Marketing Strategy

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Developing Marketing Strategies and Plans
Prepared by Prof Dipes Maitra July - 2014
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Chapter Questions

• How does marketing affect customer value?
• How is strategic planning carried out at
  different levels of the organization?
• What does a marketing plan include?

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Siemens AG has grown through new product
innovation and strategic acquisitions
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Nike Creates Value
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Three Vs Approach to Marketing
Define the value segment
Define the value proposition
Define the value network
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What is the Value Chain?

• The value chain is a tool for identifying ways to
  create more customer value because every firm is
  a synthesis of primary and support activities
  performed to design, produce, market, deliver,
  and support its product.

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Cisco Systems Taps into Partner Expertise to
Create Value
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Core Business Processes

• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship management process
• Fulfillment management process

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Characteristics of Core Competencies

• A source of competitive advantage
• Applications in a wide variety of markets
• Difficult to imitate

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Netflixs Distinctive Capabilities
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Firms Should Consider Key Questions

• Can we learn from the past?
• How should the present be evaluated?
• What do we envision for the future?

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What is Holistic Marketing?

• Holistic marketing sees itself as integrating the
  value exploration, value creation, and value
  delivery activities with the purpose of building
  long-term, mutually satisfying relationships and
  coprosperity among key stakeholders.

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Intels New Brand Identity Leap Ahead
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What is a Marketing Plan?

• A marketing plan is the central instrument for
  directing and coordinating the marketing effort.
• It operates at a
  strategic and tactical level.

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Levels of a Marketing Plan

• Strategic
• Target marketing decisions
• Value proposition
• Analysis of marketing opportunities

• Tactical
• Product features
• Promotion
• Merchandising
• Pricing
• Sales channels
• Service

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Figure 2.2 The Strategic Planning,
Implementation, and Control Processes
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Corporate Headquarters Planning Activities

• Define the corporate mission
• Establish strategic business units (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
Take a long-term view
Short, memorable, meaningful
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Major Competitive Spheres
Industry
Products
Geographical
Vertical channels
Competence
Market segment
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Rubbermaid Commercial Products, Inc.
Our vision is to be the Global Market Share
Leader in each of the markets we serve. We will
earn this leadership position by providing to
our distributor and end-user customers
innovative, high-quality, cost- effective and
environmentally responsible products. We will
add value to these products by providing
legendary customer service through our
uncompromising Commitment to Customer
Satisfaction.
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Motorola
The purpose of Motorola is to honorably serve
the needs of the community by providing products
and services of superior quality at a fair price
to our customers to do this so as to earn an
adequate profit which is required for the total
enterprise to grow and by doing so, provide the
opportunity for our employees and shareholders to
achieve their personal objectives.
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eBay
We help people trade anything on earth. We will
continue to enhance the online trading
experiences of allcollectors, dealers, small
businesses, unique item seekers, bargain hunters,
opportunity sellers, and browsers.
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Table 2.3 Product Orientation vs. Market
Orientation
Company Product Market
Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover
Xerox We make copying equipment We improve office productivity
Standard Oil We sell gasoline We supply energy
Columbia Pictures We make movies We entertain people
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Dimensions That Define a Business
Customer groups
Technology
Customer needs
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Characteristics of SBUs

• It is a single business or collection of related
  businesses
• It has its own set of competitors
• It has a leader responsible for strategic
  planning and profitability

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Figure 2.3 The Strategic Planning Gap
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Strategies Suggested by Ansoffs Product-Market
Expansion Grid

• Market penetration
• Market development
• Product development
• Diversification

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The Growth of Starbucks
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What is Corporate Culture?

• Corporate culture is the shared experiences,
  stories, beliefs, and norms that characterize an
  organization.

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Tactics for Managing Change

• Avoid the innovation title for the team
• Use the buddy system
• Set the metrics in advance
• Aim for quick hits first
• Get data to back up your gut

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Figure 2.5 The Business Unit Strategic Planning
Process
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Market Opportunity Analysis (MOA)

• Can the benefits involved in the opportunity be
  articulated convincingly to a defined target
  market?
• Can the target market be located and reached with
  cost-effective media and trade channels?
• Does the company possess or have access to the
  critical capabilities and resources needed to
  deliver the customer benefits?

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Market Opportunity Analysis (MOA) (cont.)

• Can the company deliver the benefits better than
  any actual or potential competitors?
• Will the financial rate of return meet or exceed
  the companys required threshold for investment?

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FedEx
FedEx added Sunday deliveries based on customer
requests and market demand
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Figure 2.6 Opportunity Matrix
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Figure 2.6 Threat Matrix
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Goal Formulation and MBO

• Units objectives must be hierarchical
• Objectives should be quantitative
• Goals should be realistic
• Objectives must be consistent

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Porters Generic Strategies
Overall Cost Leadership
Differentiation
Focus
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Categories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
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Marketing Plan Contents

• Executive summary
• Table of contents
• Situation analysis
• Marketing strategy
• Financial projections
• Implementation controls

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Evaluating a Marketing Plan

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

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Marketing Debate

• What good is a mission statement?
• Take a position
• Mission statements are critical to a
• successful marketing organization.
• or
• 2. Mission statements rarely provide
• useful marketing value.

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Marketing Discussion

• What implications do Porters value
• chain and the holistic marketing
• orientation model have for
• marketing planning?

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Marketing Planning

• Building a marketing plan. An effective marketing
  plan is the result of a systematic, creative,
  yet structured process that uncovers market
  opportunities threats a business can then
  address in order to achieve its performance
  objectives.. The development of a marketing plan
  is a process, each step in the process has a
  structure that enables the marketing plan to
  evolve from abstract ideas a compilation of
  information into a comprehensive document that is
  easy to understand logical in its conclusions,
  which demonstrates the high probability of the
  success of its proposed strategies.
• Situational analysis. Step 1. Assessment of
  current performance, market conditions, customer
  needs, competitive position. Step 2. SWOT
  analysis summarizes key strengths, weaknesses,
  opportunities threats that the plan needs to
  address.
• Next Marketing Strategy. Step 3. Propose a
  strategic marketing plan with respect to
  investment market share objectives for a
  specified planning horizon. Step 4. Develop a
  marketing mix strategy with respect to product,
  price, promotion, place to achieve proposed
  plan share objectives.
• Next Performance plan. Step 5.Based on the
  proposed strategy, develop the revenue plan
  marketing budget needed to support the proposed
  share revenue plan. Step 6. Develop a profit
  plan for the planning horizon that presents
  marketing profits, performance metrics a risk
  analysis.
• Next Performance review. Step 7.Does the plan
  meet the strategic performance, profitability
  objectives with acceptable risk?
• Adjust Marketing Strategy, Marketing Budget,
  Performance Objectives.
• Performance Gap. The performance gap is so wide
  as to require a review of the marketing strategy
  marketing budget.

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Marketing Planning

• Part 1. Situational Analysis where are we now?
  The strategic marketing planning process starts
  with a detailed situational analysis of the
  market business with respect to current market
  forces, the businesss competitive position,
  its current performance. The primary purpose of a
  situation analysis is to uncover key performance
  issues that usually go unnoticed in day-to-day
  business operations. First, we need to go deeper
  into the market the businesss operation to
  fully understand customer needs, competition,
  channel systems, as well as business positioning,
  margins profitability.
• A thorough situation analysis is required for a
  business to understand current performance
  market conditions to uncover the key issues
  that affect performance.
• Situation Analysis (Where are we now?) gt
  Marketing Strategy (Where do we want to go?) gt
  Performance Plan (Where will this take us?)
• The above shows us the output of the situation
  analysis is the marketing strategy. The marketing
  strategy must reconcile current performance
  market conditions with desired performance
  objectives. The combination of the situation
  analysis marketing strategy drives the
  objectives of the marketing plan with respect to
  market share, sales, margins, marketing
  profitability..
• Step 1. Current situation. A fact based analysis
  of the current situation is the first requirement
  in building a successful marketing plan. But
  acquiring accurate information on where are we
  now with respect to performance, market
  conditions, competitive position is often the
  most challenging aspect of building a market
  based performance plan. When specific information
  is not readily available, managers may be tempted
  to work around it, as though it were information
  not relevant to approaching the businesss
  current situation. Unfortunately this is not an
  acceptable approach. In some cases, the
  information may be truly unavailable, then
  managers will have to make estimates based on
  their experience marketing knowledge.

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Marketing Planning

• CURRENT SITUATION.
• Current Performance. 1. Sales. 2. Margins. 3.
  Profits.
• Market Demand. 1. Market Size. 2. Growth rate. 3.
  Potential.
• Competition Industry. 1. Competition. 2.
  Industry. 3. Share Position
• Market Share. 1. Market Share 2. Share Metrics.
  3. Share Potential
• Customer Needs. 1. Customer Needs 2. Purchase
  Behavior. 3. Customer Profile
• Competitive Position Value. 1. Product
  Service 2. Cost of Purchase 3. Customer value
• The above summarizes the data needed for fully
  capturing the essence of the current situation.
  As mentioned, estimates or assumption may often
  have to replace actual data, especially when
  marketing managers are new to the process of
  developing a market-based analysis of a
  businesss current situation. Over time, however,
  any estimates or assumptions will be replaced
  with market data. Managers may feel a bit uneasy
  in making estimates or assumptions, but almost
  every marketing manager needs to make them when
  developing a businesss initial assessment of its
  current situation. The assessment, however, will
  force on a businesss marketing managers a better
  knowledge of their market, leading to discovery
  of new data sources. The real enemy is a
  completely blank paper. Even using a guess is
  better than using nothing. Estimates
  assumptions at least can be modified as the
  actual data emerge.

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Marketing Planning

• Current Performance. The best place to begin work
  on an analysis of the current situation is with
  an accurate appraisal of the businesss
  performance. The appraisal might include only the
  most recent year of sales, margins, profits or
  it could include the same information for the
  previous two, three or more years. The
  information needed would be (1) Customer
  satisfaction, (2) Customer retention, (3)
  Customer profitability, (4) Customer loyalty.
• Market Demand. An important element of a
  situation analysis is an appraisal of the market
  with respect to demand. What is the markets
  present size, where is the market heading in
  terms of its growth rate price trends? What is
  the upper limit on market demand, the point at
  which the market will reach its full potential?
  Each of these considerations has strategy
  implications. A market in early development, far
  from its market potential growing rapidly, will
  require a strategy different than one for a fully
  developed very slow growing market.
• Competition Industry Attractiveness. Two spread
  sheets are created. The first page of the
  situation analysis section presents a summary of
  the competitive industry forces that influence
  profit performance, either favorably or
  unfavorably. As with any page in the marketing
  plan, the layout design will reflect the
  talents creativity of the individual or team
  building the marketing plan. The goal is to make
  each page highly readable, informative, easily
  understood, consistent in appearance writing
  style with the other pages.
• Share Performance Metrics. To help us understand
  opportunities to grow its market share achieve
  its share potential, we should have share
  performance metrics This should include a share
  development path, which, is a sequence of share
  performance metrics that shape market share. At
  each step of the share development path, share
  performance is measured by a particular
  performance metric. By multiplying positive share
  metrics, we arrive at a market share index. The
  market share index, is nearly the same as its
  actual market share.

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Marketing Planning

• Customer Needs Market Segmentation. The market
  is segmented and customers differ with regard to
  needs demographics. The marketing plan includes
  a separate page for each segment.
• Competitive Position Customer value. By
  plotting the overall benefits index the overall
  cost of purchase index, we can create a value
  map. It is possible that a small quantity segment
  creates a superior value as a result of
  outstanding customer benefits. In the large
  quantity segment, the customer value is about the
  same or marginally better but results from a
  combination of superior customer benefits cost
  of purchase.
• STEP 2. SWOT Analysis. To complete this phase of
  the marketing planning process, we must now
  comprehensively examine the situational forces
  uncovered by the analysis of the current
  situation, along with other forces that the
  analysis may not have captured. For example
  trends in government regulation, health costs,
  waste disposal could be significant influences on
  future performance. The role of a SWOT analysis
  is to document all present possible future
  influences on performance, negative or positive.
• Using this structure, the most important issues
  are specifically identified addressed in the
  marketing strategy section of the marketing plan.
  The key issues serve as the primary guideline in
  developing the marketing strategy, they must be
  carefully specified articulated. This step in
  the planning process will have a major part in
  determining the marketing strategy its impact
  on future performance. ..

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Marketing Planning

• MARKETING STRATEGY Where do we want to go? As
  we prepare to develop a marketing strategy, a
  businesss managers must carry forward into their
  strategic thinking each issue identified in the
  situation analysis, including those articulated
  in the SWOT analysis. The following lists the
  components of the situation analysis, it is
  around these components that the issues are
  organized.
• Components Based on the situational analysis
  (where are we now?) comprising of current
  performance, market demand growth, competition
  industry, market share metrics, customers
  needs, positioning value SWOT analysis, we
  move to develop marketing strategy. The question
  is where do we want to go with our strategy with
  respect to market share, product positioning,
  price-value, channels to market communication.
  This should lead us to proper performance plan
  (Where will our strategy take us?).
• STEP 3. Strategic Market Plan. On the basis of
  insights brought to light by the situation
  analysis, a businesss managers develop a
  strategic market plan that will guide the
  development of specific marketing mix strategy.
  The primary purpose of a strategic market plan is
  to give a business a strategic direction, with a
  set of performance objectives, to guide the
  development of a marketing mix strategy. To
  facilitate this process, a strategic market
  planning portfolio is used.
• COMPONENTS OF A MARKETING STRATEGY. 1. Strategic
  Market Plan. (A) Strategic objectives (B)
  Positioning Plan (C) Investment. 2. Share
  objectives. (A) Market size (B) Growth rate (C)
  Potential. 3. Positioning Strategy. (A)
  Competitors (B) Industry (C) Share position. 4.
  Price strategy (A) Market Share (B) Share metrics
  (C) Share potential 5. Channel Potential (A)
  Customer needs (B) Purchase behavior (C) Customer
  profile. 6. Communication strategy (A) Product
  service (B) Cost of purchase. (C) Customer value.

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Marketing Planning

• Market Share Objective. For each strategic market
  plan , we need to have very specific market share
  objectives share performance metrics for the
  planning horizon. We could simply state how share
  is expected to play out over the planning period,
  but a more comprehensive approach would be to
  specify objectives for share development during
  the plans time horizon, along with the changes
  necessary in the share performance metrics to
  realize these objectives.
• STEP 4. Marketing Mix Strategy. The next step in
  the marketing planning process is the development
  of a marketing mix strategy to put the strategic
  market plan into effect. Although an overall
  marketing strategy to protect, grow, reduce
  focus, harvest, enter, or exit a market position
  is set by the strategic market plan, more
  specific marketing mix strategies are needed for
  each of the key performance issues . Each element
  of a marketing mix strategy is a specific
  response to a key performance issue identified by
  the assessment of the current situation. The
  marketing mix strategies will be only as good as
  the key performance issues uncovered as an output
  of the situation analysis.
• Product positioning strategy. The purpose of the
  positioning strategy is to make explicit the
  current proposed product positioning with
  respect to product, service brand benefits.
  What specifically is going to change with respect
  to benefits as a result of this marketing
  strategy? How are prices going to be managed
  given changes in the delivered benefits? How are
  the non-price cost of purchase expected to
  change with the proposed positioning strategy?
  Finally, what will be the impact on customer
  value how will these changes impact the
  proposed value proposition? All these
  considerations must be clearly addressed to
  achieve the desired impact with respect to
  product positioning.

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Marketing Planning

• Channel Strategy. A businesss channel strategy
  is a roadmap the business follows in selling
  delivering its products services to target
  customers. For each channel that links the
  business with customers, the business benefits by
  knowing the average revenues, margins,
  marketing sales expenses. Managers can then
  compute the marketing ROI for each channel take
  into account the profitability of their various
  channels when making distribution decisions.
  channel mapping channel strategies must be
  analyzed beforehand.
• Communication Strategy. The marketing mix
  strategy section of a marketing plan should also
  include Marketing Communications. This presents
  a concise but all inclusive presentation of the
  kinds of communications needed to impact customer
  awareness, consideration, trial, preference.
  The material includes both push pull
  communications.
• Push pull Communication. Push communications
  are directed at channel intermediaries channel
  influencers, with the objective of creating a
  market push from channels. Pull communications
  are directed at target customers are equally
  important. Their objectives are to create
  interest among customers, motivating them to
  acquire more information or to evaluate products.
  Push communications include articles in the trade
  business press. The push strategy also
  addresses the need for sales training for channel
  personnel who make sales presentations to small
  quality customers, it calls for improved 2-way
  communications between the business
  intermediaries. Pull communications include
  direct mail, advertising in trade professional
  journals, a free trial promotional program for
  potential customers. This document does not
  include cost or other details. about the
  marketing communications, as these specifics are
  part of a businesss marketing budget media
  plan.

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Marketing Planning

• Performance Plan What is the expected impact?
  The market plans section on marketing mix
  strategy leads us to the performance plan.
  Earlier the situation analysis helped us
  understand where the business is now to
  identify the key issues that were addressed in
  the marketing strategy. The marketing strategy in
  turn will give the business an overall strategic
  direction. It serves as a general guideline in
  developing the marketing mix strategy for
  carrying out the marketing strategy. Each element
  of the marketing strategy, including the tactical
  marketing mix components, will impact the
  performance plan, as well as certain elements of
  the situation analysis.
• Developing a performance plan. Performance plan
  will lead us to Where will this marketing
  strategy take us with respect to 1. Market share.
  2. Sales Revenues. 3. Competitive position. 4.
  Marketing profits.
• STEP 5. Develop a revenue plan marketing
  budget.
• Revenue plan. In developing a performance plan, a
  business first translates the objectives of the
  market share strategy into a revenue plan. One
  important part of a revenue plan is information
  on the market demand in the situation analysis.
  Based on current demand estimated market growth
  rates, it offers an estimate for future demand.
  Sales are a function of this demand the market
  share objectives. A revenue plan also presents
  revenue plan for each market segment. Separate
  plans are needed because each segment has
  different pricing, percent margins, marketing
  sales expenses subsequently each has different
  levels of marketing profitability differing
  marketing ROIs.
• Marketing Budget. Market share gains are not
  free. Even a strategy to hold market share in a
  growing market needs an increased marketing
  budget. A business needs to allocate resources in
  the form of a marketing budget based on the
  strategic marketing plan the marketing mix
  strategy.

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Marketing Planning

• Marketing budget ( contd ). Without adequate
  resources the marketing mix strategies cannot
  succeed, performance objectives will not be
  achieved. Determining the marketing budget is one
  of the more difficult parts of the marketing
  planning process. Specifying the budget does not
  need to be a precise process, but allocations
  must represent a logical connection with the
  strategy performance objectives. Businesses use
  one of the 3 ways to build a marketing budget
  that is based on a specific strategic market plan
  the marketing mix strategy designed to achieve
  the target level of performance.
• Percent-of-sales Marketing Budget. For a
  percent-of-sales marketing budget, the percent of
  sales used is often based on previous experience
  but could vary from past experience, depending on
  the nature of the strategic market plan that that
  will be implemented. An aggressive growth
  strategy might require more than the normal
  percent of sales to achieve share sales
  objectives. On the other hand, a harvest strategy
  may slowly reduce marketing sales expenses as a
  percent of sales while market share is being
  harvested over time.
• A typical hold strategy may keep marketing
  sales expenses as a percent of sales at the same
  level. But the marketing budgets Rupee amount
  will still change as a constant percent of
  increasing sales. The figure for percent of sales
  modestly increase each year because the strategy
  calls for growing share in a growing market.
• Customer-mix Marketing Budget. For a customer-mix
  marketing budget, the cost of customer
  acquisition retention the combination of new
  retained customers are used to establish the
  budget. Because the rate of new customer
  acquisition can change the marketing budget
  required, the customer-mix approach to funding
  marketing budget is seen by many market based
  businesses as the best approach to take.
• Marketing Budget Marketing administration cost
  Acquisition cost per customer x No of new
  customers Retention cost per customer x No .of
  retained customers.

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Marketing Planning

• (Contd). The challenge in this approach to
  estimating marketing expenses is determining how
  much of the non marketing administrative expenses
  should be designated for customer acquisition
  how much for customer retention.
• Bottom-up Marketing budget. A bottom up approach
  to developing a marketing budget requires
  specifying each marketing task the amount
  needed to accomplish it, given a particular
  strategic market plan marketing mix strategy.
  In using a bottom-up approach to developing a
  marketing budget, it is helpful to classify
  expenses as personnel non personnel. For
  marketing management, personnel costs include all
  salaries benefits. Non personnel expenses
  typically include travel living expenses, as
  well as commissioned studies consultants fees.
• STEP 6. Develop a Profit Plan. In the profit
  plan, all elements of a marketing plan merge into
  a forecast of percent margins marketing
  profitability. Sales revenues are brought forward
  from the revenue plan, the budget allocations
  needed to support these sales forecasts are also
  brought into the profit plan. Because market
  segment profitability has such a major role in
  the overall profit plan, separate profit plans
  are to be created for each market segment
• Break-Even Analysis. Understanding the concept of
  break-even sales helps us evaluate the efforts
  needed to recover a businesss investment in a
  marketing budget. Once a business goes beyond the
  break even level of sales, it starts making a
  profit. In implementing a strategy to grow share,
  we know that a business with an actual market
  share close to break even market share faces a
  risk of loss than a business with a large
  difference between the actual break even market
  share.
• Performance Scorecard. A performance scorecard
  typically gives us the results of important
  market metrics, customer metrics, profitability
  metrics. These performance measurements help us
  understand the reasons behind a businesss
  performance with regard to sales, margins,
  marketing sales expenses. marketing profits.

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Marketing Planning

• (contd). Measures of customer satisfaction,
  customer retention, customer loyalty, the net
  promoter index allow us to track performance over
  time. If these performance metrics are not
  meeting their performance benchmarks, then it is
  less likely the business will achieve its
  objectives.
• Income Statement. While not a necessity for a
  performance plan, this section of the businesss
  marketing plan could include an income statement.
  Preparing the statement requires a good knowledge
  of the non marketing overhead expenses some
  method of projecting the changes the expenses
  will undergo with changes in sales.. Using a
  percent-of-sales approach can be a safe way to
  estimate these expenses.
• Multiplying the pre tax return on sales by the
  sales-to-asset ratio gives us the pre-tax return
  of assets.
• Pre-Tax ROA Pre-tax ROS x Sales-to Asset Ratio.
  Using this methodology, we can project the
  pre-tax return on assets for each year of the
  marketing plan.
• STEP 7. Performance Review. The performance
  review involves the ongoing monitoring of
  marketing profit performance in light of the
  marketing plans timeline. If the business fails
  to meet the desired performance objectives stated
  in the strategic marketing plan, then the
  marketing plan must be reevaluated with respect
  to all inputs used in the marketing planning
  process. These performance gaps require the
  business to consider several options. One is to
  reexamine its pricing, customer channel
  discounts , unit costs, the marketing budget to
  determine if, in fact, there are opportunities to
  improve performance.
• A second alternative is to reexamine the entire
  marketing plan. The situation analysis the key
  performance issues would be reviewed to see if
  other tactical marketing mix strategies would
  more effectively achieve the desired performance
  objectives.

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Marketing Planning

• (Contd) Whichever the case, a credible marketing
  mix strategy must be linked to the market
  situation, key performance issues, available
  resources, then linked to the projections of
  external marketing metrics internal profit
  metrics.
• After the marketing plan is implemented,
  performance gaps are likely to emerge because of
  changing market conditions the effectiveness of
  the proposed marketing tactics. Addressing these
  performance gaps as they occur is a critical part
  of the marketing planning process. Modifying,
  adapting, or even abandoning a strategy is part
  of the process of building implementing a
  marketing plan.
• Developing a marketing plan involves both
  structure creativity, The process begins with a
  broad view of market opportunities, a view that
  encourages consideration of all market
  opportunities. For each market opportunity, a
  strategic market objective is set, based on
  market attractiveness competitive position
  attained or attainable in the market. For each
  market the business pursues, a separate situation
  analysis marketing plan are required. The
  situation analysis enables the business to
  uncover factors that may limit performance. These
  key performance issues are the basic materials
  from which marketing strategies are built. Each
  aspect of the strategy must be scrutinized with
  respect to the market situation, key issues,
  the resources needed to achieve specific
  performance objectives. With the marketing
  strategy the budget set. An estimate of
  marketing financial performance metrics must be
  projected over a specified time frame. If the
  marketing plan fails to produce desired levels of
  performance , the marketing strategy needs to be
  reexamined.
• The benefits of a good marketing plan are many.
  The planning process leads a business to discover
  new market opportunities, to make better use of
  assets capabilities, to clearly define its
  market focus, to improve marketing productivity
  to establish an effective process for evaluating
  progress towards goal.

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Communication Strategy

• The Promotion Mix. (Marketing Communications mix)
  A companys total promotion mix also called
  its marketing communication mix consists of the
  specific blend of advertising, sales promotion,
  public relations, personal selling direct
  marketing tools that the company uses to
  persuasively communicate customer value build
  customer relationships. Definitions of the five
  major promotion tools follow.
• Advertising Any paid form of non personal
  presentation promotion of ideas, goods, or
  services by an identified sponsor.
• Sales Promotion Short-term incentives to
  encourage the purchase or sale of a product or
  service.
• Public Relations Building good relations with
  the companys various publics by obtaining
  favorable publicity, building up a good corporate
  image, handling or heading off unfavorable
  rumors, stories, events.
• Personal selling. Personal presentation by the
  firms sales force for the purpose of making
  sales building customer relationships.
• Direct marketing. Direct connection with
  carefully targeted individual customers to both
  obtain an immediate response cultivate lasting
  customer relationship the use of direct mail,
  the telephone, direct response television, , e
  mail, the internet , other tools to communicate
  directly with specific consumers.
• Each category involves specific promotional
  tools used to communicate with customers. For
  example, advertising includes broadcast, print,
  Internet, outdoor, and other forms. Sales
  promotion includes discounts, coupons, displays,
  demonstrations. Personal selling includes sales
  presentations, trade shows incentive programs

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• (Contd) Public relations includes press releases,
  sponsorships, special events, Web pages. And
  direct marketing includes catalogs, telephone
  marketing, kiosks, the Internet, more.
• At the same time, marketing communication goes
  beyond these specific promotion tools. The
  products design, its price, shape, color of
  its package, the stores that sell it- all
  communicate something to buyers. Thus, although
  the promotion mix is the companys primary
  communication activity, the entire marketing mix
  promotion product, price place must be
  coordinated for greatest communication impact.
• INTEGRATED MARKETING COMMUNICATIONS.
• Marketing depends heavily on an effective
  communication flow between the company the
  consumer. Manufacturing a fine product making
  it available on the market is only a part of the
  company job. It is equally important to make it
  known to the consumer that such a product is
  available in the market. In a competitive market,
  where several firms are striving to win over
  consumers , it is not enough if just the
  availability is made known. It is essential to
  propagate the distinctiveness of the product
  the nature extent of value it carries by using
  different methods media of communication. This
  set of tasks constitute the promotion mix or
  the fourth P of marketing.
• In the traditional marketing approach, , the
  Promotion Mix consisting of personal selling,
  advertising, sales promotion, publicity, is the
  only package available for communicating to the
  consumer. In the modern approach, besides the
  promotion mix, other entities like the product,
  price channel are also reckoned as vital tools
  for communicating with the market. In other
  words, all the 4 Ps of marketing are considered
  as components of the communications mix of the
  firm. The firm can communicate with the consumer
  through quality products, attractive convenient
  packages, pictures symbols, the price the
  terms of sale, attractive stores efficient
  sales men.

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Communication Strategy

• (Contd) When the various stimuli emanating from
  all such sources are received interpreted by
  the consumer, marketing communication takes
  place. The process also ensures the feedback from
  the consumer on how the total offering of the
  company is received by the consumer.
• (A) Marketing Communications must harness all
  value bearing components. We know the problems of
  todays brand manager in carrying out his brand
  promotion campaigns. Innumerable messages keep
  flowing on the established media, like Print,
  TV, the new age media like Net, Mobile phones,
  Blogs, Chat groups, free video sharing sites
  like You tube. This is posing a big threat to the
  effectiveness of the firms own advertising
  sales promotion campaigns. Before the firms
  formal message reach the target audience, more
  comprehensive often more factual messages about
  the product are already in circulation among them
  through various routes.
• (B) Marketing communication through product cues.
  The product is a carrier of certain messages let
  us call them product cues. The product, for
  example, conveys meanings through its physical
  features such as its color, shape size, its
  package labels, its brand name. A product is
  not a mere non-living object. Products Brand
  project a personality of its own. And consumers,
  on turn, attribute certain meaning significance
  to the product. A purchase is the result of this
  process. In other words, a product communicates
  with the consumer through its personality.
• The product personality as a Whole Communicates.
  The product personality is constituted of
  several elements such as 1. The physical
  features, the material, the size, shape, design,
  the finish, etc. 2. The package, its color, size,
  design, labeling. 3. The brand name
  logo/company name.
• All these elements are sources of product cues or
  product messages to the consumer. They carry
  certain impressions these impressions
  communicate something about the product.

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Communication Strategy

• Physical features of the product communicate. To
  begin with, the product communicates through its
  physical features. Its material, its design,
  color, shape, odor, finish all convey something
  to the buyer. Pink color, oval shape, jasmine
  scent, silky feel, pocket size, feathery touch-
  these are all product features with communicative
  persuasive value.
• Communication can be visual or it can be tactile-
  through touching. It can be through aroma or it
  can be through performance seeing the product
  functioning.
• The Package Communicates. The package takes up
  the role of a silent salesman in the
  shelf/counter of the retail shop. For packaged
  consumer products, the package has evolved as a
  powerful communication tool. It provides the
  first appeal to the consumer. The actual product
  comes only later. The package is there to be seen
  felt. Its color, its shape size, its labels
  lettering the brand name, the material used
  they all carry some communication cues.
• The colors on the package communicate. Colors
  have the great communicative significance. There
  are exciting colors, there are dull colors.,
  there are soothing colors there are inviting
  colors. There are colors that evoke appetite
  colors that invite sleep. There are colors
  associated with prosperity, love romance. There
  is a color of war aggression a color of
  peace. There are colors associated with festivals
  mourning. Race, climate age affects color
  preference. Level of education, literacy
  religion too affects them. When properly used,
  color is a source of emotional enjoyment to most
  people.
• Business firms pay a great deal of money to
  psychologists research institutions to discover
  the colors color patterns that will suit their
  products influence people in their purchases.
  It is not by accident that a large number of
  packages, displayed on the shelves of any store,
  are in the shades of red yellow. Research has
  shown that red yellow colors arrest the eyes
  grab attention. These colors also make the
  package look a little bigger than what it really
  is.

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Communication Strategy

• (contd) Blue is deemed to convey peace,
  contentment, security. Blue is a color wide
  used by banks in their logos house style.
  Children normally prefer bright colors adult
  subdued colors. The right color or the right
  combination of colors on a package can boost the
  communicative appeal of the package.
• Package Design. Just like the color of the
  package, its size, shape desgns too have a
  communicative role. A good package design is eye
  catching is not a strain for the consumer who
  looks at the product examines it. A bad package
  design can harm the total product message. The
  product may be of high quality, but it may suffer
  in the market if the package design does not
  succeed in avoking a favorable response.
  Pictures, labels other illustrations on the
  package increase its communicative value.
• The Brand Name the Logo Communicate. Brand
  name. as a component of the total product has
  great communication value. No woman asks for just
  facial make up she asks for Sunsilk, Halo,
  Clinic-all-clear, or Head Shoulders. From the
  utility angle any of these products may serve the
  purpose.. But the buyer identifies the products
  distinguishes one from the other through the
  brand name. And this is the main function
  intended from a brand name to distinguish the
  companys product from that of its competitors.
• Brand names should be supported by logo
  slogans. Together they enhance the communication
  effect.
• The company name communicates. In addition to the
  brand name, firms also use the company name for
  marketing communication. For example, most
  products of the house of Tatas, carry the suffix
  A Tata Product. We have seen that products
  from Godrej, from hair dye to steel cupboards,
  refrigerators to printers sell under the company
  name. In such cases, the firm is actually using
  the company name its image as a marketing
  communication tool.

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Communication Strategy

• (C) Marketing Communication Through Price Cues.
  Price conveys something more than the price. What
  are the informational cues that price provides to
  consumers?
• Price quality equation. Quite frequently,
  consumers view price as an index of quality. When
  several brands of the same product are available,
  consumers tend to use price as a cue to quality.
  The buyer associates the higher priced brand with
  better quality. Similar is the case with products
  that are used as gifts when a person selects a
  gift item, he normally likes to avoid a cheap
  brand. Here also, price as an informational cue,
  plays a key role in his decision making process.
• Price status equation. Price, in certain cases,
  becomes a symbol of prestige or status for the
  buyer. This is quite often true of high priced
  consumer goods. The status conscious buyer uses
  the high price tag as a status symbol, when he
  proudly declares that he has purchased the
  highest priced brand in the market. He sees price
  as a symbol of prestige.
• Price, an indicator of technological superiority.
  Technological changes that result in product
  innovations also tempt the customer to use price
  as the most reliable information cue. A potential
  buyer in search of a good refrigerator may come
  across different brands, each claiming a
  distinctiveness quality performance, each
  listing out its technological features. While
  such product information is also intended to be
  an essential message carrier, the layman who is
  not well versed with the technical claims may
  ultimately rely on the price cue as a measure of
  product excellence.
• Consumers concept of a reasonable price .
  With certain products, consumers develop an idea
  of a reasonable price. They may not know anything
  about the companys cost of production or the
  profits it makes out of the product. The
  reasonable price they assume might be based on
  prices of similar products available in the
  market. When the actual price of a given brand is
  more than the reasonable price they have assumed,
  they are reluctant to buy..

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Communication Strategy

• (contd) And, if the actual prices are much lower
  than the reasonable price, then the consumers
  suspect the quality. Only a price that comes near
  about the reasonable price will find acceptance.
• So the marketer has to remember that price is not
  merely an economic tool. The psychological
  effects of price on the consumer have to be
  considered, the communicative role of price has
  to be exploited to make the total product
  offering attractive to consumers.
• (D) Place as a component of marketing
  communications. Quite often, we hear people
  saying I buy only from X store. If you ask
  them why, their replies may run like this They
  have a big selection Its a lovely place to
  shop in Their service is good It is
  cheap Its location is good They sell
  quality products.
• The Store image. Just like a product projecting
  its image, the store also projects an image of
  its own through various factors, such as its
  location, external looks, shop displays, store
  salesmen, the extent of merchandise it carries,
  the extra service it offers, its policy on price,
  its reputation in the locality, the type of
  customers who patronize it, etc. To a youngster a
  particular store may look old fashioned he may
  not like to patronize it. His father may may find
  the same store decent reliable. The youngster
  may like a shop with modern exterior design
  interior décor, with a spacious shopping space
  good display. Music adds to his pleasure the
  shop satisfies his sense of aesthetics. A young
  lady will find it awkward to buy her favorite
  cosmetics from a cheap-looking stationery store.
  She may prefer to buy the same item from an
  outlet in the new shopping complex, with its
  glamorous appearance collections. The extent
  of merchandise carried in the store also helps to
  project its image in a favorable manner. People
  normally do not like to patronize a poorly
  stocked shop. They like to visit stores that
  display a good inventory because it conveys to
  them the look of abundance variety. Well
  trained well mannered sales personnel in the
  store also play an important role in marketing
  communications.

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Communication Strategy

• (contd) Store Level Merchandizing. Often, it is
  merchandizing at the store level including
  display service that speeds up the movement
  of products from the store counter to the
  shoppers basket. A consumer who normally goes to
  a particular retail store to buy his usual brand,
  may switch over to a competing brand seeing the
  product on display. In todays highly competitive
  market , many companies see to it that the store,
  as a whole, become a display unit, attracting
  high consumer traffic.
• Store choice is linked to store image. The choice
  of a store by a consumer depends, to a large
  extent, on what the store communicates to him.
  Store choice is the result of the process where
  by the consumer compares the characteristics of
  the given store, as communicated through the
  store image, with his evaluative criteria of a
  good store. He works out 4 steps in his mind
  before making the store choice 1. Formulate the
  criteria 2. identifies the characteristics of the
  given store 3. Compares the two 4. Decides
  whether the store is acceptable or not. If past
  experience with a store have been satisfactory,
  the store is usually revisited without
  re-evaluation. Again, it is not as though the
  consumer elaborately works each of the 4 steps
  before making the store choice. But the process
  does take place in his mind. And in this process,
  the communicative element of the store is the
  most important aspect In certain cases, the very
  name of the store or its category triggers off in
  his mind the required responses the decision.
  For example, he may have in his mind certain
  ready associations with terms like supermarket,
  cooperative store, discount store. Margin
  free shop exclusive shop. In other cases ,
  his mind quickly sifts the criteria such as
  location, extent of merchandize carried ,
  attractiveness of the store, point of sales
  promotion, service, the salesmen the nature of
  the clientele patronizing the store.
• So the store is a good communication tool for the
  marketer. We saw that Reliance Textiles as its
  marketing strategy , the company used the
  showroom idea in marketing Vimal fabrics.

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Communication Strategy

• (E) Promotion as a Component of Marketing
  Communications. We have so far discussed the
  first 3 components product, price place of
  the marketing communication mix. We come to the
  last most substantial component Promotion.
  The very fact that the promotion was , for a
  quite long time, considered to be synonymous with
  marketing communication is a pointer to its
  pre-eminent role in marketing communications. We
  have already mentioned, promotion itself consists
  of 4 different components, namely 1. Personal
  Selling 2. Advertising 3. Sales Promotion 4.
  Publicity. Of these, Personal selling,
  Advertising Sales Promotion have been
  discussed. Here, we shall briefly discuss the
  last component Publicity.
• Publicity. It is the 4th major element of the
  promotion mix. While advertising, personal
  selling Sales Promotion are designed
  controlled by the firm, publicity on ther other
  hand, is not easily controllable by the firm.
  Since a business firm is an active entity in a
  society, it is always under public gaze. News
  publicity naturally builds around it. The firms
  interest is in ensuring that the publicity that
  builds up is favorable to it. In fact, the firm
  has to tackle the subject on two fronts 1.
  oversee influence the stories/news that appear
  about it in the media, 2. conduct publicity
  campaigns around some innovations being carried
  out by it or around some topic of curent
  importance to the public, like environmental
  issues, health, welfare or by sponsoring some
  newsworthy events. Both these activities are
  important for creating maintaining good public
  opinion about the firm its products/activities.
  Large firms have separate publicity/public
  relations department to take care of the job.
• A firm must make special efforts for directing
  publicity in its favor. It must have excellent
  relations with the various media. Otherwise some
  unfavorable news about it or about one of its
  specific products/brands may appear now then.
  That is why large firms always keep an constant
  vigil on their media relations. This is also
  essential from another angle news items
  appearing in the press other media often have a
  greater degree of credibility than advertising
  message. This must be undone.

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Communication Strategy

• Sponsorship of Events and Event Management. These
  days sponsorship of events event management
  have become a preferred tool for creating
  publicity. It is also used as a sales promotional
  tool.
• Sponsorship of events. When newsworthy events
  takes place, business firms associate themselves
  with such events as sponsors. There are diverse
  ways of sponsoring events title sponsorship,
  co-sponsorship, official supplier status, etc.
  Depending on the scope of sponsorship , the
  sponsoror gets a host of benefits rights. These
  includes signage, tickets, hospitality, product
  category exclusivity the right to advertising ,
  promotion publicity. Today, the field of sports
  is attracting maximum sponsors because of the
  high visibility of the events. The business firms
  either sponsor an event as a whole, or take the
  lead role in specific aspects associated with the
  event. Manufacturers of watches take up the role
  of official time- keepers in such events soft
  drinks food chains take up the role of official
  suppliers.
• Event Management. A reference to event
  management is integral to a discussion on
  sponsorship of events. Making an event
  spectacular through a variety of communication
  display techniques is the crux of event
  management. The event can be anything, a product
  launch, an exhibition, a contest, a stage show,
  or a sport event. The whole idea is to capitalize
  on the very opportunity by converting the event
  itself into a grand display. Today, many
  advertising agencies have come up with separate
  event management outfits to serve their clients.
  These outfits specialize in all event details,
  which an advertising company or a public
  relations firm may not be in a position to. On
  behalf of the client, these event management
  firms do everything conceptualization, program
  design, logistic planning, technical planning,
  venue management. In making the event
  spectacular, lighting, sound special effects
  are creatively used. The intention is to lend a
  unique character to the entire event so that it
  leaves a lasting impression on the audience.

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• PR (Public Relations). PR is basically management
  of reputation. These days companies have to fight
  for their reputation that is why PR is becoming
  very important. There may be issues relating to
  the internal operations of the company that have
  to be explained to the outside world. PR
  accomplishes this task effectively.
• All firms whether they sell consumer products or
  business products, use PR. This is so because a
  good corporate reputation makes selling easier
  cheaper. If corporate reputation is good, it
  helps in product sales, saves on advertising
  renders every activity easier. Normally, PR is
  more rigorous in bad times. In recessionary
  times, large companies often cut out the
  advertising budget spend a part of it on PR.
• Integrated Marketing Communication A Potent
  Tool. We emphasize the fact that all the 4 Ps of
  marketing have a communication role. We also
  highlighted the fact that marketing
  communications is a dynamic process. It involves
  a multi-point continuous dialogue between the
  firm its customers. The marketing communicator
  has to constantly adjust his messages to the
  changes in the consumer environment the
  business environment. The various communication
  tools available to him has to be exploited in an
  integrated way with imagination. The potential
  of every tool should be known to him he has to
  use them in such a way that one supports
  suppliments the other. If the different
  communication tools pull in different directions,
  it may nullify his communication effort. The role
  of every component in the total promotion program
  should be identified marketing efforts should
  be allocated accordingly to obtain the best
  results. The entire marketing communications task
  must be conceived executed as per a unified
  strategy.

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Advertising

• Advertising is any paid form of non personal
  presentation promotion of ideas , goods or
  services by an identified sponsor . Ads can be
  cost effective way to disseminate messages,
  whether to build a brand preference or to educate
  people.
• Most companies use an outside agency to help
  create ad campaigns to select purchase media.
  Today, advertising agencies are redefining
  themselves as communication companies that assist
  clients to improve their overall communications
  effectiveness by offering strategic practical
  advice on many forms of communication.
• In developing an advertising program , marketing
  managers must always start by identifying the
  target market buyer motives. Then they can make
  the 5 major decisions, known as the 5 Ms
  1. Mission What are the advertising objectives?
  2. Money How much can be spent? 3. Message What
  message should be sent? 4. Media What media
  should be used? 5. Measurement How should the
  results be evaluated? The following is the
  sequence.
• Mission. 1. Sales goals. 2. Advertising
  Objectives gt Money. Factors to consider1. Stage
  in PLC. 2. Market Share consumer base. 3.
  Competition clutter. 4. Advertising frequency.
  5. Product substitutability. -gt Message. 1.
  Message generation. 2. Message evaluation
  selection 3. Message execution 4. Social
  responsibility review. - gt Media. 1. Reach,
  frequency, impact. 2. Major Media types. 3.
  Specific media vehicles. 4. Media timing. 5.
  Geographical media allocation. - gt Measurement 1.
  Communication impact. 2. Sales impact.
• Setting the Objectives. The advertising
  objectives must flow from prior decisions on
  target market, brand positioning the marketing
  program.
• An advertising goal or objective is a specific
  communications task achievement level to be
  accomplished with a specific audience in a
  specific period of time.

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Advertising

• (A) Informative advertising aims to create brand
  awareness knowledge of new products or new
  features of existing products.
• (B) Persuasive advertising aims to create liking,
  preference, conviction, purchase of a product or
  service.
• (C) Reminder advertising aims to stimulate repeat
  purchase of products services.
• (D) Reinforcement advertising aims to convince
  current purchasers that they made the right
  choice.
• Developing advertising strategy. Advertising
  strategy consists of two major elements creating
  advertising messages selecting advertising
  media. In the past, companies often viewed media
  planning as secondary to the message-creation
  process. The creative department first created
  good advertisements, then the media department
  selected purchased the best media for carrying
  these advertisements to desired target audiences.
  This often caused friction between creative
  media planners.
• Today, however, media fragmentation, soaring
  media costs, more focused target marketing
  strategies have promoted the importance of the
  media planning function. More more, advertisers
  are bringing a closer harmony between their
  messages the media that deliver them.
• The fragmentation of the audiences among growing
  array of new media technologies is forcing
  marketers to put less emphasis on traditional
  outlets, such as TV more on narrowly targeted
  media. As a result, the decision which medium to
  use for an ad campaign iPod , Web site, Video
  on demand, broadcast or cable television, or e
  mail is now sometimes more critical than the
  creative elements of the campaign. Now, marketers
  are asking ad agencies for strategies that
  integrate creative ideas with media placement.
  The geographic area also helps determine types of
  ads used.

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Advertising

• Creating the Advertisement Message. No matter how
  big the budget, advertising can succeed only if
  advertisements gain attention communicate well.
  Good advertising messages are specially important