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Marketing Process & Strategic Marketing Planning II Module BBA

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Marketing Process Model Understanding the market place and customer needs and wants Design a customer-driven marketing strategy Construct an integrated marketing program that delivers superior values Build profitable relationships and create customer delight Capture value from customers to create profits and customer equity

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What is Strategic Planning? <ul><li>It is the managerial process that helps to develop a strategic and viable fit between the firm’s objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products. </li></ul>

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How to go about it? <ul><li>Defining the corporate mission </li></ul><ul><li>Establishing SBUs </li></ul><ul><li>Allocating resources for SBUs </li></ul><ul><li>Planning for new business </li></ul>

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Corporate Mission <ul><li>This seeks to embody the entire goals of the organization and the objective of its existence. </li></ul><ul><li>It seeks to provide a sense of purpose, direction and opportunity </li></ul><ul><li>For e.g. e-bay’s mission: </li></ul><ul><li>“ to provide a global trading platform where practically anyone can trade practically anything”. </li></ul>

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5 questions that the firm must ask itself <ul><li>What is our business? </li></ul><ul><li>Who is our customer? </li></ul><ul><li>What does our customer need? </li></ul><ul><li>What will our business be? </li></ul><ul><li>What should our business be? </li></ul>

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Marketing Myopia <ul><li>Industry is a customer satisfying process not a goods producing process. </li></ul><ul><li>It is important therefore how you redefine your business. </li></ul>

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Good mission statements have three characteristics <ul><li>They focus on a limited number of goals </li></ul><ul><li>It stresses the major values and policies the firm desires </li></ul><ul><li>It defines the major competitive scope of operation </li></ul>

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Infosys Mission statement <ul><li>“ To achieve our objectives in an environment of fairness, honesty and courtesy towards our clients, employees, vendors and society at large” </li></ul><ul><li>Google Mission </li></ul><ul><li>“ To organize the world’s information and make it universally acceptable and useful”. </li></ul>

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SBU <ul><li>It is a company within a company </li></ul><ul><li>The business is differentiated from the rest of the company </li></ul><ul><li>It has its own set of competitors </li></ul><ul><li>It is a separate profit centre </li></ul>

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The BCG Matrix Mkt Share Mkt growth ??? Stars Dogs Cash Cows

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SBU strategies <ul><li>Build </li></ul><ul><li>Hold </li></ul><ul><li>Harvest </li></ul><ul><li>Divest </li></ul>

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The GE Model Business Strength Mkt Attractiveness Strong Medium Weak Strong Medium Weak

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Ansoff’s Product-Market Grid Current products New products Current Mkts New Mkts Mkt penetration strategy Mkt development strategy Product development strategy Diversification strategy

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The SBU Planning Process <ul><li>Analyzing Market opportunities </li></ul><ul><li>Developing Marketing strategies </li></ul><ul><li>Program Formulation & Implementation </li></ul><ul><li>Marketing Control </li></ul>

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SWOT Analysis <ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul>

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Porter’s Generic Strategies <ul><li>Overall cost leadership </li></ul><ul><li>Product Differentiator </li></ul><ul><li>Focus </li></ul>

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Overall Cost Leadership <ul><li>This strategy involves the firm winning market share by appealing to cost-conscious or price-sensitive customers. </li></ul><ul><li>the firm hopes to take advantage of economies of scale </li></ul><ul><li>low direct and indirect operating costs, by offering basic no-frills products and limiting customization and personalization of service. </li></ul>

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Differentiation Strategy <ul><li>Differentiate the products in some way in order to compete successfully. </li></ul><ul><li>A differentiation strategy is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy. </li></ul>

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Focus <ul><li>The firm can choose to compete in the mass market (like Wal-Mart) with a broad scope, or in a defined, focused market segment with a narrow scope </li></ul><ul><li>The firm typically looks to gain a competitive advantage through product innovation and/or brand marketing rather than efficiency. A focused strategy should target market segments that are less vulnerable to substitutes or where a competition is weakest to earn above-average return on investment. </li></ul>

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The contents and structure of the marketing plan <ul><li>The executive summary </li></ul><ul><li>Situational analysis </li></ul><ul><li>Threats and opportunity Analysis </li></ul><ul><li>Marketing objectives </li></ul><ul><li>Marketing strategies </li></ul><ul><li>Marketing tactics/Action Programs </li></ul><ul><li>Schedules and budgets </li></ul><ul><li>Financial data and control </li></ul>

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Why is marketing planning necessary? <ul><li>Systematic futuristic thinking by management </li></ul><ul><li>better co-ordination of company efforts </li></ul><ul><li>development of better performance standards for control </li></ul><ul><li>sharpening of objectives and policies </li></ul><ul><li>better prepare for sudden new developments </li></ul><ul><li>managers have a vivid sense of participation </li></ul>

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Objectives of the marketing plan <ul><li>Acts as a roadmap </li></ul><ul><li>assist in management control and monitoring the implementation of strategy </li></ul><ul><li>informs new participants in the plan of their role and function </li></ul><ul><li>to obtain resources for implementation </li></ul><ul><li>to stimulate thinking and make better use of resources </li></ul>

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Criticisms of marketing planning <ul><li>Formal plans can be quickly overtaken by events </li></ul><ul><li>Elements of the plan may be kept secret for no reason </li></ul><ul><li>gulf between senior managers and implementing managers </li></ul><ul><li>the plan needs a sub-scheme of actions </li></ul>

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<ul><li>Assignment of responsibilities, tasks and timing </li></ul><ul><li>Awareness of problems, opportunities and threats </li></ul><ul><li>Essential marketing information may have been missing </li></ul><ul><li>if implementation is not carefully controlled by managers, the plan is worthless! </li></ul>

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Cautionary notes for effective planning <ul><li>Don’t blindly rely on mathematical and statistical calculations. Use your judgement as well </li></ul><ul><li>Don’t ever assume that past trends can be exploited into the future forever </li></ul><ul><li>if drawing conclusions from statistical data, make sure the sample size is sufficiently large </li></ul>

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Analyzing Marketing Opportunities <ul><li>The Company’s Microenvironment </li></ul><ul><li>The Company’s Macro environment </li></ul>

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Micro Environment <ul><li>The company </li></ul><ul><li>Suppliers </li></ul><ul><li>Marketing Intermediaries </li></ul><ul><li>Customers </li></ul><ul><li>Competitors </li></ul><ul><li>Publics </li></ul>

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Macro Environment <ul><li>Demography </li></ul><ul><li>Economic Environment </li></ul><ul><li>Natural Environment </li></ul><ul><li>Technological Environment </li></ul><ul><li>Political Environment </li></ul><ul><li>Cultural Environment </li></ul>

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Marketing Information system <ul><li>It consists of people , equipment and procedures to gather , sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers </li></ul>

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Marketing Information System Process Analysis Planning Implementation Control Marketing Environment Target Markets Marketing Channels Competitors Publics Macro environment Forces Assessing Information Needs Distributing & Using Information Marketing Information System Internal database Marketing Intelligence Marketing Research Information analysis Marketing Managers and other info users Developing Needed Information

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Internal Records <ul><li>The order to payment cycle </li></ul><ul><li>Sales Information Systems </li></ul><ul><li>Databases, Data-warehousing and data-mining </li></ul>

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Marketing Intelligence <ul><li>It is a set of procedures and sources managers use to obtain everyday information about developments in the market environment. </li></ul><ul><li>Sources: Books, newspapers, trade publications, stake holders, internet, discussion groups, blogs etc </li></ul>

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How to improve market intelligence?

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<ul><li>Train & motivate the sales force to spot new developments </li></ul><ul><li>Motivate intermediaries to pass information </li></ul><ul><li>Network Externally: trade shows, conferences etc </li></ul><ul><li>Government data resources </li></ul><ul><li>Information from outside suppliers </li></ul><ul><li>Online customer feedback </li></ul>