BUSI 406 PRINCIPLES OF MARKETING: MARKETING STRATEGY PLANNING CHAPTER 2

Today’s Agenda  Answer any questions  Team Assignments  Let’s Review  Discuss material you read in Chapter 2

Let’s Review  Where did marketing come from?  Micro vs. Macro Marketing  Role of customer expectations, satisfaction, and value  Marketing concept

Today’s Goals  Marketing strategy planning  3C’s, SWOT, target marketing, and 4 P’s in a marketing mix  Attractive Opportunities

What is Marketing Strategy Planning? Finding attractive opportunities, developing sustainable marketing strategies, and being rewarded financially for doing so. Marketing Strategy Planning involves:  3C’s: Company, customers, competitors SWOT analysis  Marketing Strategy: Specifying a target market and a related marketing mix  Target Market: a fairly homogenous group of customers to whom a company wishes to appeal  Marketing Mix: the controllable variables (4 P’s) the company puts together to serve this target group  Product  Place  Price  Promotion and communication  Pro forma Budget: A plan without a budget is not a plan, show me the numbers, expected revenues against expected expenses, plus other outcome metrics

Selecting a Market-Oriented Strategy is Target Marketing Production-oriented manager sees everyone as basically similar and practices “mass marketing” Marketing-oriented manager sees everyone as different and practices “target marketing”

A B2B Example of Target Marketing

Marketing Strategy Planning Process – 3 C’s and SWOT Start with a broad look at the market - A group of consumers with broadly similar needs and different firms offerings (substitute) ways of meeting those needs. Think about opportunities in terms of “fit” Fit with customer needs Fit with the firm’s competencies Fit with the competitive situation Customers Company SWOT Competitors The “Market”

SWOT Analysis Threats Opportunities WeaknessesStrengths INTERNAL EXTERNAL

Developing Marketing Mixes for Target Markets – The 4 P’s The marketing mix TARGETMARKET

Product Elements

Place Elements or Distribution and Logistics Manufacturer or producer Geico Wholesaler

Promotion and Marketing Communications Elements Telling and Selling the Customer Mass Adv Social Media Mass Adv Social Media Personal Selling Sales Promotion

Price Elements Price Flexibility Price Flexibility Price Changes Over the Life Cycle Price Changes Over the Life Cycle Pricing Objectives Pricing Objectives Discounts and Allowances Discounts and Allowances Geographic Pricing Terms Geographic Pricing Terms Competition Price Setting

All 4 P’s Contribute to the Whole Marketing Mix Product Place Promotion Price Selection of Target Market Understanding the Target Market Leads to Good Strategies!

The Marketing Plan Guides Implementation and Control + Time- Related Details Time- Related Details Marketing Plan Marketing Plan = Target Market Target Market Marketing Mix Marketing Mix Marketing Strategy Marketing Strategy A Firm’s Marketing Program A Firm’s Marketing Program = = + + Other Marketing Plans Other Marketing Plans

Why Do Businesses Care?  Mass marketing no longer works  Effective positioning minimizes cost of ineffective marketing mix  Optimizing for each segment leads to high profits and loyalty  Necessary to stay competitive

Marketing Strategy Planning Process Identifies Opportunities to Serve Target Markets and to be Financially Rewarded for doing so Well

What Are Attractive Opportunities? Avoid Hit-or- Miss Marketing Competitive Advantage Breakthrough Opportunities

Types of Growth Opportunities to Consider Diversification Market development Product development Market penetration Present productsNew products Present markets New markets GENERIC GROWTH STRATEGIES

Market Penetration  Market Penetration  Trying to increase sales of a firm’s present products in its present markets.

Product Development  Product Development  Offering new or improved products to present markets

Market Development  Market Development  Trying to increase sales by selling present products in new markets  Why international opportunities?  The world is getting smaller!  Competitive advantage at home and abroad  Being a first-mover in a new market  Finding better trends

Diversification  Diversification  Moving into new products in new markets What do you think went wrong?

Today’s Take-Aways  Marketing strategy planning is an important process for all marketing organizations  Target marketing - Can’t develop one product for everyone!  Organizations use the marketing mix (4 P’s) to respond to the needs and preferences of the target market  Identifying attractive opportunities is important for growth and increasing organizational effectiveness

For Next Class…Wednesday  No class on Monday  For Wednesday read Chapter 3 – Evaluating Opportunities in the Changing Marketing Environment  We’ll talk about how to prepare the first team case write-up in class