1. Marketing Planning Strategic Marketing

2. Marketing Planning Good marketing requires good planning  To plan accordingly a company must examine itself & its business environment  Companies conduct a SWOT Analysis to accomplish this

3. Marketing Planning What is a SWOT Analysis?  A SWOT Analysis occurs when a company looks at their strengths and weaknesses and analyzes the opportunities and threats that surround them.  Helps handle weaknesses  Prepares for threats

4. Strengths & Weaknesses Strengths & weaknesses are internal factors that affect a business Internal Analysis centers on the 3 C’s  Company What a company does well & what don’t they do well  Customers Customer feedback/surveys  Competition What is your company market share vs. your competitors? What products, promotions, etc.. do they offer that are successful? Must evaluate these components fairly  Sometimes done by outside strategists

5. Strengths & Weaknesses Organizational Resources help identify internal factors  Production costs  Marketing skills  Financial Resources  Employee Capabilities  Available Technology

6. External Opportunities & Threats Opportunities and Threats are external factors that affect a company Examine what your competition is doing Conduct Environmental Scans

7. External Opportunities & Threats Environmental Scan: Examine outside influences that impact your company Political/Legal: Laws, Regulations, Foreign Policy, etc.. Economic: Robust Economy v. Recession Socio-Cultural: Lifestyle, Attitudes, Opinions, & Demographics of customers Technological: Taking advantage of the latest & greatest

8. McDonald’s SWOT Example List at least two examples from the information given

22. Competitive Advantage Competitive Advantage is a set of unique features of a company and its products  Target Market views them as significant or superior to the competition  There are 3 types of competitive advantages Cost Product/Service Differentiation Niche Strategies

23. Cost Competitive Advantage Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins.  Obtain inexpensive raw materials  Efficient manufacturing facilities  Avoid marginal customers Wal-mart is a company with a cost-competitive advantage  Strong Buying Power Relationships

24. Cost Competitive Advantage Costs can be reduced for a company through….  Experience Curves: Costs will decline as experience with a product increases.  Prices are set based on anticipated costs versus current costs  Efficient Labor: Labor costs are typically higher in low- skill, labor-intensive industries such as product assembly & apparel merchandise Nike, Levi’s, & Liz Clairborne all produce overseas

25. Cost Competitive Advantage No frills goods & services  Eliminate extras to reduce costs  Example Southwest & Allegiant Airlines Government Subsidies  Government provides grants & interest free loans to target industries  Example agriculture industry $10 - $30 billion a year

26. Cost Competitive Advantage Product Design  Cutting-edge design technology offsets labor costs  Examples are BMW & Companies using Reverse Engineering Reengineering  Rethinking & redesigning a process to increase profits  Often done by reorganizing specific departments

27. Cost Competitive Advantage Product Innovations  Done to lower production costs (new technology) New Methods of Service Delivery  Medical expenses have been lowered due to outpatient surgery & walk-in clinics  Airlines promote online purchasing & kiosks  Banks charge for using a teller

28. Product/Service Differentiation Product/Service Differentiation exists when a firm provides something unique that is valuable to buyers beyond simply offering a low price  More sustainable than Cost Competitive  Examples of how it occurs Brand Name (Lexus) Strong Dealer Network (Caterpillar Tractor) Product Reliability (Maytag) Image (Neiman Marcus) Service (Fedex)

29. Niche Differentiation Niche Differentiation seeks to target & effectively serve a single segment of the market  Allows smaller companies to compete  Take the “leftovers” of a giant corporation  Usually occurs by targeting a specific geographic area Jack in the Box only on West Coast

30. Competitive Advantage A sustainable competitive advantage exists when it cannot be copied by the competition  Nike, Rolex, Nordstrom, Southwest Air, etc…  Building your competitive advantage versus copying it allows for more growth

31. Strategic Decisions The end result of a SWOT Analysis & identification of a competitive advantage is to evaluate the strategic direction of the firm There are three strategic decisions to choose from

32. Strategic Decision Market Penetration is based off of trying to increase market share among existing customers. Example  Maxwell house creates an aggressive coffee campaign with advertisements & price promotions such as coupons to existing customers.  The goal is to increase sales by adding more customers

33. Strategic Decision Market Development means attracting new customers to existing products.  New uses for old products  McDonalds opening new restaurants in Russia, China, & Italy  Coke & Pepsi growing faster overseas

34. Strategic Decisions Product Development strategies involve the creation of new products for present markets. Clothing manufacturers are typically product developers  Designing a suit that is better in hot weather

35. Strategic Decisions Diversification is a strategy of increasing sales by introducing new products into new markets Example  Sony buys Columbia Pictures  Coca-Cola manufacturers water treatment & water conditioning equipment

36. Assignment Create a SWOT analysis for a competitor of your research company  Identify the target market of your competition  Each aspect of the SWOT needs to have at least two identifiers Explain to me how your company has created a competitive advantage & what they could do to create a competitive advantage using a different approach  Cost  Product/Service Differentiation  Niche

37. Assignment Of the 3 Strategic Directions a company can take, which approach does your company currently use. Explain answer. Of the 3 Strategic Directions a company can take, what could your company do to fulfill those  Market Penetration, Market Development, Product Development

38. Marketing Planning