Developing Marketing Strategies

Session 2 January 21, 2012

Simultaneous strategies
1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 =6 =6 =6 =6 =6 =6 =6 =6 =6

Marketing and customer value

Marketing is to satisfy the customers needs & wants Deliver customer value at a profit Traditional Vs value chain creation
Segmentation Mass Marketing Specialized marketing

Traditional physical process

Make the product Sell the product
Design the product Advertise Distribute

Process

Sell

Service

Make

Price

Value chain and delivery system

Communicate the value

Choose the value

Market selection tools

Strategic Marketing

Customer segmentation

Distribution / Servicing

Sales force

Sourcing / Making

Sales promotion

Value positioning

Pricing

Advertising

Tactical Marketing

Product development

Service development

Provide the value

Value Chain
Value approach to marketing
Define the value segment value defining process Define the value proposition value developing process Define the value network value delivering process

Value Chain
Michael Porter proposed more value to customers
Support Activities Firms infrastructure Human Resource Management Technological Development

Inbound logistics

Operations

Outbound

Marketing

logistics

& Sales

Service

Primary Activities

Margins

Procurement

Core competencies
Business own and nurture the resources and competencies that make up the essence of the business
It is a source of competitive advantage in that it makes a significant contribution to perceive customers benefits. It has applications in a wide variety of markets It is difficult for competitors to imitate

Competitive advantage accrues to companies that possess distinctive capabilities Core competencies refer to that areas of special technical and production expertise Distinctive capabilities describe excellence in broader business processes

Marketing Plan
It is the central instrument for directing and coordinating the marketing efforts It operates at two levels Strategic Marketing Plan: It lays out the target markets and the value proposition the firm will offer based on the analysis of the best market opportunities Tactical Marketing Plan: It specifies marketing tactics, including product features, promotions, merchandising, pricing, sales channels and service Teams develop the marketing plan with inputs and agreements from every important function. Management implement plans at appropriate levels, monitors results and take necessary (corrective) steps

Marketing Plan
It is a written document that summarizes that the marketer has learned about the market place and indicate how the firm plan to reach its marketing objectives It contains tactical guidelines for the marketing programs and financial allocations over a planning period It is one of the most important outputs of the marketing process Executive summary Situational analysis Marketing strategy Financial projections Implementations and controls

Corporate mission
Corporate mission is a concise statement of the overall purpose for an organization existence. The statement of mission provides the nest starting point for strategic planning when they are expressed in terms of the customer benefit the firms sees itself offering A clear mission statement provides employees with a shared sense of purpose, direction and opportunity Peter Drucker classic question
What is our business Who is the customer What is the value to the customer What will our business be What should business be

Corporate mission
Good mission statements Focus on limited number of goals Stress the companys major policies and values Define the major competitive spheres within which the company will operate Take into account the long term view Is short, memorable, and meaningful

Corporate mission
Intensive growth
Product (Market) development, penetration, diversification

Integrative growth
Backward (vendors), forward (stores), horizontal (competitors) growth

Diversification growth
Concentric diversification - technological or marketing synergies with existing product lines appealing to new group of customers. Eg. Music industry start making tapes Horizontal diversification product lines unrelated to current product line. Eg. Music industry start making cassette holding trays Conglomerate diversification no relationship with its current technology, product, services. Eg. Music industry enter a new business like application software

Organizational culture
Organization comprises of culture, structure, and policies. Structure and policies can change but culture is difficult to change. People have to adapt to the culture to implement the strategy Culture is the way people talk, dress, greet customers etc

Managing change
A few strategies for managing change in the organization include Avoid the innovative title Use of buddy system Set the metric in advance Aim for a quick hit first Get data to back up the gut feeling

Strategic Business Units

Assessing Growth
Current Products New Products

Current Markets

Penetration

Product Development

New Markets

Market Development

Diversification

SWOT analysis
Monitor key macro environment forces and micro environment factors that can effect the profitability EXTERNAL ENVIRONMENT (Opportunities / Threats) Marketing opportunities are the areas of buyers need and the interest that a company has a high probability for profitability
Supply something that is in short supply Supply the existing products / services in a new / superior way Supply a new products / services

SWOT analysis
Monitor key macro environment forces and micro environment factors that can effect the profitability INTERNAL ENVIRONMENT (Strengths / Weaknesses) Make a checklist to evaluate yourself Marketing Finance Manufacturing
Company reputation Market share Customer satisfaction Product quality Service quality Pricing Distribution Promotion Sales force Innovation Geographic Cost Availability of capital Cash flow Financial stability Facilities Economies of scale Capacity Able / dedicated work force Production timelines Technical and manufacturing skills

Organizations
Visionary Capable leadership Dedicated employees Entrepreneurial orientation Flexible / responsive

Opportunities
Opportunities may take may forms Take into account converging industry trends and introduce hybrid products. Eg phones with camera Make the buying process convenient or efficient. Eg Online purchase Meet the need for more information and advice. Eg food / news / health channels Customize the standard form of products. Eg clothing Introduce new capabilities. Eg youtube Deliver the products faster. Eg TCS Vs Pakistan post Offer products at a lower price. Eg generic pharma products

Goal formulation
Goal formulation constitutes / is a mix of objectives, profitability, sales growth, market share improvement, risk , innovation, reputation, etc Management by Objectives (MBO) system to work the objectives must meet certain criteria They must be arranged in an hierarchy, from most to least important Objectives should be made quantifiable as much as possible Objectives should be realistic (SMART) Objectives must be consistent

Strategic Formulation
Strategy is a game plan achieving the targets Marketing strategy Technological strategy Sourcing strategy Michael Porter generic strategy
Over all leadership Differentiation Focus

Same strategy for the same target market constitutes a strategic group.

Strategic Alliance
To attain leadership firms require to form alliance Product or service alliance Pakola packaging Pepsi products Promotional alliance Logistic alliance Pricing alliance

End