Principles of marketing: Chapter 3 - Strategic and Marketing Planning

Principles of marketing: Chapter 3 - Strategic and Marketing Planning presents The Marketing Mix, The Boston Consulting Group Matrix, The BCG Matrix, Product/Market Expansion Grid, Components of the Marketing Plan.

TS Nguyễn Minh ðức PRINCIPLES OF MARKETING Chapter Strategic and Marketing Planning Dr NGUYỄN MINH ðỨC NONG LAM UNIVERSITY HCM CITY Nguyễn Minh ðức 2009 The Marketing Mix Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức The Marketing Mix The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives 7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment Traditional 4Ps extended to encompass growth of service industry Nguyễn Minh ðức 2009 Price Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức Price Pricing Strategy Importance of: knowing the market elasticity keeping an eye on rivals Image copyright: www.freeimages.co.uk Nguyễn Minh ðức 2009 Product Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức Product Methods used to improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g Extension strategies Specialised versions New editions Improvements – real or otherwise! Changed packaging Technology, etc Image copyright: www.freeimages.co.uk Nguyễn Minh ðức 2009 Promotion Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức Promotion Strategies to make the consumer aware of the existence of a product or service NOT just advertising Nguyễn Minh ðức 2009 Place 10 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức Place The means by which products and services get from producer to consumer and where they can be accessed by the consumer The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?) 11 Nguyễn Minh ðức 2009 People 12 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức People People represent the business The image they present can be important First contact often human – what is the lasting image they provide to the customer? Extent of training and knowledge of the product/service concerned Mission statement – how relevant? Do staff represent the desired culture of the business? 13 Nguyễn Minh ðức 2009 Process 14 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức Process How people consume services? What processes they have to go through to acquire the services? Where they find the availability of the service? Contact Reminders Registration Subscription Form filling Degree of technology 15 Nguyễn Minh ðức 2009 The Marketing Mix Blend of the mix depends upon: Marketing objectives Type of product Target market Market structure Rivals’ behaviour Global issues – culture/religion, etc Marketing position Product portfolio Product lifecycle Boston Matrix 16 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức The Boston Consulting Group Matrix (BCG Matrix) (The Product Market Portfolio) Introduction Whilst there are companies that produce a single product or service, most organizations are multiproduct or consider diversification into other products Within a multi-divisional company, there may be some products at Introduction, some at the Growth stage, and others in Maturity and Decline stage Each of these may be in different markets, and different countries 17 Nguyễn Minh ðức 2009 The BCG Matrix This is a complex planning process, and The Product Market Portfolio, developed by the Boston Consulting Group (1972), is a technique developed to try and handle it The Product Market Portfolio is a useful tool for strategic planning, in that it allows the planners to select the optimal strategy for individual units whilst aiming for overall corporate objectives As a first step, the technique requires an assessment of each product of an organization in isolation from other products 18 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 TS Nguyễn Minh ðức The Boston Consulting Group (BCG) Market Share High High STARS Low CASH COWS Market Growth 19 Low QUESTION MARKS DOGS Nguyễn Minh ðức 2009 The BCG Matrix The Boston Consulting Group (BCG) developed a matrix based on empirical research that assesses a company’s products in terms of Potential Cash Generation and Cash Expenditure requirements Products or Strategic Business Units (SBUs) are categorized in terms of: A) Market Growth Rate and B) Relative Market Share 20 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 10 TS Nguyễn Minh ðức Product/Market Expansion Grid Product Development d) It needs to react to technological developments e) The company is particularly strong in R & D f) The company has a strong organization structure based on product divisions g) For offensive or defensive motives, for example responding to competitive innovations in the market 45 Nguyễn Minh ðức 2009 Product/Market Expansion Grid Product Development Drawbacks of Product Development: For example: -the process of creating a broad product line is expensive and potentially unprofitable, and -it carries considerable investment risk 46 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 23 TS Nguyễn Minh ðức Product/Market Expansion Grid Product Development Drawbacks of Product Development: There are reasons why new product development is becoming increasingly difficult to achieve: a) In some industries there is a shortage of new product ideas b) Even when a product is successful it might still suffer a short life cycle with rivals quick to ‘copycat’ in the market but with their own innovations and improvements c) There is a high change of product failure 47 Nguyễn Minh ðức 2009 Product/Market Expansion Grid Diversification Is a strategy that entails the deployment of a company’s resources into new products and new markets I.e Diversification occurs when a company decides to make new products for new markets The company thus becomes involved in activities that differ from those in which it is currently involved Diversification strategy means the company selectively changes the product lines, customer targets and perhaps its manufacturing and distribution arrangements This strategy is probably the highest risk of all the strategic options 48 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 24 TS Nguyễn Minh ðức Product/Market Expansion Grid Conclusion: It is advisable to pursue with the least risky, i.e Market Penetration first If the potential of this strategy is insufficient to close the gap, it is necessary to try Market Development, I.e extending the product to new customers or Product Development, I.e selling different products to the existing market 49 Nguyễn Minh ðức 2009 Strategic and Marketing Planning Introduction Strategic Planning involves developing an overall company strategy for long-run survival and growth A major concern in the strategic planning process is Marketing Planning Marketing planning is the process of: -Assessing opportunities and resources -Determining objectives -Defining strategies, and -Establishing guidelines for implementation and control of the marketing program 50 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 25 TS Nguyễn Minh ðức Marketing Plan –(ASSIGNMENT) The outcome of marketing planning is the development of a Marketing Plan A Marketing Plan is a written document that outlines and explains all the activities necessary to implement marketing strategies It describes: -the firm’s current position or situation -establishes marketing objectives for the product or product group, and -specifies how the organization will attempt to achieve these objectives 51 Nguyễn Minh ðức 2009 Components of the Marketing Plan I) Executive Summary II) Environmental Analysis A The marketing environment B Target markets C Current marketing objectives and performance III) SWOT Analysis A Strengths and Weaknesses B Opportunities and Threats IV) Marketing Objectives 52 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 26 TS Nguyễn Minh ðức Components of the Marketing Plan V) Marketing Strategies A Target market B Marketing mix VI) Marketing Implementation A Marketing organization B Activities and responsibilities C Implementation timetable VII) Evaluation and Control A Performance standards B Financial controls C Monitoring procedures (audits) 53 Nguyễn Minh ðức 2009 Components of the Marketing Plan I) Executive Summary Is a synopsis (Often just one or two pages) of the entire marketing plan It includes: -An Introduction -An explanation of the major aspects of the plan, and -A statement about the costs of implementing the plan 54 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 27 TS Nguyễn Minh ðức Components of the Marketing Plan I) Executive Summary The Executive Summary does not provide detailed information but rather gives an overview of the plan so that readers can identify key issues pertaining to their roles in the planning and implementation process The Executive Summary is one of the most important parts of the marketing plan because it is often furnished to people outside the organization 55 Nguyễn Minh ðức 2009 Components of the Marketing Plan II) Environmental Analysis (A The Marketing Environment) Supplies information about the company’s current situation with respect to: -the marketing environment -the target market, and -the firm’s current objectives and performance 56 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 28 TS Nguyễn Minh ðức Components of the Marketing Plan II) Environmental Analysis (A The Marketing Environment) The first section of the environmental analysis is an assessment of all the external environmental factors:-Political, legal and regulatory -Economic -Social cultural -Technological, and -Competitive that can affect marketing activities 57 Nguyễn Minh ðức 2009 Components of the Marketing Plan II) Environmental Analysis (A The Marketing Environment) In addition, this section should include information about such Internal Environmental matters as: -the firm’s current culture -the availability and deployment of human resources -the age and capacity of equipment or technology, and -the availability of financial resources 58 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 29 TS Nguyễn Minh ðức Components of the Marketing Plan II) Environmental Analysis (B Target Markets) In the second section of the Environmental Analysis, the organization should examine the current status of its targets markets This section assesses: -the current needs of each target market -anticipated changes in these needs, and -how well the organization’s products are meeting these needs 59 Nguyễn Minh ðức 2009 Components of the Marketing Plan II) Environmental Analysis (C Current Marketing Objectives and Performance) The final aspect of environmental analysis is a critical evaluation of the firm’s current marketing objectives and performance All organizations should periodically examine their marketing objectives to ensure these objectives remain consistent with the changing marketing environment This analysis yields important input for later stages of the marketing plan The organization should also evaluate its current performance with respect to changes in the environment and the target markets 60 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 30 TS Nguyễn Minh ðức Components of the Marketing Plan II) Environmental Analysis The information needed for environmental analysis is obtained from both the internal and external environments, usually through the firm’s marketing information system However, if required information is not available, it may have to be collected through marketing research The environmental analysis phase is one of the most difficult parts of the marketing plan and often illustrates the need for an ongoing effort at collecting and organizing environmental data 61 Nguyễn Minh ðức 2009 Components of the Marketing Plan III) SWOT Analysis The SWOT analysis assesses an organization’s Strengths, Weaknesses, Opportunities, and Threats (SWOT) These factors are derived from the environmental analysis in the preceding portion of the marketing plan The analysis of Strengths and Weaknesses focuses on Internal Factors that give an organization certain advantages and disadvantages in meeting the needs of its target markets 62 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 31 TS Nguyễn Minh ðức Components of the Marketing Plan III) SWOT Analysis Strengths: Refer to competitive advantages or core competencies that give the firm an advantage in meeting the needs of its target markets Any analysis of company strengths should be customer-focused because strengths are meaningful only when they assist the firm in meeting customer needs Strengths are usually related to core competencies that provide a competitive advantage 63 Nguyễn Minh ðức 2009 Components of the Marketing Plan III) SWOT Analysis Weaknesses: Refer to any limitations a company might face in developing or implementing a marketing strategy For example: -PepsiCo, with fewer resources than the Coca-Cola Company, has found it difficult to expand in the market, which includes restaurants theaters, and sports arenas, where Coca-Cola holds two-thirds of the market 64 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 32 TS Nguyễn Minh ðức Components of the Marketing Plan III) SWOT Analysis Opportunities: Refer to favorable conditions in the environment that could produce rewards for the organization if acted upon properly I.e Opportunities are situations that exist but must be acted upon if the firm is to benefit from them For example: -Amazon.com, acted quickly when new technology made it possible to sell books on the Internet Threats: Refer to conditions or barriers that may prevent the firm from reaching its objectives 65 Nguyễn Minh ðức 2009 Components of the Marketing Plan IV) Marketing Objectives A Marketing Objectives states what is to be accomplished through marketing activities For example: A marketing objective of Ritz Carlton Hotels is to have 92% of its customers indicate they had a memorable experience at the hotel 66 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 33 TS Nguyễn Minh ðức Components of the Marketing Plan IV) Marketing Objectives Marketing Objectives can be stated in terms of: -Product introduction -Product improvement or innovation -Sales volume -Profitability -Market share -Pricing -Distribution -Advertising, or -Employee training activities 67 Nguyễn Minh ðức 2009 Components of the Marketing Plan V) Marketing Strategies It outlines how the firm will achieve its marketing objectives Marketing strategies refers to how the firm will manage its relationships with customers so that it gains an advantage over the competition Marketing strategy consist of: A) Target market selection, and B) The development of a marketing mix 68 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 34 TS Nguyễn Minh ðức Components of the Marketing Plan V) Marketing Strategies A) Target Market Selection The marketing plan should clearly define Target Markets in terms of: -Demographics -Geography -Psychological profiles -Product usage and so on This step is crucial because to develop a marketing mix that can satisfy customer needs, a marketer must understand those needs 69 Nguyễn Minh ðức 2009 Components of the Marketing Plan V) Marketing Strategies B) The Development of a Marketing Mix In developing a marketing mix, the firm should determine how the elements of the mix: -Product -Price -Promotion, and -Place (Distribution) Will work together to satisfy the needs of the target market It is at the marketing mix level that a firm details how it will achieve a competitive advantage 70 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 35 TS Nguyễn Minh ðức Components of the Marketing Plan V) Marketing Strategies B) The Development of a Marketing Mix To gain an advantage, the firm must something better than its competitors In other words: -Its products must be of higher quality -Its prices must be consistent with the level of quality -Its distribution methods must be efficient and cost as little as possible, and -Its promotion must be more effective than the competitors’ It is also important that the firm attempt to make these advantages sustainable A sustainable competitive advantage is one that cannot be copied by the competitors 71 Nguyễn Minh ðức 2009 Components of the Marketing Plan VI) Marketing Implementation This section of the marketing plan outlines how the marketing strategies will be implemented by answering some the questions below: -What specific actions will be taken? -How will these activities be performed? -When will these activities be performed? -Who is responsible for the completion of these activities? -How much will these activities cost? Without a workable plan for implementation, the success of the marketing strategy is in jeopardy 72 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 36 TS Nguyễn Minh ðức Components of the Marketing Plan VII) Evaluation and Control It details how the results of the plan will be measured and evaluated The control phase of this section includes the actions that can be taken to reduce the differences between planned and actual performance -Standards for assessing the actual performance need to be established These standards can be based on increases in sales volume, profitability, or market share -The second part of the control process deals with the financial data that can be used to evaluate whether the marketing plan is working 73 Nguyễn Minh ðức 2009 Assessment For The End Of Module Assignment: Your company has been operating for three years without developing any proper marketing plan With your qualification, you are recruited as a Marketing Manager with the assigned task of looking into the possibility of designing a proper marketing plan for your company Refer to a product or service, write a MARKETING PLAN that will assist your company to attain its objectives in increasing sales, market share and profitability Length: 3000 words 74 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyễn Minh ðức 2009 37 ... Marketing Planning Marketing planning is the process of: -Assessing opportunities and resources -Determining objectives -Defining strategies, and -Establishing guidelines for implementation and. .. ðức 2009 Strategic and Marketing Planning Introduction Strategic Planning involves developing an overall company strategy for long-run survival and growth A major concern in the strategic planning. .. (Often just one or two pages) of the entire marketing plan It includes: -An Introduction -An explanation of the major aspects of the plan, and -A statement about the costs of implementing the plan