Marketing

Strategic planning and segmentation

Strategic Marketing Planning(SMP)

• Definition:The logic (Strategy/how) that matches the organization objectives & resources to its changing marketing opportunities within the organization’s financial boundaries.

• SMP is driven by the marketing concept as the market orientation is the prime strategic philosophy influencing:– Mission statement--purpose of existence (e.g. NIKE)– Internal strategies---value chain (inter-departmental)– External strategies---networking (with government, retailers)– Growth strategies---[e.g. Kellogg's, Pepsi (PepsiCo. foods)]

• Objectives plan: Market penetration, Market development, and Diversification

• Resources plan(4P’s): Product, Price, Promotion and Place/Distribution

SMP goals (Conti.)

• Maximize revenue

• Maximize profit

• Maximize return on investment

• Minimize cost

Contradicting (usually)

Optimum compromise

Types of SMP (Conti.)

– Strategic planning• Goal: Doing the right thing

• Time: Long term (3-5 years)

• Focus: Pan-organizational

– Tactical planning • Goal: Doing things right

• Time: Short term (1 or less years)

• Focus: Departmental

Strategic marketing management process

• Analysis of environment and customer behavior

• Planning: developing the marketing plan (for a product)that is a written document capturing the logic linking the organization objectives of creating/offering a certain product to its market/s with its overall objectives. – Implementation: applying the plan(action/execution)--vital for

success--ensuring ownership of the plan.

– Control: measure results--evaluate performance--take corrective action

Strategic marketing management process (conti.)

• Analysis– Environment (Marketing intelligence, managerial

environment(e.g. SWOT, BCG)• SWOT[strengths, weaknesses, opportunities and threats]

• BCG Matrix:

– Customer behavior: MIS Dog?

Cow

Market growth rate

High-Market share-low

High

Low

Segmentation

• Market Segmentation: dividing the consumer market into smaller groups each of which shares similar yet distinctive characteristics requiring different offerings. – Levels of market segmentation

Mass(e.g. early Coca-cola)

Segments

(Kellogg's)

Niche(e.g. CanJet)

Micro(local/individual) (e.g. some retailers/RR)

Segment Variables

Segmentation (Conti.)

• Consumer market segmentation variables(driven from consumer behavior)

– Geographic

• Country, city size, province, residential area, etc. (Retailers)

– Demographic

• Age, gender, income, etc.---Insurance (life/driving, etc.)

– Psychographic

• lifestyle/personality----GAP/Timberland/CAT

– Behavioral

• User status/rate, etc.---Air Canada Aeroplan/frequent flyer/VIP

Segmentation (Conti.)

• Targeting: – Evaluate and then

Select segment/s to serve

Positioning for competitive advantage

• Definition:the distinctive perception (position) of the product in customers’ mind compared to competition.– USP (more for more/M-Benz) v.Value proposition

(same for less/Loblaws’ PC)– iMac v. Pc’s– Risks

• Under-positioning--no perception at all

• Over-positioning---too narrow perception

• Confused positioning--vague perception