Chapter 1: Marketing in a Changing World

2,510 views
2,446 views

Published on

Published in: Business
0 Comments
3 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,510
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
90
Comments
0
Likes
3
Embeds 0
No embeds

No notes for slide
  • The Marketing Communications Mix This CTR relates to the material on pp. 422-423. Tools of The Marketing Communications Mix Advertising. Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising often utilizes mass media and may be adapted to take advantages of a given mediums strengths to convey information. Sales Promotion. Sales promotions consist of short-term incentives to encourage purchase of sales of a product or service. Limited time offers or dated coupons are common sales promotions. Public Relations. Public relations is an on-going process of building good relations with the various publics of the company. Key elements in the process are obtaining favorable publicity, building and projecting a good "corporate image," and designing an information support and response team to respond proactively to unfavorable rumors, stories, or events. Personal Selling. Personal selling describes the use of oral presentations in a conversation with one or more prospective buyers for the purposes of making a sale. Personal selling combines product information and benefits with the interpersonal dynamics of the sales person. Good interpersonal relationship skills and effective oral communication skills are needed for personal selling. Direct Marketing. Directed communications with carefully targeted individual consumers to obtain an immediate response.
  • Analyzing Current SBU’s: Boston Consulting Group Approach This CTR corresponds to Figure 2-2 on p. 39 and relates to the discussion on pp. 38-39. Designing the Business Portfolio The business portfolio is the collection of businesses and products that make up the company. In portfolio analysis, management evaluates the businesses for their strategic fit in meeting company objectives. Strategic Business Units (SBUs) consist of separate units of the company that can be planned independently from other company businesses. The BCG Matrix Stars. High growth, high share businesses. Stars often require heavy investment to build/maintain share in rapidly expanding markets. You may wish to discuss the importance of market share to product profitability at this point. Cash Cows . Low growth, high share businesses. Cows generate profits for investment in other businesses. Question Marks. High growth, low share businesses. Strategy must decide between further investment to move question marks to star status or phasing the product out. Dogs . Low growth, low share. Dogs are often targets for divestment, but may still be profitable and/or contribute to other organizational goals.
  • Analyzing Current SBU’s: Boston Consulting Group Approach This CTR corresponds to Figure 2-2 on p. 39 and relates to the discussion on pp. 38-39. Designing the Business Portfolio The business portfolio is the collection of businesses and products that make up the company. In portfolio analysis, management evaluates the businesses for their strategic fit in meeting company objectives. Strategic Business Units (SBUs) consist of separate units of the company that can be planned independently from other company businesses. The BCG Matrix Stars. High growth, high share businesses. Stars often require heavy investment to build/maintain share in rapidly expanding markets. You may wish to discuss the importance of market share to product profitability at this point. Cash Cows . Low growth, high share businesses. Cows generate profits for investment in other businesses. Question Marks. High growth, low share businesses. Strategy must decide between further investment to move question marks to star status or phasing the product out. Dogs . Low growth, low share. Dogs are often targets for divestment, but may still be profitable and/or contribute to other organizational goals.
  • Product/Market Expansion Grid This CTR corresponds to Figure 2-4 on p. 41 and relates to the material on pp. 41-42. Developing Growth Strategies Market Penetration. A penetration strategy involves increasing sales to present target customers. The product itself remains unchanged although there may be a substantial change in how the product is promoted. You may wish to link market penetration with other company-wide strategies such as market leader if appropriate to course progress at this time. Market Development. A market development strategy involves identifying new segments for the current products offered by the company. Market development can be successful for old products like Arm & Hammer Baking Soda (used as a refrigerator deodorant). You may wish to link market development to emerging technologies such as geodemographics for identifying new market segments. Product Development. A product development seeks growth by modifying existing products or introducing new products to serve an existing market. Line extensions in snack foods are often useful for illustrating this strategy to students. You may ask your class how many flavors of Doritos they can name as an example. Diversification. This strategy involves taking profits from existing products or businesses to acquire or enter new markets, usually in different industries from previous company efforts. RJR buying Nabisco is an example.
  • The Marketing Process This CTR corresponds to Figure 2-5 on p. 45 and to material on pp. 44-45. Teaching Tip: This material previews the focus on later chapters. You may wish to show this CTR as an introduction to the following discussion on target consumers. The lecture information below is provided if you wish to cover the strategic background information prior to coverage of details. The Marketing Process This begins an extended discussion of planning, organization, and specific-actions that includes slide transparencies on the 4 Ps, factors affecting marketing strategy decisions, and a general outline of the contents of a marketing plan. These topics are covered in more detail on subsequent CTRs. Marketing Analysis (and Planning). Marketing must conduct a complete analysis of its situation and all relevant environmental influences. Further, marketing must provide each functional area of the company with the information from this analysis that affects their area-specific tasks. Selecting Target Markets. In evaluating analysis, it should become clear that the company cannot service each market opportunity equally well. Target market selection occurs by matching strengths and weaknesses identified in analysis to particular target markets. Marketing Implementation. Plans must be coordinated and launched with realistic logistical support if they are to succeed. Marketers must be able to translate plans into concrete action. Marketing Control. The need to measure, assess and evaluate performance all relate to control issues. These are discussed in more detail later.
  • Chapter 1: Marketing in a Changing World

    1. 1. Topic 2 Developing and Implementing Strategic Marketing Plans Marketing Management (MAR4803) By Kanghyun Yoon
    2. 2. Issues To Be Discussed <ul><li>Let’s consider the following issues to understand what the marketing management is. </li></ul><ul><li>Issue 1: How to deliver the values to the customer? </li></ul><ul><ul><li>The important concepts for this issue are …. </li></ul></ul><ul><ul><li>Two important formulas are …. </li></ul></ul><ul><li>Issue 2: What kinds of strategic planning process do we need to consider? </li></ul><ul><ul><li>The important concepts for this issue are …. </li></ul></ul><ul><li>Issue 3: How to design a strategic marketing plan? </li></ul><ul><ul><li>Consider several components that a strategic marketing plan must possess. </li></ul></ul>
    3. 3. Issue 1: How to Deliver the Customer Value?
    4. 4. How to Improve the Customer Value? <ul><li>Consider how the following companies enhance their performance? </li></ul><ul><ul><li>Examples: Wal-Mart, Dell, Amazon.com, Fedex Express, e-Bay (online auctioneer) or Mobshop.com (group buying company), and so on. </li></ul></ul><ul><ul><ul><li>They are enhancing their customer values at the company level. </li></ul></ul></ul><ul><ul><ul><li>An important formula is …. </li></ul></ul></ul><ul><ul><li>Examples: Dell and Nike, Sonymusic.com, BMG and Columbia House music club, Amazon.com and Barnes and Noble, Carnival, Epinions.com, and so on. </li></ul></ul><ul><ul><ul><li>They are improving the customer values at the product/brand level. </li></ul></ul></ul><ul><ul><ul><li>An important formula is …. </li></ul></ul></ul><ul><li>To deliver the customer value, it is important to understand the following concepts. </li></ul><ul><ul><li>Value chain (system) and three generic competitive strategies: </li></ul></ul><ul><ul><li>Value delivery process: </li></ul></ul>
    5. 5. The Value Chain System M W Customer R R R W S S S F Supply Chain Function Distribution Channel Function
    6. 6. Three Generic Competitive Strategies Differentiation Cost Leadership Focus on Cost Focus on Differentiation Competitive Advantage Lower Cost Differentiation Market Scope Narrow Broad
    7. 7. Basic Tasks of Marketing Management <ul><li>What kinds of tasks the marketing managers do toward building profitable long-term relationship with the customers? </li></ul><ul><li>Task 1: Capturing Marketing Insights from the Changing Environment. </li></ul><ul><ul><li>The detailed tasks are …. </li></ul></ul><ul><li>Task 2: Connecting with Customers. </li></ul><ul><ul><li>The detailed tasks are …. </li></ul></ul><ul><li>Task 3: Developing an Effective Marketing Mix. </li></ul><ul><ul><li>The detailed tasks are …. </li></ul></ul><ul><li>Task 4: Developing and Implementing Marketing Plans. </li></ul><ul><ul><li>The detailed tasks are …. </li></ul></ul>
    8. 8. Value Creation and Delivery Process <ul><li>Consider how the marketing management process is similar to the value creation and delivery sequence in page 36 of the textbook. </li></ul><ul><li>The Stages of Marketing Management Process: </li></ul><ul><li>Stage 1: Identifying marketing opportunities or problems. </li></ul><ul><ul><li>Key purpose: Understand major environmental forces or trends that link to both marketing opportunities and threats. </li></ul></ul><ul><li>Stage 2: Developing a well-defined target market . </li></ul><ul><ul><li>Key purpose: Identify different segment within the product market and select the most promising segment(s) as the target market. </li></ul></ul><ul><li>Stage 3: Designing a new product by understanding the customers. </li></ul><ul><ul><li>Key purpose: Design a new product by understanding potential customers’ needs and their purchasing patterns. </li></ul></ul><ul><li>Stage 4: Developing a marketing mix. </li></ul><ul><ul><li>Key purpose: Design a competitive marketing strategy by blending product, price, promotion, and place strategies. </li></ul></ul><ul><li>Stage 5: Managing the marketing efforts. </li></ul><ul><ul><li>Key purpose: Measure and evaluate the performances of current marketing strategy. </li></ul></ul>
    9. 9. Issue 2: Types of Strategic Planning Process
    10. 10. Three Types of Strategic Planning <ul><li>The textbook mentions three types of strategic planning: </li></ul><ul><ul><li>Corporate and division strategic planning. </li></ul></ul><ul><ul><li>Business strategic planning. </li></ul></ul><ul><ul><li>Product or marketing strategic planning. </li></ul></ul><ul><li>Corporate Strategic Planning: </li></ul><ul><ul><li>Defining the corporate mission -> Defining the business -> Assessing growth opportunities -> Organization and organizational culture. </li></ul></ul><ul><li>Business Strategic Planning: </li></ul><ul><ul><li>Business mission -> SWOT analysis -> Goal formulation -> Strategy formulation -> Program formulation -> Implementation -> Feedback and control. </li></ul></ul><ul><li>Product/Marketing Strategic Planning: </li></ul><ul><ul><li>Develop a marketing plan by following the marketing process (e.g., value creation and delivery process). </li></ul></ul>
    11. 11. Strategic Planning Process <ul><li>Companies should find their right game plan (e.g., strategic planning) for a profitable and sustainable business future. </li></ul><ul><ul><li>Example: Levi Strauss & Co. </li></ul></ul><ul><li>Strategic Planning involves the development of an overall company strategy for long-run survival and growth. </li></ul><ul><ul><li>It is the management process of developing and maintaining a strategic fit between company’s goals and capabilities and its changing marketing opportunities. </li></ul></ul><ul><li>This strategic planning process involves: </li></ul><ul><ul><li>Defining the Company Mission : Statement of an organization’s purpose; should be market oriented. </li></ul></ul><ul><ul><li>Setting Company/Business Objectives and Goals : Supporting goals and objectives to guide the entire company. </li></ul></ul><ul><ul><li>Designing the Business Portfolio : Collection of businesses and products that make up the company. </li></ul></ul><ul><ul><li>Planning Functional Strategies : Detailed planning of each department to accomplish strategic objectives and goals. </li></ul></ul>
    12. 12. Designing the Business Portfolio <ul><li>Given the company’s mission and objectives, two Issues for long-run survival and growth should be considered … </li></ul><ul><ul><li>Does my company have a best business portfolio currently? </li></ul></ul><ul><ul><li>How to develop strategies for future growth? </li></ul></ul><ul><li>Issue One: Analyzing its current business portfolio . </li></ul><ul><li>The best business portfolio is the one that best fits the company’s strengths and weaknesses to business opportunities in the environment. </li></ul><ul><li>The company must: </li></ul><ul><ul><li>analyze its current business portfolio (e.g., Strategic Business Units, SBU’s), </li></ul></ul><ul><ul><li>decide which SBU’s should receive more, less, or no investment, </li></ul></ul><ul><ul><li>develop growth strategies for adding new products or businesses to the portfolio. </li></ul></ul><ul><li>Analytical tools: Boston Consulting Group (BCG) Growth-Share Matrix or General Electric (GE) Matrix . </li></ul>
    13. 13. BCG Growth-Share Matrix <ul><li>Question Marks </li></ul><ul><li>High growth, low share </li></ul><ul><li>Build into Stars/ phase out </li></ul><ul><li>Requires cash to hold </li></ul><ul><li>market share </li></ul><ul><li>Stars </li></ul><ul><li>High growth & share </li></ul><ul><li>Profit potential </li></ul><ul><li>May need heavy </li></ul><ul><li>investment to grow </li></ul><ul><li>Cash Cows </li></ul><ul><li>Low growth, high share </li></ul><ul><li>Established, successful </li></ul><ul><li>SBU’s </li></ul><ul><li>Produces cash </li></ul><ul><li> Dogs </li></ul><ul><li>Low growth & share </li></ul><ul><li>Low profit potential </li></ul>Relative Market Share High Low Market Growth Rate Low High
    14. 14. Developing Strategies for Future Growth <ul><li>Issue Two: Developing Strategies for Future Growth . </li></ul><ul><li>The second issue for strategic planning is to find appropriate businesses or products that the company should consider in the future, e.g., growth strategies. </li></ul><ul><li>Two useful devices for identifying growth opportunities are the SWOT analysis and the product-market expansion grid for identifying three intensive growth strategies (Ansoff 1957). </li></ul><ul><li>The SWOT analysis: </li></ul><ul><ul><li>Consider the Market Opportunity Analysis (MOA) </li></ul></ul><ul><li>The product-market expansion grid has four windows : </li></ul><ul><ul><li>Market Penetration : increase sales to present customers with current products. How? Cut prices, increase advertising, get products into more stores. </li></ul></ul><ul><ul><li>Market Development : develop new markets with current products. How? Identify new demographic or geographic markets. </li></ul></ul><ul><ul><li>Product Development : offering modified or new products to current customers. How? New styles, flavors, colors, or modified products. </li></ul></ul><ul><ul><li>Diversification : new products for new markets. How? Start up or buy new businesses. </li></ul></ul>
    15. 15. Product-Market Expansion Grid 1. Market Penetration 2. Market Development 3. Product Development 4. Diversification Current Markets New Markets Current Products New Products Product-Market Expansion Grid
    16. 16. Planning Functional Strategies <ul><li>Given the results of strategic planning at the company level, all the functional departments need to work together to accomplish its strategic objectives. </li></ul><ul><li>Marketing managers should find their own roles and action plans, which can be summarized into a strategic marketing plan that includes different marketing tasks in the marketing management process (Kotler and Armstrong 2004). </li></ul><ul><li>Tasks in the Marketing Management Process </li></ul><ul><li>Task 1: Identifying marketing opportunities and/or problems . </li></ul><ul><ul><li>Monitor major environmental forces that create both opportunities and threats. </li></ul></ul><ul><li>Task 2: Developing a well-defined target market. </li></ul><ul><ul><li>Identify most promising segment(s) that have homogeneous needs. </li></ul></ul><ul><li>Task 3: Creating the value (i.e., marketing offers) by understanding the customers . </li></ul><ul><ul><li>Understand the customers in terms of their needs, their buying patterns, and their personal characteristics. </li></ul></ul><ul><ul><li>Develop a right product to satisfy the needs of the customers within each segment. </li></ul></ul><ul><li>Task 4: Integrating all the marketing activities by developing a marketing mix . </li></ul><ul><ul><li>Design a viable marketing strategy by blending 4 Ps such as product, price, promotion, and place strategies. </li></ul></ul><ul><li>Task 5: Managing the marketing efforts . </li></ul><ul><ul><li>Measure and evaluate the performances of implemented marketing strategies. </li></ul></ul>
    17. 17. Factors that affect Marketing Process Target Consumers Product Place Price Promotion Marketing Implementation Marketing Planning Marketing Control Marketing Analysis Competitors Marketing Intermediaries Publics Suppliers Demographic- Economic Environment Technological- Natural Environment Political- Legal Environment Social- Cultural Environment
    18. 18. Issue 3: Contents of Strategic Marketing Plan
    19. 19. Components of Strategic Marketing Plan <ul><li>Executive Summary </li></ul><ul><li>Situation Analysis </li></ul><ul><ul><li>Industry or category analysis </li></ul></ul><ul><ul><li>Competitive situation analysis </li></ul></ul><ul><ul><li>Customer analysis </li></ul></ul><ul><ul><li>Environmental analysis </li></ul></ul><ul><li>Company and Marketing Objectives </li></ul><ul><ul><li>Company, marketing, and financial goals or objectives </li></ul></ul><ul><li>Marketing Strategy </li></ul><ul><ul><li>Definition of target market after segmentation, targeting, and positioning procedures </li></ul></ul><ul><ul><li>Four Ps or marketing mix (product, price, promotion, and place strategies) </li></ul></ul><ul><li>Financial Projections and Action Programs </li></ul><ul><ul><li>Financial projections for budgets and sales forecasting </li></ul></ul><ul><ul><li>Action programs </li></ul></ul><ul><li>Implementation Controls of the marketing efforts. </li></ul>
    20. 20. Reference <ul><li>Blackwell, Roger D., Paul W. Miniard, and James F. Engel (2001), Consumer Behavior, 9 th ed., Harcourt College Publishers. </li></ul><ul><li>Ferrell, O. C. and Michael D. Hartline (2008), Marketing Strategy , 4 th ed., Thomson: South-Western, Ohio. </li></ul><ul><li>Kotler, Philip and Kevin Lane Keller (2007), A Framework for Marketing Management , 3 rd ed., Pearson: Prentice-Hall, New Jersey. </li></ul><ul><li>Kotler, Philip and Kevin Lane Keller (2007), Marketing Management , 12 th ed., Pearson: Prentice-Hall, New Jersey. </li></ul><ul><li>Kotler, Philip and Gary Armstrong (2004), Principles of Marketing , 10 th ed., Prentice Hall. </li></ul><ul><li>Lehmann, Donald R. and Russell S. Winer (2005), Analysis for Marketing Planning , 6 th ed., McGraw-Hill, Boston. </li></ul><ul><li>Winer, Russell S. (2007), Marketing Management , 3 rd ed., Pearson: Prentice-Hall, New Jersey. </li></ul><ul><li>Zikmund, William G. (2003), Essentials of Marketing Research , 2 nd ed., Thomson: South-Western. (see chapter 1) </li></ul>

    ×