Strategic Marketing Planning
Strategic Marketing Planning
11/16/2009 Dr. Ranjan Kantha, KBS 2
What is Strategic Planning?
It is the managerial process that helps to develop a strategic and viable fit between the firm’s objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products.
11/16/2009 Dr. Ranjan Kantha, KBS 3
How to go about it?
Defining the corporate missionEstablishing SBUsAllocating resources for SBUsPlanning for new business
11/16/2009 Dr. Ranjan Kantha, KBS 4
Corporate Mission
This seeks to embody the entire goals of the organization and the objective of its existence.It seeks to provide a sense of purpose, direction and opportunity
11/16/2009 Dr. Ranjan Kantha, KBS 5
5 questions that the firm must ask itself
What is our business?Who is our customer?What does our customer need?What will our business be?What should our business be?
11/16/2009 Dr. Ranjan Kantha, KBS 6
Marketing Myopia
Industry is a customer satisfying process not a goods producing process.It is important therefore how you redefine your business.
11/16/2009 Dr. Ranjan Kantha, KBS 7
Good mission statements have three characteristics
They focus on a limited number of goalsIt stresses the major values and policies the firm desiresIt defines the major competitive scope of operation
11/16/2009 Dr. Ranjan Kantha, KBS 8
Infosys Technologies Limited
“To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors, and society at large.”
11/16/2009 Dr. Ranjan Kantha, KBS 9
Biocon
“To be an integrated biotechnology enterprise of global distinction.”
11/16/2009 Dr. Ranjan Kantha, KBS 10
eBay
“We help people trade anything on earth.We will continue to enhance the onlinetrading experiences of all—collectors, dealers, small businesses, unique itemseekers, bargain hunters, opportunitysellers, and browsers.”
11/16/2009 Dr. Ranjan Kantha, KBS 11
Product Orientation vs. Market Orientation
Company Product Market
Xerox We make copying equipment
We improve office productivity
Columbia Pictures
We make movies We entertain people
Encyclopedia Britannica
We sell encyclopedias We distribute information
Carrier We make air conditioners and furnaces
We provide climate control inside homes
11/16/2009 Dr. Ranjan Kantha, KBS 12
SBU
It is a company within a companyThe business is differentiated from the rest of the companyIt has its own set of competitorsIt is a separate profit centre
11/16/2009 Dr. Ranjan Kantha, KBS 13
Concept of Planning
What should be doneWhy is action necessaryWhere shall it be doneHow shall it be doneWho will do itWhat physical resources required
11/16/2009 Dr. Ranjan Kantha, KBS 14
Steps in planning
Establish the objectiveSituation analysis Environmental scanningDetermine alternate course of actionEvaluation of alternativesSelect the best from the alternativesFormulation of planExecution
11/16/2009 Dr. Ranjan Kantha, KBS 15
Steps in the Marketing Planning Process
11/16/2009 Dr. Ranjan Kantha, KBS 16
Marketing Planning
11/16/2009 Dr. Ranjan Kantha, KBS 17
BCG Market Share/Market Growth BCG Market Share/Market Growth MatrixMatrix
11/16/2009 Dr. Ranjan Kantha, KBS 18
The BCG Matrix for ITC Ltd.
StarsHotelsPaperboards/
Packaging.Agri business.
?FMCG- Others
CowsFMCG-Cigarettes
Dogs Maybe ITC Infotech.
11/16/2009 Dr. Ranjan Kantha, KBS 19
PorterPorter’’s Five s Five Forces ModelForces Model
11/16/2009 Dr. Ranjan Kantha, KBS 20
SWOT SWOT AnalysisAnalysis
11/16/2009 Dr. Ranjan Kantha, KBS 21
Ansoff’s Product-Market Grid
Current products New products
Current Mkts
New Mkts
Mkt penetrationstrategy
Mkt developmentstrategy
Product developmentstrategy
Diversificationstrategy
11/16/2009 Dr. Ranjan Kantha, KBS 22
SBU strategies
BuildHoldHarvestDivest
11/16/2009 Dr. Ranjan Kantha, KBS 23
SWOT Analysis
StrengthsWeaknessesOpportunitiesThreats
11/16/2009 Dr. Ranjan Kantha, KBS 24
The GE Model
Business Strength
Mkt
Attr
activ
enes
s
Strong
Medium
Weak
StrongMediumWeak
11/16/2009 Dr. Ranjan Kantha, KBS 25
The Planning Process
Analysing Market opportunitiesDeveloping Marketing strategiesPlanning Marketing ProgramsManaging the Marketing Effort
11/16/2009 Dr. Ranjan Kantha, KBS 26
Porter’s Generic Strategies
Overall cost leadershipProduct DifferentiatorFocus
11/16/2009 Dr. Ranjan Kantha, KBS 27
Marketing Control
Annual Plan controlProfitability controlStrategic Control
11/16/2009 Dr. Ranjan Kantha, KBS 28
Elements of a Marketing Strategy
Blending the four strategy elements of marketing decision-making to satisfy chosen target markets
ProductPriceDistributionPromotion
11/16/2009 Dr. Ranjan Kantha, KBS 29
Target Target MarketMarket
Group of people toward whom the firm decides to direct its marketing efforts
11/16/2009 Dr. Ranjan Kantha, KBS 30
Marketing Mix VariablesMarketing Mix VariablesProduct StrategyProduct Strategy
What goods or services to offerCustomer servicePackage designBrand namesTrademarksWarrantiesProduct Life Cycle PositioningNew-product development
11/16/2009 Dr. Ranjan Kantha, KBS 31
Marketing Mix Variables Marketing Mix Variables Distribution StrategyDistribution StrategyPlanning that ensures that consumers find their products in the proper quantities at the right times and places.
Modes of transportationWarehousingInventory controlOrder processingMarketing channels
11/16/2009 Dr. Ranjan Kantha, KBS 32
Marketing Mix Variables Marketing Mix Variables Promotional StrategyPromotional Strategy
Blending together the various elements of promotion to communicate most effectively with the target marketInforming, persuading, and influencing a consumer’s purchase decision.IMC
11/16/2009 Dr. Ranjan Kantha, KBS 33
Marketing Mix Variables Marketing Mix Variables Pricing StrategyPricing StrategyDeals with the methods of setting profitable and justifiable prices
11/16/2009 Dr. Ranjan Kantha, KBS 34
The Marketing EnvironmentThe Marketing EnvironmentCompetitivePolitical – LegalEconomicTechnologicalSocial – Cultural
Rule of three
11/16/2009 Dr. Ranjan Kantha, KBS 35
Methods for Marketing Planning
Business Portfolio AnalysisBusiness Portfolio AnalysisStrategic Business UnitsStrategic Business Units (SBUs) are key business units within diversified firms
A division, product line, or single product may define an SBUFirms redesign their SBUs as market conditions dictate
11/16/2009 Dr. Ranjan Kantha, KBS 36
The BCG MatrixThe BCG MatrixMarket Share/ Market Growth MatrixMarket Share/ Market Growth Matrix: a marketing planning tool that classifies a firm’s SBU’s or products according to industry growth rates and market shares relative to competing products
StarsCash CowsDogsQuestion Marks
11/16/2009 Dr. Ranjan Kantha, KBS 37
The Strategic Context
11/16/2009 Dr. Ranjan Kantha, KBS 38
The Strategic Context FrameworkThe Vision - a statement about what an organization wants to become. It should give shape and direction to an organization’s future.
The Mission - a broad statement of intention, which sets out an organisation’s purpose and direction, what it wishes to achieve in the long term.
Organisational values - define the acceptable interpersonal and operating standards of behaviour. They govern and guide the behaviour of individuals within the organisation.
Organisational Goals - the desired outcomes of the organisation’s various activities. These may be articulated in terms of profit, market share, share value, return on investment or numbers of customers served.
Corporate Strategy - the means by which the resources of the organisation are matched with the needs of the environment in which the organisation decides to operate.
11/16/2009 Dr. Ranjan Kantha, KBS 39
Three Key Activities of Marketing Strategy Development
11/16/2009 Dr. Ranjan Kantha, KBS 40
Strategic Market Analysis• External Environment - Pestle, Environmental Scanning
• Performance Environment - 5 Forces, Competitor and Supplier Analysis
• Internal Environment - resource analysis
The task is to assimilate the information derived from the analysis of the environment, and to bring it together in a form that can be easily understood. To do this two main
tools can be used:
Scenario Planning
SWOT
11/16/2009 Dr. Ranjan Kantha, KBS 41
Strategic Market Analysis
Scenario Planning –an attempt to understand how trends might influence the future of an organisation and how managers can gain a better understanding of some of the uncertainties an organisation faces if it pursues particular strategies.
SWOT –A series of checklists derived from the marketing audit and the PESTLE analysis, presented as the internal strengths and weaknesses, and the external opportunities or threats.
11/16/2009 Dr. Ranjan Kantha, KBS 42
Strategic Marketing Goals
11/16/2009 Dr. Ranjan Kantha, KBS 43
Strategic Marketing Growth Goals
• Intensive growth - refers to concentrating activities on markets and/or products that are familiar. By increasing market share or by introducing new products to an established market growth, growth is achieved by intensifying activities.
• Integrative growth - occurs where an organisation continues to work with the same products and same markets but starts to perform some of the activities in the value chain that were previously undertaken by others.
• Diversification - refers to developments outside the current chain of value adding activities. This type of growth brings new value chain a activities because the firm is operating with new products and in new markets.
11/16/2009 Dr. Ranjan Kantha, KBS 44
Strategic Market Action
11/16/2009 Dr. Ranjan Kantha, KBS 45
Five Areas of Strategic Market Action
Competitive - is achieved when an organisation has an edge over advantage its competitors when attracting buyers. It has a
superior value proposition.
Generic - there are three generic strategies; overall cost strategies leadership, differentiation and focus strategies, used
in order to develop an advantage.
Competitive - Four main positions can be identified; market leader, positioning challenger, follower and nicher
Strategic - Strategic Competition & Warfare, Strategic Cooperation intent & Relationships
Marketing – organising and implementing the strategic action. planning
11/16/2009 Dr. Ranjan Kantha, KBS 46
Marketing Planning
Marketing planning is a sequential process involving a series of activities
leading to the setting of marketing objectives and the formulation of plans for
achieving them.
(McDonald, 2002 : 27).
11/16/2009 Dr. Ranjan Kantha, KBS 47
Summary• Described the strategic planning process.
• Explained the key influences that impact on marketing
strategy.
• Explained how understanding competitors can assist the
development of marketing strategy.
• Explained the principles of Porter’s generic strategies.
• Explained how scenario planning and SWOT analysis
can help strategic marketing decision-making.
• Outlined the key elements within a marketing plan