Marketingplanning“The art of making choices”

Delft, February 17, 2010

Michael Hompes

Introduction

Michael Hompes• Social Psychology (Uva Amsterdam)• Organisation & Mngmt Studies (Sydney, Australia)• Consultant at Scenter

Topics during class:

-Marketingplanning: a methodology explained– Developed and used by Scenter Consultancy

-Cases, wrapup + assignment (Sicco Santema)

To start off

Turn to your neighbour and discuss:

Have you ever written a marketingplan?

If yes, what was difficult?

If no, what do you think the difficulties are?

• Lack of chief executive support• No plan for the planning activity• Line management hostility• Lack of support, resources and skills• Confusion over technology, jargon and procedures• An emphasis on too much detail in a rigid one year planning

ritual• Separation of planning from other functional areas in the

business• Failure to relate marketing planning to corporate planning• The delegation of marketing planning to planners• Lack of knowledge and marketing skills• Confusion between the planning process and its outputs• Planning for planning’s sake

Source: McDonald, 1992

Marketingplanning difficulties (1990’s)

• Inadequate information• Senior managers lacking business skills• Management’s failure to see the whole picture• Lack of understanding of customers• Individual manager’s empire building• Top-down approach to planning• Time to conduct planning activities• Poor involvement of functions/teams• Current apparent business success/arrogance• Lack of enthusiasm amongst non-marketers• Staff: lack of and turnover• Resistance to changeSource: Simkin,2000

Marketingplanning difficulties (2000’s)

Introducing the method

• 10 experiences or lessons

• Principles of the method

• The method

– Choosing the Goal– Choosing the Strategic Issues– Choosing the Activities

10 experiences / lessons (1)

• Plans without focus will fail – Where is the plan going?– What is the key-message / strategy?

• Focus on strengths

• 360° views: diverge and converge

• Moving forwards and backwards

• Create involvement

10 experiences / lessons (2)

• Combine intuition en logic

• Make implicite criteria explicit

• Plans without a leader will fail

• Put the execution / implementation on the daily agenda

• Use the learning potential of your organization

Outline of a marketing plan

But what happens most of the times......?

Goal (within scope)

SWOT analysis

Strategic Issue # 1

Strategic Issue # 2

Strategic Issue # 3

Strategic Issue # 4

Project # 1 Project # 2 Project # 3 Project # 4

Actions belonging to project

#1

Actions belonging to project

#2

Actions belonging to project

#3

Actions belonging to project

#4

Choosing the scope

Organization

Business unit

Productgroup / marketsegment

Product / account

Product / market

combination

Example of Scope

Philips

Philips medical systems

Philips medical systemsNetherlands

Philips medical systemsNetherlands – product x

Philips medical systemsNetherlands – product x – hospital x

My point

• Focus!

• Make sure the SWOT is within the context of your scope

Outline of a marketing plan

But what happens most of the times......?

Goal (within scope)

SWOT analysis

Strategic Issue # 1

Strategic Issue # 2

Strategic Issue # 3

Strategic Issue # 4

Project # 1 Project # 2 Project # 3 Project # 4

Actions belonging to project

#1

Actions belonging to project

#2

Actions belonging to project

#3

Actions belonging to project

#4

Defining a SMART Goal

S pecific

M easurable

A mbitious / A ttainable

R ealistic

T ime-bound

SMART?

• Realizing a growth in turnover of 10%

Same, but different formulation:• Selling 50 machines with a total turnover of € 60 mln in

2008

Goals: examples

• Realizing a growth in turnover of 20% within 1 year for product type A in the business segment of the market

• Bringing in 15 new customers in the business segment of the market within 1 year

• Realizing a turnover of € 500.000 from customer X

Outline of a marketing plan

But what happens most of the times......?

Goal (within scope)

SWOT analysis

Strategic Issue # 1

Strategic Issue # 2

Strategic Issue # 3

Strategic Issue # 4

Project # 1 Project # 2 Project # 3 Project # 4

Actions belonging to project

#1

Actions belonging to project

#2

Actions belonging to project

#3

Actions belonging to project

#4

SWOT

S trenghts

W eaknesses

O pportunities

T hreats

That looks easy!

S&W = internal

O&T = external

# elements in the SWOT source: Hill & Westbrook, 1997

Step 1:Identifying Opportunities & Threats

• Making a list of (minimal) 15 Opportunities and 15 Threats– Within your scope!!!

• External Analysis = what is happening outside!

– That looks easy……(but most of the time isn’t….)

Summary of analysis

ThreatsOpportunities

WeaknessesStrengths

1

2

3

1

2

3

1

2

3

1

2

3

OpportunitiesCorrectly formulated opportunities

Incorrectly formulated opportunities

Rise in consumer expenditures

If we advertise more, the consumer expenditures will rise

New market segments entering the market

Targeting new market segments

Segment A has a need for customized products

Offer customized products to segment A.

There is a customer need for….In the market ….

Do not start sentence with ‘we’….

Opportunities or options / actions?

From an actual case mentioned opportunities:

• Growing market and customer demand for added value products.

• Strengthening market share world-wide.

• Further roll-out in Asia and USA.

• Products developing better than plan.

• Entering new categories

Opportunities & Threats (in summary)

Which opportunities are really relevant?

• Which will certainly occur?

• And have big impact?

• Which are relevant within the scope of our plan?

• Which are specific / concrete?

Which threats are really relevant?

• Which will certainly occur?

• And have big impact?

• Which are relevant within the scope of our plan?

• Which are specific / concrete?

Strenghts & Weaknesses

• Internal!– “we are……”– “we have…..”

Example:• A “7” for math

– A 8 for history

– Which is the strength?

•Strengths: things we are better in than our competitors!

•Weaknesses: things we are worse in than our competitors!

•Everything is relative!!!!

Criteria of Strenghts

• What are real strengths? • Is the resource…

• Superior to the competition?• Important?• Non-copiable / non-imitable• Applicable• Immobile

Examples of Strengths?

• Brand awareness• Quality• Innovation power• Variation within portfolio• Global A brand• Market share

Let’s make some choices!

• Using the 10 point method to go from longlist to shortlist

• Each member has 10 points to give to:– The opportunities– The threats– The strengths – The weaknesses

• Eg. Opportunity #1: 5 points, Opportunity #4: 2 points, Opportunity #6: 2 poins and Opportunity #9: 1 point

• It’s about making choices transparant!

This is how it works

Teammember1 Teammember2 Teammember3 Teammember4 Teammember5 TotalOpportunity 1Opportunity 2 4 3 2 2 3 14Opportunity 3 2 3 2 2 9Opportunity 4 2 2Opportunity 5 0Opportunity 6 1 1Opportunity 7 2 1 3 2 8Opportunity 8 1 1Opportunity 9 1 1 2Opportunity 10 0Opportunity 11 1 1 2 2 2 8Opportunity 12 1 1 2Opportunity 13 0Opportunity 14 1 1 1 3Opportunity 15 0

Total 10 10 10 10 10 50

Objectivity by multisubjectivity

• It is not about the numbers!

• We use the numbers to identify– Which things we agree upon

• Agree that it is important• Agree that it is not important

– Which things we disagree upon

• Only focus on elements were there is a need for discussion!!

• You can adjust your score!

Role of the facilitator

• Make sure every team member scores individually

• Adding all individual scores on a flip chart

• Lead the discussion (or: watch how a team member leads the discussion....)

Outline of a marketing plan

But what happens most of the times......?

Goal

SWOT analysis

Strategic Issue # 1

Strategic Issue # 2

Strategic Issue # 3

Strategic Issue # 4

Project # 1 Project # 2 Project # 3 Project # 4

Actions belonging to project

#1

Actions belonging to project

#2

Actions belonging to project

#3

Actions belonging to project

#4

Reacting 1-dimensionally

Stre

nght

sW

eakn

esse

sInte

rn

S1

S2

S3

W1

W2

W3

Use strengths

Enhance weaknesses

ExternOpportunities Threats

O1 O2 O3 T1 T2 B3

Grabbing

opportunities

Ward off

Threats

Reacting 1-dimensionally

ExternalOpportunities Threats

Stre

ngth

sW

eakn

esse

sInte

rnal

S1

S2

S3

W1

W2

W3

O1 O2 O3 T1 T2 T3

Attack Defend

Enhance Turn Around

The confrontation matrix

SWOT CommDesign

Strong resources Weak resources

Part of international chain Creating staff leaving firm

Experience in entertainment industry

Market differentiation

Full service approach Management capabilities

Opportunities Threats

Government more interested in design

Customers becoming more critical

Customers want more integrated approach

Entertainment industry is pricesensitive

Internationalization customers Rise of the internet

Confrontation matrix

Government more interested

in design

Customers want more integrated

approach

Internationalization customers

Customers becoming more

critical

Entertainment industry is

pricesensitive

Rise of the internet

Part of international chain

strenghtsExperience in

entertainment industry

Full service approach

market differentiation

weaknesses Management capabilities

Creating staff leaving the firm

Opportunities Threats

Confrontation matrix (2)

Government more interested

in design

Customers want more integrated

approach

Internationalization customers

Customers becoming more

critical

Entertainment industry is

pricesensitive

Rise of the internet

Part of international chain 5 1 6

StrenghtsExperience in

entertainment industry 3 5 8

Full service approach 1 5 3 3 3 15

market differentiation 5 3 1 5 14

Weaknesses Management capabilities 3 5 8

Creating staff leaving the firm

1 1 1 3

9 9 9 9 9 9

Opportunities Threats

External

Opportunities Threats

Wea

knes

ses

Inte

rnal

Stre

nght

s

Part of an internationalchain

Experience in the entertainment industry

Full concept approach

No market differentiation

Management capabilities

Creative staff leavingthe firm

Governmentmoreinterested indesign

Customers believea more integralapproach is necessary

Internationalizationof customers

Customers are becoming more critical

Entertainmentindustry isprice sensitive

Internet becomingmore relevant

5553

1300

3105

5553

0035 5555

3330

0100

0055

0101

0500

5555

1101

5533

3

1010

0031 0003

0330

3003 155

10110010 0301

1000

3030

53133300

0101

10100010

8

4

4

18

9

1 1

2

6

20

3

918

3

1

6

5

12

1 2

10 3

1

6

20

2

16

4

14

6

0000

0

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0

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0

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0

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0

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0

Directions of options

ExternalOpportunities ThreatsSt

reng

ths

Wea

knes

sesIn

tern

al

S1

S2

S3

W1

W2

W3

O1 O2 O3 T1 T2 T3

Attack Defend

Enhance Turnaround

Choosing and definingstrategic issues

• How can I use my… (strength) to take advantage of …. (an opportunity)

• How can I use my … (strength) to ward off ….. (a threat)

• How can I enhance…. (a weakness) to take advantage of …. (an opportunity)

• How can I enhance…. (a weakness) to ward off ….. (a threat)

Example: Strategic issues CommDesign

 How can we use the fact that we are a part of an international chain to take advantage of the internationalization of customers? (attack)

 How can we use our full concept approach to take advantage of the fact that customers believe a more integral approach is necessary? (attack)

How can we use our experience in the entertainment industry to ward off the price sensitiveness of the entertainment industry (defend)

Outline of a marketing plan

But what happens most of the times......?

Goal

SWOT analysis

Strategic Issue # 1

Strategic Issue # 2

Strategic Issue # 3

Strategic Issue # 4

Project # 1 Project # 2 Project # 3 Project # 4

Actions belonging to project

#1

Actions belonging to project

#2

Actions belonging to project

#3

Actions belonging to project

#4

Choosing the Projects and Activities

• Generating options

• Choosing (decision-making) criteria

• Choosing projects

• Choosing Activities

Generating options

Challenge:How can we lower the initial price to ward off the fact that customers are price sensitive?

We can……• Lower the initial price• Lease the product to the customer• Raise the price, but offer free service• Offer telemetric maintenance• Provide loans• Introduce pay per bit• Offer guarantees• Tempt innovating companies with a low price

Criteria and norms

AnglesCriteria Norms

Suitability does it fit the Challenge?

yes

Finance ROITurnoverCosts

15%> + $ 200.000< 50.000

New business # new customers > 5 per year

Customer satisfaction

score in survey average score 8

Creativity # nominations# new ideas

> 4 per year> 15 per year

Organization realizableimplementation time

< 2 years results< 8 months implemented

Activity plan

wie Wanneer (maand)

1 2 3 4 5 6 7 8 9 10

11

12

Voorbereiding leasekennis aantrekken NBD manager ervaren NBD manager student NBD manager Inlezen projectteam Projectteam Concept overleggen met installateurs

Projectteam

Berekenen leasekosten Projectteam afschrijving Projectteam installatiekosten Projectteam servicekosten etc. Projectteam Bepalen lease"producten" Projectteam Concept testen bij innovatieve klanten

Projectteam + AM

Concepten aanpassen na concepttest

Projectteam

Opstellen communicatiemix Projectteam + PR

Enkele accountmanager opleiden Projectteam + AM

Uitvoering Selecteren potentiele klanten Projectteam +

AM

Promoten concept bij potentiele klanten

Projectteam + AM

Promoten concept bij engineerbureaus

Projectteam + AM

Verkoop concepten AM

Monitoring Stuurgroep

Assignment: marketingplanning

Describe how you would market/sell your product/service, using the marketingplanning methodologysee also www.marketingplanning.com

•A (SMART) goal•SWOT longlist•SWOT selection•Confrontation matrix & selected strategic issues•Criteria for selecting options•Per strategic issue

• Option• Evaluation against criteria

•Selected project•Actions

Journal of Business & Industrial Marketinghttp://web.ebscohost.com/ehost/detail?vid=1&hid=21&sid=3db41a53-2cae-49bb-ae37-a127ac615396%40sessionmgr2

Journal of Supply Chain Managementhttp://www.blackwell-synergy.com/loi/jscm

Journal of Purchasing and Supply Managementhttp://www.sciencedirect.com/science//journal/14784092

Customer Relationship Managementhttp://web.ebscohost.com/ehost/detail?vid=1&hid=114&sid=a89d2e6c-389e-403a-a5e3-139f5f54127a%40sessionmgr109

Industrial Marketing Managementhttp://www.sciencedirect.com/science//journal/00198501

Journal of Personal Selling & Sales Managementhttp://web.ebscohost.com/ehost/detail?vid=1&hid=103&sid=7319428e-9a8f-43a4-b4b3-efa4ee11a009%40sessionmgr103