Download Strategic Marketing - Admiral Business Systems

SME BUSINESSLINK SEMINAR
PRESENTATION
HIGH MARKETING THAT BRINGS RESULTS
–
2011
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 [email protected]
Lecturer- MBA marketing NTU, CIM, WUA, ZIM.
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)
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
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…
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
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)
Strategic Marketing
Marketing Strategy 1:
Analysis, Objectives &
Strategic Choices
May 2011
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)
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
Clarifying the Mission
STRATEGIC INTENT
Vision of what you want to be
MARKET DEFINITION
Customer Targets
MISSION
Objectives &
Strategy
COMPETITIVE POSITIONING
Differential advantage
Hooley, Cox & Adams (1992)
COMPANY VALUES
Guiding Principles
DISTINCTIVE COMPETENCIES
Core Skills
MACRO-ENVIRONMENT
• POLITICAL/LEGAL
– Regulation/deregulation
shape – (Ideology, motivation) & stability
Level of control?
– Attitudes towards competition, social responsibility,
environmental matters, customer protection
– Legislation on the organisation, employment &
Future
policy?
wages, profits, marketing tactics
Employment law, advertising
controls etc..
MACRO-ENVIRONMENT (2)
• TECHNOLOGICAL
– Rate of change
– Protection of innovation
– Availability of technology
• ECONOMIC
–
–
–
–
Income & wealth (PDI)
Employment
Growth & demand
Interest & exchange rates
The Internet is
a good example
Personal Disposable
Income
All these affect PDI
MACRO-ENVIRONMENT (3)
• SOCIAL
– Culture
All impact on
nature of
demand
e.g. needs
– Demographics
– Family & social patterns
– Psychographics (Lifestyle, AIO)
• PHYSICAL
Social Responsibility
– Social costs of consumption
– Natural forces
– Environment
e.g. seasonality
MICRO ENVIRONMENT
• Market
– size, growth rates, trends
– market structure, critical success factors
CSFs - what it
takes to be
successful in this
market
• 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)
Purchase importance
(perceived risk)
Competitors
– actual/potential competitors, strengths/weaknesses
– size, market share, profitability
– entry barriers to new competitors, trends
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
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
INTERNAL ENVIRONMENT (2)
• Marketing mix audit
e.g. how well are brands
built & maintained?
– effectiveness of operational marketing
• Marketing structures audit
– marketing organisation
e.g. structure
– marketing training
– intra- and inter-departmental communications
• Marketing systems audit
– marketing information systems (MIS)
– marketing planning system
– marketing control system
i.e. the
overall
framework
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)
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
Internal marketing audit (2)
• Marketing mix audit
e.g. how well are brands
built & maintained?
– effectiveness of operational marketing
• Marketing structures audit
– marketing organisation
e.g. structure
– marketing training
– intra- and inter-departmental communications
• Marketing systems audit
– marketing information systems (MIS)
– marketing planning system
– marketing control system
i.e. the
overall
framework
Situation analysis then allows
organisation to consider…
1)
Likelihood of change in the marketplace?
2)
The drivers of change?
3)
Likely response of main rivals? What would their
approach do to their overall positioning?
4)
What response can organisation make realistically?
How to develop weaknesses, turn into strengths,
threats into opportunities?
SWOT
•
•
•
•
Strengths
Weaknesses
0pportunities
Threats
Objectives
• More detailed than the mission statement
• Derived from the mission or strategic vision
Consider:• Are they compatible?
• Are they consistent?
• Nature of business
• Organizational culture
• Are they SMART?
–
–
–
–
–
Specific
Measurable
Achievable
Realistic
Timely
Objective setting
(general vs specific)
• Optimise sales
Increase awareness from 5% to 7.5% of target
market in Harare by the end of 2011/12
• Gain a foothold in the Zambian market
Achieve 2% market share of target market in
Zambia by end of 2011/12
• Ensure target market is aware of product/service
Increase sales by 5% per annum in 2011
and 2012
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)
Generic Strategies
SCOPE
COMPETITIVE
SOURCE OF COMPETITIVE
ADVANTAGE
Industry
wide
(broad)
Single
segment
(narrow)
Low Cost
Differentiation
COST
LEADERSHIP
DIFFERENTIATION
FOCUS
Ansoff’s Growth Matrix
Product
Market
Present
New
Present
Market
penetration
Product
development
New
Market
development
Diversification
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
Growth Strategy
• MARKET PENETRATION Cont,
Gain customers from competitors
Reduced price incentives
Introductory offers
Sales force incentives
Recruit sales/marketing people from
competitors
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
Growth Strategy
• MARKET DEVELOPMENT
New market segments
New distribution channels
New geographical areas
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)
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
Marketing Mix:
Operational Marketing
MARKETING MIX
Marketing Elements – The 7Ps
• Product
• Price
• Promotion – Personal selling, Sales promotion,
Advertising, publicity
• Place
• People
• Physical Evidence
• Process
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
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, instore display, point of sale materials, brochures,
leaflets all below the line support
PLC strategies
Product
Offer a basic
product
Offer product
extensions,
service, warranty
Diversify brands
and models
Phase out weak
items
Price
Use cost-plus
Price to penetrate
market
Price to match or
beat competitors
Cut price
Build selective
distribution
Build intensive
distribution
Build more
intensive
distribution
Go selective:
phase out
unprofitable
outlets
Advertising
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
Sales
Promotion
Use heavy sales
promotion to
entice trial
Reduce to take
advantage of
heavy consumer
demand
Increase to
encourage brand
switching
Reduce to
minimal level
Distribution
Pricing Approaches
Cost-based pricing:
cost-plus (in
manufacturing)
and mark-up (in
retailing)
Non-market-based
pricing
Competitor-based
pricing:
skimming;
penetration pricing;
predatory pricing
Customer-based pricing:
demand pricing;
psychological pricing;
discounting; product-mix
pricing
Market-based pricing
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
Channels of distribution
Producer
Consumer
Producer
Retailer
Consumer
Producer
Wholesaler Retailer
Consumer
Producer Agent
Consumer
Wholesaler
Retailer
Promotion -marketing communications
Implementation & Control
Defining Implementation
“Marketing strategy concerns the issues of
what should happen and why it should
happen.
Implementation focuses on actions: who
is responsible for various activities, how
the strategy should be carried out, where
things will happen and when actions will
take place.”
Jobber (1998)
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
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)
Factors for the success of
implementation
• Leadership
• Marketing-oriented culture
• Supportive, effective structure
• Internal marketing
• Resources
• Evaluation and control procedures
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
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)
Internal Marketing to Support
Implementation
Internal Marketing can help by:
• Focusing on the customer
• Building employee knowledge
• Encouraging cooperation & commitment to the
plan
• Boosting pride in performance
Wider conception of IM
• It is NOT simply the application of marketing
concepts within the organisation
• It should NOT be seen as a specialist
function, but should converge with, for e.g.:
–
–
–
–
HR development
strategic management
quality management
corporate communications
• It should be seen as an integrative process of
internal relationship management
• To effect change, must involve many levels
and departments in development of IM plan
Marketing Control System
Alter
objectives
Alter
standards
Decide marketing
objectives
Set performance
standards
Locate
responsibility
Evaluate performance
against standards
Take corrective/
supportive action
Praise
reward
promote
advise
train
discipline