Bus169 Kotler Chapter 02


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Bus169 Kotler Chapter 02

  1. 1. Strategic Marketing and Planning 0
  2. 2. Chapter Objectives <ul><li>Explain strategic planning. </li></ul><ul><li>Describe the marketing management and planning process. </li></ul><ul><li>Identify the relevant sections of a marketing plan and specify the contents of each. </li></ul><ul><li>Discuss the development of marketing strategy and its implementation. </li></ul><ul><li>Explain how marketing organisations control and evaluate their marketing performance. </li></ul>0
  3. 3. Marketing Process <ul><li>The process of analysing marketing opportunities; researching and selecting target markets; designing appropriate market strategies; planning marketing programs; implementing and controlling the marketing effort to achieve objectives. </li></ul><ul><li>i.e. Developing the appropriate MIX. </li></ul>0
  4. 4. Strategic Planning <ul><li>Most firms operate according to formal plans. </li></ul><ul><li>Proper planning can help the firm to better understand the changing business environment </li></ul><ul><li>Managers are often so busy that they claim there is no time for planning. </li></ul><ul><li>Those firms ‘failing to plan, are planning to fail’. </li></ul><ul><li>The need for greater flexibility in response to change has led to an increase in the use of scenario planning. </li></ul>0
  5. 5. Strategic Planning <ul><li>The process of developing and maintaining a strategic fit between the organisation’s goals and capabilities in the light of changing marketing opportunities. </li></ul><ul><li>It relies on developing a: </li></ul><ul><ul><li>Clearly defined Company mission </li></ul></ul><ul><ul><li>Set of specific Business Objectives </li></ul></ul><ul><ul><li>Strong Business Portfolio of products </li></ul></ul><ul><ul><li>Set of Coordinated Functional Strategies </li></ul></ul>0
  6. 6. Strategy Hierarchy <ul><li>Corporate Strategy level </li></ul><ul><li>Strategic Business Unit (SBU) Level </li></ul><ul><li>Individual Functional Level </li></ul><ul><ul><li>e.g. a strategy for Manufacturing function; </li></ul></ul><ul><ul><li> or for the Marketing division </li></ul></ul>0
  7. 7. Figure 2.1 The Strategy Hierarchy
  8. 8. Marketing Management and Planning <ul><li>Involves four levels of decision making: </li></ul><ul><ul><li>Corporate. </li></ul></ul><ul><ul><li>Divisional. </li></ul></ul><ul><ul><li>Business unit. </li></ul></ul><ul><ul><li>Product. </li></ul></ul><ul><li>The organisation’s HO is responsible for a corporate strategic plan; each division develops a divisional plan that allocates funds to each SBU in the division. </li></ul><ul><li>Marketing plans operate at two levels; the strategic; and the tactical. </li></ul>
  9. 9. The company's overall mission and objectives are defined by the: <ul><li>functional plan </li></ul><ul><li>strategic plan </li></ul><ul><li>marketing plan </li></ul><ul><li>customer analysis </li></ul><ul><li>CEO </li></ul>
  10. 10. Marketing or Business Plan? <ul><li>Marketing planning procedures and content can vary considerably between companies. </li></ul><ul><li>The plan can be referred to as: </li></ul><ul><ul><li>a ‘business plan’ </li></ul></ul><ul><ul><li>a ‘marketing plan’, and sometimes </li></ul></ul><ul><ul><li>an ‘operating plan’. </li></ul></ul>0
  11. 11. Cont’d <ul><li>Business plan incorporates the plans for all of the firm’s functions, including - R & D; Production; Finance; Human resources; IT; and Marketing. </li></ul><ul><ul><li>The marketing plan has its focus on customer acquisition and retention, and the resources required to implement specific marketing functions (such as,research; selling; advertising; sales promotion). </li></ul></ul><ul><ul><li>In most cases, the marketing plan will cover one year. </li></ul></ul><ul><ul><li>Plans can vary in their length and complexity. </li></ul></ul><ul><ul><li>Some shortcomings of marketing plans are: </li></ul></ul><ul><ul><li> lack of realism; insufficient market/ competitive analysis; </li></ul></ul><ul><ul><li>too much short-term focus; non-inclusion of other groups. </li></ul></ul>0
  12. 12. Figure 2.2 Analysis, Planning, Implementation and Control
  13. 13. Table 2.1 Contents of a Marketing Plan
  14. 14. Nature and Contents of a Plan <ul><li>Executive Summary </li></ul><ul><ul><li>The marketing plan should open with a brief summary of the key elements. </li></ul></ul><ul><ul><li>This summary is aimed at the senior management to enable them to quickly grasp the plan’s primary emphasis; its goals and its major recommendations. </li></ul></ul><ul><ul><li>The summary would often be no more than a couple of pages in length. </li></ul></ul>0
  15. 15. The Nature and Contents of a Marketing Plan <ul><li>Current marketing situation </li></ul><ul><ul><li>This section will present relevant background data on the target market; the product; the competition; distribution; and the macro-environment. </li></ul></ul><ul><ul><li>The data can be gathered from a variety of sources, including from a database of information maintained/ updated by the firm. </li></ul></ul>0
  16. 16. The Nature and Contents of a Marketing Plan <ul><li>Product Situation </li></ul><ul><ul><li>This states the sales, product prices, contribution margin and profits for past years. </li></ul></ul><ul><li>Competitive Situation </li></ul><ul><ul><li>Identify and describe the main competitors in terms of size, goals, market share, product quality, marketing strategies and other characteristics. </li></ul></ul><ul><li>Distribution Situation </li></ul><ul><ul><li>This presents data on the size and importance of each marketing (distribution) channel. </li></ul></ul><ul><li>Macro-environment Situation </li></ul><ul><ul><li>A brief summary of the broad macro trends-demographic, economic, technological, political/legal and sociocultural that affect the product line’s future. </li></ul></ul>
  17. 17. The Nature and Contents of a Marketing Plan <ul><li>Opportunity and issue analysis </li></ul><ul><ul><li>After summarising the current marketing situation, the manager would need to identify the major: </li></ul></ul><ul><ul><ul><li>Opportunities and Threats (internal) </li></ul></ul></ul><ul><ul><ul><li>Strengths and Weaknesses (external) </li></ul></ul></ul><ul><ul><ul><li>Issues </li></ul></ul></ul>0
  18. 18. The Nature and Contents of a Marketing Plan <ul><li>Objectives </li></ul><ul><ul><li>After summarising the issues involved with the product line, the manager must decide on the objectives of the plan. </li></ul></ul><ul><ul><li>Two types of objectives must be set: </li></ul></ul><ul><ul><ul><li>Financial </li></ul></ul></ul><ul><ul><ul><li>Marketing </li></ul></ul></ul>0
  19. 19. The Nature and Contents of a Marketing Plan <ul><li>Marketing strategy </li></ul><ul><ul><li>The marketing logic by which the business unit hopes to achieve its marketing objectives. Marketing strategy consists of specific strategies for target markets; each element of the mix; and marketing expenditure level. </li></ul></ul><ul><ul><li>The marketing strategy often comes after the positioning strategy statement. </li></ul></ul>0
  20. 20. The Nature and Contents of a Marketing Plan <ul><li>Action programs </li></ul><ul><ul><li>Plan must specify the broad marketing activities designed to achieve the business objectives. Each marketing strategy element must be expanded to answer: </li></ul></ul><ul><ul><ul><li>What will be done? </li></ul></ul></ul><ul><ul><ul><li>When will it be done? </li></ul></ul></ul><ul><ul><ul><li>Who will do it? </li></ul></ul></ul><ul><ul><ul><li>How much will be spent? </li></ul></ul></ul>0
  21. 21. The Nature and Contents of a Marketing Plan <ul><li>Projected profit-and-loss statement </li></ul><ul><ul><li>Action plans allow the manager to build a supporting budget. </li></ul></ul><ul><ul><ul><li>On the revenue side, the budget shows the forecast sales volume in units and the average price. </li></ul></ul></ul><ul><ul><ul><li>On the expense side, it shows the cost of production; physical distribution; and marketing; broken down into detailed categories. The difference between revenues and sales is the projected profit. </li></ul></ul></ul>0
  22. 22. Action programs outline: <ul><li>what will be done </li></ul><ul><li>when it will be done </li></ul><ul><li>who will do it </li></ul><ul><li>how much will be spent </li></ul><ul><li>all of the above </li></ul>
  23. 23. The Nature and Contents of a Marketing Plan <ul><li>Controls </li></ul><ul><ul><li>This section outlines the controls for monitoring the plan’s progress. Typically, the goals and budget are spelled out for each month or for each quarter. </li></ul></ul><ul><ul><li>Senior management can review the results of each period and identify businesses that are not attaining their goals. </li></ul></ul><ul><ul><li>Managers of those businesses that are not performing satisfactorily, must explain what is happening and the actions they will take to achieve plan. </li></ul></ul><ul><ul><li>A contingency plan outlines the steps that management would take in response to specific adverse developments. The purpose is to encourage managers to think about any difficulties that might lie ahead. </li></ul></ul>0
  24. 24. The Nature and Contents of a Marketing Plan <ul><li>Analysing market opportunities requires: </li></ul><ul><ul><li>a reliable marketing information system. </li></ul></ul><ul><ul><li>appropriate market research to gather information about the marketing environment (macro/ micro). </li></ul></ul><ul><ul><li>an understanding of consumer markets. </li></ul></ul><ul><ul><li>close monitoring of competitor activities. </li></ul></ul><ul><ul><li>Macro - economic; political; technol; cultural (indirect) </li></ul></ul><ul><ul><li>Micro - those that directly affect ability to perform </li></ul></ul>0
  25. 25. <ul><li>How does your marketing plan measure up? </li></ul><ul><li>Before implementing the plan, it can be useful to evaluate it by answering the following questions: </li></ul><ul><ul><li>Do your marketing objectives relate directly to: </li></ul></ul><ul><ul><li>the company’s strategic initiatives? </li></ul></ul><ul><ul><li>what was learned in the situational analysis? </li></ul></ul><ul><ul><li>the capacity of the current marketing mix to handle them? </li></ul></ul><ul><ul><li>the firm’s strengths, and to the opportunities available? </li></ul></ul><ul><ul><li>the firm’s weaknesses, and to the threats that might endanger it? </li></ul></ul>Evaluating the Marketing Plan 0
  26. 26. <ul><ul><li>Are the marketing objectives clear, measurable statements of what is to be achieved? </li></ul></ul><ul><ul><li>Do the objectives, strategies and tactics relate to each other? </li></ul></ul><ul><ul><li>Does each strategy in the plan contain a cost/ benefit evaluation? </li></ul></ul><ul><ul><li>Is everyone involved in the implementation included in the planning process in some way? </li></ul></ul><ul><ul><li>Is the business’s vision truly a ‘shared vision’? </li></ul></ul><ul><ul><li>If each of these questions can be answered positively, then it is likely the plan is ready for implementation. </li></ul></ul>Cont’d 0
  27. 27. <ul><li>Marketing implementation is the process that turns marketing strategies and plans into marketing actions in order to accomplish the strategic marketing objectives. </li></ul><ul><li>Implementation involves day-to-day, and month-to-month activities that effectively put the marketing plan into operation. </li></ul><ul><li>Whereas marketing planning addresses the: </li></ul><ul><ul><li>what and why of marketing activities, </li></ul></ul><ul><ul><li>implementation addresses the who; where; when; and how theses activities will happen. </li></ul></ul>Implementing Marketing Plan 0
  28. 28. <ul><li>Isolated Planning – not realistic; too general </li></ul><ul><li>Making trade-offs between Long-term and Short-term Objectives </li></ul><ul><li>People’s Natural Resistance To Change </li></ul><ul><li>Lack of Financial and Marketing Integration (ROI) </li></ul><ul><li>Emphasis on the Document, not on content and reality of the situation </li></ul>Reasons For Poor Implementation of Marketing Plans 0
  29. 29. Factors For Successful Implementation <ul><li>Action program that pulls together the people and activities in a coordinated manner. </li></ul><ul><li>An organisation structure that suits the situation. </li></ul><ul><li>Appropriate decision/ reward systems (procedures that guide planning; budgeting; remuneration etc) . </li></ul><ul><li>Careful human resources planning (skills; motivation). </li></ul><ul><li>Marketing strategies that fit with the company culture . (a system of values and beliefs shared by people in an organisation - the collective identity and meaning) . </li></ul>0
  30. 30. Department organisation <ul><li>Implementation of the plan will be influenced by the structure of the organisation </li></ul><ul><li>Marketing department can be structured in a variety of ways to suit the particular business operation </li></ul><ul><li>Refer to figures 2.3; 2.4; 2.5 for sample organisational structures </li></ul>
  31. 31. Figure 2.3 Functional Organisation
  32. 32. Figure 2.4 Geographic Organisation
  33. 33. Figure 2.5 Project Management Organisation
  34. 34. Table 2.3 Possible Future Scenarios for Brand Management
  35. 35. Controlling and Evaluating Performance <ul><li>Marketing control is the process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that marketing objectives are attained. </li></ul><ul><li>Operating control involves checking ongoing performance against the marketing plan and taking corrective action where necessary. </li></ul><ul><li>Strategic control is checking that the company’s basic strategies are well matched to its market opportunities. </li></ul>
  36. 36. Controlling and Evaluating Performance <ul><li>Marketing Audit is a comprehensive, systematic, independent and periodic examination of a company’s environment; objectives; strategies; and activities to identify problem areas and opportunities, and to recommend a plan of action to improve the firm’s marketing performance. </li></ul>
  37. 37. Figure 2.6 The Control Process
  38. 38. Which of the following is not part of a corporate strategy? <ul><li>mission and vision </li></ul><ul><li>objectives </li></ul><ul><li>resource deployment </li></ul><ul><li>tactics </li></ul><ul><li>corporate values </li></ul>