Stmkt class.1-3-spring.2013


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Stmkt class.1-3-spring.2013

  1. 1. 2/17/2013 STRATEGIC MARKETING SPRING.2013 Dr. Amira El-Deeb 1 Course Resources 2Dr.Amira El-Deeb - AUC 1
  2. 2. 2/17/2013 Course Resources 3 Course Resources 4Dr.Amira El-Deeb - AUC 2
  3. 3. 2/17/2013 Course Resources 5 Course Resources 6Dr.Amira El-Deeb - AUC 3
  4. 4. 2/17/2013 Course Resources 7 Course Resources 8Dr.Amira El-Deeb - AUC 4
  5. 5. 2/17/2013 Course Resources  In addition to: ◦ PowerPoint slides ◦ Marketers’ magazine blog  ◦ Marketing from A to Z  Facebook Group 9 Let’s start our trip…  What’s Marketing?  Marketing Concepts  Proactive vs. reactive marketing  Market Driven vs. Market Driving  4 Ps vs. 4 Cs  Need , want & demand  What is Product?  Product mix  Promotional mix  Customer vs. consumer  CPV  PLC  STDP 10Dr.Amira El-Deeb - AUC 5
  6. 6. 2/17/2013 An Overview of Strategic Marketing Dr.Amira El-Deeb 11 What is Marketing?  Marketing as a culture characterized by a set of values and beliefs that highlights the importance of the customer’s interests  Marketing as a strategy concerned with the choice of products, markets and competitive attitude  Marketing as the set of tactics (essentially the seven Ps of the expanded marketing mix) that provides the basis for the implementation of the business and competitive strategy. 12Dr.Amira El-Deeb - AUC 6
  7. 7. 2/17/2013 Market, Sales, Technology Orientation 13 14Dr.Amira El-Deeb - AUC 7
  8. 8. 2/17/2013 What is the difference between… Marketing Strategy & Strategic Marketing Strategy Definition ◦ It comes from the military sciences ◦ It’s The art of planning and directing overall military operations and movements in a war or battle ◦ It’s a plan of action designed to achieve a major or overall aimDr.Amira El-Deeb - AUC 8
  9. 9. 2/17/2013 Strategic Marketing – definition.1  It’s a market-driven process of strategy development, taking into account a constantly changing business environment and the need to achieve high levels of customer satisfaction. Strategic Marketing- definition.2  concerned with the direction and scope of the long-term activities performed by the organization to obtain a competitive advantage to satisfy needs or solving problems  It’s both a philosophy and a set of techniques which address everything about the product 18Dr.Amira El-Deeb - AUC 9
  10. 10. 2/17/2013 STRATEGIC MARKETING PROCESS 19 Strategic Marketing process It’s the long term process of planning, implementing, and controlling different Marketing Strategies. 20Dr.Amira El-Deeb - AUC 10
  11. 11. 2/17/2013 Strategic Marketing process Understanding the Strategic Planning Process  Strategic Planning ◦ The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan 22Dr.Amira El-Deeb - AUC 11
  12. 12. 2/17/2013 Steps of Strategic Planning Most large companies consist of 3 organizational levels: 23 Levels of Strategic Planning  1.The Corporate level : ◦ Defining the purpose and mission of the Company. ◦ Designing the business portfolio. ◦ Planning for new business, downsizing older business  2.The Business unit level : ◦ Business unit mission ◦ Goal formulation ◦ Designing strategies ◦ Developing detailed marketing plans 24Dr.Amira El-Deeb - AUC 12
  13. 13. 2/17/2013 Assessing Organizational Resources and Opportunities  Market Opportunity ◦ A combination of circumstances and timing that permits an organization to reach a target market  Core competencies are matched to opportunities to give competitive advantages Strategic window optimal fit between market opportunities (the key requirements of a market) and core competencies (the particular capabilities of a firm) 25 DEVELOPING VISION & MISSION STATEMENTS 26Dr.Amira El-Deeb - AUC 13
  14. 14. 2/17/2013 Mission /Strategy /Tactics Mission Strategy Tactics Goals Mission /Strategy /Tactics  Mission ◦ The reason for existence for an organization ◦ Answers the question “What business are we in?”  Goals ◦ Provide detail and scope of mission  Strategies ◦ Plans for achieving organizational goals  Tactics ◦ The methods and actions taken to accomplish strategiesDr.Amira El-Deeb - AUC 14
  15. 15. 2/17/2013 Strategy Example Example 1 Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably Vision: Live a good life  Mission: Successful career, good income  Goal: To find a job with good salary  Strategy: Obtain a college education  Tactics: Select a college and a major  Operations: Register, buy books, take courses, study, graduate, get job Developing Vision & Mission  Great benefits can be achieved if an organization: ◦ Systematically revisits their vision and mission statement ◦ Treats them as living documents ◦ Considers them to be an integral part of the firm’s cultureDr.Amira El-Deeb - AUC 15
  16. 16. 2/17/2013 Developing Vision & Mission Participation by as many managers as possible is important in developing the mission because through involvement people become committed to an organization Vision & Mission Statement Vision Statement Mission Statement - Defines your long - Products and - term dream services provided - It’s inspirational - Your business - statement values - WHAT TO DO? HOW TO DO? -Dr.Amira El-Deeb - AUC 16
  17. 17. 2/17/2013 Business vision Desired future state; the aspiration of the Organization  What are our Dreams? Where do we want to go?  What do we want to look like in 5, 10, 15 years? Vision Statement Examples Tyson Foods’ vision is to be the world’s first choice for protein solutions while maximizing shareholder value.Dr.Amira El-Deeb - AUC 17
  18. 18. 2/17/2013 Vision Statement Examples General Motors’ vision is to be the world leader in transportation products and related services. Vision Statement Examples Dell’s vision is to create a company culture where environmental excellence is second nature.Dr.Amira El-Deeb - AUC 18
  19. 19. 2/17/2013 Vision Clear Business Vision Comprehensive Mission Statement Mission Statement Astatement of purpose that distinguishes one organization from other enterprises Adeclaration of an organization’s “reason for being”= “What is our business?”, “what the organization does”,” whom we want to serve.”Dr.Amira El-Deeb - AUC 19
  20. 20. 2/17/2013 Mission Statements are also called  Statement of purpose  Statement of philosophy  Statement of beliefs  Statement of business principles  A statement “defining our business” Products or Services Markets Customers Mission Technology Employees Components Survival, Growth, Public Profits Image Self-Concept PhilosophyDr.Amira El-Deeb - AUC 20
  21. 21. 2/17/2013 Mission Statement Examples Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries in providing quality products with a passion for customer-driven innovation. We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers. We will lead our industry in the application of appropriate technologies. We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance. We will deliver value to our shareholders, positive operating results and industry-leading earnings.Dr.Amira El-Deeb - AUC 21
  22. 22. 2/17/2013 Mission Statement Examples We aspire to make PepsiCo the world’s premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity. Mission Statement examples SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company 44Dr.Amira El-Deeb - AUC 22
  23. 23. 2/17/2013 Mission Statement examples MARRIOTT’S Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value 45 Mission Statement Examples Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best- in-class service and support; flexible customization capability; superior corporate citizenship; financial stability.Dr.Amira El-Deeb - AUC 23
  24. 24. 2/17/2013 Mission Statement Examples Proctor & Gamble will provide branded products and services of superior quality and value that improve the lives of the world’s consumers. As a result, consumers will reward us with industry leadership in sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. Mission Statement Examples L’Oreal, we believe that lasting business success is built upon ethical standards which guide growth and on a genuine sense of responsibility to our employees, our consumers, our environment and to the communities in which we operate.Dr.Amira El-Deeb - AUC 24
  25. 25. 2/17/2013 Nokia Vision : Our vision is a world where everyone can be connected Mission : Nokia helps people to fulfill this need and we help people feel close to what matters to them. We focus on providing consumers with very recent technology that is a joy to use, and beautiful. Principles of Marketing A.U.C - Amira EL-Deeb 49 Otsuka Pharmaceutical Co.  Vision ◦ The creation of products to serve the better health of people around the world.  Mission ◦ Clinical studies are carried in research centers in the USA ,Germany, UK and Japan aiming for products of universal value. With a collaboration among marketing, research sectors so that customers real needs may be feedback for further product development. Principles of Marketing A.U.C - Amira EL-Deeb 50Dr.Amira El-Deeb - AUC 25
  26. 26. 2/17/2013 Benefits of Mission Statements  Better financial results  agreement on purpose  Resource allocation  Establishment of culture  Focal point for individuals  Establishment of work structure  Basis of assessment and control  Resolution of different views Market-Oriented Mission • A mission statement should be: – An “invisible hand” to guide & control everything in the organization. – Not too narrow nor too broad – Fitting of market environment – Based on distinctive competencies – Motivating 1-52Dr.Amira El-Deeb - AUC 26
  27. 27. 2/17/2013 Market-oriented & Product-oriented Mission  Do not offer me things. offer me solutions  Do not offer me clothes. Offer me attractive looks.  Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking.  Do not offer me a house. Offer me security, comfort, and a place that is clean and happy.  Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. Market-oriented & Product-oriented Mission Carrier :  We make air conditioners  (Product oriented )  We provide climate control  ( Market Oriented ) Principles of Marketing 54Dr.Amira El-Deeb - AUC 27
  28. 28. 2/17/2013 Figure 1.4 Philips mission and vision statement Business Goals Goals convert the organization’s mission into tangible actions and results that are to be achieved, often within a specified time frame. Three major categories of goals: 1. Production 2. Financial 3. Marketing 1-56Dr.Amira El-Deeb - AUC 28
  29. 29. 2/17/2013 Production Goals Apply to the use of manufacturing and service capacity and to product and service quality. Financial Goals Focus on profit, cash flow, and shareholder wealth. Marketing Goals customer satisfaction customer value creation 1-57 Marketing objectives  A statement of what is to be accomplished through marketing activities, it should be SMART  Should be stated in clear & Specific words  Should be accurately measurable  Should be ambitious, achievable, attainable to motivate the others  Should be realistic according to market needs  Should specify a time frame for accomplishment e.g. To increase sales of product globally by 30% within 5yrs. 58Dr.Amira El-Deeb - AUC 29
  30. 30. 2/17/2013 1. The Corporate Strategic Planning  B. Designing the Business Portfolio Step 1: Analyze the current business portfolio•  By classifying Strategic Business unit ( SBU )into one of four categories using the:  Market growth rate  SBU’s relative market share within the market.  Through a technique called … BCG “ Boston Consulting Group matrix ” 59 1. The Corporate Strategic Planning  B. Designing the Business Portfolio Step 1: Analyze the current business portfolio•  Market Growth rate % = Total Market Sales this year – Total Market Sales last year % Total Market Sales last Year  Relative Market Share = The Company Sales The Leader Sales 60Dr.Amira El-Deeb - AUC 30
  31. 31. 2/17/2013 Source: “The BCG Portfolio Matrix” from the Product Portfolio Matrix, © 1970, The Boston Consulting Group. Reproduced by permission. FIGURE 2.4 61 BCG MATRIX 1. Question mark: (high growth market but with low market share), question mark units or products require lots of money 2. Stars a market leader unit (or product) in a high growth market, the company must spend money to keep up with the high market growth. 3. Cash cow a product still has the largest relative market share although the market annual growth rate is less than 10 %. Although a cash cow business produces a lot of cash for the company, it doesn’t have to finance expansion because the market growth rate has slowed down. 4. Dogs are products that have weak market share in a low growth markets. 62Dr.Amira El-Deeb - AUC 31
  32. 32. 2/17/2013 After the analysis, the company determines which strategy and budget are to assign to each SBU, and a one of four strategies can be applied: Build where the objective is to increase market share. Hold: here the objective is to preserve market share. More investment should be done to keep that level. Harvest: harvesting involves “milk the business” e.g. eliminating R&D, not replacing the physical plants as it wears out, not replacing sales people, and reducing promotional expenditure. Divest: here is the objective is to sell or liquidate the business because resources can be better used else where. 63 Case: SMART Your company “smart” is working in the manufacturing and marketing of entertainment products producing four products: DVD, Notebook, videos, and radios, as a marketing manager you should determine what objective and which strategy and budget is to assign to each product, Before deciding on a strategy, you should explain the reason for adopting such strategy to such product 64Dr.Amira El-Deeb - AUC 32
  33. 33. 2/17/2013 2007 2008 Total DVD market 10.000.000 11.800.000 Product A Sales 700.000 800.000 SMART DVD 0 200.000 Total Notebook market 18.000.000 20.700.000 SMART Notebook 1.800.000 2.200.000 Product B sales 1.000.000 1.200.000 Total Videos market 7.000.000 7.500.000 SMART Videos 500.000 600.000 Product B sales 250.000 300.000 Total Radio Market 5.500.000 5.590.000 Product A sales 700.000 800.000 SMART radio 400.000 300.000 65 The GE Matrix Weak Medium Strong Invest or Grow Strong Earn selectively Medium Harvest or Divest Weak Business Strength 66Dr.Amira El-Deeb - AUC 33
  34. 34. 2/17/2013 67 GE Matrix  The size of each represents the size of each market.  Within each circle is a clearly defined segment which represents the business’s market share within that market.  The larger the circle, the larger the market, and the larger the segment, the larger the market share. 68Dr.Amira El-Deeb - AUC 34
  35. 35. 2/17/2013 Market attractiveness:  Size of market.  Market rate of growth.  The nature of competition and its diversity.  Profit margin.  Impact of technology, the law, and energy efficiency.  Environmental impact. 69 Competitive position:  Market share.  Management profile.  R & D.  Quality of products and services.  Branding and promotions success.  Place (or distribution).  Efficiency.  Cost reduction. 70Dr.Amira El-Deeb - AUC 35
  36. 36. 2/17/2013 1. The Corporate Strategic Planning Planning for new Businesses• a. Intensive growth Current Product New Product Current Market Product Market Penetration Development New Market Diversification Market Development 71 Figure 1.6 Alternative growth directionsDr.Amira El-Deeb - AUC 36
  37. 37. 2/17/2013  Market penetration  where a company would attempt to make more sales to current customers without changing its products.  Market development  a situation where a company would identify and develop new markets for its current products.  Product development = a company would modify or create new products and offer them to current markets.  Diversification = companies start up or buy businesses outside of its current products and markets. 73 1. The Corporate Strategic Planning : Planning for new Businesses• b. Integrative Growth  Backward integration: ◦ acquiring supplier  Forward integration: ◦ acquiring distributor 74Dr.Amira El-Deeb - AUC 37
  38. 38. 2/17/2013 2. Business unit strategic planning ◦ A. Business unit mission  We redefine the mission of our business but for each SBU ◦ B. SWOT analysis  Analyze the environment around us, externally & internally ◦ C. Setting the goals & objectives ◦ D. Developing Marketing strategy & plan ◦ E. Implementation & Feedback 75 SWOT Analysis  An assessment of the organization’s strengths, weaknesses, opportunities, and threats ◦ Strengths  competitive advantages or core competencies ◦ Weaknesses  limitations on competitive capability ◦ Opportunities  favorable conditions in the environment ◦ Threats  conditions or barriers to reaching objectives 76Dr.Amira El-Deeb - AUC 38
  39. 39. 2/17/2013 The Four-Cell SWOT Matrix Source: Reproduced from Nigel F. Piercy, Market-Led Strategic Change. Copyright © 1992, p. 371, with permission from Elsevier Science. FIGURE 2.2 77 TWOS Analysis 78Dr.Amira El-Deeb - AUC 39