Marketing Management Module 3 The Marketing Mix

Unit 10: Marketing Planning Marketing plans provide: – Consistency with overall corporate plan – Responsibility Identifies and holds accountable the people charged with implementing the plan – Communication Consistent and persistent – in all directions – Commitment Agreement to the plans fosters commitment and contribution to the effort

Reasons Plans Fail (pg. 32) Weak support from chief executive and top management Lack of a plan for planning Lack of line management support: – hostility – lack of skills – lack of information – lack of resources – inadequate organisational structure Confusion over planning terms Too many details, too far ahead Once-a-year ritual Separation of operational planning from strategic planning Failure to integrate marketing planning into a total corporate planning system Delegation of the planning task

Situation Analysis Industry attractiveness analysis Competitor analysis Customer analysis Resource analysis Marketing analysis

Porter’s Model of Competitive Forces The threat of new entrants – Barriers to entry: Economies of scale Cost advantage High switching cost Limited access to distribution channels Government policy Product differentiation Strong brand identity The threat of substitutes Bargaining power of suppliers Bargaining power of buyers Rivalry between direct competitors

Marketing Objectives Should Flow from Mission Statement What is the nature of the business undertaken by the organisation? Who are the consumers? What are the consumers’ needs? What is the nature of the internal resources and abilities at the organisation’s disposal? How can the organisation satisfy consumer needs? What environmental factors have to be taken into consideration?

Set Objectives They must be quantifiable and measurable They must be as specific as possible Objectives must have a specified time limit Objectives must be reachable and reasonable Rank the objectives in order of importance

SMART Objectives and Goals Specific Measurable Achievable Realistic Timely

Hierarchy of Objectives

Formulating Market Strategies Market leader Market challenger Market follower Market specialist (niche)

Benefits of Marketing Planning Consistency Environmental scanning Organisational adaptation Achievement Resource allocation Competitive advantages

McKinsey Enterprise Strength Model

Assessing Market Attractiveness Market segment size/profitability Market growth rate Profit margin # of competitors Economic conditions Technological changes Socio-cultural changes Action by authoitiess

Assessing Enterprise Strength Market share Profitability Technology Product quality Resources – Labour, capital, raw materials Knowledge of the market

Unit 11: Marketing Implementation “Without implementation, planning is useless” 4 Factors determine the crucial forces that affect a company’s ability to formulate and implement strategies: – Organisational structure – People (or leadership) – Organisational culture – Managerial processes

Barriers to Strategy Implementation Unclear strategy and conflicting priorities Ineffective senior management team Poor vertical communication Inadequate down-the-line leadership skills and development Poor coordination across functions, businesses and borders Goals that have not been sufficiently defined Formulators of strategy are not involved in implementation or have left before implementation has finished.

Unit 12: Marketing Control and Evaluation “Evaluation that focuses solely on mistakes is not ideal.” (pg. 41) Marketing control can be described as the ongoing process of measurement and evaluation of the results of the marketing strategies and plans, where corrective action can be taken in order to ensure that marketing objectives are attained and competitors beaten.

Marketing Evaluation and Control Model (pg. 42)

Standards for Measuring the Different Marketing Activities Input standards – Usually quantified in money value and/or manpower Output standards – Usually sales, measured in income or units Sales forecast Sales quotas The sales budget Efficiency measures (timekeeping, load factors)

Non-Financial Marketing Controls Market share New products developed Product complaints received Brand equity Price independence Distribution achieved

Marketing Cost Analysis (pg. 47) Three dimensions 1.Begins with the income statement (actual cost centres: salaries, travel, rent, etc.) 2.Actual cost centres are allocated to specific marketing activities to produce a marketing cost statement. 3.Total costs of each marketing activity are then allocated to individual sales areas.

Sample Allocation of Marketing Costs

Efficiency Analysis Efficiency of sales representatives Average costs per visit Sales per square metre of sales space Number of lost clients per time period Advertising effectiveness Delivery costs per order Handling costs as percentage of sales.

Customer Value Analysis Identification and personal data Product purchases Product usage and Consumption patterns

Marketing Audit A periodic, comprehensive, systematic and independent investigation into the organisation’s marketing environment and specific marketing activities… (pg. 48) – Periodic investigation – Comprehensive investigation – Systematic investigation – Independent investigation

Marketing Audit Dimensions Marketing environment audit Marketing strategy audit Marketing organisation audit Marketing system audit Marketing productivity audit Marketing function audit