Strategic Planning and Marketing Plans
-
Upload
venkataiims -
Category
Documents
-
view
112 -
download
0
Transcript of Strategic Planning and Marketing Plans
Lesson 2Strategic Planning
and Marketing Plans
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Lesson Objectives
1. Explain strategic planning and how it relates to the organisation’s mission, objectives and goals
2. Identify and define methods for designing the business portfolio, developing growth strategies and planning functional strategies
3. Outline the marketing process
4. Introduce the components of the marketing plan
5. Explain the ways in which marketing organisations control and evaluate their marketing performance
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Strategic Planning
Visions demand a strategy, strategy requires a plan Organizations that fail to plan, plan to fail Plans help you anticipate and respond quickly to
changes The main purpose of strategic planning is to help
firms understand how to compete for the future
The process of developing and maintaining a strategic fit between the organization's goals and capabilities in the light of changing marketing opportunities
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 3.2: Strategy Hierarchy
SBUStrategy
SBU Strategy• Business definition• Objectives• Product market portfolio• Competitive strategy• Resource allocation and management
Marketing Strategy•Marketing objectives•Product/marketsstrategies
Corporate Level
Functional Level of SBU
Strategic Business Unit Level
Corporate Strategy• Mission and vision• Objectives• Business portfolio strategy• Resource development• Corporate values
SBUStrategy
Finance andadministration
strategy
Production and operation
strategy
R&D StrategyTechnology
Product development
Human resources strategy
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Corporate, Business, and Marketing Strategy
Corporate Strategy
• Building core competencies
•Business portfolio•Capital investments and
resource allocation•Corporate culture•Corporate structure
•Product/ market portfolio•Resource allocation•Product-markets•Business culture•Strategic cost• Management
•Markets•Products and services•Profit-yielding strategies•Brand management•Profit improvement
Business Strategy
• Distinctive competencies• Developing competitive
position• Competitive advantage
Marketing Strategy
• Developing marketposition
• Customer satisfaction
Focus
Customer value creation, maintenance and defence
Focus
Economicvalue added
Focus
Economicvalue added
ShareholderValue
BusinessValue
CustomerValue
Corporate Strategy
• Building core competencies
•Business portfolio•Capital investments and
resource allocation•Corporate culture•Corporate structure
•Product/ market portfolio•Resource allocation•Product-markets•Business culture•Strategic cost• Management
•Markets•Products and services•Profit-yielding strategies•Brand management•Profit improvement
Business Strategy
• Distinctive competencies• Developing competitive
position• Competitive advantage
Marketing Strategy
• Developing marketposition
• Customer satisfaction
Focus
Customer value creation, maintenance and defence
Focus
Economicvalue added
Focus
Economicvalue added
ShareholderValue
BusinessValue
CustomerValue
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Hierarchy of Objectives
Company Objectives
Business Unit Objectives
Functional Objectives
3M
Adhesives
Production Finance Marketing HR R&D
Product Place Promotion Price
Personal SellingAdvertising
Sales Promotion
Marketing Objectives
Promotion Objectives PR
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 3.4: Steps in Strategic Planning
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Step 1: The Mission Statement
A statement of the organisation’s purpose – what it wants to accomplish in the larger environment.
market oriented (not short term like product and technological definitions).
based on organisational core competencies
Our mission is to organize the world’s information and make it universal accessible and useful.
Yahoo!’s mission is to connect people to their passion, their communities and the world’s knowledge.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Marketing Myopia
Sustained growth depends on how broadly companies define their businesses and how carefully they gauge their customers’ needs. . . Thus, companies should stop defining themselves by what they produced (product-oriented) and instead reorient themselves toward customer needs (customer-oriented) - Theodore Levitt, Marketing Myopia
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Table 3.1: Product and Market Oriented Business Definitions
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
DO NOT OFFER ME THINGS.
Do not offer me clothes. Offer me attractive looks.
Do not offer me shoes. Offer me comfort for my feet and the
pleasure of walking…
Do not offer me furniture. Offer me comfort and the quietness of
a cosy place.
Do not offer me things. Offer me ideas, emotions, ambience,
feelings and benefits.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
The 5Ws of the Mission Statement
Five basic questions to be answered:• Why we are here?• What we do?• Who we serve?• What we believe?• What are our core competencies or competitive
advantages?
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Setting Company Objectives and Goals
Company objectives must be/have: Compatible with company resources Measurable Time frame Ownership & accountability
Marketing objectives must be compatible with company objectives.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education AustraliaSource: Kotler et al. (2007)
Step 2: Corporate Objectives & Goals
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Step 3: The Business Portfolio
A business portfolio is the collection of businesses and products that make up the company
Four basic questions to be answered:• Which SBUs need to be built? • Which SBU to be maintained?• Which SBU to be harvested?• Which SBU to be divested?
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
a) Analyze the Current Business Portfolio
Most portfolio analyses evaluate the SBUs of a firm on two important dimensions: the attractiveness of the SBU’s market and the strength of the SBU’s position in the market.
The best known portfolio-planning analysis methods and tools were developed by the Boston Consulting Group and by General Electric.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 3.6: Boston Consulting Group Approach
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Business Strength
High
Medium
Low
Strong Average Weak
A
B
C
D
Ind
ustr
y
Att
racti
ven
ess
Figure 3.7: GE’s Strategic Business-Planning Grid
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
b) Shape the FutureBusiness Portfolio
Determine the future role of each SBU and choose the appropriate resource allocation strategy: Build Maintain Harvest Divest
Developing strategies for growth (product/market expansion grid) or downsizing business portfolio
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 3.9: Product/Market Expansion Grid
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Developing Growth Strategies
1. Market Penetration: promoting the company growth by increasing sales of current products to current markets.
2. Market Development: promoting growth by identifying and developing new segments.
3. Product Development: promoting growth by offering modified or new products.
4. Diversification: starting up or acquiring businesses outside the current products and markets.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
TargetConsumers
Product
Place Price
Promotion
Mar
ketin
g
Impl
emen
tatio
n
Marketing
Planning
Marketing
Control
Mar
ketin
g
Analys
is
Competitors
MarketingChannels
PublicsSuppliers
Demographic -Economic
Environment
Technological -Natural
Environment
Political -Legal
Environment
Social -Cultural
Environment
Step 4: The Marketing Strategy
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
(1) Analyzing marketing opportunities (2) Segmenting the market (3) Targeting markets (4) Positioning products (5) Crafting the marketing mix (4Ps) (6) Implementing and managing the
marketing effort
The Marketing Process
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Analysing Marketing Opportunities
Think of some companies who have identified marketing opportunities.
Marketing opportunity is an area of buyer need and interest in which there is a high probability that a company can perform profitably by satisfying that need.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
1. supplying something in short supply 2. supplying an existing product/service
in a new/superior way 3. supplying a new product or service
Sources of Marketing Opportunities
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Targeted Marketing
To succeed in today’s competitive marketplace, companies must be consumer centred
As there are too many consumers with too many needs, a company must divide up the total market, choose the best segments and design strategies for profitably serving chosen segments better than its competitors do
This process involves four steps: demand measurement and forecasting, market segmentation, targeting and positioning (Lesson 4)
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Target Consumers (2)
Demand Measurement and Forecasting
A company needs to analyse, estimate and identify the current and future size of the market before entering the market. Demand can be forecasted by a variety of methods and scenario planning is an important part of this process.
Market Segmentation
Dividing a market into direct groups of buyers who might require separate products or marketing mixes; the process of classifying customers into groups with different needs, characteristics or behaviour.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Marketing Strategies for Competitive Advantage
Market Nicher
Market Follower
Market Challenger
Market Leader
STRATEGY A COMPANY ADOPTSDEPENDS ON ITS
INDUSTRY POSITION
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Developing the Marketing Mix
The marketing mix is the set of controllable variables; product, price, place and promotion (4 Ps) that the company uses to meet the target markets needs and wants.
Organisations that include service components use the extended marketing mix (7Ps).
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Marketing Mix at
Product Advertising solutions (AdWords for text- based ads)
Business Solutions (Search Appliance models)
Google Store (Selling tangible items)
Price List price with AdWords ranges from $0.05 to $50 per day (advertisement, the amount of times individuals click, ads ranking).
Discounts and allowances are not available at Google.
Payment period at Google is based on its relationship with customers (the credit history of the customer)
Credit terms: a monthly credit limit for those customers with good financial record ($50 to $500/month)
Place The internet.
Promotion Word-of-mouth instead of advertising (viral marketing)
Credible brand (ordinal name)
Any displayed advertisements are designated as “sponsored links.”
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
A Marketing Plan or a Business Plan?
The business plan incorporates the plans of all functions —production, R&D, finance, human resources, IT and marketing.
The marketing plan has its focus on customer acquisition, retention and the resources required.
It is the central document for directing and coordinating the marketing effort.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 4.1: The Relationship Between Analysis, Planning, Implementation and Control
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Table 4.1: Contents of a Marketing Plan
Section Description
I. Executive Summary and Table of Contents
Brief overview of the proposed plan
II. Current Marketing Situation
Background data on the market, product, competition, distribution and macro environment
III. SWOT and Issue Analysis
Identify main: strengths, weaknesses, opportunities, threats facing the product line
IV. Objectives Define financial objectives and marketing goals such as sales volume, market share and profit
V. Marketing Strategy Present broad marketing approach that will be used to achieve the plan’s objectives
VI. Action Programs Present special marketing programs designed to achieve the business objectives
VII. Projected Profit and Loss Statement
Forecast the plan’s expected financial outcomes
VIII. Controls Indicates how the plan will be monitored
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
The Marketing Plan in Detail
Executive Summary
Aimed at senior management to enable them to grasp quickly the plan’s major thrust, its goals and recommendations
The summary should be no more than one page long
Current Marketing Situation Relevant background data on the target market, product,
competition, distribution and the macro-environment
SWOT and Issues Analysis Opportunities and Threats Strengths, Weaknesses and Issues facing the product line
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
The Marketing Plan in Detail
Marketing Strategy The marketing strategy is often presented in list form after
the inclusion of a positioning strategy statement which typically includes:
• Target Market• Product positioning• Product line• Price• Communication• Sales• Promotion
Objectives Two types of objectives must be set:
• Financial • Marketing
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
The Marketing Plan in Detail
Action Programs Each marketing strategy element must now be
elaborated to answer: • What will be done?• When will it be done?• Who will do it? • How much will be spent?
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
The Marketing Plan in Detail
Projected Profit-and-Loss Statement
Action plans allow the product manager to build a supporting budget.
Shows the forecast sales volume in units and the average price.
Costs include production, physical distribution and marketing broken down into finer categories.
The difference between revenues and sales is the projected profit.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
The Marketing Plan in Detail
Controls The goals and budget are spelled out for each month or
quarter. Senior management can review the results of each
period and identify businesses that are not attaining their goals.
Managers of lagging businesses must explain what is happening and the actions they will take to improve plan fulfillment.
A contingency plan outlines the steps that management would take in response to specific adverse developments.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Evaluating the Marketing Plan (1)
How does your marketing plan measure up? Before implementing the marketing plan it can be useful to evaluate it by answering the following questions:1. Do your marketing objectives relate directly to the
company’s strategic initiatives?2. Do your marketing objectives relate directly to what you
learned in your situational analysis?3. Do your marketing objectives relate directly to the
capacity of your current marketing mix to handle them?4. Do your marketing objectives relate directly to your
business’s strengths and to the opportunities available?5. Do your marketing objectives relate directly to your
business’s weaknesses and to the threats that endanger it?
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Evaluating the Marketing Plan (2)
6. Are your marketing objectives clear, measurable statements of what is to be achieved?
7. Do your marketing objectives, strategies and tactics relate to each other?
8. Does each strategy in your marketing plan contain a cost/benefit evaluation?
9. Is every person involved in implementation included in the marketing planning process in some way?
10. Is the plan clearly visible on your desk every day?
11. Is your business’s vision truly a ‘shared vision’?
If you can answer all these questions positively you have a powerful marketing plan ready for implementation.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Implementing the Marketing Plan
To turn marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.
Implementation involves day-to-day, month-to-month activities that effectively put the marketing plan to work.
Whereas marketing planning addresses the what and why of marketing activities, implementation addresses the who, where, when and how.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Reasons for Poor Implementation
Isolated planning Trade-offs between long and short-term
objectives Natural resistance to change Lack of financial and marketing integration Overemphasis on the document
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Factors for Successful Implementation
Action program that pulls all the people and activities together.
Formal organisation structure. A company’s decision and reward systems (operating
procedures that guide planning, budgeting, remuneration and other activities).
Careful human resources planning. Marketing strategies must fit with its company culture.
Company culture is a system of values and beliefs shared by people in an organisation—the company’s collective identity and meaning.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Marketing Department Organisation
Implementation is affected by the structure of the organisation.
The most common form of marketing organisation is by job function.
Product management organisation or geographical organisation could be other approaches.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 4.2: Functional Organisation
MarketingDirector/Manager
New-ProductManager
SalesManager
AdvertisingManager
MarketingResearchManager
CustomerService
Manager
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 4.4: Product Management Organisation
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Controlling and Evaluating Performance
Marketing Control: The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that marketing objectives are attained.
Marketing Audit: A comprehensive, systematic and periodic examination of a company’s environment, objectives, strategies and activities to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing performance.
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Figure 4.5: The Control Process
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Step 1. Ask “Where Are We Now?”
SWOT Analysis Strengths
• Competencies? Sustainable Competitive Advantages? Unique Selling Points?
Weakness Opportunities Threats
Internal
External
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
SWOT should result in information about: Firm itself Trends in industry Competitors Customers
Need to translate into action plan
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Objectives: Make a profit Develop the organization Be socially useful
Company objectives affect marketing objectives Objectives must be compatible Coy resources may limit opportunities
• Financial strength, marketing strength, production capability and flexibility
Step 2: Ask “Where Do We Want To Go?”
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Step 3: Segment, Target, Position
Market Segmentation Identify buyers 1) with common needs, and 2) will
respond similarly
Targeting Select a segment and focus efforts and resources
on it
Positioning How consumers see your product Points of difference, company philosophy etc
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Step 4: Develop Marketing Program
Strategies for the 4Ps What product to offer? At what price? How to promote to consumers? Where to place them for sale?
Estimate budgets
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Step 5: Implement & Control
Implementation Obtain resources Organize the team Develop schedules Working with other departments Executing plan
Control Steer to stay to plan Steps 4 & 5: Iterative process May need update of 4P strategies