Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–1

Part 1: Marketing strategy and management

Chapter 2: Strategic marketing planning

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When we finish this lecture you should

• Understand what marketing managers do• Know what marketing strategy planning is• Understand what target marketing means• Be familiar with the four Ps of the marketing mix• Be familiar with the framework for marketing

planning• Understand that marketing plans are a written

statement of the strategy• Know the difference between a marketing strategy, a

marketing plan and a marketing program• Understand the difference between international and

global strategy

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Figure 2.1 The marketing management process

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Figure 2.2 A marketing strategy showing the four Ps of the marketing mix

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Marketing strategy planning

• Finding opportunities and developing profitable marketing strategies

• Target market– A similar group of customers to whom a company

wishes to appeal

• Marketing mix/four Ps– The controllable variables that the company puts

together to satisfy this target group

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Figure 2.4 Overview of the marketing strategy planning process

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Figure 2.4 Overview of the marketing strategy planning process

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Exhibit 2.1Marketers must design their plan with a specific target market in mind.

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Target marketing vs mass marketing

• Target marketing– Marketing mix is tailored to fit specific target

customers

• Mass marketing– Vaguely aims at ‘everyone’ with the same

marketing mix

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Figure 2.5 Marketing decisions areas organised by the four Ps

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The four Ps—product

• Concerned with developing the right product for the target market

• A ‘product’ can be a service• Branding can be a key element of a product

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Figure 2.6 Typical changes in marketing variables over the product life cycle

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The four Ps—place

• Place is concerned with getting the right product to the target market

• A product reaches customers through a channel of distribution– Any series of businesses (or individuals) that

participate in the flow of products from producer to consumer

• Physical distribution and decisions about logistics relate to other ‘place’ decisions

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Figure 2.7 Four examples of basic channels of distribution for consumer products

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The four Ps—promotion

• Promotion is informing the target market or others in the channel about the right product

• Marketers put together an optimum portfolio of these tools—the promotional mix – Personal selling– Non-personal communication

Advertising Publicity Sales promotions

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Exhibit 2.2aNew products must be introduced to the market with a differentiation that makes them stand out from their competition.

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 2–17

The four Ps—price

• Price setting must consider the kind of competition in the target market—and the cost of the whole marketing mix

• Often, different customers pay different prices

• Marketers must decide what’s included in the price

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Blending the four Ps

• Why is the four Ps idea helpful?– Provides an organising framework– Helps to bring many, more detailed decisions

together in a logical fashion– Focuses thinking on the idea that ‘ALL’ marketing

decisions must work together as a whole

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Figure 2.8 Relating strategy policies to operational decisions for a children’s shoe company

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Figure 2.9 Framework and summary outline of the different sections of a marketing plan

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Figure 2.9 Framework and summary outline of the different sections of a marketing plan (continued)

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Figure 2.9 Framework and summary outline of the different sections of a marketing plan (continued)

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The marketing plan

• Marketing plan—a written statement of a marketing strategy and the time-related details for carrying out the strategy

• Spells out, in detail– What marketing mix is offered– To what target market– For how long– What resources (costs) are needed and at what

rate– What results are expected (e.g. sales and profits)– What control procedures will be used

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Structure of a marketing plan

• Executive summary• Introduction and situation analysis• Target market and segments• Objectives and goals• Strategic options• Selected strategy• Tactics• Budget• Audit and control procedures

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Executive summary

• A complete 1–2 page summary of the marketing plan

• An overview of the major goals and elements of the plan

• Key underlying assumptions– Relevant corporate objectives– External environmental factors

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Introduction and situation analysis

• Background about company• Key performance trends and any desired

changes• Set the scene and assess the company’s

past strategy

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Introduction and situation analysis (continued)

• Environment scanning for relevant trends– Demographic– Economic– Social and cultural– Technological– Political and legal– Competitors– Market research– SWOT analysis– Assumptions to be made

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Segmentation and targeting

• Main benefit delivered by the product must be identified

• Segment/s of the population most likely to value this benefit should be discussed

• Market research– Estimate the market size, given the target market

and the foreseeable competition

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Company objectives or goals

• Outline the company mission • Identify all company objectives or goals• Managers should ensure their objectives are

SMART– Specific– Measurable– Achievable– Realistic– Time-bound

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Strategic options and selected strategy

• Identify and analyse possible strategic choices• Select particular target markets and develop

major marketing mix components• Test ‘fit’ the company’s SWOT analysis• Prepare a broad statement of strategic

direction indicating overall marketing mix and target market strategies to be developed

• Specify competition• Prepare a positioning statement and image

description

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Tactical elements—the marketing mix

• Significant detail within each component of the selected strategy

• Product name, brand• Price• Place of distribution• Packaging options and design• Advertising, sales promotions, sales-force

management

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Tactical elements—the marketing mix (continued)

• Credit terms• Timing, budgeted costs• People to coordinate• Key results expected

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Budget

• Monthly• Quarterly• Product or product-group level• Sales quantities and revenues• Costs

– Production– Provision of services– Physical distribution– Advertising– Personal selling

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Audit and control procedures

• Monitoring of performance• Which activities are being achieved• Monitor relevant internal/external

environmental factors• Relate to objectives

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The marketing program

• Marketing program—blends all the company’s marketing plans into one ‘big’ plan, which is an integrated part of the whole-company strategic plan

• Program requires an effective ‘building up’ process– A good program must be based on good plans– Each plan must be carefully developed– Each plan is based on a marketing strategy– Each strategy is based on a marketing mix and a

target market

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Figure 2.10 Elements of an organisation’s marketing program

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Figure 2.11 Distribution of different companies based on their marketing performance

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Strategy planning for international marketing

• Marketing managers must plan the company’s overall marketing program to be flexible so that it can be adapted to conditions in different countries

• Delegate responsibility to local managers• Develop regional groupings• Global marketing

– Focus on similarities between markets around the world and attempts to develop and implement common product, place and promotion strategies and plans in those various markets

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Suggested approach to global marketing

• Identify all important areas of similarity and difference between markets

• Delegate some decision-making to local management

• Clarify which elements of the marketing mix are essential in achieving goals

• Obtain feedback from local management to enable common problems to be identified

• Consider developing a strong international culture

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Exhibit 2.5Cultural differences are some of the reasons that make international marketing difficult.

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What we will be doing in the next chapter

• In Chapter 3 we will discuss that marketers must understand the capabilities of the company and its competitors; analyse customer needs; and choose marketing strategy variables within the framework of the marketing environment. They must also understand how that environment is changing when assessing the best opportunities for their organisation.