strategic marketing management · pdf filestrategic marketing management process chapter 15...

StrategicStrategicMarketingMarketing

ManagementManagementProcessProcess

Chapter 15Chapter 15Also includesAlso includesAppendix AAppendix A

Accounting forAccounting formarketersmarketers

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-1

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-2

Strategic PlanningStrategic Planning

nn The managerial process of matching anThe managerial process of matching anorganisationorganisation’’s resources with itss resources with itsmarketing opportunities over the longmarketing opportunities over the longrun.run.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-3

Strategic PlanningStrategic Planning

nn The process:The process:–– Define organisationDefine organisation’’s mission.s mission.–– Set organisational objectives.Set organisational objectives.–– Evaluate organisationEvaluate organisation’’s strategic businesss strategic business

units (units (SBUSBU’’ss).).–– Select strategy to achieve organisationSelect strategy to achieve organisation’’ss

objectives.objectives.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-4

The marketing managementThe marketing managementprocessprocess

PLANNINGAnalyse situationSet goalsSelect strategies

and tactics

IMPLEMENTATIONOrganiseStaffDirect

EVALUATIONCompareperformancewith goals

Feedback, so management can adapt future plans and theirimplementation to the changing environment

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-5

The Mission StatementThe Mission Statement

nn A mission statement is a short clearA mission statement is a short clearstatement defining the central reasonstatement defining the central reasonfor an organisationfor an organisation’’s existence.s existence.

nn It answers the questions:It answers the questions:–– What business are we in?What business are we in?–– What business should we be in?What business should we be in?

nn It is expressed in terms of benefits.It is expressed in terms of benefits.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-6

EvaluatingEvaluating SStrategictrategicBBusinessusiness UUnitsnits

nn An analysis of current products and theAn analysis of current products and themarkets in which they are operating.markets in which they are operating.

nn An SBU may be:An SBU may be:–– A major division in an organisationA major division in an organisation–– A group of related productsA group of related products–– A single product or brandA single product or brand

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-7

B.C.G. Product Portfolio AnalysisB.C.G. Product Portfolio Analysis

Stars

Cash cows Dogs

Question marks

High Low

High

Low

COMPANY’S MARKET SHAREIN

DU

STR

YG

RO

WTH

RA

TE

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-8

THE BOSTON CONSULTING GROUP MATRIX

• A strategic business unit (SBU) model canbe classified according to two factors:– its market share relative to competitors– the growth rate of the industry in which

the SBU operates• These models, known as portfolio

analysis, assess the needs of particularSBUs.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-9

THETHE BBOSTONOSTON CCONSULTINGONSULTINGGGROUPROUP MATRIXMATRIX

nn They are divided into high and lowThey are divided into high and lowcategories.categories.

nn They seek to reduce risk and optimiseThey seek to reduce risk and optimiseoutcomes and determine resourceoutcomes and determine resourceallocation.allocation.

nn A company should seek a balancedA company should seek a balancedportfolio of SBUs with a mix of stars,portfolio of SBUs with a mix of stars,cash cows, and questions marks, butcash cows, and questions marks, buthopefully no dogs.hopefully no dogs.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-10

High Low

High

Low

BUSINESS POSITION

MA

RK

ET A

TTR

AC

TIVE

NES

SMedium

Medium

INVEST INVEST PROTECT

INVEST PROTECT HARVEST

PROTECT HARVEST DIVEST

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-11

GENERAL ELECTRIC BUSINESS SCREEN

• Management can classify SBUs or major productsbased on two factors, market attractiveness andbusiness position.

• Each of these factors is rated according to severalcriteria.

• Each SBU is rated with respect to all criteria.• Overall ratings (usually numerical scores) for both

factors are calculated for each SBU.• Based on these ratings, each SBU is labelled as

high, medium, or low with respect to: (a) marketattractiveness, and (b) business position.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-12

PRESENT PRODUCTS

PRESENTMARKETS

NEW PRODUCTS

NEWMARKETS

Marketpenetration

Marketdevelopment

Productdevelopment

Diversification

The Growth MatrixThe Growth Matrix

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-13

The Growth MatrixThe Growth Matrix

nn Market penetrationMarket penetration——Marketing ofMarketing ofpresent products to present markets.present products to present markets.

nn Market developmentMarket development——MarketMarketpresent products to new markets.present products to new markets.

nn Product developmentProduct development——MarketingMarketingnew products to present markets.new products to present markets.

nn DiversificationDiversification——Market new productsMarket new productsto new markets.to new markets.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-14

PorterPorter’’s Generic Strategics Generic StrategicModelModel

nn Overall cost leadershipOverall cost leadership–– Producing standardised product at a lowProducing standardised product at a low

costcost

nn DifferentiationDifferentiation–– Market a USP (Unique Selling Proposition)Market a USP (Unique Selling Proposition)

nn FocusFocus–– Concentration on a small specialty marketConcentration on a small specialty market

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-15

Marketing AuditMarketing Auditnn A marketing audit is a comprehensiveA marketing audit is a comprehensive

review and evaluation of the marketingreview and evaluation of the marketingfunction in an organisation.function in an organisation.–– An audit examines:An audit examines:

nn Marketing strategyMarketing strategynn Structure of the marketing divisionStructure of the marketing divisionnn Marketing systemsMarketing systemsnn Marketing productivityMarketing productivitynn Marketing functionsMarketing functions

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-16

.

Strategic company planning1. Define org. mission2. Conduct situation analysis

3. Set org. objectives4. Select appropriate strategies

Strategic marketing planning1. Conduct situation anal.2. Develop marketing obj.3. Determine positioning and

differential advantage

4. Select target markets,measure market demand

5. Design strategicmarketing mix

Annual marketing planningPrepare annual marketing planfor each major product andcompany division

PLANNING SEQUENCE

IMPLEMENTATION AND EVALUATION

Accounting for MarketersAccounting for Marketers

Appendix A, Chapter 15Appendix A, Chapter 15

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-18

Accounting reportsAccounting reports

nn Two typesTwo types–– Balance SheetBalance Sheet–– Profit and Loss StatementProfit and Loss Statement

nn Balance SheetBalance Sheet——a snapa snap--shot of theshot of thefinancial position of a business at afinancial position of a business at agiven point in time.given point in time.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-19

Balance sheetBalance sheet

nn Three main elements:Three main elements:

–– AssetsAssets——What the company owns or isWhat the company owns or isowed.owed.

–– LiabilitiesLiabilities——What the company owes toWhat the company owes toothers.others.

–– OwnerOwner’’s equitys equity——The net worth of a firm.The net worth of a firm.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-20

Profit and loss statementProfit and loss statement

nn Usually structured as follows:Usually structured as follows:–– SalesSales $$–– Less Cost of goods soldLess Cost of goods sold $____$____–– EqualsEquals Gross profitGross profit $$–– Less ExpensesLess Expenses $____$____–– Equals Net profitEquals Net profit $____$____

(See Table 15A(See Table 15A –– 1 in the text)1 in the text)

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-21

MarkMark--up and gross marginup and gross marginnn Dollar markDollar mark--upup

nn MarkMark--up %up % --------------------nn CostCostnn Dollar markDollar mark--upup

nn Gross margin (markGross margin (mark--up %)up %)----------------------nn (based on selling price) Selling price(based on selling price) Selling price

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-22

Analytical ratiosAnalytical ratios

–– Net profit percentage, Net profitNet profit percentage, Net profit------------------------------------

Net salesNet sales

–– Expense ratio, ExpensesExpense ratio, Expenses------------------------------

Net salesNet sales

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-23

Analytical ratiosAnalytical ratiosnn Stock turn rate,Stock turn rate, cost of goods soldcost of goods sold

nn Rate of stock turnRate of stock turn ------------------------------------------average inventory at cost ofaverage inventory at cost of

goods soldgoods sold

nn Total dollar markTotal dollar markdowndown

nn Mark down %Mark down % ------------------------------------------------------------Total net salesTotal net sales (given(given

period)period)

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-24

Analytical ratiosAnalytical ratios

nn Average collection periodAverage collection periodNet salesNet sales

--------------------------------------------------------------------------------------

average accounts receivable (oraverage accounts receivable (ordebtors)debtors)

nn Return on investment (ROI)Return on investment (ROI)Net profitNet profit SalesSales

ROI=ROI= ---------------- XX --------------------sales investmentsales investment