Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–1 Part 1: Marketing strategy and management Chapter 2: Strategic marketing planning

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–2 When we finish this lecture you should Understand what marketing managers do Know what marketing strategy planning is Understand what target marketing means Be familiar with the four Ps of the marketing mix Be familiar with the framework for marketing planning Understand that marketing plans are a written statement of the strategy Know the difference between a marketing strategy, a marketing plan and a marketing program Understand the difference between international and global strategy

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–3 Figure 2.1 The marketing management process

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–4 Figure 2.2 A marketing strategy showing the four Ps of the marketing mix

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–5 Marketing strategy planning Finding opportunities and developing profitable marketing strategies Target market – A similar group of customers to whom a company wishes to appeal Marketing mix/four Ps – The controllable variables that the company puts together to satisfy this target group

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–6 Figure 2.4 Overview of the marketing strategy planning process

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–7 Figure 2.4 Overview of the marketing strategy planning process

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–8 Exhibit 2.1 Marketers must design their plan with a specific target market in mind.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–9 Target marketing vs mass marketing Target marketing – Marketing mix is tailored to fit specific target customers Mass marketing – Vaguely aims at ‘everyone’ with the same marketing mix

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–10 Figure 2.5 Marketing decisions areas organised by the four Ps

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–11 The four Ps—product Concerned with developing the right product for the target market A ‘product’ can be a service Branding can be a key element of a product

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–12 Figure 2.6 Typical changes in marketing variables over the product life cycle

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–13 The four Ps—place Place is concerned with getting the right product to the target market A product reaches customers through a channel of distribution – Any series of businesses (or individuals) that participate in the flow of products from producer to consumer Physical distribution and decisions about logistics relate to other ‘place’ decisions

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–14 Figure 2.7 Four examples of basic channels of distribution for consumer products

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–15 The four Ps—promotion Promotion is informing the target market or others in the channel about the right product Marketers put together an optimum portfolio of these tools—the promotional mix – Personal selling – Non-personal communication  Advertising  Publicity  Sales promotions

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–16 Exhibit 2.2a New products must be introduced to the market with a differentiation that makes them stand out from their competition.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–17 The four Ps—price Price setting must consider the kind of competition in the target market—and the cost of the whole marketing mix Often, different customers pay different prices Marketers must decide what’s included in the price

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–18 Blending the four Ps Why is the four Ps idea helpful? – Provides an organising framework – Helps to bring many, more detailed decisions together in a logical fashion – Focuses thinking on the idea that ‘ALL’ marketing decisions must work together as a whole

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–19 Figure 2.8 Relating strategy policies to operational decisions for a children’s shoe company

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–20 Figure 2.9 Framework and summary outline of the different sections of a marketing plan

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–21 Figure 2.9 Framework and summary outline of the different sections of a marketing plan (continued)

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–22 Figure 2.9 Framework and summary outline of the different sections of a marketing plan (continued)

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–23 The marketing plan Marketing plan—a written statement of a marketing strategy and the time-related details for carrying out the strategy Spells out, in detail – What marketing mix is offered – To what target market – For how long – What resources (costs) are needed and at what rate – What results are expected (e.g. sales and profits) – What control procedures will be used

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–24 Structure of a marketing plan Executive summary Introduction and situation analysis Target market and segments Objectives and goals Strategic options Selected strategy Tactics Budget Audit and control procedures

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–25 Executive summary A complete 1–2 page summary of the marketing plan An overview of the major goals and elements of the plan Key underlying assumptions – Relevant corporate objectives – External environmental factors

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–26 Introduction and situation analysis Background about company Key performance trends and any desired changes Set the scene and assess the company’s past strategy

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–27 Introduction and situation analysis (continued) Environment scanning for relevant trends – Demographic – Economic – Social and cultural – Technological – Political and legal – Competitors – Market research – SWOT analysis – Assumptions to be made

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–28 Segmentation and targeting Main benefit delivered by the product must be identified Segment/s of the population most likely to value this benefit should be discussed Market research – Estimate the market size, given the target market and the foreseeable competition

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–29 Company objectives or goals Outline the company mission Identify all company objectives or goals Managers should ensure their objectives are SMART – Specific – Measurable – Achievable – Realistic – Time-bound

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–30 Strategic options and selected strategy Identify and analyse possible strategic choices Select particular target markets and develop major marketing mix components Test ‘fit’ the company’s SWOT analysis Prepare a broad statement of strategic direction indicating overall marketing mix and target market strategies to be developed Specify competition Prepare a positioning statement and image description

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–31 Tactical elements—the marketing mix Significant detail within each component of the selected strategy Product name, brand Price Place of distribution Packaging options and design Advertising, sales promotions, sales-force management

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–32 Tactical elements—the marketing mix (continued) Credit terms Timing, budgeted costs People to coordinate Key results expected

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–33 Budget Monthly Quarterly Product or product-group level Sales quantities and revenues Costs – Production – Provision of services – Physical distribution – Advertising – Personal selling

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–34 Audit and control procedures Monitoring of performance Which activities are being achieved Monitor relevant internal/external environmental factors Relate to objectives

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–35 The marketing program Marketing program—blends all the company’s marketing plans into one ‘big’ plan, which is an integrated part of the whole-company strategic plan Program requires an effective ‘building up’ process – A good program must be based on good plans – Each plan must be carefully developed – Each plan is based on a marketing strategy – Each strategy is based on a marketing mix and a target market

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–36 Figure 2.10 Elements of an organisation’s marketing program

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–37 Figure 2.11 Distribution of different companies based on their marketing performance

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–38 Strategy planning for international marketing Marketing managers must plan the company’s overall marketing program to be flexible so that it can be adapted to conditions in different countries Delegate responsibility to local managers Develop regional groupings Global marketing – Focus on similarities between markets around the world and attempts to develop and implement common product, place and promotion strategies and plans in those various markets

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–39 Suggested approach to global marketing Identify all important areas of similarity and difference between markets Delegate some decision-making to local management Clarify which elements of the marketing mix are essential in achieving goals Obtain feedback from local management to enable common problems to be identified Consider developing a strong international culture

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–40 Exhibit 2.5 Cultural differences are some of the reasons that make international marketing difficult.

Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–41 What we will be doing in the next chapter In Chapter 3 we will discuss that marketers must understand the capabilities of the company and its competitors; analyse customer needs; and choose marketing strategy variables within the framework of the marketing environment. They must also understand how that environment is changing when assessing the best opportunities for their organisation.