MODULE 4 MARKETING STRATEGY A2 Marketing and Accounting and Finance Marketing Decision-making

A framework for making informed decisions about marketing. Structured, scientific approach to decision making. Helps firm decide strategy to achieve marketing objectives. A framework for making informed decisions about marketing. Structured, scientific approach to decision making. Helps firm decide strategy to achieve marketing objectives. The Marketing Model Definition

The Marketing Model 1. Set marketing objectives based on corporate objectives 3. Form hypothesis 4. Test options 2. Gather data 5. Control & Review Constraints – Internal and External Constraints – Internal & External

Objectives Goals / targets firms set themselves to achieve, which provide a focus for decision- making / setting strategy. Objectives Goals / targets firms set themselves to achieve, which provide a focus for decision- making / setting strategy. Explanation 1. Setting objectives – starting point

Strategy A medium to long-term plan of action for achieving a firm’s objectives. Strategy A medium to long-term plan of action for achieving a firm’s objectives. 1. Setting objectives – starting point Explanation

Common marketing objectives: Brand awareness / recognition Marketing standing / share / leadership / domination Repeat business, customer loyalty. Common marketing objectives: Brand awareness / recognition Marketing standing / share / leadership / domination Repeat business, customer loyalty. 1. Setting objectives – starting point Explanation

Set in relation to overall business objectives: Survival / breakeven Return on investment, profit, sales Growth and expansion Market share / leadership / domination, ‘being the best’. Set in relation to overall business objectives: Survival / breakeven Return on investment, profit, sales Growth and expansion Market share / leadership / domination, ‘being the best’. 1. Setting objectives – starting point Explanation

Example: New business: Corporate objective – survive in first 2 years. Marketing objective – gain brand awareness. Example: New business: Corporate objective – survive in first 2 years. Marketing objective – gain brand awareness. 1. Setting objectives – starting point Explanation

Enables informed decisions on how to achieve objectives. Data on: business’s current and/or potential market(s). aspects relating to marketing mix. Enables informed decisions on how to achieve objectives. Data on: business’s current and/or potential market(s). aspects relating to marketing mix. 2. Gathering data Explanation

Strategies should take into account: Internal capabilities. External environment. Strategies should take into account: Internal capabilities. External environment. 2. Gathering data Explanation

Therefore, data required on: current / potential internal resources. changes in external business environment. Therefore, data required on: current / potential internal resources. changes in external business environment. Explanation 2. Gathering data

These factors: impact on success in achieving objectives. influence strategy that should be adopted. These factors: impact on success in achieving objectives. influence strategy that should be adopted. Explanation 2. Gathering data

Primary ‘First hand’ – not in existence. Secondary ‘Second hand’ – already exists. Primary ‘First hand’ – not in existence. Secondary ‘Second hand’ – already exists. Explanation 2. Gathering data

Primary – gathered from: Face-to-face discussions Telephone or postal surveys Direct observation. Primary – gathered from: Face-to-face discussions Telephone or postal surveys Direct observation. Explanation 2. Gathering data

Secondary – obtained from: Libraries, Internet, in the form of: Government reports National / local newspapers Trade publications International / national reference books / directories Secondary – obtained from: Libraries, Internet, in the form of: Government reports National / local newspapers Trade publications International / national reference books / directories Explanation 2. Gathering data

Secondary – obtained from: Annual company reports. Past records from within business such as: Market share, profit and contribution. Secondary – obtained from: Annual company reports. Past records from within business such as: Market share, profit and contribution. Explanation 2. Gathering data

Method – depends on: research objectives. time and finance available. Primary: more up-to-date. more specific to needs. more time consuming and costly to obtain. Method – depends on: research objectives. time and finance available. Primary: more up-to-date. more specific to needs. more time consuming and costly to obtain. Explanation 2. Gathering data

Identify ways of achieving marketing objectives. Consider the potential costs and benefits. Investigate strategies where benefits outweigh costs. Identify ways of achieving marketing objectives. Consider the potential costs and benefits. Investigate strategies where benefits outweigh costs. 3. Forming hypotheses Explanation

Further investigation of some / all aspects of marketing mix. May involve: building a prototype. test marketing a new product / service. investigating alternative distributors’ attitudes towards products / services. Further investigation of some / all aspects of marketing mix. May involve: building a prototype. test marketing a new product / service. investigating alternative distributors’ attitudes towards products / services. 4. Testing options Explanation

assessing elasticity of demand. investigating choice of media and analysing effectiveness. Once options tested: best strategy / strategies can be selected, and implemented with some guarantee of success. assessing elasticity of demand. investigating choice of media and analysing effectiveness. Once options tested: best strategy / strategies can be selected, and implemented with some guarantee of success. 4. Testing options Explanation

Involves: Establishing set standards of performance, measuring actual against standard, and taking corrective action where appropriate. Involves: Establishing set standards of performance, measuring actual against standard, and taking corrective action where appropriate. 5. Controlling & Reviewing Explanation

Business should: regularly review results achieved by strategy adopted in relation to original objectives set. take corrective action as required. Business should: regularly review results achieved by strategy adopted in relation to original objectives set. take corrective action as required. 5. Controlling & Reviewing Explanation

Marketing decisions must take into account: business’s capabilities, e.g. capital and human resources. external factors currently / likely to be affecting business over time period stated in objectives. Marketing decisions must take into account: business’s capabilities, e.g. capital and human resources. external factors currently / likely to be affecting business over time period stated in objectives. Internal & External Constraints Explanation

At every stage – essential to ensure: objectives and strategy – achievable / realistic. judgments / revisions – fair and appropriate. At every stage – essential to ensure: objectives and strategy – achievable / realistic. judgments / revisions – fair and appropriate. Internal & External Constraints Explanation

save costs (market research / test marketing). minimise time taken to implement new strategies. help business gain competitive edge. save costs (market research / test marketing). minimise time taken to implement new strategies. help business gain competitive edge. Scientific Marketing Decisions versus Hunches Hunches

Hunches based on years of experience – may prove successful, but… Greater risk of failure. Hunches based on years of experience – may prove successful, but… Greater risk of failure. Scientific Marketing Decisions versus Hunches Hunches

Time consuming, costly, but… helps detect potential problems / weaknesses with particular decisions / strategies so may help to: cut costs of initial investment. avoid effect of failure on long-term reputation of business. Time consuming, costly, but… helps detect potential problems / weaknesses with particular decisions / strategies so may help to: cut costs of initial investment. avoid effect of failure on long-term reputation of business. Scientific approach Scientific Marketing Decisions versus Hunches

Will depend on: resources available. risk involved. attitude toward risk of key decision makers. Will depend on: resources available. risk involved. attitude toward risk of key decision makers. Choice of approach Scientific Marketing Decisions versus Hunches

Choice of approach Eg: Limited financial resources – decisions taken on a hunch High capital investment needed, thus high cost of failure – invest in scientific approach. Eg: Limited financial resources – decisions taken on a hunch High capital investment needed, thus high cost of failure – invest in scientific approach. Scientific Marketing Decisions versus Hunches

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