Marketing: An Introduction Armstrong, Kotler

1. Marketing: An Introduction Armstrong, Kotler Chapter Two Strategic Planning and the Marketing Process

2. Looking Ahead • Explain companywide strategic planning and its four steps. • Discuss business portfolio design and strategies. • Explain marketing’s role in strategic planning and the importance of value chains and networks. • Describe the elements of a customer-driven marketing strategy and mix. • List the marketing managementfunctions and elements of a marketing plan.

3. What Is Strategic Planning? Strategic Planningis the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

4. Steps in Strategic Planning We look first at the organization’s overall strategic planning, then we discuss how marketers guided by the strategic plan, work closely inside and outside the company to serve customers, finally we examine marketing strategy and planning. Corporate level • Define the company mission. • Set company objectives and goals. • Design the business portfolio. Figure 1 Business unit, product and market levels. • Plan marketing and other functional strategies.

5. Steps in Strategic Planning Figure 1 Defining the Company mission Setting company Objectives & goals Designing the Business portfolio Planning marketing And other functional strategies

6. Corporate level 1- Defining a clear company mission: “Purpose” • Mission Statement of marketing unit ; should be realistic, specific, motivated, and should fit the market environment. • Examples; Company Product-oriented definitionMarket-oriented definition Disney We run theme Parks We create fantasies- a place where is America still works the way it’s supposed to. Mercedes We build cars With a leadership position in the industry comes a responsibility to give back

7. Corporate level 2- Setting company objectives and goals • The company’s mission needs to be turned into detailed supporting objectives for each level of management. Mission leads to business objectives and marketing objectives. • Example; if the business over all objective is to “increase the company market share”. marketing strategic plan might increase products availability and promotion, and that may require more sales people and more budget. Figure 2

8. Figure 2 Marketing

9. Market level 3- Designing the Business portfolio • The business portfolio is the collection of businesses and products that make up the company. • The company must: • Analyze its current business portfolio or Strategic Business Units (SBUs). • Decide which SBUs should receive more, less or no investment.. Figure 3 4- Developing strategies for growth and downsizing; Example; product/ market expansion grid. Figure 4

10. Analyzing the current business portfolioUsing; growth share matrixdeveloped by Boston consulting Group ( BCG) The objective is which question marks can be turned to Starts, and Which starts can be turned into cash flows, and clear decisions about dogs • Stars • High growth market & high share • Profit potential • “May require heavy • investment to grow” • Question Marks • High growth, low market share • “Require a lot of cash to • hold market share” ? • Cash Cows • Low growth market, high share • we have to establish, successful • SBU’s • “ Less investment, but a lot • Of cash” • Dogs • Low growth market & share • Low profit potential • “ low cash flow may be • generated”

11. Potential Matrix Problems • Can be time consuming and costly. • Difficult to define SBUs and measure market share and growth. • Focus on the current business, not future planning. • Can place too much emphasis on growth. • Can lead to poorly planned diversification.

12. Market level 4- Developing strategies for growth and downsizing; Example; product/ market expansion grid. Figure 4 Strategies for growth business Market penetration; making more sales to current customers without changing its products. By improving services, re prices, menu selection. Market development; opening new market for the existing products. New market target, international market. Product development; new product for current market. Add a breakfast special, buy one get one free…. Diversification; Buy businesses of outside of its current products and markets. Starbuck coffee sells music CDs.

13. Existing Products New Products Existing Markets Market Penetration Product Development New Markets Market Development Diversification Analyze Opportunities by Tim Horton’s • Product-Market Expansion Grid identifies four potential growth areas. Figure 4

14. Marketing strategy and the marketing mix Marketing strategy; marketing logic to by which the company hopes to achieve a profitable life-long relationship with customers. It involves deciding which customers to serve (segmentation and targeting) and with what value proposition ( differentiation and positioning),Figure 5

15. Intermediaries Competitors Marketing analysis product Marketing planning Figure 5 segmentation Target market place Customer price positioning Marketing control promotion Marketing implementation Suppliers Publics

16. Factors Influencing Company Marketing The Four P’s

17. Market segmentation; dividing the market into different groups of buyers who have different needs, and who might require separate products or marketing mix. Target marketing; the process of evaluation each market segment’s attractiveness and selecting one ore more segments to enter. Market positioning; placing a product to occupy a clear and desirable place relative to competitors in consumer’s minds. Blazer “ Like a rock”. Lexus ” The passionate pursuit of excellence’. Marketing Mix; set of controllable tactical marketing tools (Product, price, place, promotion) to influence the demand for its product in the market.

18. Create Marketing Mix • Product – offers the right product, service or experience. • Price – controls perceived value and satisfaction. • Place – allows customers easy access to product and support. • Promotion – communicates the offer and the value proposition. Figure 6

19. Product • Varity • Quality • Design • Features • Brand name • Packaging • services • Price • List price • Discounts • Allowances • Payment period • Credit terms • Developing Marketing Mix Figure 6 Target customers Intended Positioning • Place • Channels • Coverage • Assortments • Locations • Inventory • Transportation • Logistics • Promotion • Advertising • Personal selling • Sales promotion • Public relation

20. The Four Ps and the Four Cs • PRODUCT provides CUSTOMER SOLUTION • PRICE represents CUSTOMER COST • PLACE provides CONVENIENCE • PROMOTION is 2-way COMMUNICATION

21. Manage Marketing Effort • Build strong operational marketing plan. • Carry out the plan. • Organize marketing department. • Leverage value chain and value network. • Exercise control. • Set goals. • Measure and evaluation performance. • Take corrective action. Figure 7

22. Analysis • Marketing analysis; It’s the process of planning, implementing, and control Planning Develop strategic plans Develop marketing plans Implementation Carry out the plan Control Measure results Evaluate results Take corrective Action