marketing planning & strategy - session 1

7/31/2019 Marketing Planning & Strategy - Session 1

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MARKETING MANAGEMENT

MRM - (2010-12)

Tapas Kumar Mandal


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UNDERSTANDING MARKETINGSTRATEGY

SESSION: 1


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GENESIS OF MARKETING STRATEGY

To Grasp Marketing Planning we have to start with

corporate strategy planning Nature, Importance and Scope of Strategy Planning

Strategy Planning and Value delivery Process

Clarifying the Mission

Defining the business

Surveying the Environment

Internal Appraisal of the Farm

Setting Corporate objectives Formulating the Corporate Strategy

Drawing heavily from both Logic and Intuition

2-3


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LEVELS OF A MARKETING PLAN

Strategic

Target marketing

decisions

Value proposition

Analysis of marketingopportunities

Tactical

Product features

Promotion

Merchandising

Pricing

Sales channels Service

2-4


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CORPORATE HEADQUARTERS PLANNING

ACTIVITIES

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Define the corporate mission

Establish SBUs

Assign resources to each SBU

Assess growth opportunities


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GOOD MISSION STATEMENTS

Focus on limited number of goals

Stress major policies and values

Define major competitive spheres

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MAJOR COMPETITIVE SPHERES

Industry

Products

Competence

Market segment

Vertical channels

Geographical

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DIMENSIONS THAT DEFINE A BUSINESS

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Customergroups

TechnologyCustomer

needs


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CHARACTERISTICS OF SBUS

It is a single business or collection of relatedbusinesses

It has its own set of competitors

It has a leader responsible for:

Strategic planning

Profitability

Efficiency

2-10


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MARKET OPPORTUNITY ANALYSIS (MOA)

Can the benefits involved in the opportunitybe articulated convincingly to a defined targetmarket?

Can the target market be located andreached with cost-effective media and tradechannels?

Does the company possess or have access

to the critical capabilities and resourcesneeded to deliver the customer benefits?

2-11


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..MARKET OPPORTUNITY ANALYSIS

Can the company deliver the benefits betterthan any actual or potential competitors?

Will the financial rate of return meet orexceed the companys required threshold for

investment?

2-12


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Why is marketing planning

necessary? Systematic futuristic thinking by management

better co-ordination of company efforts

development of better performance standardsfor control

sharpening of objectives and policies

better prepare for sudden new developments managers have a vivid sense of participation


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Objectives of the marketing plan

Acts as a roadmap

assist in management control and monitoring theimplementation of strategy

informs new participants in the plan of their role andfunction

to obtain resources for implementation to stimulate thinking and make better use of

resources


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.Objectives of the marketing plan

Assignment of responsibilities, tasks andtiming

Awareness of problems, opportunities andthreats

Essential marketing information may have

been missing if implementation is not carefully controlled by

managers, the plan is worthless!


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EVALUATING A MARKETING PLAN

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Is the plan simple?

Is the plan specific? Is the plan realistic? Is the plan complete?


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THE CONTENTS AND STRUCTURE OF THE MARKETING

PLAN

The executive summary

table of contents

situational analysis and target market

marketing objectives

marketing strategies

marketing tactics

schedules and budgets financial data and control


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CAUTIONARY NOTES FOR EFFECTIVE PLANNING

Dont blindly rely on mathematical and

statistical calculations. Use your judgementas well

Dont ever assume that past trends can be

exploited into the future forever

if drawing conclusions from statistical data,

make sure the sample size is sufficientlylarge


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STANDARD PLANNING FRAMEWORK

Analysis - where are we now?

Objectives - where do we want to be?

Strategies - which way is best?Tactics - how do we ensure arrival?

Control - are we on the right track?


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BOSTON CONSULTING GROUP (BCG)MATRIXis developed byBRUCEHENDERSONof theBOSTON CONSULTING

GROUP IN THE EARLY 1970s.

According to this technique, businesses or

products are classified as low or highperformers depending upon their marketgrowth rate and relative market share.


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To understand theBoston Matrix you need to

understand how market share and market growthinterrelate.


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Market shareis the percentage of the total market that isbeing serviced by your company, measured either inrevenue terms or unit volume terms.

RELATIVE MARKET SHARE

RMS = Business unit sales this yearLeading rival sales this year

The higher your market share, the higher proportion of themarket you control.


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Market growthis used as a measure of a marketsattractiveness.

MGR = Individual sales - individual sales

this year last yearIndividual sales last year

Markets experiencing high growth are ones where the totalmarket share available is expanding, and theres plenty of

opportunity for everyone to make money.


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It is a portfolio planning modelwhich is based on theobservation that a companys business units can be

classified in to four categories:

Stars

Question marks

Cash cows

Dogs

It is based on the combination of market growth and marketshare relative to the next best competitor.


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HIGH GROWTH, HIGH MARKET SHARE

Stars are leaders in business.

They also require heavy investment, to

maintain its large market share. It leads to large amount of cash

consumption and cash generation.

Attempts should be made to hold themarket share otherwise the star willbecome a CASH COW.


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Low growth , High market share

They are foundation of the company andoften the stars of yesterday.

They generate more cash than required.

They extract the profits by investing aslittle cash as possible

They are located in an industry that ismature, not growing or declining.


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LOW GROWTH, LOW MARKET SHARE

Dogs are the cash traps.

Dogs do not have potential to bring inmuch cash.

Number of dogs in the company shouldbe minimized.

Business is situated at a decliningstage.


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HIGH GROWTH , LOW MARKET SHARE

Most businesses start of as questionmarks.

They will absorb great amounts of cash ifthe market share remains unchanged,(low).

Why question marks?

Question marks have potential to becomestar and eventually cash cow but can alsobecome a dog.

Investments should be high for question

marks.


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To assess :

Profiles of products/businesses

The cash demands of products

The development cycles of products

Resource allocation and divestmentdecisions


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Identifying and dividing a company into SBU.

Assessing and comparing the prospects of eachSBU according to two criteria :

1. SBUS relative market share.

2. Growth rate OF SBUS industry.

Classifying the SBUS on the basis of BCG

matrix.

Developing strategic objectives for each SBU.


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BCG MATRIX is simple and easy tounderstand.

It helps you to quickly and simply screen the

opportunities open to you, and helps youthink about how you can make the most ofthem.

It is used to identify how corporate cashresources can best be used to maximize acompanys future growth and profitability.


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BCG MATRIX uses only two dimensions,Relative market share and market growthrate.

Problems of getting data on market shareand market growth.

High market share does not mean profits allthe time.

Business with low market share can beprofitable too.


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MAHINDRA & MAHINDRA


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scorpio

Jeepbalero


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Though BCG MATRIX has its limitations it is oneof the most FAMOUS AND SIMPLE portfolioplanning matrix ,used by large companies

having multi-products.

marketing planning & strategy - session 1

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