Strategic Marketing Management

Guidelines for â€Å"Strategic Marketing Project† Elements: 1. Environmental Analysis (SWOT) 2. Identifying Customers 3. Competitor/Value Creation Analysis 4. Marketing Mix: The 4 P’s 5. Financial Analysis and Budget 6. Implementation and Control Plan 1. Know Your Marketplace †¢ Strengths, Weaknesses, Opportunities, and Threats (SWOT) †¢ Trends and changes: – Market analysis – Segmentation – Prioritizing target markets 1. Know who you are selling to (market analysis, segmentation, prioritizing targets) 2. Know what is important to targeted customers (customer analysis) 3. Make sure you are distinctively different from your competition in areas of importance to targeted segments (competitive analysis, reallocation of resources if necessary, positioning, market intelligence) 4. Focus attention of everyone on delivering what the customer wants (management of people, monitoring and control). 5. Constant monitoring of changes in the market (market intelligence, market analysis, internal feedback system) The most fundamental marketing concept is treating customers like you are truly interested in them. That means making sure you are meeting needs that customers perceive as important. Meeting needs is the heartland of every marketing program. A useful tool in assessing the marketplace is SWOT. Assessing the opportunities and threats and how the business can capitalize on them or avoid them using the firm’s strengths weaknesses 2. Who Are Your Customers? Customer/Consumer Trends Customers †¢ Just-in-time inventory †¢ Business to business (B2B) †¢ Manufacturing mentality †¢ Industrialization of agriculture Consumers †¢ Households with fewer people †¢ Active, on-the-go lifestyles Concern over the health aspect of food, with a desire for good taste †¢ Less time for meal prep Know What Is Important to Your Customer †¢ Get inside the mind of your customers †¢ Find out why they would buy from you. . . or why they would not †¢ Truly understand their needs – Intentional listening – Customer analysis – Solve their p roblems 3. Competitor/Value Creation Analysis Make sure you are distinctively different from your competition in areas of importance to your customers †¢ Competitive analysis †¢ Reallocation of resources if necessary †¢ Positioning The Value Chain The Value Chain, or value plate, does is breakdown the functions of a company into its activities to provide a way to assess the internal capacities of the business. The value chain categorizes the generic value-adding activities of an organization. The â€Å"primary activities† include: inbound logistics, operations (production), outbound logistics, marketing and sales (demand), and services (maintenance). The â€Å"support activities† include: administrative infrastructure management, human resource management, technology (R&D), and procurement. The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. 4. Determining the Marketing Mix †¢ The set of controllable variables that will accomplish the marketing objectives: †¢ Product strategy †¢ Place (distribution) strategy †¢ Promotion (communication) strategy †¢ Pricing strategy Product Strategy †¢ Portfolio of Products – Flavors, colors, variants, blends, genres etc – Fits your strengths and weaknesses – Provides acceptable risk/return trade off – Meets needs of a particular customer segment Quality – No. 1 versus No. 2 – †¢ Service – Timely custom operations – Pre-sorting of grain or livestock quality †¢ Volume – Large and small quantities – Guaranteed volumes (contract) Example: McDonald’s Product Package †¢ Food †¢ Fast service †¢ Fun for the kids †¢ Variety â € ¢ Non-smoking †¢ Consistent product Place/Distribution Strategy †¢ Location – Delivery to multiple points Promotion Strategy †¢ Advertising – Creating TVC, Radio copy, Print ads, outdoor/hoardings ad, Posters, brochures and other advertisements on the products – Creating a logo †¢ Personal Selling Telling your customers how you create value – Having lunch with the corporate customer/vendor †¢ Public Relations – Being a good neighbor – Being involved in the community – Open house days Price Strategy Price is the cost the customer must bear in order to obtain the product. It includes: †¢ list price †¢ discounts †¢ allowances †¢ payment period †¢ credit terms Pricing Methods †¢ Value-Based Pricing – Set price based on buyers’ perception of value (rather than on the seller’s costs) †¢ Cost-Based Pricing – Add a standard markup to the cost of the pr oduct †¢ Competition-Based Pricing Set price based on following competitors’ prices 5. Financial Analysis and Budgeting †¢ Estimate the demand given the pricing and promotion strategy. †¢ Determine expenses associated with production and marketing. †¢ Determine anticipated cash flows. †¢ Will strategy cash flow? When? †¢ What are the critical assumptions of the financial analysis and what are the impacts of changes in those assumptions? 6. Implementation and Control †¢ Focus attention of everyone on delivering what the customer wants – Management of people – Monitoring and control Good luck! Strategic Marketing Management Strategic Marketing Management Sample Exam Questions Question 1: a. Is the PLC (Product life cycle) concept useful in developing Marketing strategies? Describe why or why not? What are the limitations of the PLC concept? A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organisation with markets, competitors and other environmental factors. b. What are the advantages available to Google with their Google maps (as a Pioneer firm) in the Internet search engine market? What are the advantages available to any of the follower firms in the market? c. Under what conditions to pioneer and follower strategies each have the greatest probability of long-term success? Question 2: a. Explain the term ‘sustainable competitive advantage’ b. Discuss five (5) differentiation and five (5) overall cost leadership strategies a firm can pursuer to create sustainable competitive advantages c. What are four (4) different types of businesses based on their intended rate of product-market development as proposed by Miles and Snow? d. You are the marketing manager for a generic products division of a major pharmaceutical manufacturer. Your division is a low-cost defender that maintains its position in the generic drug market by holding down its costs and selling generic products to distributors and pharmacies at very low prices. What are the implications of this business strategy for each of the 4Ps in the strategic marketing programme you would develop for your division? Question 3: a. What is market orientation? What are the advantages and drawbacks of being ‘market oriented’ for a firm like Qantas Airways? Lecture 1: Market orientation is implementing a more customer-focused approach to marketing. This involves companies that make what they can sell as opposed to selling what they can make. Market oriented companies have a broad product line and base their pricing on perceived benefits provided as opposed to production and distribution costs as Product oriented firms do. Their research is focused on identifying new opportunities and applying new technology to satisfy customer needs as opposed to product improvement and cost cutting solutions like product oriented firms. Such companies design packaging for customer convenience and use it as a promotional tool rather than to merely protect the product or reduce costs involved and they emphasise their promotion on product benefits and ability to satisfy customer needs or solve problems (as opposed to product features, quality and price). Advantages include†¦ b. Discuss the factors that mediate a marketing’s strategic role within an organisation Lecture 1: Competitive factors affect a firms market orientation Influence of different development stages across industries and global markets Strategic Inertia . Outline the major levels of strategy in most large, multi-product organisations Lecture 1: 1. Corporate Strategy: Decisions about the organisation’s scope and resource deployments across its divisions or businesses 2. Business-level strategy: How a business unit competes within its industry 3. Marketing strategy (Functional) Effective allocation and coordination of marketing resourc es and activities d. List the five components of a well-developed strategy. Lecture 1: 1. Scope (breadth of the strategic domain) 2. Goals and Objectives (What is to be accomplished) 3. Resource deployments (Allocation of limited resources) 4. Identification of sustainable competitive advantage (How the organisation will compete) 5. Synergy (Whole greater than the sum of parts) Question 5: Apple computer’s iPods holds a commanding share of the rapidly growing global market for digital music players. To maintain its lead as the market continues to grow, what strategic marketing objectives should Apple focus on and why? Which specific marketing actions would you recommend for accomplishing Apple’s objectives? Be specific with regard to each of the 4Ps in the firm’s marketing programme. Question 6. While we have seen that a business may have a number of other strategic options, the conventional wisdom suggests that a declining business should either be divested or harvested for maximum cash flow. Under what kinds of market and competitive conditions do each of these two conventional strategies make good sense? What kinds of marketing actions are typically involved in successfully implementing a harvesting strategy? Strategic Marketing Management Strategic Marketing Management Sample Exam Questions Question 1: a. Is the PLC (Product life cycle) concept useful in developing Marketing strategies? Describe why or why not? What are the limitations of the PLC concept? A strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organisation with markets, competitors and other environmental factors. b. What are the advantages available to Google with their Google maps (as a Pioneer firm) in the Internet search engine market? What are the advantages available to any of the follower firms in the market? c. Under what conditions to pioneer and follower strategies each have the greatest probability of long-term success? Question 2: a. Explain the term ‘sustainable competitive advantage’ b. Discuss five (5) differentiation and five (5) overall cost leadership strategies a firm can pursuer to create sustainable competitive advantages c. What are four (4) different types of businesses based on their intended rate of product-market development as proposed by Miles and Snow? d. You are the marketing manager for a generic products division of a major pharmaceutical manufacturer. Your division is a low-cost defender that maintains its position in the generic drug market by holding down its costs and selling generic products to distributors and pharmacies at very low prices. What are the implications of this business strategy for each of the 4Ps in the strategic marketing programme you would develop for your division? Question 3: a. What is market orientation? What are the advantages and drawbacks of being ‘market oriented’ for a firm like Qantas Airways? Lecture 1: Market orientation is implementing a more customer-focused approach to marketing. This involves companies that make what they can sell as opposed to selling what they can make. Market oriented companies have a broad product line and base their pricing on perceived benefits provided as opposed to production and distribution costs as Product oriented firms do. Their research is focused on identifying new opportunities and applying new technology to satisfy customer needs as opposed to product improvement and cost cutting solutions like product oriented firms. Such companies design packaging for customer convenience and use it as a promotional tool rather than to merely protect the product or reduce costs involved and they emphasise their promotion on product benefits and ability to satisfy customer needs or solve problems (as opposed to product features, quality and price). Advantages include†¦ b. Discuss the factors that mediate a marketing’s strategic role within an organisation Lecture 1: Competitive factors affect a firms market orientation Influence of different development stages across industries and global markets Strategic Inertia . Outline the major levels of strategy in most large, multi-product organisations Lecture 1: 1. Corporate Strategy: Decisions about the organisation’s scope and resource deployments across its divisions or businesses 2. Business-level strategy: How a business unit competes within its industry 3. Marketing strategy (Functional) Effective allocation and coordination of marketing resourc es and activities d. List the five components of a well-developed strategy. Lecture 1: 1. Scope (breadth of the strategic domain) 2. Goals and Objectives (What is to be accomplished) 3. Resource deployments (Allocation of limited resources) 4. Identification of sustainable competitive advantage (How the organisation will compete) 5. Synergy (Whole greater than the sum of parts) Question 5: Apple computer’s iPods holds a commanding share of the rapidly growing global market for digital music players. To maintain its lead as the market continues to grow, what strategic marketing objectives should Apple focus on and why? Which specific marketing actions would you recommend for accomplishing Apple’s objectives? Be specific with regard to each of the 4Ps in the firm’s marketing programme. Question 6. While we have seen that a business may have a number of other strategic options, the conventional wisdom suggests that a declining business should either be divested or harvested for maximum cash flow. Under what kinds of market and competitive conditions do each of these two conventional strategies make good sense? What kinds of marketing actions are typically involved in successfully implementing a harvesting strategy? Strategic Marketing Management Guidelines for â€Å"Strategic Marketing Project† Elements: 1. Environmental Analysis (SWOT) 2. Identifying Customers 3. Competitor/Value Creation Analysis 4. Marketing Mix: The 4 P’s 5. Financial Analysis and Budget 6. Implementation and Control Plan 1. Know Your Marketplace †¢ Strengths, Weaknesses, Opportunities, and Threats (SWOT) †¢ Trends and changes: – Market analysis – Segmentation – Prioritizing target markets 1. Know who you are selling to (market analysis, segmentation, prioritizing targets) 2. Know what is important to targeted customers (customer analysis) 3. Make sure you are distinctively different from your competition in areas of importance to targeted segments (competitive analysis, reallocation of resources if necessary, positioning, market intelligence) 4. Focus attention of everyone on delivering what the customer wants (management of people, monitoring and control). 5. Constant monitoring of changes in the market (market intelligence, market analysis, internal feedback system) The most fundamental marketing concept is treating customers like you are truly interested in them. That means making sure you are meeting needs that customers perceive as important. Meeting needs is the heartland of every marketing program. A useful tool in assessing the marketplace is SWOT. Assessing the opportunities and threats and how the business can capitalize on them or avoid them using the firm’s strengths weaknesses 2. Who Are Your Customers? Customer/Consumer Trends Customers †¢ Just-in-time inventory †¢ Business to business (B2B) †¢ Manufacturing mentality †¢ Industrialization of agriculture Consumers †¢ Households with fewer people †¢ Active, on-the-go lifestyles Concern over the health aspect of food, with a desire for good taste †¢ Less time for meal prep Know What Is Important to Your Customer †¢ Get inside the mind of your customers †¢ Find out why they would buy from you. . . or why they would not †¢ Truly understand their needs – Intentional listening – Customer analysis – Solve their p roblems 3. Competitor/Value Creation Analysis Make sure you are distinctively different from your competition in areas of importance to your customers †¢ Competitive analysis †¢ Reallocation of resources if necessary †¢ Positioning The Value Chain The Value Chain, or value plate, does is breakdown the functions of a company into its activities to provide a way to assess the internal capacities of the business. The value chain categorizes the generic value-adding activities of an organization. The â€Å"primary activities† include: inbound logistics, operations (production), outbound logistics, marketing and sales (demand), and services (maintenance). The â€Å"support activities† include: administrative infrastructure management, human resource management, technology (R&D), and procurement. The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. 4. Determining the Marketing Mix †¢ The set of controllable variables that will accomplish the marketing objectives: †¢ Product strategy †¢ Place (distribution) strategy †¢ Promotion (communication) strategy †¢ Pricing strategy Product Strategy †¢ Portfolio of Products – Flavors, colors, variants, blends, genres etc – Fits your strengths and weaknesses – Provides acceptable risk/return trade off – Meets needs of a particular customer segment Quality – No. 1 versus No. 2 – †¢ Service – Timely custom operations – Pre-sorting of grain or livestock quality †¢ Volume – Large and small quantities – Guaranteed volumes (contract) Example: McDonald’s Product Package †¢ Food †¢ Fast service †¢ Fun for the kids †¢ Variety â € ¢ Non-smoking †¢ Consistent product Place/Distribution Strategy †¢ Location – Delivery to multiple points Promotion Strategy †¢ Advertising – Creating TVC, Radio copy, Print ads, outdoor/hoardings ad, Posters, brochures and other advertisements on the products – Creating a logo †¢ Personal Selling Telling your customers how you create value – Having lunch with the corporate customer/vendor †¢ Public Relations – Being a good neighbor – Being involved in the community – Open house days Price Strategy Price is the cost the customer must bear in order to obtain the product. It includes: †¢ list price †¢ discounts †¢ allowances †¢ payment period †¢ credit terms Pricing Methods †¢ Value-Based Pricing – Set price based on buyers’ perception of value (rather than on the seller’s costs) †¢ Cost-Based Pricing – Add a standard markup to the cost of the pr oduct †¢ Competition-Based Pricing Set price based on following competitors’ prices 5. Financial Analysis and Budgeting †¢ Estimate the demand given the pricing and promotion strategy. †¢ Determine expenses associated with production and marketing. †¢ Determine anticipated cash flows. †¢ Will strategy cash flow? When? †¢ What are the critical assumptions of the financial analysis and what are the impacts of changes in those assumptions? 6. Implementation and Control †¢ Focus attention of everyone on delivering what the customer wants – Management of people – Monitoring and control Good luck! Strategic Marketing Management Guidelines for â€Å"Strategic Marketing Project† Elements: 1. Environmental Analysis (SWOT) 2. Identifying Customers 3. Competitor/Value Creation Analysis 4. Marketing Mix: The 4 P’s 5. Financial Analysis and Budget 6. Implementation and Control Plan 1. Know Your Marketplace †¢ Strengths, Weaknesses, Opportunities, and Threats (SWOT) †¢ Trends and changes: – Market analysis – Segmentation – Prioritizing target markets 1. Know who you are selling to (market analysis, segmentation, prioritizing targets) 2. Know what is important to targeted customers (customer analysis) 3. Make sure you are distinctively different from your competition in areas of importance to targeted segments (competitive analysis, reallocation of resources if necessary, positioning, market intelligence) 4. Focus attention of everyone on delivering what the customer wants (management of people, monitoring and control). 5. Constant monitoring of changes in the market (market intelligence, market analysis, internal feedback system) The most fundamental marketing concept is treating customers like you are truly interested in them. That means making sure you are meeting needs that customers perceive as important. Meeting needs is the heartland of every marketing program. A useful tool in assessing the marketplace is SWOT. Assessing the opportunities and threats and how the business can capitalize on them or avoid them using the firm’s strengths weaknesses 2. Who Are Your Customers? Customer/Consumer Trends Customers †¢ Just-in-time inventory †¢ Business to business (B2B) †¢ Manufacturing mentality †¢ Industrialization of agriculture Consumers †¢ Households with fewer people †¢ Active, on-the-go lifestyles Concern over the health aspect of food, with a desire for good taste †¢ Less time for meal prep Know What Is Important to Your Customer †¢ Get inside the mind of your customers †¢ Find out why they would buy from you. . . or why they would not †¢ Truly understand their needs – Intentional listening – Customer analysis – Solve their p roblems 3. Competitor/Value Creation Analysis Make sure you are distinctively different from your competition in areas of importance to your customers †¢ Competitive analysis †¢ Reallocation of resources if necessary †¢ Positioning The Value Chain The Value Chain, or value plate, does is breakdown the functions of a company into its activities to provide a way to assess the internal capacities of the business. The value chain categorizes the generic value-adding activities of an organization. The â€Å"primary activities† include: inbound logistics, operations (production), outbound logistics, marketing and sales (demand), and services (maintenance). The â€Å"support activities† include: administrative infrastructure management, human resource management, technology (R&D), and procurement. The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. 4. Determining the Marketing Mix †¢ The set of controllable variables that will accomplish the marketing objectives: †¢ Product strategy †¢ Place (distribution) strategy †¢ Promotion (communication) strategy †¢ Pricing strategy Product Strategy †¢ Portfolio of Products – Flavors, colors, variants, blends, genres etc – Fits your strengths and weaknesses – Provides acceptable risk/return trade off – Meets needs of a particular customer segment Quality – No. 1 versus No. 2 – †¢ Service – Timely custom operations – Pre-sorting of grain or livestock quality †¢ Volume – Large and small quantities – Guaranteed volumes (contract) Example: McDonald’s Product Package †¢ Food †¢ Fast service †¢ Fun for the kids †¢ Variety â € ¢ Non-smoking †¢ Consistent product Place/Distribution Strategy †¢ Location – Delivery to multiple points Promotion Strategy †¢ Advertising – Creating TVC, Radio copy, Print ads, outdoor/hoardings ad, Posters, brochures and other advertisements on the products – Creating a logo †¢ Personal Selling Telling your customers how you create value – Having lunch with the corporate customer/vendor †¢ Public Relations – Being a good neighbor – Being involved in the community – Open house days Price Strategy Price is the cost the customer must bear in order to obtain the product. It includes: †¢ list price †¢ discounts †¢ allowances †¢ payment period †¢ credit terms Pricing Methods †¢ Value-Based Pricing – Set price based on buyers’ perception of value (rather than on the seller’s costs) †¢ Cost-Based Pricing – Add a standard markup to the cost of the pr oduct †¢ Competition-Based Pricing Set price based on following competitors’ prices 5. Financial Analysis and Budgeting †¢ Estimate the demand given the pricing and promotion strategy. †¢ Determine expenses associated with production and marketing. †¢ Determine anticipated cash flows. †¢ Will strategy cash flow? When? †¢ What are the critical assumptions of the financial analysis and what are the impacts of changes in those assumptions? 6. Implementation and Control †¢ Focus attention of everyone on delivering what the customer wants – Management of people – Monitoring and control Good luck!