Principles of Marketing -Session 2 Strategic Planning and the Marketing Process

By: Dr.R.Satish Kumar

Session Objectives

Explain strategic planning Describe competitive advantage strategies Explain relationship marketing and its tools Describe functional planning strategies Describe the marketing process List the marketing management functions and elements of the marketing plan

Strategic Planning

The process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities

Strategic Planning: Steps

Defining Defining the the company company mission mission

Setting Setting company company objectives objectives and goals and goals

Designing Designing the the business business portfolio portfolio

Planning, , Planning marketing, , marketing and other and other functional functional strategies strategies

Strategic Planning
Corporate Strategic Planning Strategic Business Unit (SBU) Business Unit Strategy

Functional Strategy

Strategic Planning: Mission Statement

Mission Statement

Purpose Guides peoples efforts Understand values Ethical behaviour

Strategic Planning: Mission Statement Criteria

Market-oriented Realistic Specific Appropriate for the environment Based on competencies Motivating

Designing the Business Portfolio The Big Picture

B u si e ss Po rtfo l o : T h e co l e cti n n i l o o f b u si e sse s a n d p ro d u cts th a t n co m p ri th e co m p a n y se

Analyzing the current portfolio Plan crossfunctional strategies

Develop growth strategies

Designing the Business Portfolio: Analyzing the Current Portfolio

Portfolio analysis: A tool that management uses to identify and evaluate the various businesses that make up the company Identify key businesses Assess attractiveness of each business

BCG Approach one option

Determine appropriate support level

Designing the Business Portfolio: The BCG Growth-Share Matrix

High

Market growth rate

Star

Question mark

Cash cow

???
Dog Low

Low
High

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Relative market share

Designing the Business Portfolio: Analyzing the Current Portfolio

Problems with Matrix Approaches

Difficult and time consuming Costly to implement Difficult to define SBUs Focus is on current business over future Overemphasis on market share and growth

Today, strategic planning is decentralized

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Designing the Business Portfolio: Developing Growth Strategies

Existing products Existing markets

New products

1. Market penetration

3. Product 3. Product development development

New markets

2. Market 2. Market development development

4. Diversification 4. Diversification

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Designing the Business Portfolio: Developing Growth Strategies

Competitive position may be a determinant of strategy

Involves competitive analysis

Market-leaders Market-followers Market-challengers Market-nichers

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Designing the Business Portfolio: Developing Growth Strategies

Achieving competitive advantage

Overall cost leadership Differentiation Focus

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Designing the Business Portfolio: Developing Growth Strategies

Gain leadership positions by delivering superior value to customers

Operational excellence Product leadership Customer intimacy

Clear chosen strategy leads to success Middle-of-the-road strategies do worst

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Designing the Business Portfolio: Developing Growth Strategies

Customer relationship marketing

Creating, maintaining, and enhancing strong relationships with customers and other stakeholders Losing a customer means losing them for LIFE!

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Designing the Business Portfolio: Customer Value

Total Customer Value Total Customer Value

Customer Delivered Value

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Designing the Business Portfolio: Customer Satisfaction

Depends on products actual performance relative to buyers expectations Different degrees of satisfaction Based on expectations

Past buying experiences Word of mouth Marketing information

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Designing the Business Portfolio: Developing Growth Strategies

Loyalty and retention are related to customer satisfaction Growing share of customer Build loyalty through:

Financial benefits Club marketing programs Social benefits Add structural ties

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Designing the Business Portfolio: Planning Functional Strategies

Marketings Role

Guiding philosophy is the marketing concept Identify opportunities Evaluate potential Develop unit marketing strategies

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Designing the Business Portfolio: Planning Functional Strategies

Collaboration Between Functions
Marketing provides customer perspective All functions critical to satisfaction Inherent conflict between functions

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The Marketing Process

Demographiceconomic environment
M A ar k na e ly tin si g s

Marketing Channels
Ma P l r ke an tin ni g ng

Technologicalnatural environment

Product Target Consum ers Promotion

Suppliers

Place

Price
Im M p l ar em ke en tin ta g tio n

Publics

Ma Co rke nt ting ro l

Politicallegal environment

Competitors

Socialcultural environment

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Target Consumers
Market Segmentation

Market Targeting Market Targeting

Market Positioning Market Positioning

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Target Consumers: Market Segmentation

Group of consumers With a similar response To a given set of marketing stimuli

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Target Consumers: Market Targeting

Evaluating each segments attractiveness Selecting one or more segments to enter Single or multiple segment strategy

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Target Consumers: Market Positioning

Product occupies:

Position in consumers mind Clear Distinct Desirable relative to competition

Establishes competitive advantage

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The Marketing Mix

Product Product Target Target consumer consumer ss

Price Price

Promotion Promotion

Place Place

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M E L P M II A T N E T E L P M A T N

N N A L P G N IP N N A L G N I
N O II N O

g e tr a rt tS S c ia g e t c i s n a lP P s n a l

y ra rC a C tr u O y r O t u s n a lP P s n a l

e k ra a M g n ik tr M e g n i t s n a lP P s n a l

s y lA a n A s in s y l a s i

Managing the Marketing Effort

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Evaluate Results CONTROL Measure Results

Corrective Action

Marketing Plan Contents E xe cu ti su m m a ry ve C u rre n t m a rke ti g si a ti n n tu o A n a l s o f o p p o rtu n i e s a n d ysi ti th re a ts O b j cti s a n d i e s e ve ssu M a rke ti g stra te g y n A cti n p ro g ra m s o B u d g e ts 29 C o n tro l s

Marketing Implementation
Fit with company culture Decision and Reward systems Organization structure People

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Marketing Department Organization B y m a rke ti g fu n cti n p e rfo rm e d n o B y g e o g ra p h i a re a s co ve re d c B y p ro d u ct o r b ra n d re sp o n si i i b l ty B y m a rke ts se rve d M u l p l a p p ro a ch e s fo r l rg e ti e a co m p a n i s e

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C e k a T v ie tk c e ra rT o e C v i t c e r r o e

n o ic tA c A n o i t

a u lE a v E e tv u l a e t m rr o fe rP e P e c n a m o f c n a rM u s a e M e r u s a e e m rr o fe rP e P e c n a m r o f e c n a o G tS e S s le a o G t s l a

Marketing Control

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Session Review

Why is strategic planning important? How do businesses achieve competitive advantage? Explain relationship marketing What are functional planning strategies? Explain the marketing process List the marketing management functions

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