MM-Unit 2

Strategic Planning – Marketing Management Process – Analysis of Marketing

opportunities, Selecting Target Consumers, Developing Marketing Mix
Analysis of Macro and Micro environment
Marketing Research as an Aid to Marketing, Marketing Research Process – Sales
Forecasting – Techniques
 What is a Marketing Plan?
A marketing plan is the central instrument for
directing and coordinating the marketing
effort.
It operates at a strategic and tactical level.
 Levels of a Marketing Plan

• Strategic • Tactical
– Target marketing – Product features
decisions – Promotion
– Value proposition – Merchandising
– Analysis of marketing – Pricing
opportunities – Sales channels
– Service
 Strategic Planning
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
missions, setting supporting objectives, designing
a sound business portfolio, and coordinating
functional strategies.
The Strategic Planning, Implementation,
and Control Processes
 Corporate Headquarters’
Planning Activities

• Define the corporate mission

• Establish strategic business units (SBUs)
• Assign resources to each SBU
• Assess growth opportunities
 Defining the Corporate Mission
Mission statement

A Statement of the organization’s purpose-what it wants

to accomplish in the larger environment.
Example:

Google mission – “ To organize the world’s information and

make it universally accessible and useful”
Good Mission Statements
Focus on limited number of goals

Stress major policies and values

Define major competitive spheres

Take a long-term view

Short, memorable, meaningful

 Motorola

“The purpose of Motorola is to honorably

serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.”
 eBay

“We help people trade anything on earth.

We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”
HUL Mission Statement
‘ our mission at Hindustan Unilever is to meet to everyday needs
of people everywhere in India. We stand committed to continuously
improving the quality of life of each and every Indian. Because
ultimately, our future is closely linked to the future to every Indian home
and the housewives who run them.’
 Market-Oriented Business Definitions
Company Product –Oriented Definition Market Oriented Definition
Revlon We make cosmetics. We sell lifestyle and Self expression;
success and statues; memories, hopes,
and dreams.
Disney We run theme parks We provide fantasies and entertainment
– a place where America still works the
way it’s supposed to.
Wal-Mart We run discount stores. We offer products and services that
deliver value to Middle Americans.
Xerox We make copying, fax, and We make businesses more productive
other office machines by helping them scan, store, retrieve,
revise, distribute, print, and publish
documents.
 Strategic Business Unit (SBU):
• “A unit of the company that has a separate
mission and objectives and that can be planned
independently from other company business.
An SBU can be a company division, a product
line within a division or sometimes a single
product or brand”.
• - BCG Approach
• - The General Electric Approach
 Reliance
Industries

Exploration Petroleum
and Refining Petro Retail
and
Textiles
Production chemicals
Marketing

Relaince Reliance Relaince

Reliance Reliance Relaince Relaince I
Fresh Super Digital Relaince
Mart Market Trends store
Foot Prints
 Characteristics of SBUs
• It is a single business or collection of related
businesses
• It has its own set of competitors
• It has a leader responsible for strategic
planning and profitability
 Assigning Resources to Each SBU
The BCG growth – share Matrix
High

Star Question Mark

Market Growth rate

Cash cow Dog

High Low

Relative market share

The General Electric Approach
Business Strength

Strong Average Weak

attractiveness High A C
Industry

Medium B D

Low

Invest and grow

Maintain investment

Harvest or divest
Figure 2.3 The Strategic Planning Gap
Ansoff’s Product-Market Expansion Grid
 Developing Growth Strategies

Product / market expansion grid

A portfolio-planning tool for identifying company
growth opportunities through market penetration, market
development, product development or diversification.

Market Penetration
A Strategy for company growth by increasing sales
of current products to current market segment without
changing the product.
 Market Development
A Strategy for company growth by identifying and
developing new market segments for current company products.

Product Development
A Strategy for company growth by offering modified or
new products to current market segment. Developing the
product concept into a physical product in order to ensure that
the product idea can be turned into a workable product.
Diversification
A Strategy for company growth by starting up or
acquiring businesses outside the company’s current products
and markets.
 The Business Unit
Strategic Planning Process
SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats
 Goal Formulation
• Goals should be arranged hierarchically from
most to least important.
• Objectives should be quantitative whenever
possible.
• Goals should be realistic.
• It should be consistent.
Strategy Formulation: Porter’s
Generic Strategies
Overall Cost Leadership

Differentiation

Focus
 Generic Strategies

Cost
Leadership Differentiation Focus

• Superior profits • Creating a • Concentrating on

through lower product or service a limited part of
costs. that is perceived the market.
as being unique
• E.g. : WalMart, “throughout the • E.g. : PepsiCo
Tesco industry”
• E.g. : Mcdonald,
FedEx
Program Formulation Implementation:
• Should check the marketing program is worth
the cost.
• Should follow the Mckinseys 7 S framework.
Hardware: System, Structure, Strategy
Software: Skill, Style, Staff and Shared Values

Feed Back and Control:

 The Marketing Process
Marketing Process
The process of (1) analyzing marketing opportunities;
(2) selecting target markets;(3) developing the marketing mix;
and(4) managing the marketing effort.
 Market Opportunity Analysis (MOA)

• Can the benefits involved in the opportunity be

articulated convincingly to a defined target market?
• Can the target market be located and reached with
cost-effective media and trade channels?
• Does the company possess or have access to the
critical capabilities and resources needed to deliver
the customer benefits?

2-30
Copyright ©
2009 Pearson Education,
 Market Opportunity Analysis (MOA) (cont.)

• Can the company deliver the benefits better

than any actual or potential competitors?
• Will the financial rate of return meet or
exceed the company’s required threshold for
investment?
Demographic – economic Technological – natural
Environment
Environment

Political – legal Social – cultural

Environment Environment
 The Marketing Environment
Marketing Environment:
• The actors and forces outside marketing that
affect marketing management’s ability to build
and maintain successful relationships with
target customers
Microenvironment:
• Includes the actors close to the company
Macro environment:
• Involves larger societal forces
 Microenvironment
Actors – Marketing must consider
other parts of the
organization including
1. The company
finance, R&D, purchasing,
2. Suppliers operations and
3. Marketing accounting
intermediaries – Marketing decisions must
relate to broader
4. Customers company goals and
5. Competitors strategies
6. Publics
3 - 34
 Microenvironment
Actors – Marketers must watch
supply availability and
pricing
1. The company
– Effective partnership
2. Suppliers relationship management
3. Marketing with suppliers is essential
intermediaries
4. Customers
5. Competitors
6. Publics
3 - 35
 Microenvironment
Actors – Help to promote, sell and
distribute goods to final
buyers
1. The company
– Include resellers, physical
2. Suppliers distribution firms, marketing
3. Marketing services agencies and
intermediaries financial intermediaries
4. Customers – Effective partner relationship
management is essential
5. Competitors
6. Publics
3 - 36
 Microenvironment
Actors – The five types of
customer markets
1. The company • Consumer
• Business
2. Suppliers
• Reseller
3. Marketing
• Government
intermediaries
• International
4. Customers
5. Competitors
6. Publics
3 - 37
 Microenvironment
Actors – Conducting competitor
analysis is critical for
success of the firm
1. The company
– A marketer must monitor
2. Suppliers its competitors’ offerings
3. Marketing to create strategic
intermediaries advantage
4. Customers
5. Competitors
6. Publics
3 - 38
 Microenvironment
Actors – A group that has an
actual or potential
interest in or impact on
1. The company an organization
– Seven publics include:
2. Suppliers • Financial
3. Marketing • Media
intermediaries • Government
• Citizen-action
4. Customers • Local
5. Competitors • General
6. Publics • Internal
3 - 39
 Demographic Environment
• Population growth and purchasing power
• Population age mix- Pre-school children,
school-age children, teens, young adults,
middle-aged adults and older adults.
• Ethnic and other markets
• Education- Illiterates, high school dropouts,
Secondary school certificates, college degrees
and professional degrees.
• Household Pattern
 The Economic Environment
• Consumer Psychology
• Income Distribution
• Income level and consumption pattern
Socio-Cultural Environment
Basically, socio cultural factors are customs,
lifestyles and values that characterize a
society. Social factors include reference
groups, family, role and status in the society.
 Natural Environment

Shortage of
raw materials

Increased
energy costs

Anti-pollution
pressures

Governmental
protections
 Technological Environment
• Accelerating pace of change
• Unlimited opportunities for innovation
• Varying R & D budgets
Political- Legal Environment:
• Consists of laws, government agencies and pressure
groups that influence or limit various organizations
and individuals in a given society
– Legislation affecting businesses worldwide has increased
– Laws protect companies, consumers and the interests of
society
– Increased emphasis on socially responsible actions
 Market segmentation
• Dividing a market into distinct groups of buyers on the basis of
needs, characteristics, or behavior who might require
separate products or marketing mixes.
Market segment
• A group of consumer who respond in a similar way to a given
set of marketing efforts.
Market targeting
• The process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter.
Market Positioning
Arranging for a product to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of
target consumers.
 Distinguishing feature of the cars Car model belonging to the
Car Segment in this segment segment
A Cars priced below Rs. 3.5 Lakh Alto, Spark, Nano, Eon

A1 Hatchback priced lower than Rs. 6 Santro, Indica, Beat

Lakh
A2 Hatchback priced between Rs. 6 Ritz, i10, i20, Swift, Figo
to 7.5 Lakh

B1 Vans Versa, Omni

B2 MUV/MPV Toyota Innova, Mahindra Xylo,
Tata Sumo and Mahindra Bolero
C1 Sedan models priced below Rs. 8 Indigo, Fiesta, Sunny
Lakh
C2 Sedan models priced between Rs. Verna, Manza, Linea
8 to 9.5 Lakh

D1 Premium Sedan models priced Fluence, Corolla

below Rs. 15 Lakh

D2 Luxury Sedan models priced Sonata, Camry, Kizashi

below Rs. 25 Lakh
 Developing the Marketing mix
Product Place
Product variety Channels
Quality Coverage
Design Assortments
Features Marketing Locations
Brand name Mix Inventory
Packaging Transport
Sizes
Services
Warranties Price Promotion
Returns List Price Sales Promotion
Discounts Advertising
Allowances Sales force
Payment Period Public relations
Credit terms Direct Marketing