Instructor: Amir Ekhlassi (2) Developing Marketing Strategies and Plans

Instructor: Amir Ekhlassi

(2)Developing Marketing Strategies and Plans

Strategic planningStrategic planning: is 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 mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies.

Defining The company

mission

Setting companyObjectivesAnd goals

DesigningThe business

portfolio

Planning marketingAnd other functional

strategies

Corporate level

Business unit, product,And market levels

2 ©Compiled by: Amir Ekhlassi

Strategic planning (cont’d)

Marketing planning occurs at the business unit, product, and market levels. It supports company strategic planning with more detailed planning for specific marketing opportunities.

MissionStatement

MarketingObjective 1

Marketing Objective 2

Marketing Objective 3

Marketing strategy

Marketing strategy

Marketing strategy

Marketing strategy

Marketing strategy

Marketing strategy

3©Compiled by: Amir Ekhlassi

Setting strategic directions

1. Business portfolio planning2. Growth opportunities


1.Designing the business portfolioThe business portfolio is the collection of

businesses and products that make up the company.

The company must: Analyze its current business portfolio or

strategic business units (SBU’s)Decide which SBU’s should receive more,

less, or no investment,Develop growth strategies for adding new

products or businesses to the portfolio.


StarsHigh growth & ShareProfit potentialMay need heavy investment to grow

Question marksHigh growth, low shareBuild into stares or phase outRequire cash to hold market share

Cash cowsLow growth, high shareEstablished, successful SBU’s Produce cash

Dogs Low growth & shareLow profit potential

Analyzing current SBU’s: BCG growth-share matrix

Relative market share high Low

Mar

ket

grow

th r

ate

high

low


2.Developing growth strategies in the age of connectedness Marketing has the main responsibility for

achieving profitable growth for the company. Marketing must identify, evaluate, and select

market opportunities and lay down strategies for capturing them.

One useful device for identifying growth opportunities is the product / market expansion grid.


Product / market expansion grid

Market penetration Product development

Market development Diversification

Existing Products

New products

Existing Markets

new Markets


Product / market expansion grid based on Starbucks

Market penetration: making more sales to current customers without changing its products. How? Add new stores in current market areas,

improvements in advertising, prices, etc. Market development: identify and develop new markets

for its current products. How? Review new demographic (senior consumers) or

geographic (Asian, European & Australian) marketsProduct development: offering modified or new products

to current markets.How? Increasing food offerings, sell coffee in

supermarkets, extend to Frappuccino drinks. Diversification: start up or buy businesses outside current

products and markets. How? Currently testing how new restaurant concepts –

café starbucks and Circadia, or branded casual clothing. 9

©Compiled by: Amir Ekhlassi

Assessing growth opportunity Intensive growth:

A growth objective within the reference market it operates.

Integrative growth:A growth objective within the industrial

chain, lateral expansion of its generic activity, backward and forward.

Diversification growth:A growth objective based on opportunities

outside its normal field of activity.


Intensive Growth: Market Development

New market segments (industrial and consumer markets, new industrial sector, new consumer segment)

New distribution channel (direct marketing, vending machine, franchise system)

Geographic expansion (local expansion, global expansion)


Intensive growth: Product Development

Discontinues innovationNew generation of productsProduct line expansion, rationalization or

acquisitionFeatures addingProduct performance improvement


Integrative growthBackward integrationForward integrationHorizontal integration ( reinforce the

competitive position, common customer, channel or supplier)


Growth by diversificationConcentric diversification: the goal is to build

a network of related activities and benefit from synergy. Technology or market relation.

Pure diversification: the goal is to burn into entirely new activities and set a portfolio of product and business activities.


Marketing’s role in strategic planningThere is much overlap between overall company strategy and

marketing strategy. Marketing plays a key role in the company’s strategic planning

to several ways: First, marketing provides a guiding philosophyguiding philosophy (the

marketing concept) that suggests company strategy should revolve around serving the needs of important consumer groups.

second, marketing provides inputsinputs to strategic planners by helping to identify attractive market opportunities and by assessing the firm’s potential to take advantage of them.

Finally, within individual business units, marketing designs designs strategiesstrategies for reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to carry them out profitably.


Factors influencing company marketing strategy


Connecting with customers

Each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments better than its competitors do. This process involves three steps: (STP)(STP)

Market segmentation

Market targeting

Market positioning


Market segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing mixes is called market segmentation.

A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.


Market targeting

Market targeting involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time.


Market positioningArranging for a product to occupy a clear,

distinctive, and desirable place relative to competing products in the minds of target consumers.

In positioning its product, the company first identifies possible competitive advantage on which to build the position.

To gain competitive advantage, the company must offer greater value to chosen target segments.

Effective positioning begins with actually differentiating the company’s marketing offer.


Developing the marketing mix

We define marketing mix as the set of controllable, tactical marketing tools (product, price, place, and promotion) that the firm blends to produce the response it wants in the target market.

The marketing mix consists of everything the firm can do to influence the demand for its product.


Developing the marketing mix (cont’d)

Target Customers

Intended positioning

PriceList priceDiscounts

AllowancesPayment period

Credit terms

PlaceChannelsCoverageLocations

AssortmentsInventory

Transportationlogistics

ProductVarietyQualityDesign

FeaturesBrand namePackagingservices

PromotionAdvertising

Personal sellingSales promotionPublic relations


Developing the marketing mix (cont’d)ProductProduct means the goods-and-services

combination the company offers to the target market.

PricePrice is the amount of money customers have to pay to obtain the product.

PlacePlace includes company activities that make the product available to target consumers.

PromotionPromotion means activities that communicate the merits of the product and persuade target customers to but it.


The marketing planComprehensive, written statement of what is

expected from each business unit in the future. Usually prepared annuallyIncludes both historical information and

recommendations on how to improve performance

Combines strategies with timetables for action


Evaluating a marketing plan

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


Contents of a marketing plan

Executive summary

Current marketing situation

Threats and opportunity analysis

Objectives and issues

Marketing strategy

Action programs

Budgets

Controls 26 ©Compiled by: Amir Ekhlassi

Building a marketing planBenefits of building a marketing plan

Identifying opportunitiesLeveraging core capabilities Focused marketing strategyResource allocation

Creativity Vs. Structure Formal Vs. informal market planning processInternal Vs. external motivation


The process of building a marketing plan

Step 1: Situation analysis

Step 2:SWOT

Analysis

Step 3: StrategicMarket

plan

Step 4:Marketing

Mixstrategy

Step 5:Marketing

budget

Step 5:Marketing

budget

Step 6:MarketingPerform

plan

Step 7: Performance

evaluation

Adjust MarketingPlan as

necessary


Step 1: situation analysis

Situation analysis Situation analysis

Market demand•Size& growth•Potential environment

Customer analysis•End users•Intermediaries•Non consumers

Competitor analysis•Structure•Gap analysis•situations

Competitive position•Market share•Price/quality•Cost/value

Performance metrics•Sales•Customer satisfaction•Margin/profit


Step 2: SWOT analysis

external

Opportunities

Threats

internal

Strengths

weaknesses

Situation analysis

Key performance issues


Step 3: strategic market plan

MarketAttractiveness

CompetitiveAdvantage

Product-marketPortfolio and

Plan selectionBased on

InformationUncovered inThe situationAnd SWOT

analysis


Step 4: marketing mix strategy

Strategy and key performance issuesPositioning strategyValue propositionChannel strategyPerformance objectives

Marketing mix elementsPricePromotionPlaceProduct


Step 5: marketing budgetWhat is the purpose of the marketing budget? Five ways to build a marketing budget

Top – downCustomer mixBottom – up Sales forecastMonthly budget


Step 6: performance timelinePerformance metrics:

Share positionSales revenueProfit performanceCustomer awarenessCustomer satisfactionProduct availabilityPerceptions of product and service qualityNet marketing contribution


Step 7: performance evaluation

What is performance evaluation?Why is performance evaluation important?What if the plan is not meeting performance

objectives?


Thank You For Your Patience & Attention


Documents

Instructor: Amir Ekhlassi (2) Developing Marketing Strategies and Plans