Introduction to marketing Tutorial week 5 The marketing planning process

Agenda Revision and discussion

Steps in strategic planning Defining the company mission Setting company objectives and goal Designing the business portfolio Planning marketing and other functional strategies Business unit, product and market level corporate level

Marketing strategy

THE MARKETING PLANNING PROCESS ANALYSIS PLANNING Develop strategic plan Develop marketing plans IMPLEMENTATION Carry out the plans CONTROL Measure results Evaluate results Take corrective action FEEDBACK

Stages in Marketing Planning The question…   Where are we now? Business mission, marketing audit, SWOT analysis Where would we like to go? Marketing Objectives How do we get there? Core strategy, marketing mix decisions, organisation implementation Are we on course? Evaluation & Control

SWOT analysis Strength What is business good at? Are our products popular? Are our customer loyal? Do we have skilled and motivated workforce? Are we in solid financial position? Weakness: Is our business declining? Do we have competent manager? Is our computer system obsolete? Have we experienced past failures? Are we upgrading facilities? Opportunities what will new technology bring for us? Is the national economy strong? Are interest rates low? What are our possible new markets? What other business can we acquire to expand the org. Threats: What trends have been evident in the markets? What are the new laws and regulation? Are there new competitors? Are current competitors taking over our market share?

SWOT Analysis and Strategy Development

Marketing planning (Doing right things) Marketing mix strategy Generic strategies Cost leadership, differentiation or focus Product portfolio BCG matrix, to analyse which product to discard and which to retain Promotional strategies Distribution channel strategies Push Vs pull strategies Budget allocation

Marketing planning Guidelines for tactical planning: Try to do something that competition has not thought of yet Do not expect the results straight away Consistent message to all the people involved in the marketing process Be prepared for competitors response

Marketing implementation The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives. Whereas marketing planning addresses the what and why of marketing activities, implementation addresses the who, where, when and how. Doing things right.

Marketing control (are we on course?) Marketing control involve four step process Set specific marketing goal Measure its performance in market place Evaluate the cause of any difference between expected and actual performance Take corrective action to close the gaps between its goals and its performance.

Return on marketing investment Return on marketing investment is the net return from marketing investment divided by the costs of marketing investment. It measure the profit generated by investments in marketing activities. Company can access ROI in terms of Standard marketing performance (brand awareness, sales and Market share) Customer centered measure (customer acquisition, retention and life time value)

The marketing plan layout

Marketing plan Key contents of marketing plan Purpose of the plan and the ‘mission’ of the business Where the firm is now- ‘situational analysis’ Where it aims to get to (marketing objectives) and how it plans to achieve its target (marketing strategy) Turning the strategy into appropriate marketing tactics (marketing mix) The budget required to implement the plan effectively Executive summary and a time frame for implementation of the plan

Purpose and mission Information to understand the purpose of it Is it a new business proposal or Is it to prepare the business for the launch of new product Background information about the business- including the mission statement Will be important if the audience is not familiar with the company E.g. potential financial investor

Situational analysis This part answers the question- ‘where are we now?’ For e.g. you are driving a car in the city and you are looking for particular address (your objective) Map- (your plan) But unless you know where you are at present on the map (situation analysis), you will not be able to direct yourself towards your goal Important to know Current strength Existing product range and market shares Existing and potential customers Customer tastes and trends External problems and opportunities

Situational analysis- importance If not undertaken, then the rest of the plan can be misdirected Aiming to reach inappropriate objective or By using outdated strategies

Situational analysis Situational analysis cover 5 main areas Current product analysis Target market analysis Competitor analysis Economic and potential environment SWOT analysis

Marketing objectives and strategy Where do we want to be? All plans need target to focus attention and to direct effort SMART objectives Can be expressed in terms of Sales Market share Sales growth Helps for review of the company’s marketing strategy

Marketing objective and strategy Marketing strategy: It outlines how the company intends to achieve its marketing objective Considers overall approach to be taken by the business Some strategic decision include: Mass marketing vs niche marketing Sell more to same market or new market Develop product for existing customer or new product for new customer Strategy chosen will depend on Company mission and objectives Situational analysis The resource of the business

Marketing mix tactics Plan now focus on product, price, place and promotion tactics Marketing mix should be fully integrated to be most effective Marketing plan will explain how the 4Ps are related and linked to each other so that the consumers are not confused For e.g. low prices for high image product promoted in exclusive magazines

Marketing budget The plan must give details of How much is required to put the marketing strategy and tactics into effect The expected sales performance of the plan to allow the comparison between marketing expenditure and expected sales Lays out the spending requirements to meet the plans overall objectives Budget depends upon Spending as much as competitors Past expenditure and sales

Reviewing the plan – and the marketing strategy Set marketing objectives Research SWOT Establish marketing strategy Plan to put strategy into effect Review progress towards objectives How successful was it? Results of the marketing plan needs to be checked against the original objectives Should be an ongoing process and not just at the end Revise strategy if necessary

Marketing planning - evaluation Three main benefits Potential entrepreneurs will need marketing plan to convince potential financial investors Specific marketing plans might also be needed to help introduce a new strategy Important part of the annual overall business planning process Provides direction and purpose to future marketing decisions that everyone in the department and the organisation as a whole can understand and support

Marketing plan- potential limitations Firstly, complex, costly and time consuming Small business might not have money or skilled management know how In fast changing market, plan might be outdated even before it is published Secondly, marketing managers might become wedded to the plan that they have devoted so much time and energy They might ignore the changes in the external environment Such as economic downturn

Individual Class test (35 min) Outline the difference between the macro and micro marketing environments and outline the key components of the environmental scanning audit (15 marks) Examples from case studies and/or from relevant sources should be implemented as appropriate. (5 marks)