Marketing
Strategic planning and segmentation
Strategic Marketing Planning(SMP)
• Definition:The logic (Strategy/how) that matches the organization objectives & resources to its changing marketing opportunities within the organization’s financial boundaries.
• SMP is driven by the marketing concept as the market orientation is the prime strategic philosophy influencing:– Mission statement--purpose of existence (e.g. NIKE)– Internal strategies---value chain (inter-departmental)– External strategies---networking (with government, retailers)– Growth strategies---[e.g. Kellogg's, Pepsi (PepsiCo. foods)]
• Objectives plan: Market penetration, Market development, and Diversification
• Resources plan(4P’s): Product, Price, Promotion and Place/Distribution
SMP goals (Conti.)
• Maximize revenue
• Maximize profit
• Maximize return on investment
• Minimize cost
Contradicting (usually)
Optimum compromise
Types of SMP (Conti.)
– Strategic planning• Goal: Doing the right thing
• Time: Long term (3-5 years)
• Focus: Pan-organizational
– Tactical planning • Goal: Doing things right
• Time: Short term (1 or less years)
• Focus: Departmental
Strategic marketing management process
• Analysis of environment and customer behavior
• Planning: developing the marketing plan (for a product)that is a written document capturing the logic linking the organization objectives of creating/offering a certain product to its market/s with its overall objectives. – Implementation: applying the plan(action/execution)--vital for
success--ensuring ownership of the plan.
– Control: measure results--evaluate performance--take corrective action
Strategic marketing management process (conti.)
• Analysis– Environment (Marketing intelligence, managerial
environment(e.g. SWOT, BCG)• SWOT[strengths, weaknesses, opportunities and threats]
• BCG Matrix:
– Customer behavior: MIS Dog?
Cow
Market growth rate
High-Market share-low
High
Low
Segmentation
• Market Segmentation: dividing the consumer market into smaller groups each of which shares similar yet distinctive characteristics requiring different offerings. – Levels of market segmentation
Mass(e.g. early Coca-cola)
Segments
(Kellogg's)
Niche(e.g. CanJet)
Micro(local/individual) (e.g. some retailers/RR)
Segment Variables
Segmentation (Conti.)
• Consumer market segmentation variables(driven from consumer behavior)
– Geographic
• Country, city size, province, residential area, etc. (Retailers)
– Demographic
• Age, gender, income, etc.---Insurance (life/driving, etc.)
– Psychographic
• lifestyle/personality----GAP/Timberland/CAT
– Behavioral
• User status/rate, etc.---Air Canada Aeroplan/frequent flyer/VIP
Segmentation (Conti.)
• Targeting: – Evaluate and then
Select segment/s to serve
Positioning for competitive advantage
• Definition:the distinctive perception (position) of the product in customers’ mind compared to competition.– USP (more for more/M-Benz) v.Value proposition
(same for less/Loblaws’ PC)– iMac v. Pc’s– Risks
• Under-positioning--no perception at all
• Over-positioning---too narrow perception
• Confused positioning--vague perception