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Marketing Management

Marketing

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.”

American Marketing Association’s definition of marketing, first published in Marketing News, 1 March, 1985. http://www.youtube.com/watch?v=l4seWLW2KhQ&feature=related

Marketing in the twenty-first century Marketing in the twenty-first century will focus on:

— market exchange — functional benefits (superior products) — process benefits (new ways to make transactions between buyers and sellers easier, quicker, cheaper and/or more pleasant)

— social exchange — Relationship/value benefits (from customer satisfaction to loyalty).

Strategy planning — Strategy planning is a process that embraces two separate, but related, activities: — strategy formation – deciding what to do — planning – deciding how to do it.

— That is, planning is all about programming strategies and then elaborating and considering the operational aspects of their consequences.

— Strategy is the starting point of planning. Planning helps to translate intended strategies into realised strategies.

The key point The most important point to bear in mind is that strategic planning needs to facilitate strategic thinking, not to act as a straightjacket that inhibits creativity.

Benefits of planning — To understand the business’s current position and how it got there

— To set realistic objectives for future directions — To design strategies and tactics to achieve the objectives

— To help the business cope with complex tasks and multiple impacting influences

— To cope with change and uncertainty in the external environment

— To reduce disorganisation within the internal environment

Limitations of planning — the resulting decisions are only as good as the person (people) doing the analysis

— can be unnecessary, and may lead to wastage or delays — takes time, and can become quickly outdated — can become the focus rather than the method — may result in imbalances between different areas within the organisation

— can get overlooked or forgotten in the urgency of running the business

— resulting plans may not be financially supportable, or may lose management support over time

Understanding the strategic planning process —

From a marketing point of view, the strategic planning process establishes an organisational mission and formulates corporate goals and strategy, which are then the basis of marketing objectives, marketing strategy and a marketing plan.

—

A market orientation direction by the organisation will ensure that customer satisfaction is an integral part of the entire planning process.

The three levels of Strategy within an organisation •

Strategy: –

Corporate - (what is our competitive advantage; what business are we in?) – Business – (where products/services and or market investment decisions are made – what market do we compete in with what product or service?) – Functional/tactical (how should we position our brands vs. rivals’?) < segmentation < targeting < Positioning < The mix – 4/7p’s

Components of Strategic Planning

The strategic marketing management process Planning • Analyse situation. • Set goals. • Select strategies and tactics.

Implementation • Organise. • Staff. • Direct.

Evaluation • Compare performance with goals.

Feedback so management can adapt future plans to the changing environment

The strategic marketing planning process (1) Strategic analysis Strategy development Implementation

Evaluation and control

Situation analysis

Problems & opportunities

Marketing objectives

Marketing strategies

Budget

Implementation

Evaluation & control

The strategic marketing planning process (2)

Situation analysis • business definition & scope • external environment review • macro (or remote) environment • industry (or near) environment • critical success factors • internal capabilities review

Situation analysis

Problems & opportunities

Marketing objectives

Marketing strategies

Budget

Implementation

Evaluation & control

The strategic marketing planning process (3) Situation analysis

Marketing objectives

Budget

Problems & opportunities

Marketing strategies

Implementation

Evaluation & control

Problems and opportunities statement SWOT A synthesis or summary of the situation analysis highlighting the really important items that must be addressed in the strategy formation process.

The strategic marketing planning process (4) Marketing objectives • The performance requirements to be achieved over the timeframe of the SMP. • A balancing act between meeting financial imperatives (corporate objectives) and the reality of the business unit’s strategic position and productmarket opportunities.

Situation analysis

Problems & opportunities

Marketing objectives

Marketing strategies

Budget

Implementation

Evaluation & control

The strategic marketing planning process (5) Situation analysis

Problems & opportunities

Marketing objectives

Marketing strategies

Budget

Implementation

Evaluation & control

Marketing strategies The identification and targeting of existing and new market segments, the determination of product/brand positioning and the appropriate marketing mix strategies for each targeted segment – 4Ps (product, price, place and promotional strategies) for manufacturers, and 7Ps (the additional 3Ps being people, process management and physical assets) for service providers.

The strategic marketing planning process (6) Situation analysis

Budget • Resource allocation, and approval • Market and sales forecasts • Profitability/ROI projections • Presentation to, and approval by, senior management.

Marketing objectives

Budget

Problems & opportunities

Marketing strategies

Implementation

Evaluation & control

The strategic marketing planning process (7) Situation analysis

Problems & opportunities

Marketing objectives

Marketing strategies

Budget

Implementation

Evaluation & control

Implementation • action planning • assignment of responsibilities and tasks • setting and monitoring deadlines (who, what & when)

The strategic marketing planning process (8) Evaluation and control • Establish adaptive control system. • Track environmental factors. • Monitor performance. • Evaluate performance. • Modify objectives and/or strategies. • Take corrective action.

Situation analysis

Problems & opportunities

Marketing objectives

Marketing strategies

Budget

Implementation

Evaluation & control

The Strategic Planning process in action! — The strategic planning process is enacted through the development of a marketing plan

— A marketing plan supports the marketing management process

— A marketing plan is a road map — It must be flexible, robust, specific and realistic — A marketing plan is a statement of conclusions and recommended initiatives focused on directing future action for the organisation as a whole.

The marketing plan content — — — —

— — — — — — — — —

Table of contents Executive summary Organisational mission statement Situation analysis — Organisational Core Competencies Analysis — Environmental Analysis - PESTLED — Product/Market Analysis — Customer Analysis — Competitor Analysis SWOT Critical Issues Marketing Goals and Objectives Target Market Marketing Strategies & Tactics Communication/Action plans Forecasts and Budgets Implementation & Evaluation Appendices

What is a market driven organisation? A business is market-oriented when its culture is systematically and entirely committed to the continuous creation of superior customer value. It involves the use of superior organisational skills in understanding and satisfying customers.

How do organisations achieve market orientation?

Through obtaining information on customers, competitors, markets and from within the organisation itself. It is viewing the information from a total business perspective, deciding how to deliver superior value, satisfaction and quality. It requires customer focus, competitor intelligence and co-ordination among the business functions.

A market-driven organisation Shared beliefs and values

Organisation structure and systems

• Mirrors market need

• Customers first

Strategy development process • Competitive advantage as a theme

• Team-based

Superior skills in understanding and satisfying customers

Supporting programs and actions • People • Incentives • Communications

• Macro environment • Customer needs • Competitor analysis • Distribution channels • Company resources

• Competitive advantage • Target buyers • Product/brand positioning

• Product • Pricing • Promotion • Place • People

What supports a market-driven approach is the concept of delivering value • A firm must satisfy customer needs while sustaining a

competitive advantage, to ensure long-term profitability. • As a result, the strategic marketing concept reflects a

customer, competitor and inter-functional orientation – that focus is on delivering a value proposition

It is about creating a value proposition • The superior value proposition is the nature of the

marketing offer to customers and is at the heart of marketing. • It is essentially a particular marketing mix that

gives a firm a competitive advantage in their market. It is closely allied to marketing positioning.

Determining superior value proposition — The value proposition is the marketing offer to customers and is closely related to the Four-P marketing mix.

— A superior value proposition can be based

on a superior product, price, distribution or promotion or a superior combination of these.

— Usually an emphasis on just one of the Ps being superior.

Marketing and The Value Delivery Process

Marketing and The Value Chain — The value chain identifies strategically relevant activities that create value and cost in a business.

Ensuring competitive advantage — A competitive advantage is a super strength of a company, relative to competitors, that provides a distinctive value proposition to consumers, and is significantly valued by those consumers.

http://www.youtube.com/watch?v=0JaDiBiAnv8 How is this for competitive advantage!

SCA — Sustainable Competitive Advantage v Substantial — v to the market and relative to competitors

v Meaning — v has real meaning for the company

v Sustainable — v Core Capabilities — v over as long a time as possible v assets and skill base it has to last v Leveraged —

v into key buying attributes. v Competitors — v hard to duplicate

v Synergies — v matched to corporate/business/marketing strategies

The elements of competitive advantage

Sources of advantage • superior skills • superior resources • superior controls

Positional advantages • superior customer value • lower relative costs

Investment of profits to sustain advantage

Performance outcomes • customer satisfaction • brand loyalty • market share • profitability

Core Competencies and Capabilities — Called sources of competitive advantage

— Superior skills — management skills could include knowledge about customer needs

ã Superior resources — distribution and production capabilities eg. De Beers diamond distribution

ã Superior controls — capabilities in monitoring business processes and results, maybe from powerful computer information systems

Characteristics of Core Competencies and Capabilities — A source of competitive advantage

— Applications in a wide variety of markets

— Difficult to imitate

Strategy for competing on competencies & capabilities — Complex bundles of skills and collective learning, exercised through organisational processes that enable firms to coordinate activities and make use of their assets.

— The central proposition of the ‘competing on core

competencies and capabilities’ thesis is that superior customer value is gained by seeking, developing and exploiting the organisation’s unique capabilities.

Strategy for competing on competencies & capabilities — The central idea here is to match special resource requirements to different market segments.

— Thus different market segments could require different capabilities. — In turn, this suggests that some firms may be good at meeting the needs of one segment, but not others, so this should be taken into account when selecting market targets.

Strategy for competing on competencies & capabilities — Core Capabilities: those capabilities that directly contribute to a sustainable competitive advantage

— Value-Added Support Capabilities: those capabilities that

directly support the core capabilities and therefore indirectly contribute to a competitive advantage

— Essential Support Capabilities: neither of the first two, but must be done for the business to exist

Strategy for competing on competencies & capabilities marketing capabilities

— Channel Management

— Strategy & Planning

— Corporate Advertising

— Measurement &Control

— Event Management

— Media Relations

— Market Research &

— Positioning & Branding

Analysis

— Marketing Communications Marketing

— Product Development — Public Relations

Strategy for competing on competencies & capabilities Non-marketing capabilities

— financial position — management and leadership — human resources — R&D — operations – production capabilities and supply

— interfunctional coordination and responsiveness

For example, take Coca-Cola — If superior advertising is part of the strategic competitive advantage, then core competence or capabilities might include ad design and market research that help develop the advertising concept.

— Then value-added capabilities would be those capabilities that contribute to better ad designs and market research such as the selection of better ad agencies or hiring of better market research staff.

The Corporate Mission Statement Mission statements describe:

— the nature of the business — the vision statement/strategic intent — a competitive advantage — a commitment to survival, growth and profitability — should speak to all key stakeholders.

Vision statements Vision statements are motivational statements designed to inform management and staff how they will change and move towards the future. Effective vision statements should: —provide future direction —expresses a consumer benefit —be realistic —be motivating —be fully communicated —be consistently followed and measured.

Marketing planning

Activities — Is your organisation market oriented? If so why and how?

— What is your value proposition and why? — What are your core competencies? – List and why! — What is your competitive advantage and why? — Mission and Vision Statements (refer next slide)

The Corporate Mission Statement — Write your own personal mission statement! — ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ ___________________

— Write your team’s organisations mission statement! — ____________________________________________ ____________________________________________ ____________________________________________ _______________