Marketing Decisions Marketing Planning

1. Marketing DecisionsMarketing Planning MBA Fall Term II Class Two

2. THE VALUE DELIVERY PROCESS

3. Phases of the Value Delivery Process

4. Phases of the Value Delivery Process • Accessing market opportunities and customer value: Environmental scanning and understanding the customers needs, wants and demands. • Choosing the value: Critical decisions pertaining to STP and branding which is the essence of strategic marketing. • Designing value: Decisions related to product/service strategies, new offerings and pricing. • Delivering value: Focuses on distribution and access issues. • Communicating value: Using IMC for promotion • Maintain and sustain: Value that has been created needs to be sustained and maintained.

5. The Value Chain • A tool to identify ways to create more customer value. • This model suggests that every company carries activities in order to design, produce, market, deliver and support its products. • This model identifies nine strategically relevant activities-five primary activities and four support activities. • The five primary activities are: • Inbound logistics: Bringing materials into the business. • Operations: Converting materials into final products. • Outbound logistics: Shipping out the final products. • Marketing: Includes sales. • Service: After sales

7. The Value Chain • It is the specialized departments of the company that handle the support activities: • Procurement • Technology development • Human resource management • Firm infrastructure

8. Core Business Process of Organizations • The market sensing process: All the activities in gathering and acting upon information about the market. • The new-offer realization process: All the activities in researching, developing and launching new high quality offerings quickly and within budget. • The customer acquisition process: All the activities in defining target markets and prospecting for new customers. • The customer relationship management process: All the activities in building deeper understanding, relationship and offering to individual customers. • The fulfillment management process: All the activities in receiving and approving orders, shipping goods on time and collecting payment.

9. Characteristics of Core Competencies • Also known as the Competitive Advantage of a business • Core competency has three main characteristics: • It is a source of competitive advantage and makes a significant contribution to perceived customer benefits. • It has applications in a wide variety of markets. • It is difficult for competitors to imitate.

10. Holistic Marketing • Holistic marketing is a process of integrating the value exploration, value creation, and value delivery activities with the purpose of building long-term, mutually satisfying relationships and co-prosperity among key stakeholders. • Holistic marketers address three key management questions: • Value exploration: How a company identifies new value opportunities • Value creation: How a company efficiently creates more promising new value offerings • Value delivery: How a company uses its capabilities and infrastructure to deliver the new value offerings more efficiently.

11. The Strategic Planning, Implementation and Control Processes

12. CG Group • CG Biotech, • CG Real Estates, • CG Education, • CG Automobiles, • CG Electronics, • CG Cement, • CG Resorts, • CG FMCG, • CG Financial Services

13. Corporate and Division Strategic Planning • Some companies gives their business units the freedom to set their own sales and profit goals and strategies. • Some set goals for their business units but let them develop their own strategies. • Some set the goals and participate in developing individual business unit strategies.

14. Corporate Planning • Setting the corporate mission • Establishing strategic business units • Assigning resources to each strategic business unit • Accessing growth opportunities.

15. Defining the Corporate Mission • Focus in limited number of goals • Stress on the company’s major policies & values • Define the major competitive sphere • Have a long term view 5. They are as short, memorable and meaningful as possible

16. Strategic Business Unit • A relatively autonomous division of a large company that operates as an independent enterprise with responsibility for a particular range of products or activities. (Can we take the example of KUSOM?) • It is a distinct and a fully functional unit of business that develops its own strategies and plans. • General Electric has 49 SBUs in such markets as appliances, aerospace, electronics, and so on.

17. Example of SBUs • For example Pepsico has several strategic business units: • KFC • Taco Bell • Pizza Hut • Mountain Dew • Lipton Tea Brands • Frito Lay

19. External Environment Analysis (Opportunity and Threat) OPPORTUNITY • The marketing intelligence system helps in keeping track of the trends and important development related to opportunities and threats in the market. • Opportunity tapping: • To be able to provide something that is not being supplied by the competitors. • Supply an existing product or service in a new or superior way. (CG introducing new flavors of WaiWai-Pizza, Aloo Tama etc) Be able to ask customers about the problems they are facing with the existing products, or can ask them to imagine a new product and ask them what all features they wish to have in the new product.

20. External Environment Analysis(Opportunity and Threat • Marketers need to be good at spotting opportunities by considering the following: • A company may benefit from converging industry trends and introduce hybrid products or services that are new to the market. • A company may make a buying process more convenient or efficient. • A company can meet the need for more information and advice. • A company can customize a product or service. • A company can introduce a new capability • A company may be able to deliver a product or service faster • A company may be able to offer a product at a much lower price.

21. External Environment Analysis(Opportunity and Threat Environmental Threat: • A challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit. • Example: A new competitor in the market, price war with competitors, a competitor has introduced a new innovative product or service. • So basically threat is often posed by the competitors. • But at times it may be due to other macro environmental issues such as political, economic, natural, cultural etc.

22. Internal Environment (Strengths and Weaknesses) Analysis • Strengths and weaknesses are internal factors that exists within a company. • There are the controllable factors. • Strength and weaknesses have to be realistic in nature. • Strengths can be: • Human resource quality and quantity, equipments, location, financial resources, new innovative products and services etc. • Weaknesses can be: • Lack of experienced employees, low financial resource, damaged brand image, location, poor outdated technology, lack of research etc.

23. Goal Formulation • This is the next step after doing the SWOT analysis. • Some companies have a mix of objectives such as profitability, sales growth, market share improvement, innovation and reputation. • Business Objectives must meet the following four criteria: • They must be arranged hierarchically, from most to least important. • Objectives should be quantitative whenever possible (E.g. To increase market share by 30% in Pokhara). • Goals should be realistic, and not a wishful thinking. • Goals and objectives must be consistent. (not possible to increase market share and profit at the same time)

24. Strategy Formulation • Goals indicate what a business wants to achieve, whereas strategy determines how the company should achieve those goals. • Strategies lay down the various sets of activities and programs to be conducted for attaining the goals and objectives.

25. Porters Generic Strategies • Three generic strategies proposed by Michael Porter: • Overall cost leadership: Companies that focus on low production, distribution and communication cost which ultimately allows them to price their goods low and win the market share. Risk: Competitor might sell the goods at a more lesser cost. • Differentiation: Companies that focus on making their products different and unique from that of its competitors. • Focus: Companies that focus on one or more narrow market segments, gets to know them intimately and pursues either cost leadership or differentiation for the selected market segments.

26. Strategic Alliances • Also known as a Strategic Partnership, is an agreement between two or more parties that complement each other for their capabilities and resources. • Example: Star Alliance brings together about 21 different airlines al around the world like Lufthansa, Singapore Airlines, Air New Zealand, South Africa Airways in a huge global partnership that allows passengers to travel to hundreds of destinations without much hassle.

27. Strategic Alliances • Many strategic alliance may take the form of marketing alliance which can be categorized into four major types: • Product or service alliance: One company licenses another to produce its products or two companies jointly market their complementary products. (Ncell and Samsung, Himalayan Bank and Amercian Express) • Promotional alliance: One company agrees to carry the promotion of some other company’s product or service. (Mc Donalds and Disney, QFX and Foodmandu) • Logistics alliance: One company offers logistic support to other companies. (Sastodeal and Aramex couriers) • Pricing collaborations: One or more companies join in a special pricing collaboration. (Airlines and hotels/car rental companies)

28. Program Formulation and Implementation • For a great plan to be a good success, the implementation has to be done very appropriately. • It is also about deciding whether the planned program and activities is going to pay off and be worth the amount spent. • Example: Is participating in that trade show going to be worth it? Will a specific sales contest pay for itself?

29. Feedback and Control • In order to maintain the efficiency and effectiveness a company has to make sure that they keep pace with the changing environment. • Companies have to adapt themselves with the changing environment. • Success of a company depends upon how well they scan the changing environment in the external market and make changes in their goals and objectives accordingly.

30. The Marketing Plan • It is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. • Non profit and government agencies usually develop a marketing plan for fund raising activities or for raising awareness about education, nutrition, sanitation etc. • It is a formal document that is anywhere between 5-50 pages but that can vary depending upon the size of the organization.

31. The Marketing Plan-Definition • A written document that describes a company’s advertising and marketing efforts for the coming year; it includes a statement of the marketing situation, a discussion of target markets and company positioning and a description of the marketing mix that is intended to use to reach your marketing goals .

32. The Marketing Plan • It is more like a description about the set of marketing programs and activities that are going to help the company attain its strategic goals and objectives for a particular year. • It also contains the tactical guidelines for the marketing programs and financial allocations for the period. • It provides direction and focus for a brand, product or a company.

33. Contents of a Marketing Plan • Executive Summary and table of contents: The plan should always begin with a table of contents and a summary of the goals and recommendations for the management. • Situation Analysis: This section contains information about sales, costs, the market, competitors and the various forces in the macro environment. SWOT analysis is conducted in this stage. • Marketing Strategy: This section highlights the mission, marketing and financial objectives and needs the market offering is intended to satisfy as well as its competitive positioning. Also focuses on STP.

34. Contents of a Marketing Plan 4. Financial Projections: • This section includes the sales forecast, expense forecast and a break even analysis. • The revenue side of this projection shows the sales volume by month and product category whereas the expense side shows the expected cost of marketing which is broken down into finer categories. • The break even analysis shows the minimum number of units the firm must sell monthly to offset its monthly fixed cost and average per unit variable cost.

35. Contents of a Marketing Plan 5. Implementation Control: • This is the last section of the marketing plan that focuses on continuous monitoring and adjustments in the implementation plan. • This part usually contains the monthly goals and budget, so that the management can analyze them and take corrective actions if required. • Here the management compares the expected performance to the actual performance and thus makes necessary changes in plans.

36. SAMPLE MARKETING PLAN IN VC

37. THANK YOU!!!!!

38. Next Class!! • Please check VC for assignment on Marketing Plan • Prepare for test of today's chapter