Marketing Process & Strategic Marketing Planning

II Module BBA

Marketing Process Model

•

Understanding the market place and customer needs and wants

Design a customer-driven marketing strategy

Construct an integrated marketing program that delivers superior values

Build profitable relationships and create customer delight

Capture value from customers to create profits and customer equity

What is Strategic Planning?

• It is the managerial process that helps to develop a strategic and viable fit between the firm’s objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products.

How to go about it?

• Defining the corporate mission• Establishing SBUs• Allocating resources for SBUs• Planning for new business

Corporate Mission

• This seeks to embody the entire goals of the organization and the objective of its existence.

• It seeks to provide a sense of purpose, direction and opportunity

• For e.g. e-bay’s mission: “to provide a global trading platform where

practically anyone can trade practically anything”.

5 questions that the firm must ask itself

• What is our business?• Who is our customer?• What does our customer need?• What will our business be?• What should our business be?

Marketing Myopia

• Industry is a customer satisfying process not a goods producing process.

• It is important therefore how you redefine your business.

Good mission statements have three characteristics

• They focus on a limited number of goals• It stresses the major values and policies the

firm desires• It defines the major competitive scope of

operation

Infosys Mission statement

“To achieve our objectives in an environment of fairness, honesty and courtesy towards our clients, employees, vendors and society at large”

Google Mission“To organize the world’s information and make

it universally acceptable and useful”.

SBU

• It is a company within a company• The business is differentiated from the rest of

the company• It has its own set of competitors• It is a separate profit centre

The BCG Matrix

???

Stars

Dogs Cash Cows

Mkt Share

Mkt

gro

wth

SBU strategies

• Build• Hold• Harvest• Divest

The GE Model

Business Strength

Mkt

Att

rac t

ive n

ess

Strong

Medium

Weak

StrongMediumWeak

Ansoff’s Product-Market GridCurrent products New products

Current Mkts

New Mkts

Mkt penetrationstrategy

Mkt developmentstrategy

Product developmentstrategy

Diversificationstrategy

The SBU Planning Process

• Analyzing Market opportunities• Developing Marketing strategies• Program Formulation & Implementation• Marketing Control

SWOT Analysis

• Strengths• Weaknesses• Opportunities• Threats

Porter’s Generic Strategies

• Overall cost leadership• Product Differentiator• Focus

Overall Cost Leadership

• This strategy involves the firm winning market share by appealing to cost-conscious or price-sensitive customers.

• the firm hopes to take advantage of economies of scale

• low direct and indirect operating costs, by offering basic no-frills products and limiting customization and personalization of service.

Differentiation Strategy

• Differentiate the products in some way in order to compete successfully.

• A differentiation strategy is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy.

Focus • The firm can choose to compete in the mass

market (like Wal-Mart) with a broad scope, or in a defined, focused market segment with a narrow scope

• The firm typically looks to gain a competitive advantage through product innovation and/or brand marketing rather than efficiency. A focused strategy should target market segments that are less vulnerable to substitutes or where a competition is weakest to earn above-average return on investment.

The contents and structure of the marketing plan

• The executive summary• Situational analysis • Threats and opportunity Analysis• Marketing objectives• Marketing strategies • Marketing tactics/Action Programs• Schedules and budgets• Financial data and control

Why is marketing planning necessary?

• Systematic futuristic thinking by management• better co-ordination of company efforts• development of better performance standards for

control• sharpening of objectives and policies• better prepare for sudden new developments• managers have a vivid sense of participation

Objectives of the marketing plan• Acts as a roadmap• assist in management control and monitoring the

implementation of strategy• informs new participants in the plan of their role

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

resources

Criticisms of marketing planning

• Formal plans can be quickly overtaken by events

• Elements of the plan may be kept secret for no reason

• gulf between senior managers and implementing managers

• the plan needs a sub-scheme of actions

• Assignment of responsibilities, tasks and timing• Awareness of problems, opportunities and

threats• Essential marketing information may have been

missing• if implementation is not carefully controlled by

managers, the plan is worthless!

Cautionary notes for effective planning

• Don’t blindly rely on mathematical and statistical calculations. Use your judgement as well

• Don’t ever assume that past trends can be exploited into the future forever

• if drawing conclusions from statistical data, make sure the sample size is sufficiently large

Analyzing Marketing Opportunities

• The Company’s Microenvironment• The Company’s Macro environment

Micro Environment

• The company• Suppliers• Marketing Intermediaries• Customers• Competitors• Publics

Macro Environment

• Demography• Economic Environment• Natural Environment• Technological Environment• Political Environment• Cultural Environment

Marketing Information system

• It consists of people , equipment and procedures to gather , sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers

Marketing Information System Process

Analysis Planning Implementation Control

Marketing Environment

Target Markets Marketing Channels Competitors Publics Macro environment Forces

Assessing Information

Needs

Distributing & Using

Information

Marketing Information System

Internal database

Marketing Intelligenc

e

Marketing Research

Information analysis

Marketing Managers and other info users

Developing Needed Information

Internal Records

• The order to payment cycle• Sales Information Systems• Databases, Data-warehousing and data-

mining

Marketing Intelligence

• It is a set of procedures and sources managers use to obtain everyday information about developments in the market environment.

• Sources: Books, newspapers, trade publications, stake holders, internet, discussion groups, blogs etc

How to improve market intelligence?

• Train & motivate the sales force to spot new developments

• Motivate intermediaries to pass information• Network Externally: trade shows, conferences

etc• Government data resources• Information from outside suppliers• Online customer feedback