Marketing Planning and Strategy

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Marketing Planning and Strategy
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Values
Strategy
Mission
Vision
Values
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Figure 5.5
SWOT Analysis
Strengths Cost Advantages Financial
Resources Customer Loyalty Modern Production
Facilities Patents
Opportunities Add to Product Line Enter New
Markets Acquire Firms With Needed Technology
Leverage
Constraints
For critical weaknesses
Vulnerability
Weaknesses Too narrow a Product Line Lack of
Management Depth High-cost Operation Due to
High Labor Cost and Obsolete Production
Facilities Inadequate Financing
Capabilities Weak Market Image
Threats Changing Buyer Tastes Likely Entry of
New Competitors Adverse Government Policies
Problems
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Marketing Strategy

• Overall game plan. Long Term.
• Basic logic, but not the specific details, of how
  the organization intends to compete.
• Matches customer needs and wants with company
  strengths.
• Selects distinctive competencies to focus on.

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Marketing Strategy

• Identify the target market.
• Determine a distinct positioning strategy and
  craft a Unique Selling Proposition
• Give strategic direction to each element of the
  marketing mix. Integrate the marketing mix.

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The Marketing Plan

• I. Market Analysis
• A. Customer Analysis B. Competitor
  Analysis
• C. Environmental Analysis
• II. SWOT Analysis
• III. Marketing Objectives
• IV. Marketing Strategy
• A. Target Market B. Position the Offering
  C. Marketing Mix
• V. Marketing Implementation
• A. Marketing Organization B. Activities and
  Responsibilities
• C. Implementation Timetable
• VI. Evaluation and Control
• A. Performance standards B. Financial
  Control
• C. Monitoring Procedures (audits)

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McDonalds Basic Strategy

• Target the traveling public and young people.
• Concentrate on the hamburger.
• Delivery system was designed that provided
  immediate service.
• Perfection insured for French fries.
• Prices at a bargain, impulse level, but allowed
  for trade-ups to bigger hamburgers.
• Outlets were established at high-traffic
  locations.

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Sustainable Competitive Advantages

• Competitive Advantages Result From
• 1. Superior strategies for creating customer
  value
• 2. Superior execution of similar strategies
• Sustainability results when the advantage resists
  erosion by competitive behavior, or resists
  duplication by other firms.

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Sources of Sustainable Competitive Advantage

• Economies of Scale
• Innovation Products, Process, Managerial
• Brand Equity
• Relationships/ Commitments
• Superior Communication
• Corporate Culture
• Organizational Skills and Expertise

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More Sources of Sustainable Competitive Advantage

• Learning, Experience Effects
• Information Technology
• Superior Market Research, Information
• Superior Quality
• Customer Service Skills
• Human Resource Skills Competence, Teamwork,
  Coordination, Ability to Execute

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Product Concept
AUGMENTED
Tangible
Delivery
Return Recycling
Packaging
Styling
Core Benefit
Repair Service
Quality
Features
Warranty
Brand Name
Terms, conditions credit
Installation
9-1
1999 by Prentice-Hall, Inc.
C
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Brand
Other Intangible Benefits
Label/ Package
Components of a Product
Service After Sale
Warranty
Total Product
Prestige, Image
Services
Product Features
Safety
Physical Attributes
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Some Important Product Management Decisions

• What Products to Carry
• Items Lines Mix
• Width Depth Consistency
• How to Position
• Attributes to focus on
• Managing marketing mix to build the position
• Branding
• Manufacturer vs. Private Label vs.
  Generic
• Name, trademark, logo, trade character,
  trademark, etc.
• Attributes, Benefits, Values, Personality

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Laundry Detergents
Tooth- pastes
Bar Soaps
Deod- orant
Sham- poos
Coffees
Oxydol 1914 Ivory Snow 1930 Dreft 1933 Tide
1946 Cheer 1950 Dash 1954 Bold 1965 Gain 1966 Era
1972 Solo 1979 Liquid Tide 1984 Liquid Bold-3
1985 Liquid Cheer 1986 Liquid Lemon dash
1987 Tide with bleach 1988 Liquid Dreft
1989 Liquid Ivory Snow 1989
Gleem 1952 Crest 1955 Denquel 1980
Folgers (vacuumpacked) 1850 Instant
Folgers (coffee crystals) 1963 Instant High
Point 1975 Folgers (decaffeinated)
1984 Instant Folgers (decaffeinated)
1984 Folgers (Special Roast Flaked)
1986 Folgers (Gourmet Supreme) 1989
Ivory 1879 Kirks 1885 Lava 1893 Camay 1926 Zest
1952 Safeguard 1963 Coast 1974
Prell 1946 Head Shoulders 1961 Pert Plus
1979 Ivory 1983
Secret 1956 Sure 1972
Product line depth
Product mix width
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Positioning

• Positioning starts with a product. A piece of
  merchandise, a service, a company, an
  institution, or even a person ... But positioning
  is not what you do to a product. Positioning is
  what you do to the mind of the prospect. That
  is
• You position the product
• in the mind of the prospect.

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Product Positioning

• The decisions and activities intended to create
  and maintain a firms product concept in
  customers minds.
• Products are positioned relative to competing
  products. Can position to meet competition or
  avoid it.

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Positioning Map
Expensive
Excedrin
Nuprin
Bufferin
Advil
Anacin
Tylenol
For Body Aches
For Head Aches
Motrin
Bayer
Medipren

St. Josephs
Inexpensive
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Positioning Map
Expensive
Excedrin
B
Nuprin
Bufferin
Advil
Anacin
Tylenol
C
A
For Body Aches
For Head Aches
Motrin
Bayer
Medipren

St. Josephs
Inexpensive
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What is a Brand?

• A name, term, design, symbol, or any other
  feature that identifies one sellers good or
  service as distinct from those of other sellers.
• A sellers promise to deliver consistently a
  specific set of features, benefits, and services
  to buyers.

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Four Levels of Meaning for a Brand

• Attributes
• Benefits
• Values
• Personality

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Value Proposition (or Unique Selling
Proposition)

• A short phrase or sentence that summarizes what
  you really have to offer to the customer
• Must show how your product uniquely (different
  and better than any other alternative) meets a
  need of a target customer.

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Value Propositions

• Good positioning strategies start with a value
  proposition that is clearly and consistently
  communicated to target customers.
• Volvo The safest, most durable car in which
  your family can ride.
• Dominos A good, hot pizza delivered to your
  door within 30 minutes of ordering at a moderate
  price.
• Dell Computer A custom-made computer delivered
  right to your door with excellent support
  service, all for a low price.

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Reasons New Products Fail

• Lack of Product Uniqueness
• Poor Planning. (research, positioning, etc.)
• Improper Timing
• Technical Problems
• Loss of Objectivity
• Unexpected High Product Cost
• Competition
• Company Politics

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Estimating Demand

• Market Demand for a product is the total volume
  (in units or dollars) that would be bought by
• A defined customer group in a
• Defined geographical area in a
• Defined time period in a
• Defined marketing environment under a
• Defined marketing program

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Estimating Demand

• Company Demand is the companys estimated share
  of market demand at alternative levels of company
  marketing effort in a given time period.

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Estimating Demand

• Chain Ratio Method. Multiplying a base number
  (such as total population) by several adjusting
  percentages.
• Estimating Demand for baby monitors in China,
  India
• China India
• Base Number
• Total Population - 1,207.4 921.5 A
• Urbanization Rate 30.3 26.8 B
• Urban Population 365.8 247.0 C A x B
• Birth Rates per 000s 17.8 28.4 D
• Market Potential 6.5 million 7.0 E C x
  D

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Market Buildup Method

• Break a market into its component parts, estimate
  purchases or sales from each part, then sum them
• BASED ON BUYERS
• Identify all potential buyers in each market
• Estimate potential purchases for each buyer
• Sum the potential purchases for each buyer
• BASED ON SELLERS
• Identify all salespeople
• Estimate sales for each salesperson
• Sum the potential sales for each salesperson

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Survey of Buyers Intentions

• Survey a sample of the target market.
• Give the survey respondents a very clear
  description of the product or service you intend
  to sell, including price, etc.
• Ask questions like the following
• Do you intend to buy an automobile within the
  next six months?
• 0.00 0.20 0.40 0.60 0.80
  1.00
• No Slight Fair Good
  High Certain
• Chance possibility possibility
  possibility probability
• Multiply the average probability by the total
  population in the market by the percentage of the
  population that you surveyed.

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Other Methods

• Composite of Sales Force Opinions
• Jury of Expert Opinion
• Simple Trend Analysis (Extrapolating past sales
  into the future) (in IBC company cases, you will
  have to somehow determine past sales of
  competitors, or previous similar IBC companies)
• Test-market method.
• Detailed statistical analysis based on educated
  assumptions on a wide variety of variables.

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Characteristics of Good Forecasts

• A clear statement of purpose.
• Clear assumptions
• A time horizon
• Attention to discontinuities.
• Adequate accounting for social and technological
  forces
• Consider at least three scenarios
• Best conditions scenario
• Worst conditions scenario
• Most probable