(2) Developing Marketing Strategies and Plans Instructor: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Strategic planning Strategic planning: is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies. Defining The company mission Setting company Objectives And goals Designing The business portfolio Planning marketing And other functional strategies Corporate level Business unit, product, And market levels ©Compiled by: Amir Ekhlassi

Strategic planning (cont’d) Marketing planning occurs at the business unit, product, and market levels. It supports company strategic planning with more detailed planning for specific marketing opportunities. ©Compiled by: Amir Ekhlassi

Setting strategic directions Business portfolio planning Growth opportunities ©Compiled by: Amir Ekhlassi

1.Designing the business portfolio The business portfolio is the collection of businesses and products that make up the company. The company must: Analyze its current business portfolio or strategic business units (SBU’s) Decide which SBU’s should receive more, less, or no investment, Develop growth strategies for adding new products or businesses to the portfolio. ©Compiled by: Amir Ekhlassi

Analyzing current SBU’s: BCG growth-share matrix Relative market share high Low high Stars High growth & Share Profit potential May need heavy investment to grow Question marks High growth, low share Build into stares or phase out Require cash to hold market share Cash cows Low growth, high share Established, successful SBU’s Produce cash Dogs Low growth & share Low profit potential Market growth rate low ©Compiled by: Amir Ekhlassi

2.Developing growth strategies in the age of connectedness Marketing has the main responsibility for achieving profitable growth for the company. Marketing must identify, evaluate, and select market opportunities and lay down strategies for capturing them. One useful device for identifying growth opportunities is the product / market expansion grid. ©Compiled by: Amir Ekhlassi

Product / market expansion grid Existing Products New products Market penetration Product development Market development Diversification Existing Markets new Markets ©Compiled by: Amir Ekhlassi

Product / market expansion grid based on Starbucks Market penetration: making more sales to current customers without changing its products. How? Add new stores in current market areas, improvements in advertising, prices, etc. Market development: identify and develop new markets for its current products. How? Review new demographic (senior consumers) or geographic (Asian, European & Australian) markets Product development: offering modified or new products to current markets. How? Increasing food offerings, sell coffee in supermarkets, extend to Frappuccino drinks. Diversification: start up or buy businesses outside current products and markets. How? Currently testing how new restaurant concepts – café starbucks and Circadia, or branded casual clothing. ©Compiled by: Amir Ekhlassi

Assessing growth opportunity Intensive growth: A growth objective within the reference market it operates. Integrative growth: A growth objective within the industrial chain, lateral expansion of its generic activity, backward and forward. Diversification growth: A growth objective based on opportunities outside its normal field of activity. ©Compiled by: Amir Ekhlassi

Intensive Growth: Market Development New market segments (industrial and consumer markets, new industrial sector, new consumer segment) New distribution channel (direct marketing, vending machine, franchise system) Geographic expansion (local expansion, global expansion) ©Compiled by: Amir Ekhlassi

Intensive growth: Product Development Discontinues innovation New generation of products Product line expansion, rationalization or acquisition Features adding Product performance improvement ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Integrative growth Backward integration Forward integration Horizontal integration ( reinforce the competitive position, common customer, channel or supplier) ©Compiled by: Amir Ekhlassi

Growth by diversification Concentric diversification: the goal is to build a network of related activities and benefit from synergy. Technology or market relation. Pure diversification: the goal is to burn into entirely new activities and set a portfolio of product and business activities. ©Compiled by: Amir Ekhlassi

Marketing’s role in strategic planning There is much overlap between overall company strategy and marketing strategy. Marketing plays a key role in the company’s strategic planning to several ways: First, marketing provides a guiding philosophy (the marketing concept) that suggests company strategy should revolve around serving the needs of important consumer groups. second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and by assessing the firm’s potential to take advantage of them. Finally, within individual business units, marketing designs strategies for reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to carry them out profitably. ©Compiled by: Amir Ekhlassi

Factors influencing company marketing strategy ©Compiled by: Amir Ekhlassi

Connecting with customers Each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments better than its competitors do. This process involves three steps: (STP) Market segmentation Market targeting Market positioning ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Market segmentation The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing mixes is called market segmentation. A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Market targeting Market targeting involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Market positioning Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. In positioning its product, the company first identifies possible competitive advantage on which to build the position. To gain competitive advantage, the company must offer greater value to chosen target segments. Effective positioning begins with actually differentiating the company’s marketing offer. ©Compiled by: Amir Ekhlassi

Developing the marketing mix We define marketing mix as the set of controllable, tactical marketing tools (product, price, place, and promotion) that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. ©Compiled by: Amir Ekhlassi

Developing the marketing mix (cont’d) Product Variety Quality Design Features Brand name Packaging services Price List price Discounts Allowances Payment period Credit terms Target Customers Intended positioning Place Channels Coverage Locations Assortments Inventory Transportation logistics Promotion Advertising Personal selling Sales promotion Public relations ©Compiled by: Amir Ekhlassi

Developing the marketing mix (cont’d) Product means the goods-and-services combination the company offers to the target market. Price is the amount of money customers have to pay to obtain the product. Place includes company activities that make the product available to target consumers. Promotion means activities that communicate the merits of the product and persuade target customers to but it. ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi The marketing plan Comprehensive, written statement of what is expected from each business unit in the future. Usually prepared annually Includes both historical information and recommendations on how to improve performance Combines strategies with timetables for action ©Compiled by: Amir Ekhlassi

Evaluating a marketing plan Is the plan simple? Is the plan specific? Is the plan realistic? Is the plan complete? ©Compiled by: Amir Ekhlassi

Contents of a marketing plan Executive summary Current marketing situation Threats and opportunity analysis Objectives and issues Marketing strategy Action programs Budgets Controls ©Compiled by: Amir Ekhlassi

Building a marketing plan Benefits of building a marketing plan Identifying opportunities Leveraging core capabilities Focused marketing strategy Resource allocation Creativity Vs. Structure Formal Vs. informal market planning process Internal Vs. external motivation ©Compiled by: Amir Ekhlassi

The process of building a marketing plan Step 1: Situation analysis Step 2: SWOT Analysis Step 3: Strategic Market plan Step 4: Marketing Mix strategy Step 6: Marketing Perform plan Step 5: Marketing budget Adjust Marketing Plan as necessary Step 7: Performance evaluation Step 5: Marketing budget ©Compiled by: Amir Ekhlassi

Step 1: situation analysis ©Compiled by: Amir Ekhlassi

Key performance issues Step 2: SWOT analysis internal Strengths weaknesses external Opportunities Threats Key performance issues Situation analysis ©Compiled by: Amir Ekhlassi

Step 3: strategic market plan Product-market Portfolio and Plan selection Based on Information Uncovered in The situation And SWOT analysis Market Attractiveness Competitive Advantage ©Compiled by: Amir Ekhlassi

Step 4: marketing mix strategy Strategy and key performance issues Positioning strategy Value proposition Channel strategy Performance objectives Marketing mix elements Price Promotion Place Product ©Compiled by: Amir Ekhlassi

Step 5: marketing budget What is the purpose of the marketing budget? Five ways to build a marketing budget Top – down Customer mix Bottom – up Sales forecast Monthly budget ©Compiled by: Amir Ekhlassi

Step 6: performance timeline Performance metrics: Share position Sales revenue Profit performance Customer awareness Customer satisfaction Product availability Perceptions of product and service quality Net marketing contribution ©Compiled by: Amir Ekhlassi

Step 7: performance evaluation What is performance evaluation? Why is performance evaluation important? What if the plan is not meeting performance objectives? ©Compiled by: Amir Ekhlassi

Thank You For Your Patience & Attention ©Compiled by: Amir Ekhlassi