Market Planning and Strategy

Market Research Plan SWOT analysis Marketing budget Business Objectives Marketing strategies Market Research

Marketing plan needs to consider: Customers Competition Demand Suppliers Market place Distribution Future development Price

SWOT Analysis S = Strengths facing a business W = Weaknesses facing a business O = Opportunities facing a business T = Threats facing a business

SWOT Diagram Threats Weaknesses Strengths Results of internal audits Results of external audits Opportunities

Ansoff Matrix Market Penetration Market development Diversification Product development Existing New Increasing risk PRODUCTS MARKETSMARKETS

Ansoff Matrix Market Penetration Market existing products to our existing customers This means increasing the revenue by promoting the product, repositioning the brand, etc The product is not altered and no new customers are sought. Market Development Market the existing product range in a new market. The product remains the same, but it is marketed to a new audience eg exported

Product Development A new product is marketed to existing customers Develop and innovate new product offerings to replace existing ones Products are marketed to existing customers e.g. could be upgrades Diversification Market new products to new customers Two types of diversification: 1.Related diversification means remaining in a market or industry with which we are familiar 2.Unrelated diversification is where there is no previous industry nor market experience

Boston Matrix The Boston Matrix is a way of analysing how successful a company is by looking at its market share and how fast that share is growing The Boston Matrix was developed by the Boston Consulting Group in 1970 to help corporations compare their business investments and decide where to allocate funding It has two dimensions - relative market share and market growth You can look at your investment (your company, a business unit or its products and services) and place it onto the Matrix You can gain perspective from this analysis that allows you to plan with confidence to use money generated by cash cows to fund stars and possibly question marks

Boston Matrix Market growth % Market share Cash cow Proble m child Star Dogs High Low HighLow

Problem Child Most investments start in this category. A problem child has a small share of a growing market; it needs investment and attention if it is to grow. They consume resources and generate little in return as you attempt to increase market share. The corporate goal must be to grow the business to become a star. Otherwise, when the industry matures and growth slows, the unit will fall down into the dog category. Strategy - Focus

Star A star has a large share of the market and it is growing quickly. In order to grow further, it requires more investment which it is often able to pay for from its own profits. When it stops growing, a star may become a cash cow. These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Keep and build your stars. Strategy – Develop

Cash Cows If a product or business unit is a cash cow then it has a large share of a market that is no longer growing. It is regarded as staid and boring but every investor would be pleased to own as many as possible. It produces a lot of revenue but most of this can be invested in other areas of the company as further investment in the cash cow would produce little or no extra profit. Strategy - Hold

Dogs Dogs can more charitably be called pets. These are investments with a low share of a low growth market. A dog is of little value to most companies and a decision must be taken whether to continue investing in it or to dispose of the investment entirely. Strategy – Divest

Summary Look for balance within your portfolio. Try not to have any Dogs. The remaining investments need to be kept in equilibrium. The funds generated by your Cash Cows is used to turn Problem Children into Stars, which may eventually become Cash Cows. Some of the Problem Children will become Dogs.