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Marketing Planning.ppt
- 1. 2- 1 Marketing Strategies and Plans MARKETING MANAGEMENT MKT 202
- 2. 2- 2 After this session, you will be able to: • Describe the components & relevance of Strategic Planning. • Write market oriented business definition. • Position a SBU of company on BCG Matrix. • Position product of a company on Ansoff Matrix. Learning Outcomes
- 3. 2- 3
- 4. 2- 4
- 5. 2- 5 The Strategic Planning, Implementation, and Control Processes
- 7. 2- 7 What is a Marketing Plan? A marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tactical level.
- 8. 2- 8 Strategic Planning Process • Strategic Planning involves developing an overall company strategy for long-run survival and growth. • This process involves: – Defining a Mission: Statement of an organization’s purpose; should be market oriented. – Setting Company Objectives: Supporting goals and objectives to guide the entire company. – Designing a Business Portfolio: Collection of businesses and products that make up the company. – Planning Functional Strategies: Detailed planning for each department designed to accomplish strategic objectives.
- 9. 2- 9 Product Orientation vs. Market Orientation Company Product Market Missouri-Pacific Railroad We run a railroad We are a people- and-goods mover Xerox We make copying equipment We improve office productivity Standard Oil We sell gasoline We supply energy Columbia Pictures We make movies We entertain people
- 10. 2- 10 Good Mission Statements Focus on limited number of goals Stress major policies and values Define major competitive spheres Take a long-term view Short, memorable, meaningful
- 11. 2- 11 2-3 2-3 Market Oriented Market Oriented Fit Market Environment Fit Market Environment Motivating Motivating Realistic Realistic Distinctive Competencies Distinctive Competencies Specific Specific Characteristics of Good Mission Statements Characteristics of Good Mission Statements Mission Statements Mission Statements
- 12. 2- 12 Motorola “The purpose of Motorola is to honorably serve the needs of the community by providing products and services of superior quality at a fair price to our customers; to do this so as to earn an adequate profit which is required for the total enterprise to grow; and by doing so, provide the opportunity for our employees and shareholders to achieve their personal objectives.”
- 13. 2- 13 Rubbermaid Commercial Products, Inc. “Our vision is to be the Global Market Share Leader in each of the markets we serve. We will earn this leadership position by providing to our distributor and end-user customers innovative, high-quality, cost- effective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.”
- 14. 2- 14 Designing the Business Portfolio • Business Portfolio: Collection of business & products • The best portfolio is the one that best fits the company’s strengths and weaknesses to the opportunities in the environment. • The company must: –analyze its current business portfolio or Strategic Business Units (SBU’s) –decide which SBU’s should receive more, less, or no investment –develop growth strategies for adding new products or businesses to the portfolio
- 15. 2- 15 • Business Portfolio: Collection of business & products • Process: –Analyse its current business portfolio –Shape the future portfolio by developing strategies for growth and downsizing Designing Business Portfolio ITC Portfolio
- 16. 2- 16 Analyzing Current SBU’s: Boston Consulting Group Approach Question Marks • High growth, low share • Build into Stars/ phase out • Requires cash to hold market share Stars • High growth & share • Profit potential • May need heavy investment to grow Cash Cows • Low growth, high share • Established, successful SBU’s •Produces cash Dogs • Low growth & share • Low profit potential Relative Market Share High Low Market Growth Rate Low High
- 17. 2- 17 Marketing’s Role in Strategic Planning • Process of Selecting Target Consumers –Market Segmentation: determining distinct groups of buyers (segments) with different needs. –Market Targeting: evaluating and selecting which target segments to enter. –Market Positioning: products distinctive and desirable place in the minds of target segments compared to competing products. • Marketing Strategies for Competitive Advantage – Market-Leader – Market Challenger – Market-Follower – Market-Nicher
- 18. 2- 18 Assessing growth Opportunities
- 19. 2- 19 • Product/market expansion grid is a tool for identifying company growth opportunities through market penetration, market development, product development, or diversification Developing Strategies for Growth and Downsizing
- 20. 2- 20 Ansoff’s Product/ Market Expansion Grid • Market Penetration: increase sales to present customers with current products. How? • Market Development: develop new markets with current products. How? • Product Development: offering modified or new products to current customers. How? • Diversification: new products for new markets.
- 21. 2- 21 • Multi Category food company manufacturing over 250 innovative products and marketing in 35 countries. • Started with basic spices • In 1970 introduced branded & packaged spices in Pakistan • Market Penetration: (Making more sales without changing its original product) – Marketing mix improvement-design, advertising, pricing & distribution efforts – Broad range: Chili, Coriander, Kasuri methi & Turmeric powder – Added key accounts managers to handle cash and carry giants like Metro etc – Used internet to reach consumers Example-National Foods Ltd.
- 22. 2- 22 • Market Development: (Identifying & developing new markets for its current products) – Explored new geographic markets: Middle east, North America, Australia, India • Product Development: (Offering modified or new products to current markets) – Added Tomato Katchup, Chinese Sauces, Pickles, Jams, desserts – Diet versions of products • Diversification: (Starting up or buying businesses outside of its current products and markets) – Ronaq brand of ready to eat meals Example-National Foods Ltd.
- 23. 2- 23 Ansoff Matrix: Give one example each in case of Coca Cola. Market Penetration Product Development Market Development Diversification
- 24. 2- 24 Identify the strategy used by Anchor when they started manufacturing Tooth Paste? Question Diversification
- 26. 2- 26 • The Business Mission • SWOT Analysis • Goal Formulation • Strategy Formulation • Program Formulation & Implementation • Feedback & Control Business Unit Strategic Planning Business Mission Internal Environ ment External Environ ment Feedback & Control Implemen tation Program Formulat ion Strategy Formulat ion Goal Formulat ion SWOT
- 27. 2- 27 Role of Strategic Planning To use strengths, overcome the weaknesses to capitalize upon the opportunities and avert threats. WEAKNESS THREAT STRENTH OPPORTUNITY Strategic Planning Internal External
- 28. 2- 28 • Opportunity • Area of buyer need & interest that a company has a high probability of profitably satisfying. Three main sources of Opportunity: – Offer something that is in shot supply-Problem Detection Method – Supply existing product or service in a new or superior way- Ideal Method – Chart their steps in acquiring, using & disposing of a product-Consumption Chain Method • Threat • Challenge posed by an unfavourable trend or development that in the absence of defensive marketing acton, would lead to lower sales or profit. • Internal Environment (Strengths & Weakness) SWOT Analysis-External Environment
- 30. 2- 30 • Goals indicate what business unit want to achieve • Goals are objectives that are specific with respect to magnitude and time. • Example: Profitability, sales growth, market share improvement, innovation and reputation. • Business units set these objectives and then manage by objectives (MBO) Goal Formulation
- 31. 2- 31 Porter’s Generic Strategies Strategy Formulation Low-cost Differentiation Strategic advantage Narrow Broad Differentiation Focused cost leadership Focused differentiation Low-cost leadership Goals indicate what business unit want to achieve; strategy is a game plan for getting there.
- 32. 2- 32 Low cost Differentiation Focus Low cost culture Economies of scale Eliminate unnecessary costs Enjoy high profits through cost advantage Adding value through • product features • product quality • distinctive offering Offer something new or different High costs but charge premium price Niche markets Targeting Limited territory Focus on a specific group of customers Either cost leader or differentiation with in the segment Porter’s Generic Strategies
- 33. 2- 33 INDIA TO USA: Which plane would you fly? 33 COST LEADERSHIP DIFFERENTIATION FOCUS
- 34. 2- 34 Strategic Alliance • Product or Service Alliance (Credit Card) • Promotional Alliance (McDonald & Disney) • Logistic Alliances (DHL & Tanisq) • Pricing Collaboration (Hotel & rental car companies) Strategy Formulation
- 35. 2- 35 The Marketing Process Target Consumers Product Place Price Promotion Competitors Marketing Intermediaries Publics Suppliers Demographic- Economic Environment Technological- Natural Environment Political- Legal Environment Social- Cultural Environment
- 36. 2- 36 Marketing Mix- The Four P’s Target Customers Intended Positioning Product “Goods-and-service” combination that a company offers a target market Price Amount of money that consumers have to pay to obtain the product Activities that persuade target customers to buy the product Promotion Company activities that make the product available Place
- 37. 2- 37 Managing the Marketing Effort Marketing Planning Develop Marketing Strategies to Achieve Marketing Objectives Develop Marketing Plans & Budget Marketing Implementation Turn Marketing Plans into Action Plans to Achieve Marketing Objectives Marketing Analysis of Company’s Situation Control Measure Results Evaluate Results Take Corrective Action
- 38. 2- 38 Marketing Implementation Marketing Strategy Marketing Performance Implementation Climate and Culture Action Programs Decision and Reward Organizational Structure Human Resources
- 39. 2- 39 Marketing Control Set Marketing Goals Measure Performance Evaluate Performance Take Corrective Action
- 40. 2- 40 Elements of a Marketing Plan Executive Summary Current Marketing Situation Threats and Opportunities Objectives and Issues Marketing Strategy Action Programs Budgets Controls