Topic 2: Company and Marketing Strategy 1

2  Learning Outcomes  Be able to set measurable objectives  o Understand three dominant planning philosophies: Synoptic [Textbook] Planning that emphasises formal process, structure and organised direction. Incremental Planning that emphasises informality and gradual adaptation. Critical Point Planning that combines the best of the previous two approaches.  o Be able to explain a practical Business and Marketing Planning method that uses Planning  Gap Analysis to help select the firm's Marketing Strategy.  o Understandthe four primary Marketing Strategies: Market Penetration,  Market Development Product Development and Diversification.  o Be able to then understand the tight link connecting the firm's overall Marketing Strategy to its day-to-day Marketing Tactics in the form of the Marketing Mix.  o Describe various common means of implementing and controlling the firm's Marketing  Plan with particular emphasis on Marketing Metrics and Key Performance Indicators (KPI’s)

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8  Critical Point Planning: 1 st described by Dutch researchers in late 1990’s after studying Dutch SME’s.  Combines best qualities of textbook and Incremental Planning.  Most of the time the business develops and implements plans on an informal basis [incrementally].  However when faced with a major issue or decision [a ‘Critical Point’], management have the awareness and expertise to adopt a highly structured ‘Textbook’ planning approach – which does a lot to ensure that the best possible planning decisions are taken through carefully considered, properly researched & formally organised planning process.  Once the Critical Point has been resolved the firm switches back into its normal, informal Incrementalist mode.

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 Coined by H. Igor Ansoff (1957) who provided the four growth strategies of a business: 1.Market Penetration 2.Product Development 3.Market Development 4.Diversification Ansoff used SYNERGY to explain the idea that there must be a logical “common thread” between strategy, strengths and capabilities that are part of the business today and the new strategy selected for the future. 11

 Ansoff reasoned that the only way a new strategy makes commercial sense is if it adds more value to the existing business than the investment cost of taking up the new strategy.  Therefore Ansoff called synergy the 2+2=5 effect i.e. the existing strategy and strengths plus the new strategy and its fresh commercial opportunities yields a greater result than the simple sum of the parts. 12

13  A detailed plan specifying tactical marketing mix and marketing support activities, budgets and accountabilities.  It usually spans an annual cycle and is broken down by month.  The primary means of setting priorities and exercising control over marketing actions.

 The process of turning plans and strategies into concrete results and action.  Many organisations are very good at developing marketing plans but their performance does not improve because they are chronically bad at implementation. 14

 Because implementation problems arise when a strategy is actioned, it is strongly recommended that implementation issues are addressed upfront in the planning process so that the strategy itself can be developed around known implementation issues: that way a feasible and realistic strategy has an improved chance of being developed e.g. SAS. 15

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 There are only four ways to grow a business 1.Market Penetration 2.Product Development 3.Market Development 4.Diversification ◦ Each way is called a strategy ◦ Choosing a strategy is a big decision – total commitment ◦ Very similar firms can choose differing strategies ◦ SOME FIRMS DON’T HAVE A STRATEGY 17

 Knowing when to stick with your strategy and when to change is vitally important  Strategic “Windows” – Timing  Strategic Resources – these must be ◦ Adequate ◦ Concentrated ◦ Competitive 18

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ANSWER THE FOLLOWING:  Why are we here?  What’s this business supposed to do for us?  Why does it exist?  What’s its purpose? Why are we putting ourselves through this everyday?  Our long term purpose is …………… (Vision) ◦ Sell off to retire? Pass onto to Kids? Make a fortune? Have a lifestyle? What???????????????? 24

 Where have we come from? (How did we end up here?)  Lessons Learnt: Values & Culture, Options open, Avenues closed, Open spaces, Out of bounds! 25 LIGHTDARK Successes Values Beliefs Attitudes Capabilities Failures Mistakes Fears Tensions Unresolved

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 Usually a ‘full on’ exercise!  Honest, objective and candid  Triangulate your data  Expect systems problems with SME’s  Information Gaps – Customers, product- market performance, management accounting  Immediately obvious issues  Less obvious issues  Team-based assessment – Strongly recommended! 27

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“Turning our Strategy into Action” [Implementation] 1. Market Penetration 2. Market Development 3. Product Development 4. Diversification Plus: Productivity Projects and Cost Reduction Actions 37

MARKETING PLAN FOR YEAR 1  Product Actions  Pricing Actions  Promotion Actions  Distribution Actions  Process Actions  People Actions  Physical Evidence Actions  Marketing Support Actions (e.g. Marketing Research Project) Set out for each month e.g. wall planner Set budget for each action Set ‘Start’ & ‘Deadline’ for each action Set Accountability for each action KEEP IT SIMPLE, FOCUSED & PRACTICAL Don’t be ‘Plan Bound’ – Things can change 38

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 Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an organisation define and measure progress toward organisational goals  These are usually long term; why?  Extracted from Management.about.com (2012) 46

 If the company objective was to be a good employer within the industry, how do you think I would measure success?  Hint (Turnover Rates) 47