes from... • A Situation analysis: – External Threats and Opportunities – Internal Strengths and Weaknesses • Decision criteria: – Longer term Vision/Mission/Objectives – Financial criteria surrounding the decision MKTG101 2005 Week 3 3 The Strategy Hierarchy Corporate Level Corporate Strategy • Mission and vision • Objectives • Business portfolio strategy • Resource development • Corporate values Strategic Business Unit Level SBU Strategy Functional Level of Marketing Strategy SBU Marketing objectives Product markets strategies SBU Strategy • Business definition • Objectives • Product market portfolio • Competitive strategy • Resource allocation and management R&D Strategy Technology Product development SBU Strategy Production and operation strategy Finance and administration Strategy Human resources Strategy 4 MKTG101 2005 Week 3 Corporate, Business and Marketing Strategy Model • Business portfolio • Capital investments and resource allocation • Corporate culture • Corporate structure • Product/market portfolio • Resource allocation • Product-markets • Business culture • Strategic cost management • • • • • Markets Products and services Profit-yielding strategies Brand management Profit improvement Corporate Strategy • Building core competencies Focus Economic value added Shareholder Value Business Strategy • Distinctive competencies • Developing competitive position • Competitive advantage Marketing Strategy • Developing market position • Customer satisfaction Focus Economic value added Business Value Focus Customer value creation, maintenance and defence Customer Value 5 MKTG101 2005 Week 3 Steps in Strategic Planning Corporate Level Defining the Organization Vision/Mission Defining Organization Objectives and Goals Designing the Portfolio (mix of resources) Organization Level Planning, Marketing and Other Functional Strategies MKTG101 2005 Week 3 6 Planning Q’ns and terms • Vision: “What sort of organization do we want to become?” • Mission: Why are we in business? • Objective: a shorter term goal answering the Mission and helping to achieve the longerterm Vision. Obj’s have both time and a value components – e.g.10% incr in Mkt Share in 12 months MKTG101 2005 Week 3 7 Planning terms • Strategy: a description of the method(s) the Org will attempt to achieve its objectives. • Tactic: the short term application of the strategy – also known as ACTION plans – what is actually attempted to achieve Obj’s. MKTG101 2005 Week 3 8 Marketing plan structure Executive Summary Situation Analysis Action Plans/Programs Objectives Financial Analysis Strategies Monitoring & Assessment MKTG101 2005 Week 3 9 Executive Summary The marketing plan should open with a brief summary of the key points in the plan. • This summary is aimed at senior management to enable them to grasp quickly the plan’s major thrust, its goals and recommendations. • The summary should be no more than one page long. MKTG101 2005 Week 3 10 Situation analysis • Market analysis: key market characteristics e.g., share, size, structure, trends • Macro-environment: political, legal, economic, social, technical factors • Micro-environment: customers, suppliers, competitors, intermediaries MKTG101 2005 Week 3 11 Situation analysis After summarising the current marketing situation, the marketer proceeds to identify the major issues facing the product: Internal External MKTG101 2005 Week 3 12 Objectives After the marketer has summarised the issues involved with the product line, he or she must decide on the strategic plan’s objectives. Two conditions must be set when writing objectives : Usually one sets:- • A financial (eg ROI) condition and • A Marketing condition (eg Market share). MKTG101 2005 Week 3 13 SMART Objectives • • • • • Specific Measurable Achievable Realistic Timely MKTG101 2005 Week 3 14 2 main components of Mktg strategy • 1 Selecting the TARGET mkt by – i) Segmenting; – ii) Targeting and – iii) Positioning then • 2 Creating the appropriate MKTG MIX to satisfy the N&W’s of the chosen target. MKTG101 2005 Week 3 15 Stages in Target marketing • Segmentation: the process of dividing a large, heterogeneous (made up of many DIFFERENT parts) group into more than one separate, more homogeneous (made up of very SIMILAR parts) groups • Targeting: selecting the most important segment(s) • Positioning: the target market’s image of the marketing mix MKTG101 2005 Week 3 16 Creating sustainable competitive advantage using… Differentiation strategies – delivering perceived superior G&S to target mkt quality; features; brand name; after-sales service; other “mix” variables; Employing TQM strategies benchmarking; empowerment Innovation and creativity MKTG101 2005 Week 3 17 “MIX” variables • Product: The bundle of benefits offered to the customer • Price: the things of value exchanged for the product • Placement: distributing the product from point and time of production to point and time of consumption • Promotion: communicating the marketer’s offer to the customer to solicit a purchase Timetable: when each key activity in the plan will be completed MKTG101 2005 Week 3 18 Business Portfolios Market Growth Rate High Stars Question Marks ?? ? ?? Cash Cows Dogs Low High Low The BCG Matrix Relative Market Share MKTG101 2005 Week 3 19 Ansoff’s Growth Vector Matrix PRODUCTS / SERVICES Present Present New Product / Service Development – usually more R&D research & development into new G&S MARKET Market penetration to move deeper into the present mkt by taking share from competitors New to get more people to enter the mkt & buy G&S Market Development – to move away from present situation Diversification – MKTG101 2005 Week 3 20 Action Programs The marketing plan must specify the broad marketing programs designed to achieve the business objectives. The plan must explain the following in detail: • • • • What will be done? When will it be done? Who will do it? How much will be spent? MKTG101 2005 Week 3 21 Financial Analysis Marketing uses the standard accounting tools employed by the organisation when assessing all marketing activity. • Projected profit-and-loss statement – Revenue: forecast sales volume in units and the average price. – Expenses: the cost of production, distribution and marketing, fixed cost allocations etc. – Profit = Total revenue - total costs MKTG101 2005 Week 3 22 Monitoring and Assessment This section provides the measurements that will be used to control and evaluate the marketing strategies • Specify – Targets: what will be achieved – Timing: when it will be achieved – Criteria: how achievement of the plan meets the firm’s decision criteria MKTG101 2005 Week 3 23