SME BUSINESSLINK SEMINAR PRESENTATION HIGH MARKETING THAT BRINGS RESULTS – 2011

1. SME BUSINESSLINK SEMINAR PRESENTATION HIGH MARKETING THAT BRINGS RESULTS – 2011

2. INTRODUCTION GODFREY J. DUBE - MBA, MA Mkt, BBA Mkt, PGDipM, PGDMS, PGCM, Grad Dip MKT, CSM, CGLI, MCIM, MZIM, DBA Fellow, President Marketers Association of Zimbabwe, MBC Phone 0775 502 173 , 0772 402 466, email godfreyjdube@yahoo.co.uk Lecturer- MBA marketing NTU, CIM, WUA, ZIM.

3. INTRODUCTION • Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others” • Doyle (2002:36)

4. INTRODUCTION Delivering Value requires : • Understanding customers (their entire purchase and consumption experience) + predicting future needs & wants • Understanding and exploiting sources of competitive advantage to be better than the Competition • Understanding own organisation; costs, operations, profitability = A market oriented or customer-centric business

5. INTRODUCTION Traditional View of Marketing •The right product •At the right price •At the right place •With the right communications support Based upon the 4Ps of the Marketing Mix…

6. INTRODUCTION • Marketing Concept =Customer Orientation + Integrated Effort + Goal Achievement Achievement of corporate goals through meeting and exceeding customer needs better than the competition • Customer Orientation Activities focused on providing customer satisfaction • Integrated Effort All staff accept responsibility for creating customer satisfaction • Goal Achievement Belief that corporate goals can be achieved via customer satisfaction Jobber,1995)

7. Introduction Market Orientation Defined "the organizational culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers and, thus, continuous superior performance for the business" Narver & Slater (1990:20)

8. Strategic MarketingMarketing Strategy 1:Analysis, Objectives & Strategic Choices May 2011

9. STRATEGIC MARKETING • Strategic Marketing “… is concerned with adapting the organization to a changing environment. Organisations succeed when they meet the needs of customers more effectively than competitors. The problem is that the needs of customers change, new technologies appear and competitors generally get better. As a result, successful companies decline if they do not continually change and adapt.” Doyle (2002:92)

10. STRATEGIC MARKETING The Marketing Planning Process • Business mission • Marketing audit • SWOT analysis • Marketing objectives • Core strategy • Competitive advantage • Marketing mix decisions • Organisation and implementation • Control

11. Clarifying the Mission Hooley, Cox & Adams (1992)

12. MACRO-ENVIRONMENT • POLITICAL/LEGAL • Regulation/deregulation • (Ideology, motivation) & stability • Attitudes towards competition, social responsibility, environmental matters, customer protection • Legislation on the organisation, employment & wages, profits, marketing tactics Level of control? shape Future policy? Employment law, advertising controls etc..

13. MACRO-ENVIRONMENT (2) The Internet is a good example • TECHNOLOGICAL • Rate of change • Protection of innovation • Availability of technology • ECONOMIC • Income & wealth (PDI) • Employment • Growth & demand • Interest & exchange rates Personal Disposable Income All these affect PDI

14. MACRO-ENVIRONMENT (3) • SOCIAL • Culture • Demographics • Family & social patterns • Psychographics (Lifestyle, AIO) • PHYSICAL • Social costs of consumption • Natural forces • Environment All impact on nature of demand e.g. needs Social Responsibility e.g. seasonality

15. MICRO ENVIRONMENT CSFs - what it takes to be successful in this market • Market • size, growth rates, trends • market structure, critical success factors • Customers • customer profile, choice criteria, when, where, how they buy, benefits sought • buyer behaviour – influences (buying situation, personal and social influences), involvement, trends • how they rate us against our competition (on product, price, promotion & distribution) • Competitors • actual/potential competitors, strengths/weaknesses • size, market share, profitability • entry barriers to new competitors, trends Purchase importance (perceived risk)

16. MICRO ENVIRONMENT (2) • Distributors • channel attractiveness, distribution decision making unit, process, choice criteria • strengths and weaknesses, power changes • physical distribution methods, trends • Suppliers • who they are, location • strengths and weaknesses, power changes, trends

17. INTERNAL ENVIRONMENT • Operating results audit • sales, market share, profit margins, costs • Strategy audit • appropriateness of marketing objectives • market segmentation • competitive advantage • core competences and resources • positioning • portfolio analysis

18. INTERNAL ENVIRONMENT (2) e.g. how well are brands built & maintained? • Marketing mix audit • effectiveness of operational marketing • Marketing structures audit • marketing organisation • marketing training • intra- and inter-departmental communications • Marketing systems audit • marketing information systems (MIS) • marketing planning system • marketing control system e.g. structure i.e. the overall framework

19. The Marketing Audit should aid evaluation by doing the following: • describe current events • gather information that might affect marketing strategy • explore opportunities (and improve marketing strategy) • create database to aid evaluation of goals/ objectives (Kotler - in Dibb et al, 1994)

20. Internal marketing audit • Operating results audit • sales, market share, profit margins, costs • Strategy audit • appropriateness of marketing objectives • market segmentation • competitive advantage • core competences and resources • positioning • portfolio analysis

21. Internal marketing audit (2) e.g. how well are brands built & maintained? • Marketing mix audit • effectiveness of operational marketing • Marketing structures audit • marketing organisation • marketing training • intra- and inter-departmental communications • Marketing systems audit • marketing information systems (MIS) • marketing planning system • marketing control system e.g. structure i.e. the overall framework

22. Situation analysis then allows organisation to consider… • Likelihood of change in the marketplace? • The drivers of change? • Likely response of main rivals? What would their approach do to their overall positioning? • What response can organisation make realistically? How to develop weaknesses, turn into strengths, threats into opportunities?

23. SWOT • Strengths • Weaknesses • 0pportunities • Threats

24. Consider:- Are they compatible? Are they consistent? Nature of business Organizational culture Are theySMART? Specific Measurable Achievable Realistic Timely Objectives • More detailed than the mission statement • Derived from the mission or strategic vision

25. Objective setting (general vs specific) • Optimise sales • Gain a foothold in the Zambian market • Ensure target market is aware of product/service Increase awareness from 5% to 7.5% of target market in Harare by the end of 2011/12 Achieve 2% market share of target market in Zambia by end of 2011/12 Increase sales by 5% per annum in 2011 and 2012

26. Marketing strategies • means by which marketing objectives achieved • strategic choice: • understanding the bases upon which strategies are built, • generating options for evaluation and selection • focus: • definition of target markets, • competitive advantage, • future direction, • marketing mix decisions for each market segment Jobber (2006)

27. COMPETITIVE SCOPE Generic Strategies SOURCE OF COMPETITIVE ADVANTAGE Low Cost Differentiation Industry wide (broad) COST LEADERSHIP DIFFERENTIATION FOCUS Single segment (narrow)

28. Product Present New Market Product Present penetration development Market Market New development Ansoff’s Growth Matrix Diversification

29. Growth Strategy • MARKET PENETRATION There are four main ways of increasing sales of existing products to existing customers • Gaining more purchase and usage from existing types of customers • Update your services more frequently in order to stimulate extra sale • Increase advertising expenditure • Introduce new sales promotions • Reduce prices

30. Growth Strategy • MARKET PENETRATION Cont, • Gain customers from competitors • Reduced price incentives • Introductory offers • Sales force incentives • Recruit sales/marketing people from competitors

31. Growth Strategy • MARKET PENETRATION Cont, • Convert non-users • Persuade distributors to stock more products • Increase distributors • Have direct sales • Reduce loss of customers to competitors • Build barriers restrict new rivals from entering market • Enter a segment the rival has ignored

32. Growth Strategy • MARKET DEVELOPMENT • New market segments • New distribution channels • New geographical areas

33. Growth Strategy • PRODUCT DEVELOPMENT • Product modification • Change the product slightly to meet the different needs of segments of existing customers • Different quality levels • Change the product more drastically • Entirely new products • New product development (NPD)

34. Growth Strategy • DIVERSIFICATION • New products for new markets • Mergers/integration and acquisitions • Horizontal Integration • By a similar business or competitor • Vertical integration • Buy backwards or forward into the supplier or distributors • Concentric Diversification • Buy another business with technical or marketing synergies • Conglomerate Diversification • Completely new/fresh challenge

35. Marketing Mix: Operational Marketing

36. MARKETING MIX Marketing Elements – The 7Ps • Product • Price • Promotion – Personal selling, Sales promotion, Advertising, publicity • Place • People • Physical Evidence • Process

37. MARKETING MIX • Product ; A product (goods or services) in anything that satisfies a need or want. It is not a ‘thing’ with features but a package of benefits • Price; The price elements of the marketing mix is the only one which brings in revenue and price is influenced by many factors • Promotion: Promotion is the element of the marketing mix over which the marketing department generally has most control- Advertising, sales promotion, personal selling, direct marketing and merchandising • Place; Place deals with how the product is distributed and how it reaches its customers

38. MARKETING MIX • People. The attitude of staff, appearance, internal relations, behaviour, accessibility of people, B2B contacts • Process. Systems, production and operations, process of product/service delivery • Physical Evidence. (S) Buildings, furnishings, lay-outs, goods associated with the service like carrier bags, tickets and brochures, ambience – the environment or atmosphere (P) packaging, store location, accessibility, merchandising, ins-tore display, point of sale materials, brochures, leaflets all below the line support

39. PLC strategies Offer product extensions, service, warranty Offer a basic product Diversify brands and models Phase out weak items Product Price to match or beat competitors Price to penetrate market Price Use cost-plus Cut price Go selective:phase out unprofitable outlets Build more intensive distribution Build selective distribution Build intensive distribution Distribution Build product awareness among early adopters, dealers Build awareness and interest in the mass market Stress brand differences and benefits Reduce to level needed to retain hardcore loyals Advertising Reduce to take advantage of heavy consumer demand Increase to encourage brand switching Use heavy sales promotion to entice trial Sales Promotion Reduce to minimal level

40. Pricing Approaches Cost-based pricing: Customer-based pricing: Competitor-based pricing: cost-plus (in manufacturing) and mark-up (in retailing) demand pricing; psychological pricing; discounting; product-mix pricing skimming; penetration pricing; predatory pricing Non-market-based pricing Market-based pricing

41. Customer-based pricing • Demand pricing (focuses on customer responsiveness to different price levels) • Psychological pricing (relationship between price and quality perception) • Discounted pricing (cash, seasonal, trade-in allowances, segmented) • Product-mix pricing

42. Channels of distribution Producer Consumer Producer Retailer Consumer Producer WholesalerRetailer Consumer Producer Agent Wholesaler Retailer Consumer

43. Promotion -marketing communications

44. Implementation & Control

45. Defining Implementation “Marketing strategy concerns the issues of whatshould happen and whyit should happen. Implementation focuses on actions:who is responsible for various activities, howthe strategy should be carried out, where things will happen and whenactions will take place.” Jobber (1998)

46. Key Issues • IMPLEMENTATION • Success is dependent on the ability to translate a marketing strategy into a series of practical & actionable steps (tactics) • CONTROL • Success is maintained by continually monitoring progress to ensure that the plan still fits the prevailing market conditions

47. Effective implementation • Success is dependent on the ability to translate a marketing strategy into a series of practical & actionable steps (tactics) • “THE ABILITY TO DO THINGS” • Capabilities, core competences in key functional area(s) • “THE ABILITY TO GET THINGS DONE” • Having the required resources (resource allocation) • Support of key decision makers in the organisation • Interrelationships i.e. SBU-corporate relations • Cooperation of departments needed to implement the plan (e.g. R&D and production) • Commitment of “front-line” individuals and departments (e.g. marketing, sales and distribution)

48. Factors for the success of implementation • Leadership • Marketing-oriented culture • Supportive, effective structure • Internal marketing • Resources • Evaluation and control procedures

49. Internal Marketing • Deals with internal customers - an important stakeholder group • Provides communication to help employees identify with corporate objectives - the common goal • Marketing techniques can help to motivate staff and increase level of ‘involvement’ • Should precede external marketing

50. Internal Marketing “A coordinated set of activities and policies designed to build employee relationships within the organisation and reinforce internal commitment to the marketing plan and to good customer service.” Burk-Wood (2003) Why do we need it? “If the staff won’t buy it why should the customer?” Barnes (1989) “40% of customers stated that poor service was the main reason for switching to the competition.” Blume (1988)