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MM2711Introduction to Marketing

Marketing strategies

and plan development

Week 13

LEARNING OBJECTIVES

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DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN

How does a firm set up a marketing plan?

How are SWOT analyses used to analyze the marketing situation?

How does a firm choose what group(s) of people to pursue with its marketing efforts?

How does the implementation of the marketing mix increase customer value?

How can firms grow their businesses?

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Sustainable Competitive Advantage

A sustainable competitive advantage is an advantage over the competition that is not easily copied, and thus can be maintained over a long period of time.

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Customer Excellence

Customer excellence is achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service.

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Operational Excellence

Operational excellence is achieved through efficient operations and excellent supply chain and human resource management.

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Product Excellence

Product excellence occurs by having products with high perceived value, effective branding and positioning.

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Locational Excellence

Locational excellence occurs by having a good physical location and Internet presence.

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The Marketing Plan

A marketing plan is a written document composed of

•an analysis of the current marketing situation,

•opportunities and threats for the firm,

•marketing objectives and strategy specified in terms of the four P’s, action programs, and

•projected or pro-forma income (and other financial) statements.

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Three Phases of a Strategic Plan

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Step One: Defining the Mission and/or Vision

A mission statement is a broad description of a firm’s objectives and the scope of activities it plans to undertake.

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Company Product-Oriented Definition

Market-Oriented Definition

Amazon.com We sell books, videos, CDs, toys, consumer electronics and other products online

We make the Internet buying experience fast, easy, and enjoyable— we’re the place where you can find and discover anything you want to buy online

Disney We run theme parks

We create fantasies—a place where dreams come true and America still works the way it’s supposed to

Nike We sell athletic shoes and apparel

We bring inspiration and innovation to every athlete* in the world (* if you have a body, you are an athlete)

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DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN

How does a firm set up a marketing plan?

How are SWOT analyses used to analyze the marketing situation?

How does a firm choose what group(s) of people to pursue with its marketing efforts?

How does the implementation of the marketing mix increase customer value?

How can firms grow their businesses?

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Step Two: Conduct a Situation Analysis Using SWOT

A SWOT analysis is comprehensive, in that it offers both an internal and an external assessment. The firm therefore must possess expertise in both what the firm can provide and what the market wants the firm to provide.

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DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN

How does a firm set up a marketing plan?

How are SWOT analyses used to analyze the marketing situation?

How does a firm choose what group(s) of people to pursue with its marketing efforts?

How does the implementation of the marketing mix increase customer value?

How can firms grow their businesses?

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Step Three: Identifying and Evaluating Opportunities Using STP

With STP, the firm first divides the marketplace into subgroups or segments, determines which of those segments it should pursue or target, and finally decides how it should position its products and services to best meet the needs of those chosen targets.

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Disney: Segmentation, Targeting, Positioning

Families w/younger kids

Magic Kingdom

Adults, families w/older kids

Epcot

Singles and Couples

Pleasure Island

In Orlando, Disney has created different parks to meet the entertainment needs of diverse segments. Each park offers something to please every segment.

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Step Four: Implement Marketing Mix and Allocate Resources

In all firms, resources are scarce and must be allocated so that they create the most value for the firm.

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DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN

How does a firm set up a marketing plan?

How are SWOT analyses used to analyze the marketing situation?

How does a firm choose what group(s) of people to pursue with its marketing efforts?

How does the implementation of the marketing mix increase customer value?

How can firms grow their businesses?

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Price and Value Capture

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Place and Value Delivery

The product must be readily accessible

Firms therefore are experimenting with different forms of distribution, such as vending machines for cell phones, to offer consumers 24/7 access to products.

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Promotion and Value Communication

Television Radio Magazines Sales force New Media

Consumers enter into an exchange only if they know that the firm’s product or service appears in the marketplace. This is why promotion is so important. They won’t buy if they don’t know about it.

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Step Five: Evaluate Performance and Make Adjustments

Firms cannot simply remain content with a strategy for too long.

Over time, all strategies must be revised to adjust to new markets, new competitors, and new technologies.

The firm must recognize not only its failures, but also its successes to ensure continued success.

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Growth-Share Matrix

Cash cows generate cash in excess of the amount of

cash needed to maintain the business. "milked" continuously with as little investment

as possible.

Dogs "break even", generating barely enough cash

to maintain the business's market share. depress a profitable company's return on

assets ratio.

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Growth-Share Matrix

Question marks with the potential to gain market share and become a

star, and eventually a cash cow when the market growth slows.

If the question mark does not succeed in becoming the market leader, it will degenerate into a dog when the market growth declines.

Stars The hope is that stars become the next cash cows. Sustaining the market leadership may require extra cash. When growth slows, stars become cash cows if they have

been able to maintain their category leadership, or they move from star to dog.

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DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN

How does a firm set up a marketing plan?

How are SWOT analyses used to analyze the marketing situation?

How does a firm choose what group(s) of people to pursue with its marketing efforts?

How does the implementation of the marketing mix increase customer value?

How can firms grow their businesses?

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Growth Strategies

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Market Penetration

Existing marketing mix

Existing customers

In what way is a sale a Market penetration strategy?

Sales encourage current users to consume more of the current product mix, but they also bring new customers to the business. Many strategies can be used to get current consumers to consume more of your product.

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Market Development Strategy

A market development strategy employs the existing marketing offering to reach new market segments, whether domestic or international.

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Product Development

Disney Fairy Tale Weddings

A product development strategy offers a new product or service to a firm’s current target market.

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Diversification

A diversification strategy introduces a new product or service to a market segment that currently is not served.

Diversification opportunities may be either related or unrelated. In a related diversification opportunity, the current target market and/or marketing mix shares something in common with the new opportunity.

In contrast, in an unrelated diversification, the new business lacks any common elements with the present business.

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Scenario Planning

Scenario planning integrates information obtained as part of the situation and opportunity analysis steps of the marketing plan to better understand the potential performance outcomes associated with different marketing mix applications.