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Env strategy and mkt planning@4 3-07


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Env strategy and mkt planning@4 3-07

  1. 1. Marketing Strategy The Internal & External Environment
  2. 2. Planning Marketing <ul><li>Once a firm’s strategic plans are in place, more detailed plans need to be developed. </li></ul><ul><ul><li>Marketing plays a key role in strategic planning: </li></ul></ul><ul><ul><ul><li>Provides a guiding philosophy called the Marketing Concept </li></ul></ul></ul><ul><ul><ul><li>Provides input to firm’s strategic planners. </li></ul></ul></ul><ul><ul><ul><li>Marketing designs strategies for reaching each unit’s objectives. </li></ul></ul></ul><ul><li>But, we must realize that marketing is just one element of a firm’s strategy. </li></ul><ul><li>Thus we need to understand how marketing strategy integrates with firm strategy </li></ul><ul><ul><li>This often requires a sound handle on financial knowledge </li></ul></ul><ul><ul><li>Can you handle a P&L </li></ul></ul><ul><ul><ul><li>Can you explain how your strategies build toward the firm’s outcomes </li></ul></ul></ul>
  3. 3. Managing Marketing Strategy and the Marketing Mix Marketing In A Nutshell
  4. 4. Today’s Topic <ul><li>To some extent a review of strategic marketing process </li></ul><ul><li>However, a much greater emphasis and attention paid to inside and outside </li></ul><ul><ul><li>Our guiding theme: Internal and external </li></ul></ul>
  5. 5. At it most simplest form, marketing strategy consists of four steps <ul><li>APIC </li></ul><ul><li>Analysis </li></ul><ul><li>Planning </li></ul><ul><li>Implementation </li></ul><ul><li>Control and evaluation and correction </li></ul>
  6. 6. The Analysis Step <ul><li>Goal: </li></ul><ul><ul><li>Understand internal and external environment </li></ul></ul><ul><ul><ul><li>What do we face inside and outside the company </li></ul></ul></ul><ul><ul><ul><li>How do they interact? </li></ul></ul></ul><ul><ul><li>What do we know? </li></ul></ul><ul><ul><ul><li>This is why marketing research is so valuable </li></ul></ul></ul><ul><ul><ul><li>If we understand our foundation of marketing research, it can only aid in our assessment </li></ul></ul></ul><ul><li>Most common method to that summarizes our perspective is the SWOT analysis </li></ul>
  7. 7. A Company Has Two Key Marketing Environments <ul><li>1. Micro-environment: </li></ul><ul><ul><li>Actors close to the company </li></ul></ul><ul><li>2. Macro-environment </li></ul><ul><li>Larger societal forces </li></ul>
  8. 8. SWOT Analysis Example <ul><li>Strengths </li></ul><ul><ul><li>What do we do well </li></ul></ul><ul><ul><li>What’s the value of our capability </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>What don’t we do well </li></ul></ul><ul><ul><li>Is it critical that we don’t have it </li></ul></ul><ul><ul><li>Does our competitor have it…yet </li></ul></ul><ul><ul><li>Can we overcome or neutralize? </li></ul></ul><ul><li>Opportunities </li></ul><ul><ul><li>Relevant factors in the external environment </li></ul></ul><ul><ul><li>Can they be exploited (time frame) </li></ul></ul><ul><li>Threats </li></ul><ul><ul><li>What conditions threaten the firm </li></ul></ul><ul><ul><li>Can we avoid or neutralize </li></ul></ul>
  9. 9. How do we know what to examine in a SWOT (micro) <ul><li>Examples of Internal </li></ul><ul><li>Assets and resources </li></ul><ul><ul><li>Human: Expertise, experience, training, skills knowledge, marketing prowess </li></ul></ul><ul><ul><li>Firm: Control, culture, how we coordinate, our espirit de corps </li></ul></ul><ul><ul><li>Relationship: Our relationships with our vendors, customers, others </li></ul></ul><ul><ul><li>Physical: Property, equipment, proximity, geography, access </li></ul></ul><ul><li>Is it a strength or weakness? </li></ul><ul><li>Is it valuable: </li></ul><ul><ul><li>Does it improve efficiency or effectiveness </li></ul></ul><ul><li>Is it rare? </li></ul><ul><ul><li>Does the industry or a group share in it? </li></ul></ul><ul><li>Can it be imitated </li></ul><ul><ul><li>Is it difficult to imitate </li></ul></ul><ul><li>Substitutability </li></ul><ul><ul><li>Can it be duplicated? </li></ul></ul><ul><li>Exploitable </li></ul><ul><ul><li>Can you engage its full potential? </li></ul></ul>
  10. 10. How do we know what to examine in a SWOT (macro) <ul><li>Key Demographic Trends </li></ul><ul><ul><li>World population growth </li></ul></ul><ul><ul><ul><li>Now 6.2 billion </li></ul></ul></ul><ul><ul><ul><li>Projected to reach 7.9 billion by 2025 </li></ul></ul></ul><ul><li>The Economic Environment </li></ul><ul><ul><li>Affects consumer purchasing power and spending patterns. </li></ul></ul><ul><ul><li>U.S. consumers now spend carefully and desire greater value. </li></ul></ul><ul><li>Key Technological Trends </li></ul><ul><ul><li>Technological environment: Characterized by rapid change. </li></ul></ul><ul><ul><li>New technologies create new opportunities and markets & make old technologies obsolete. </li></ul></ul><ul><ul><li>U.S. leads the world in research and development spending. </li></ul></ul>When do these become important to you?
  11. 11. How do we know what to examine in a SWOT (macro) <ul><li>The Natural Environment </li></ul><ul><li>Concern for the natural environment has grown steadily, increasing the importance of these trends: </li></ul><ul><ul><li>Shortage of raw materials </li></ul></ul><ul><ul><li>Increased pollution </li></ul></ul><ul><ul><li>Increased governmental intervention </li></ul></ul><ul><li>The Political Environment </li></ul><ul><li>Includes laws, governmental agencies, and pressure groups that impact organizations and individuals. </li></ul>When do these become important to you?
  12. 12. How do we know what to examine in a SWOT (macro) <ul><li>The Cultural Environment </li></ul><ul><ul><li>Is composed of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. </li></ul></ul><ul><li>Core beliefs are persistent </li></ul><ul><ul><li>Passed from parents to children; reinforced by society </li></ul></ul><ul><ul><li>Shape attitudes and behavior </li></ul></ul><ul><li>Secondary cultural values change and shift more easily </li></ul><ul><li>Society’s cultural values are expressed through people’s views of: </li></ul><ul><ul><li>Themselves </li></ul></ul><ul><ul><li>Others </li></ul></ul><ul><ul><li>Organizations </li></ul></ul><ul><ul><li>Society </li></ul></ul><ul><ul><li>Nature </li></ul></ul><ul><ul><li>The Universe </li></ul></ul>
  13. 13. But What Do We Do With The SWOT? <ul><li>Internal: </li></ul><ul><ul><li>Analyze the organization’s internal environment, identifying its strengths and weaknesses. </li></ul></ul><ul><li>External: </li></ul><ul><ul><li>Analyze organization’s external environment its opportunities and threats. </li></ul></ul><ul><li>Interaction </li></ul><ul><ul><li>Where is our value </li></ul></ul><ul><ul><ul><li>Strengths with opportunities </li></ul></ul></ul><ul><ul><li>Where our we susceptible </li></ul></ul><ul><ul><ul><li>Weaknesses with threats </li></ul></ul></ul><ul><ul><li>How shall we proceed </li></ul></ul><ul><ul><ul><li>Strengths with threats </li></ul></ul></ul><ul><ul><ul><li>Weaknesses with opportunities </li></ul></ul></ul>
  14. 14. Planning <ul><li>Planning may include both understanding where we stand with our current business & how we might grow additional business </li></ul>
  15. 15. How Do We Assess A SBU? <ul><li>We can use a planning tool </li></ul><ul><ul><li>Market share/ market growth matrix </li></ul></ul><ul><ul><li>Classifies firm’s products (two metrics) </li></ul></ul><ul><ul><ul><li>Industry growth rates (How fast is the industry we are in growing) </li></ul></ul></ul><ul><ul><ul><li>Market share relative to competition (How well are we doing) </li></ul></ul></ul>
  16. 16. So How Does This Work? <ul><li>Step 1: </li></ul><ul><li>Analyze the current business portfolio </li></ul><ul><li>Step 2: Shape the future business portfolio </li></ul>
  17. 17. Strategic Planning <ul><li>Our next step in designing our business portfolio: </li></ul><ul><ul><li>NEW STUFF/NEW BUSINESS </li></ul></ul><ul><ul><ul><li>Developing strategies for growth by identifying, evaluating, and selecting promising new market opportunities. </li></ul></ul></ul><ul><ul><ul><li>Developing strategies for downsizing the business portfolio. </li></ul></ul></ul><ul><li>Tool: Product/market expansion grid </li></ul><ul><ul><li>However, the key is to understand in this exercise is that this matrix relies on your assumptions </li></ul></ul><ul><ul><ul><li>Who are your customers </li></ul></ul></ul><ul><ul><ul><li>What category to you compete in…What’s your space </li></ul></ul></ul><ul><ul><ul><li>What do you assume your customers do with your product </li></ul></ul></ul>
  18. 18. Strategic Planning Product/Market Expansion Grid Developing strategies for growth by identifying, evaluating, and selecting promising new market opportunities
  19. 19. Once we decide where we stand and how we might grow we can get into the more tactical areas of planning <ul><li>Market Segmentation </li></ul><ul><li>The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing programs. </li></ul><ul><li>The question is are you dividing them up arbitrarily to meet your firm’s needs or actually meeting their needs? </li></ul><ul><li>Targeting: </li></ul><ul><li>Evaluating each market segment’s attractiveness and selecting one or more segments to enter. </li></ul><ul><li>Feasibility: </li></ul><ul><ul><li>Can you, will they, does it have critical mass, is it profitable </li></ul></ul><ul><li>Market Positioning </li></ul><ul><ul><li>Clear, distinctive, desirable. believable </li></ul></ul><ul><ul><li>Consumer real estate </li></ul></ul><ul><ul><li>Differentiation that returns its investment </li></ul></ul><ul><ul><li>Do they care? </li></ul></ul><ul><ul><li>Are you just talking to yourself? </li></ul></ul>
  20. 20. Planning to Implementation: The Marketing Mix <ul><li>The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. </li></ul>
  21. 21. However… The Four P’s Taked A Rather Internal View Our Goal Is To Take A Internal & External View <ul><li>Seller’s View </li></ul><ul><ul><li>A product: mixture of goods and services the company offers. </li></ul></ul><ul><ul><li>Price: What consumer must pay for the product. </li></ul></ul><ul><ul><li>Place: How company makes the product available to customers. </li></ul></ul><ul><ul><li>Promotion: set of activities that the company uses to communicate the value of their product to the marketplace and to persuade consumers to buy it. </li></ul></ul><ul><li>Customer’s View </li></ul><ul><li>From this perspective, the four Ps become the four Cs: </li></ul><ul><ul><li>Product becomes Customer solution. </li></ul></ul><ul><ul><li>Price becomes Customer cost. </li></ul></ul><ul><ul><li>Place becomes Convenience. </li></ul></ul><ul><ul><li>Promotion becomes Communication. </li></ul></ul>P-4 C-4
  22. 22. <ul><li>Marketing implementation turns plans into actions . It involves the activities that make the plans work. </li></ul><ul><li>Implementation requires the company to blend its people, organizational structure, decision and reward systems, and company culture in a way that supports its strategies. </li></ul><ul><li>Good implementation is a challenge. </li></ul><ul><li>Marketing departments must be properly organized to ensure timely implementation. </li></ul>Marketing Management: Implementation
  23. 23. Marketing Control Process <ul><li>We often take a reactive stance to evaluation </li></ul><ul><ul><li>We do it when things go bad </li></ul></ul><ul><ul><li>Or we do it when we have to write another marketing plan </li></ul></ul><ul><li>But evaluation and correction and even correction should be monitored </li></ul><ul><li>Operating control checks ongoing performance of marketing programs against annual plan. </li></ul><ul><ul><li>If necessary, corrective action is taken. </li></ul></ul><ul><ul><li>The purpose is to ensure that the company sales, profits, and other goals are being met. </li></ul></ul><ul><li>Strategic control looks at whether the company’s basic strategies are matched to its opportunities. </li></ul>
  24. 24. Strategic Marketing Marketing audit Strategic control looks at whether the company’s basic strategies are matched to its opportunities 4 P’s The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. Analysis feeds the development of strategic plans. Marketing activities are evaluated and corrected as part of control process. Operating control checks ongoing performance of marketing programs against annual plan. Turns plans into actions Segmentation Targeting Positioning SWOT Internal (SW) External (OT) Control Implementation Planning Analysis Integrate the the value delivery chain throughout the process: Internal components; External components
  25. 25. A Final Caveat <ul><li>However, between us…marketing continues to change and so will our strategies </li></ul><ul><ul><li>The following key themes are emerging, have emerged, or always been around and we’re finally paying attention to them </li></ul></ul><ul><ul><li>Consumers playing a greater role and having a greater say </li></ul></ul><ul><ul><ul><li>Co-creation: Products, ads, buzz campaigns, TiVo </li></ul></ul></ul><ul><ul><li>Marketing metrics </li></ul></ul><ul><ul><ul><li>Google and ads when you want them </li></ul></ul></ul><ul><ul><li>The way you define your market defines you </li></ul></ul><ul><ul><ul><li>Welch’s book: Market definition so share doesn’t exceed 10% </li></ul></ul></ul><ul><ul><li>Understanding the supply chain is increasingly important </li></ul></ul><ul><ul><ul><li>The value of a network </li></ul></ul></ul><ul><ul><li>A re-definition of a market </li></ul></ul><ul><ul><ul><li>Is it a forum? </li></ul></ul></ul><ul><ul><li>The value of design and experience </li></ul></ul><ul><ul><ul><li>Panera, Jones Soda, Pottery painting </li></ul></ul></ul><ul><ul><li>Customer management vs. retention </li></ul></ul><ul><ul><ul><li>Tesco and CVS loyalty card </li></ul></ul></ul><ul><ul><li>Outsourcing, free agents and the need to “have” employees or offices </li></ul></ul><ul><ul><ul><li>Best Buy </li></ul></ul></ul>