marketing strategy and planning
TRANSCRIPT
MARKETING STRATEGY AND PLANNING
Dilip S. Mutum PhD
Nottingham University Business [email protected]
twitter: @admutum
Learning Outcomes
To define strategy, strategic planning and to understand the key concepts of the marketing planning process.
To understand the differences between strategic and tactical marketing planning.
To understand the key concepts and some strategic marketing analysis tools.
Strategy
A strategy is a plan of action designed toachieve certain defined objectives
Strategy is a plan that aims to give the enterprise a competitive advantage over rivals.
Strategy is about understanding what you do,Knowing what you want to become,
and most importantlyFocusing on how you plan to get there.
Strategy is indeed a process!!
Strategy
Strategies are developed at multiple levels in the organizations – corporate, divisional, business unit, and departmental. They form an integrated plan for the organization as a whole.
Corporate strategies are the sum of business unit strategies plus any plans for new business initiatives.
Strategic Planning
Strategic planning is the process of developing and maintaining a
strategic fit between the organization’s goals
and capabilities and its changing marketing opportunities.
Excellent Companies
In Search of Excellence – (Tom Peters and Robert Waterman,1982)
43 “excellent companies”
8 years later - only 6 excellent companies left (Pascale, 1990)
Fixation with excellent tactics at the expense of strategy Pascale, R.T. (1990), Managing on the edge, New York:
Simon and Schuster, 352 pp
THE STRATEGY-TACTICS MATRIX
Effective Ineffective
Efficient Thrive
1
Die-Quickly
2
Inefficient Survive
3
Die-slowly
4
Tactics – doing things right
Strategy–doing the right things
Strategic Planning
- External environment, - Business unit goals- Business unit strength &
weaknesses
Product/Market Analysis
Strategic Planning, Implementation,
& Control Processes
The Marketing Planning Process, McDonald, 2007:49
KEY OUTPUTS
Mission Statement
Financial Summary
Market Overview
SWOT Analyses
Portfolio Summary
Assumptions
Marketing Objectives and Strategies
Three Year Forecasts and Budgets
One-Year Short Term Plan
Managing the Marketing EffortAnalysis
Marketing Analysis – SWOT Analysis
Porter’s Generic Strategies
Overall Cost Leadership
Differentiation
Focus
The lowest production and distribution costs so they can under price competitors and win market share
The business concentrates on achieving superior performance in an important customer benefit areas valued by a large part of the market
The business focuses on one or more narrow market segments, get to know them intimately, and pursue either cost leadership or differentiation within the target segment
Five Forces Determining Segment Structural Attractiveness
Example
Mat Ramli is deciding whether to switch career and become a farmer
He's always loved the countryside, and wants to switch to a career where he's his own boss.
He creates the following Five Forces Analysis as he thinks the situation through:
Porter’s Five Forces – Buying a Farm
Threat of New entry
SupplierPower Buyer
Power
Threat of substitutio
n
Threat of new entry-Not too expensive to enter the industry-Experience needed, but training easily available-Some economies of scale-No technology protection-Low barriers to entryNew entry quite easy (-)
Competitive rivalry-Vary many competitors-Commodity products-Low switching costs-Low customer loyalty-High costs of leaving market High competition (- -)
Buyer Power-Few, large supermarkets-Vary large orders-Homogeneous product-Extreme price sensitivity-Ability to substituteHigh buying power (- -)
Supplier power-Moderate number of suppliers-Suppliers large-Able to substitute-Able to changeNeutral supplier power
Threat of substitution-Some cross-products-Ability to import foodSome substitution (-)_
Competitive
Rivalry
Industry Concept of Competition
Number of sellers and degree of differentiation
Entry, mobility, and exit barriers
Cost structure
Degree of vertical integration
Degree of globalization
Strategic Planning
All corporate headquarters undertake four planning activities:
Defining the corporate mission.
Establishing strategic business units (SBUs).
Assign resources to each SBU.(attractiveness)
Assessing growth opportunities.
(strategic fit )
Strategic Planning
The business portfolio is the collection of businesses and products that make up the company
Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company
Strategic Planning
Strategic business unit (SBU) is a unit of the company that has a separate mission and objectives that can be planned separatelyfrom other company businesses
Company division
Product line within a division
Single product or brand
Analyzing the Current Business Portfolio
Strategic Planning
Strategic planning is the process of developing and
maintaining a strategic fit between the organization’s goals and capabilities and
its changing marketing opportunities.
Strategic Planning – Assessing Growth Opportunities
Assessing growth opportunities include planning new businesses, downsizing and terminating older businesses.
If there is a gap between future desired sales and projected sales, corporate management will need to develop /acquire new businesses to fill in.
To release needed resources for other use, and to reduce costs, companies must be carefully prune, harvest or divest tired old businesses.
Strategic Planning
Difficulty in defining SBUs and measuring market share and growth
Time consuming
Expensive
Focus on current businesses, not future planning
Problems with Matrix Approaches
The Strategic Planning Gap - Assessing Growth Opportunities
Integrative - horizontal, backward and forward integration - Identify opportunities within current business, build/acquire businesses related to current businessDiversification - identify opportunities to add businesses unrelated to current businesses.
Strategic Planning – Intensive Growth
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
Jaguar XE
JLR Sales first 8 months 2013
Source: JLR Media Centre (10 Sept. 2013) (http://newsroom.jaguarlandrover.com/en-in/jlr-corp/news/2013/09/jlr_record_sales_performance_in_august_100913/)
Ansoff’s Product-Market Expansion Grid (Intensive Growth)
Strategic Planning
Market penetration is a growth strategy increasing sales to current market segments without changing the product (new stores/branches, get people to shop more often (improvement in prices, communication mix, selection of menu, etc)
Market development is a growth strategy that identifies and develops new market segments for current products (overseas market,
demographic profile)
Strategic Planning
Product development is a growth strategy that offers new or modified products to existing market segments (bank, new menu)
Diversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and markets – Virgin group of Companies
Expanding the Total Market
New customers
More usage
•those who might use it but do not•those who have never used it•those who live elsewhere
To increase the amount, level, frequency of product consumption-Through packaging or product redesign, larger packages increase
the amount consumer use at one time (impulse buying)-Increasing frequency of consumption
-to identify additional opportunities to use the brand in the same way - to identify completely new and different way to use the brand
Expanding the Total Market
New customers
More usage
Planta, Mayonnaise
Promo Segmen Nona PlantaResipi Warisanku @ Tv3! (SetiapAhad)
New Ways to Use a Brand
Arm and Hammer – not just a baking soda…..
Victorinox Adapts
More than 130 years old company
Core product: Swiss Army Knife
Post 9/11 and aircraft bans
Sales drop by 30%
What did Victorinox do?
Adapt products – without knife blades with USB memory sticks, etc.
Diversified into new product categories: watches, luggage and fashion
Moved into new markets: Russia, India and China
Categories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
Credit card
Travel web – hotel, car rental, admission ticket etc
Visa and Olympic
3PL & Businesses
Hypothetical Market Structure
Market Challenger - Pepsi buys Gatorade in a
Bypass Strategy
Bypass attack – diversify into unrelated products- New geographical market- Leapfrogging into new technologies
Market Follower Strategies
Counterfeiter
Cloner
Imitator
AdapterThe adapter takes the leader’s product and adapts or improve them
The imitator copies some things from the leader but differentiates on packaging
Emulates the leader’s product, name and packaging with slight variations – e.g.cereal
Duplicate the leader’s product and packages and sells it on the black market
Market Nicher Strategies
Niche Specialist Roles
End-User Specialist
Vertical-Level Specialist
Customer-Size Specialist
Specific-Customer Specialist
Geographic Specialist
Product-Line Specialist
Job-Shop Specialist
Quality-Price Specialist
Service-Specialist
Channel Specialist
Brand Leadership
Consumer Insights: Dulux
• ‘Paint’ is not consumer friendly
• Don’t think of paint not until we have to paint our house
• We choose the color but painter will decide the brand• Low involvement, no interaction, not ‘thrill’
about shopping for paint
• recommend by contractor, painter
• boring functional value (cold hard facts) –fungus free, color doesn’t fade
Nippon - Brand Leadership
Nippon - What Color Are You
Nippon Paint Superheroes
•Target 25 years and above (young adults)•show happy, easy to paint, icon (blobby), fashionable to paint more often
•a new need : odorless, spotless, solar reflect (product names reflect the benefits)
•Contemporary, fun, engaging (website), modern, colorful
Brand presence, intense brand engagementEducate through advertisementManage to charge premium price
