Lesson 4.2: 4E-based Strategy Formulation Lesson 4.1: A 4E-based Marketing Plan to Help Define the Firm’s Position and Image Lesson 4.2: 4E-based Strategy Formulation Lesson 4.3: Strategy Implementation and Evaluation I’m not sure how to link the lines so I was thinking Calista would and format according to first 2 lessons

A marketing plan is important in order to: Align all marketing activities with the firm’s mission statement and long-term strategic plans Help operators/owners to review and think objectively through all steps in the marketing process

A marketing plan is important in order to: Assist in the budgeting process to match resources with marketing objectives Create a process to monitor actual against expected results Help position the firm competitively in the marketplace

Building blocks of a 4E-based marketing plan:

Components of the 4E-based strategy formulation include: Mission statement Situation analysis Segmenting, marketing, and positioning

The business mission statement should express an organization’s: Purpose Approach to managing the business Primary offerings Target customers Concerns for employees and the community

The situation analysis: Refers to collecting, analyzing, and interpreting information and trends that affect the company An operator needs to constantly monitor these trends and conditions to estimate how the changes may affect the business Identifies current organizational strengths and weaknesses and emerging opportunities and threats (referred to as a SWOT analysis) Helps operators determine the direction of their business, including the use of the 4Es

For a 4E-based situation analysis consists of: Internal audit of offerings Market trends analysis Market potential analysis Competitive analysis

Internal audit of offerings: Evaluating the 4Ps Identify current strengths and weaknesses including the 4Es offered to the customer Evaluate the 4Ps in conjunction with the 4Es 4Ps of the firm: Property, Product Presentation, Promotions, and People 3 bullets to 2 bullets: (delete the third one) To identify current strengths and weaknesses including the 4Es offered to the customer To evaluate 4Ps in conjunction with 4Es 4Ps: Property, Product Presentation, Promotions, and People

The 4Ps: Property Property becomes the stage for the business, including buildings and interiors, where customers interact with goods or partake of a service

The 4Ps: Property Property = relatively permanent (i.e., physical and time-wise permanence) business assets such as: Architectural design elements Interior design elements Landscape design elements Business name or location signage Artwork Business vehicles

The 4Ps: Product Presentation Product Presentation elements enrich the experience for the customer, and goods and services are enhanced through sensory elements (e.g., music, scent) and physical elements (e.g., display units, props)

The 4Ps: Product Presentation Product Presentation = easily changeable elements of the setting that surround and enhance goods or services including Display units and props Product labels Product samples ‘In-store’ signage Presentation materials, such as: Packaging, wrapping paper for retail products Tableware, table linens, menus for food service Bedding and linens for B&Bs Music Scents and tastes

The 4 Ps: Promotions Promotions announce and emphasize the experiential aspects of the business Promotions = informational outlets and activities for publicizing/promoting the business offering or name including Advertisements Brochures or catalogs Banners Newsletters Stationary and business cards Press releases Public relations and special events

The 4Ps: People People refers to the interaction of the customer with the staff, which has a potential to create experiential offerings for the business People = qualities of staff and/or customers that affect customer experience including Physical appearance, such as: Staff uniforms or costumes Hairstyles and grooming Interpersonal behavior, such as: Warmth, humor, interpersonal communication skills Displaying or sharing of knowledge, skills, or experiences

Market trends are identified by analyzing: Customer behavior trends and preference for the key business offerings (e.g., 4Es) of the business Trends among business competitors: emerging new competitors, modifications of offerings by key competitors, and new product developments Industry trends: industry standards of offerings, general direction of industry movement, and other changes within the industry

Information on trends obtained from: Chambers of commerce Convention and visitors bureaus Universities Government agencies, such as small business development centers Trade associations Commercial organizations, such as marketing research firms and advertising agencies

Market potential analysis: Total demand estimates for the business offerings through a logical process Estimates expressed in concrete terms such as percent, number, and dollar

Competitive advantage analysis: SWOT analysis SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats Strengths and Weakness of the business identified from the internal audits Opportunities and Threats to the business identified from market trends/potential and competitive analyses

Segmenting, targeting, and positioning: Market Segmenting: grouping customers based on their common characteristics, such as needs and preference Targeting: being focused on the chosen market segments, which have been evaluated carefully for profit potential

Segmenting, targeting, and positioning: Positioning: placing a business clearly in the minds of customers by instilling a strong, salient, and positive image

Positioning begins with: Development of a strong theme that fits Mission and core offerings (4Es in particular) Target markets’ needs and preferences Effective differentiation from those of competitors

Components of the 4E strategy implementation and evaluation: Setting marketing objectives and strategies Developing a budget and allocating resources Creating a marketing control plan

Marketing objectives and strategies are: Achievable and realistic Expressed in clear numeric terms such as dollars, percent, number, or other quantitative measures Time-specific--containing a specific business deadline for achieving the goals Partially achieved by adding 4E strategies

Marketing strategies: 4E offering strategies Pricing strategies Advertising strategies

What are 4E offering strategies? Encompassing tangible goods, instrumental services, and the 4Ps (Property, Product Presentation, Promotional Application, and People) that contribute to the experiential offering (Re)designing or selecting goods, services, and experiences to better meet the needs and preferences of the selected target market segments Addressing the SWOT for your organization Thinking about how you can specifically enhance value for the customer through 4E aspects of your total offerings

Guiding principle for the 4E offering strategy by Pine and Gilmore (1999): Theme the experience Harmonize impressions with positive cues Eliminate negative cues Mix in memorabilia Engage the five senses

Pricing strategies: Affect the demand for a business offering and becomes an unavoidable focus of competition Should be done carefully in a way to maximize profit margin and, at the same time, minimize the customer’s switch to competitors Need to include the new business offering Should reflect how much customers are willing to pay for the new offerings Are determined by trial and error in many cases

Advertising strategies: Create the customer’s initial expectations about the company’s offerings and such expectations bring the customer to the business Should best reflect the business offerings, especially the newly added 4E elements Must be consistent with the positioning theme Must be convincing to the chosen target customer groups

Budget development and allocation of resources: Should be as detailed and realistic as possible Must provide information on costs of materials at the unit level of materials planned for improvements Needs to include the advertising budget in the final marketing budget

The marketing control plan: Provides a roadmap for proposed marketing actions The operator must develop a “master” chart that shows detailed time plans for implementing the suggested actions from above, and should include: Each proposed marketing action’s implementation Time sequence and time frame of each action implementation Plans to check the progress and measure the major implementation outcomes