Orientation - Strategic Marketing Management

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Strategic Marketing Management

Khalid J amil Ansari

[email protected]

[email protected]

03002265808

03312510453

December 23, 2012

Welcome to all of you!

mailto:[email protected]








Welcome

About Me

About You (why you?)

Why Strategy?

Overview of Topics

Expectations

Introduction of Concepts

Course Introduction



Who are You?

Self Introduction

Name

Company / Business / Student

Work experience, if any?

Your claim to fame?

What do you hope to gain from this course?



Why You?

You will be principals in firms

You will have to decide what to do:

What markets?

What services?

Where to dedicate your time?

What kinds of people?

You probably will be part of a team.



An Overview of the Subject



Introduction to Strategic Marketing Management

Introductory Modules , Introduction to Case Analysis,

Writing Case Analysis

Strategy Formulation

Strategy Implementation

Strategic Control

Environment Scanning (SWOT Analysis)Target Marketing

Business Strategy




Market Dominance Strategy

Promotion Strategy

Distribution Strategy

Pricing Strategy

Marketing Warfare Strategy

Market Segmentation

The Marketing Process

Marketing Positioning , Marketing Research

Presentations/Revision




Resources Needed For This Class

Recommended Book:

Doyle P. (2003), Marketing Management and Strategy,

Prentice-Hall Europe 3rd Edition. · West, D. C., J. B. Ford,

and E. Ibrahim (2006), Strategic marketing: creatingcompetitive advantage: Oxford University Press.

Reference Book :

Strategic Management and Business Policy,

12th Edition, Thomas L. Wheelen, J. David Hunger



Requirements

Home work Assignments, Class Participation,Quizzes, Case Studies, and Developing of aProject Report

4 Quizzes

MCQs, True/False, Fill in the blanks, andShort Questions

Midterm

Final Exam



The conventional definition of management is getting workdone through people.

But real management is developing people through work.

Agha Hasan Abedi



What is StrategicManagement?



Art & science of formulating,

implementing, and evaluating, cross-functional decisions that enable an

organization to achieve its objectives

Strategic Management – Defined



Strategic Management

In essence, the strategic managementis a company‘s game plan



What is Strategy?



Means by which long-termobjectives are achieved



What is meant byStrategies?



Strategies are plans to achieve long term

business aims and objectives of the organization.

Numerous major or minor business strategies

which organizations use to manage their business

operations.

Some minor strategies could be the pricing,promotion, distribution strategies organizations

use in day to day activities.

What is meant by Strategies?



Some long term major strategies could be to:

- acquire new business or open new branch

- start manufacturing plant in some other country

- close down factory, merge with another organization

- acquire a small business to improve competitive

position

What is meant by Strategies?



What isMarketing…??



What is Marketing…??

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!



Marketing = ?

Marketing is the process of planning and

executing the conception, pricing, promotion,and distribution of ideas, goods, services to

create exchanges that satisfy individual and

organizational goals American Marketing Association



MarketingManagement = ?



Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information



24

Marketing = ? Marketing is the sum of all activities that take you to a sales

outlet. After that sales takes over.

Marketing is all about creating a pull, sales is all about push.

Marketing is all about managing the four P‘s –

Product

Price

Place

Promotion



25

The 4 Ps & 4Cs?



26

The 4 Ps & 4Cs

Marketing

Mix

Product

Price Promotion

Place

Customer

Solution

Customer

Cost

Communication

Convenience



27

DifferenceBetween - Sales& Marketing ?



28

Difference Between - Sales & Marketing ?

Sales trying to get the customer to want what

the company produces

Marketing trying to get the company produce what

the customer wants



29

What do wemarket?



30

What do we market?

Goods

Services

Events

Experiences

Personalities

Place

Organizations

Properties

Information

Ideas and concepts



31

Core Concepts of Marketing Based on :

Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.



32

Core Concepts of Marketing

Need – food ( is a must )

Want – Pizza, Burger, French fry's ( translation of a need as per our experience )

Demand – Burger ( translation of a want as per

our willingness and ability to buy )

Desire – Have a Burger in a five star hotel



33

Needs, wantsdemands

Markets Marketing &

Marketers

Utility, Value & Satisfaction

Xchange, Transaction

Relationships

Products

Core Concepts of Marketing



34

In order to understand Marketing let us begin with the

Marketing Triangle

Customers

Competition Company



35

Who is a Customer ??

Anyone who is in the market looking at a

product / service for attention, acquisition, use

or consumption that satisfies a want or a need

CUSTOMER IS . . . . .



36

Customer –

CUSTOMER has needs, wants, demands and desires

Understanding these needs is starting point of theentire marketing

These needs, wants …… arise within a framework or an ecosystem

Understanding both the needs and the ecosystem isthe starting point of a long term relationship



37

How Do Consumers Choose AmongProducts & Services?

Value - the value or benefits the customers gain from

using the product versus the cost of obtaining the

product.

Satisfaction - Based on a comparison of performance

and expectations.

Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction



38

Customers - Problem Solution

As a priority , we must bring to our customers

―WHAT THEY NEED‖

We must be in a position to UNDERSTAND their

problems

Or in a new situation to give them a chance to AVOID

the problems



39

Customer looks for Value

Value = Benefit / Cost

Benefit = Functional Benefit + Emotional

Benefit

Cost = Monetary Cost + Time Cost +

Energy Cost + Psychic Cost



40

What is Strategic

MarketingManagement?



What is Strategic Marketing Management?

It is the managerial process that helps to

develop a strategic and viable fit between

the firm’s objectives, skills, resources withthe market opportunities available. It helps

the firm deliver its targeted profits and

growth through its businesses and products.



42

Strategic Marketing Management Strategic marketing management is concerned with

how we will create value for the customer

Asks two main questions

What is the organization’s main activity at a

particular time? – Customer Value

What are its primary goals and how will these be

achieved? – how will this value be delivered



How to go about it?

Defining the corporate mission

Establishing SBUs

Allocating resources for SBUs

Planning for new business



What is VisionStatement?



What is Vision Statement? Think: leading with inspiration and courage,

obsessed with future possibility, in a love affair with change.

VISION creates that momentum of growinganticipation about the future, where change isembraced as a step closer to that verycompelling picture of what’s coming next. Theexcitement about the future trumps anyapprehension about the uncertain — change isrecognized as the catalytic converter it is.



What is MissionStatement?



What is Mission Statement?

Think: managing with greatness and untamed

strength, improving everything daily.

MISSION will feed into the confidence of your

organization by feeding this ever-present self-

talk: “We can do this, and we are the onesordained to do this, for we are the best at it.” Mission will churn out revolutionary ideas about

the mundane, banishing mediocrity.



Corporate Mission?



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



5 questions that thefirm must ask itself?



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



SBU?



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 BCGMatrix?

http://www.google.com.pk/imgres?q=bcg+matrix&hl=en&sa=X&biw=1024&bih=549&tbm=isch&prmd=imvnsb&tbnid=pBDs3BceOtFkAM:&imgrefurl=http://www.quickmba.com/strategy/matrix/bcg/&docid=6r29lYrE6Hw0kM&imgurl=http://www.quickmba.com/images/strategy/matrix/bcg/growthshare.gif&w=297&h=264&ei=Ry-2T8jmGM64hAfR1fDYCA&zoom=1&iact=hc&vpx=302&vpy=178&dur=47&hovh=211&hovw=237&tx=123&ty=92&sig=116803112985553566167&page=1&tbnh=152&tbnw=171&start=0&ndsp=8&ved=1t:429,r:1,s:0,i:137






The BCG Matrix

The BCG Matrix is a business method that

was created by the Boston Consulting Group in

the 1970’s. This business method bases its

theory on the life cycle of products.

Also known as the Boston Box or Grid, BCG

Charts are divided into four types of scenarios,Stars, Cash Cows, Dogs and Question

Marks.



The BCG Matrix

??? Stars

Dogs Cash Cows

Mkt Share





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http://www.google.com.pk/imgres?q=bcg+matrix&hl=en&sa=X&biw=1024&bih=549&tbm=isch&prmd=imvnsb&tbnid=tiPmtxrAti_9eM:&imgrefurl=http://apps.develebridge.net/amap/index.php/Phase_1_Tools:_Customers&docid=UXuasbMfBIR9UM&imgurl=http://apps.develebridge.net/amap/images/8/89/Boston.jpg&w=379&h=326&ei=Ry-2T8jmGM64hAfR1fDYCA&zoom=1



SBU strategies Build

Hold

Harvest

Divest



SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats



The GE Model

Business Strength

Strong

Medium

Weak

StrongMediumWeak



Ansoff’s Product-Market Grid?



Ansoff’s Product-Market Grid

The Ansoff product/ market matrix is a tool

that helps businesses decide their product and

market growth strategy.

Ansoff’s product/ market matrix suggests that

a business’ attempts to grow depend onwhether it markets new or existing products

in new or existing markets.



Ansoff’s Product-Market GridCurrent products New products

Current Mkts

New Mkts

Mkt penetration

strategy

Mkt developmentstrategy

Product development

strategy

Diversificationstrategy



The Planning Process

Analysing Market opportunities

Developing Marketing strategies Planning Marketing Programs

Managing the Marketing Effort



Porter’s Generic Strategies

Overall cost leadership

Product Differentiator Focus



Marketing Control Annual Plan control

Profitability control

Strategic Control



72

Strategic Planning

Strategic Planning is the managerial process of

creating and maintaining a fit between the

organization‘s objectives and resources and the

evolving market opportunities.

Also called Strategic Management Process

All organizations have this

Can be Formal or Informal



73

The Strategic-Planning, Implementation, and ControlProcess

B i St t i Pl i P



74

Business Strategic-Planning Process

External environment

(Opportunity &

Threat analysis)

Internal Environment

(Strength/ Weakness analysis)

Goal FormulationBusiness Mission




75


Environmental Analysis

Internal AnalysisCompetitor Customer

Supplier

Regulatory

Social/ Political

Technology Know-How

Manufacturing Know-How

Marketing Know-How

Distribution Know-How

Logistics

Strength & Weaknesses

Identity Core Competencies

Opportunities & Threats

Identify opportunity

Fit internal Competencies with external opportunities

Firm Strategies



76

The Marketing Plan

A written document that acts as a guidebook of

marketing activities for the marketing manager



77

CONTENTS of MARKETING PLAN

Business Mission Statement

Objectives

Situation Analysis (SWOT)

Marketing Strategy

Target Market Strategy Marketing Mix

Positioning

Product

Promotion

Price

Place – Distribution

People

Process

Implementation, Evaluation and Control

The Marketing Process



78

BusinessMission

Statement

Objectives

Situationor SWOT Analysis

ImplementationEvaluation, Control

Target MarketStrategy

Marketing Strategy

Product

Promotion

Place/Distribution

Price

Marketing Mix



79

Why a product like radio declined

and now once again emerging as anentertainment medium ?



80

What Were the Drivers of This Change ?

Technology ?

Government policy ?

Other media substitutes ?



81

Factors

Influencing

Company‟sMarketing

Strategy

l k i i



82

Demographics

SocialChange

Economic

Conditions

Political &Legal Factors

Technology

Competition

EnvironmentalScanning

Target Market

ProductDistributionPromotion

Price

External Environment

is not controllable Ever-ChangingMarketplace

External Marketing Environment

Physical / Natural

The macro-environment



83

The macro-environment

is the assessment of the external forces that actupon the firm and its customers, that create

threats & opportunities



84

P r o d u c t?



85

Anything that is offered to the market for

attention, acquisition, use or consumptionthat satisfies a want or a need

Product is . . . . .



86

Types of Products

Consumer Products

IndustrialProducts

PRODUCTS

Services

Product Items Lines and Mixes



87

Product Items, Lines, and Mixes

Product Item

Product Line

Product Mix

A specific version of a productthat can be designated as adistinct offering among anorganization’s products.

A group of closely-relatedproduct items.

All products that anorganization sells.



88

Product Mix

Width – how many product lines a company has

Length – how many products are there in a product line

Depth – how many variants of each product exist within aproduct line

Consistency – how closely related the product lines are in

end use



89

Gillette‟s Product Lines & Mix

Blades and Writingrazors Toiletries instruments Lighters

Fusion – 5 blade

Mach 3 TurboMach 3 Series Paper Mate CricketSensor Adorn Flair S.T. DupontTrac II Toni S.T. DupontAtra Right GuardSwivel SilkienceDouble-Edge Soft and Dri

Lady Gillette FoamySuper Speed Dry LookTwin Injector Dry IdeaTechmatic Brush Plus

Width of the product mix

D e p t h

o f t h e p r o d

u c t l i n e s



90

What is a Service? Defining the Essence

An act or performance offered by one party to

another (performances are intangible, but may

involve use of physical products)

An economic activity that does not result in

ownership

A process that creates benefits by facilitating adesired change in customers themselves, or their

physical possessions, or intangible assets

Some Industries Service Sector



91

Some Industries - Service Sector

Banking, stock broking

Lodging

Restaurants, bars,

cateringInsurance

News and entertainment

Transportation (freight andpassenger)

Health care

Education

Wholesaling and retailing

Laundries, dry-cleaningRepair and maintenance

Professional (e.g., law,architecture, consulting)



92

Classification of Services

Pure Tangible Product

Materials / Components

Computers

Major Product with

Minor Services

Product = Service

Major Service with

Minor Product

Business Hotels

Good Transportation

BankingPure Intangible

Service

Major Characteristic of Services



93

Intangibility – Services are intangibility cannot be seen,tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed

simultaneously.

Variability or Heterogeneity – Services are highly variable

Perishability – Services cannot be stored.

Non Ownership - Services are rendered but there is no

transfer of title

Major Characteristic of Services

Th M k ti Mi



94

The Marketing Mix

The conventional view of the marketing mixconsisted of four components (4 Ps): Product,Price, Place/ distribution and Promotion.

Generally acknowledged that this is too narrowtoday; now includes , Processes, Productivity

[technology ]People [employees], Physicalevidence

Marketers today are focused on virtually all aspects

of the firm‘s operations that have the potential to

affect the relationship with customers.



95

The “8Ps” of Integrated Service

Management vs. the Traditional “4Ps”

► Product elements

► Place, cyberspace, and time

► Process

► Productivity and quality

► People

► Promotion and education

► Physical evidence

► Price and other user outlays



96

The Give and Get of Marketing

Great Words on Marketing



97

1. ―The purpose of a company is ‗to create acustomer …The only profit center is the customer.‘‖

2. ―A business has two—and only two—basicfunctions: marketing and innovation. Marketingand innovation produce results: all the rest are

costs.‖ 3. ―The aim of marketing is to make sellingunnecessary.‖

4. ―While great devices are invented in theLaboratory, great products are invented in the

Marketing department.‖ 5. ―Marketing is too important to be left to the

marketing department.‖

Drivers of Customer Satisfaction



98

Many aspects of the firm‘s value proposition

contribute to customer satisfaction:

The core product or service offered

Support services and systems

The technical performance of the firm

Interaction with the firm and it employees

The emotional connection with customers

Ability to add value and to differentiate as a

firm focuses more on the top levels

Marketers and Markets



99

Marketers are focused on stimulatingexchanges with customers who make upmarkets – B2C or B2B.

The market is comprised of people who play aseries of roles: decision makers,consumers, purchasers, and influencers.

It is absolutely essential that marketers have adetailed understanding of consumers, their

needs and wants.Much happens beforeand after the sale toaffect customer satisfaction

Stages of Customer Interaction



100

Stages of Customer Interaction

What Changed in Marketing…



101

g g

Organize by product units Focus on profitable transactions Look primarily at financial

scorecard Focus on shareholdersMarketing does the marketing Build brands through advertising Focus on customer acquisitionNo customer satisfaction

measurement

Over-promise, under-deliver

• Organize by customer segments

• Focus on customer lifetime value

• Look also at marketing scorecard

• Focus on stakeholders

• Everyone does the marketing

• Build brands through performance

• Focus on customer retention

• Measure customer satisfaction and

retention rate• Under-promise, over-deliver

Old Economy New Economy



102

What is customer -

centric?



103

Myth 1 – The larger the range of

products, the more customer-centric I am.

Mythbuster – The range of products has

emerged from being

competition-centric.



104

Myth 2 – Better technology (read CRM)

leads to better customer service.

Mythbuster – Technologyalone does not deliver,

helps people do.



105

Myth 3 – Launch a product and the

customer will start using instantly.- Give a customer a card and he willlearn how to play with it immediately

Mythbuster – Customers need

To be educated too…





107

Myth 5 – Just advertise and - You

will sell.

Mythbuster – Advertising will only sell,

Not retain customers.

M th 6 No diffe e e bet ee



108

Myth 6 – No difference betweenmarketing & selling

Mythbuster – “Selling focuses on the needs of the seller; marketing on the needs of the

buyer.



109

Myth 7 – In the absence of relationships „trust‟ builds financial brands

Mythbuster – Trust is not a differentiator at all…

it is the very minimum that the customer

expects!!



110

So what will the differentiators be :

• Technology ?

• Brand ?



111

The real differentiator of

customer – centricity in a

commoditised world of financial

products -

Customer Service !



Thank You

[email protected]

Documents

Orientation - Strategic Marketing Management