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Title: Marketing Strategy


1
Developing Marketing Strategies and Plans
Prepared by Prof Dipes Maitra July - 2014
2
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?

3
Siemens AG has grown through new product
innovation and strategic acquisitions
4
Nike Creates Value
5
Three Vs Approach to Marketing
Define the value segment
Define the value proposition
Define the value network
6
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.

7
Cisco Systems Taps into Partner Expertise to
Create Value
8
Core Business Processes
  • Market-sensing process
  • New-offering realization process
  • Customer acquisition process
  • Customer relationship management process
  • Fulfillment management process

9
Characteristics of Core Competencies
  • A source of competitive advantage
  • Applications in a wide variety of markets
  • Difficult to imitate

10
Netflixs Distinctive Capabilities
11
Firms Should Consider Key Questions
  • Can we learn from the past?
  • How should the present be evaluated?
  • What do we envision for the future?

12
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.

13
Intels New Brand Identity Leap Ahead
14
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.

15
Levels of a Marketing Plan
  • Strategic
  • Target marketing decisions
  • Value proposition
  • Analysis of marketing opportunities
  • Tactical
  • Product features
  • Promotion
  • Merchandising
  • Pricing
  • Sales channels
  • Service

16
Figure 2.2 The Strategic Planning,
Implementation, and Control Processes
17
Corporate Headquarters Planning Activities
  • Define the corporate mission
  • Establish strategic business units (SBUs)
  • Assign resources to each SBU
  • Assess growth opportunities

18
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
19
Major Competitive Spheres
Industry
Products
Geographical
Vertical channels
Competence
Market segment
20
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.
21
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.
22
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.
23
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
24
Dimensions That Define a Business
Customer groups
Technology
Customer needs
25
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

26
Figure 2.3 The Strategic Planning Gap
27
Strategies Suggested by Ansoffs Product-Market
Expansion Grid
  • Market penetration
  • Market development
  • Product development
  • Diversification

28
The Growth of Starbucks
29
What is Corporate Culture?
  • Corporate culture is the shared experiences,
    stories, beliefs, and norms that characterize an
    organization.

30
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

31
Figure 2.5 The Business Unit Strategic Planning
Process
32
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
33
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?

34
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?

35
FedEx
FedEx added Sunday deliveries based on customer
requests and market demand
36
Figure 2.6 Opportunity Matrix
37
Figure 2.6 Threat Matrix
38
Goal Formulation and MBO
  • Units objectives must be hierarchical
  • Objectives should be quantitative
  • Goals should be realistic
  • Objectives must be consistent

39
Porters Generic Strategies
Overall Cost Leadership
Differentiation
Focus
40
Categories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
41
Marketing Plan Contents
  • Executive summary
  • Table of contents
  • Situation analysis
  • Marketing strategy
  • Financial projections
  • Implementation controls

42
Evaluating a Marketing Plan
  • Is the plan simple?
  • Is the plan specific?
  • Is the plan realistic?
  • Is the plan complete?

43
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.

44
Marketing Discussion
  • What implications do Porters value
  • chain and the holistic marketing
  • orientation model have for
  • marketing planning?

45
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.

46
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.

47
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.

48
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.

49
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. ..

50
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.

51
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.

52
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.

53
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.

54
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.

55
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.

56
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.

57
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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Communication Strategy
  • (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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Communication Strategy
  • 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
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