Marketing Management and the Planning Process How do I Decide Where I am Going?

Marketing Management n process of planning, implementing, and controlling marketing activities and decisions in order to facilitate exchanges

Planning n Process of anticipating the future and determining the courses of action necessary to achieve organizational goals n 2 levels –strategic planning –tactical planning

Strategic Planning n process of determining the primary objectives of the organization, the adoption of courses of action, and the allocation of resources necessary to achieve those objectives. –long-term (3-10 years) –top management –broad company issues: expansion or contraction of markets, product lines

Tactical Planning n focuses on the implementation of the actions specified by the strategic planning process –(1 year or less) –middle and lower levels of management –determine target markets, marketing mix strategies

The Marketing Planning Process n Situation Analysis n Determination of Organizational Objectives n Evaluate Environmental Risks and Opportunities n Formulate Marketing Objectives and Strategies n Implement Marketing Strategies

Situational Analysis n Internal Review –Review each of the elements of the 4p’s n External Review –Customer –Marketplace –Industry –Government/Legal –Competition

Determine Organizational Objectives n Objectives are desired outcomes which guides management planning at lower levels and a standard for evaluating performance. They must be: –clear and specific –stated in writing –ambitious, but realistic –quantitatively measurable –tied to a time period

Assess Organizational Resources n Take stock of your assets n what are we capable of doing at this moment? n examples: personnel strengths, machinery capability, markets developed

Evaluate Environmental Risks/Opportunities n look for the strategic window of opportunity where key requirements of the market and the particular competencies of the firm best fit

Formulation of a Marketing Strategy n Overall company program for selecting a particular target market and then satisfying consumers in that segment through careful use of the elements of the marketing mix n Several Options –undifferentiated –differentiated –concentrated n Ansoff’s Grid –Market Penetration –Market Development –Diversification –Product Development

Undifferentiated Marketing n mass marketing n produces one product n market to all consumers n one marketing mix n production efficient and simplistic; minimize inventory n assumes market homogeneous

Differentiated Marketing n produce numerous products or services n various marketing mixes n aim for smaller segments; needs better met n costs of production and marketing rise

Concentrated(Focused) Marketing n service only one segment of the market n best informed of their needs and wants n is it dangerous to put all your eggs in one basket

Growth Strategies n Market Penetration –use more effective marketing for existing products and markets –attempt to increase repeat purchases n Market Development –geographical expansion –new uses –new regions

Growth Strategies (cont’d) n Product Development –same market –develop new products –i.e.., Sony n Diversification –new products –new markets –poor industry growth

Consolidation Strategies n Harvesting - good fit of product; little opportunity for growth; reduce $’s spent for promotion n Pruning - try to serve same markets - just reduce segment coverage. Stick to what you do best!

More Consolidation n Retrenchment - opposite of development –offer same product line - but retreat to strongest core market n Divestment –sell off a product line or business –weak fit between mission and competencies and the requirements for product success. EX: Burger King

Implementation of the Strategy n series of tactical plans n monitoring essential to success n unplanned events may impact plans in a negative way necessitating updates or changes

Tools Used in the Strategic Planning Process n Strategic Business Units (SBUs) –separately identifiable business –distinct mission –own competencies –executives with profit responsibility –key to determine optimal # of SBUs: to many - bogged down with details of planning operating, control. Too Few - units covering too broad a market to be useful

Other Tools n Portfolio Analysis –Market Share/Market Growth Matrix (BCG Matrix) –Market Attractiveness/Business Strengths Matrix n Spreadsheet Analysis