part four: managing marketing CHAPTER 12 MARKETING PLANNING an opening challenge Your uncle runs a shoe factory that is struggling to compete with cheaper, developing-world manufacturers. He knows you’ve done a business course so he invites you to a management meeting to discuss the way forward. Do you have anything to contribute? agenda • • • • • • organising for marketing marketing planning business mission and marketing objectives marketing strategy marketing operations evaluation and control functional organisation board finance HR mktg ops geographic (regional) head office Scotland Wales function or product/brand N. England S. England product/brand board frozen food functions baked goods confectionery pet food matrix organisation marketing head ug studies head pg studies research degrees HR accounting how to plan AQ – re-set figure type blocks to marketing planning • • • • • • hierarchical management structures vertical communications horizontal communications turf battles power struggles functional silos McKinsey 7S model AQ – re-set figure type and enlarge figure seven key planning questions 1. where are we now? 2. how did we get here? 3. where will we be (if we continue to do the same things)? – identifies the strategic gap 4. 5. 6. 7. where do we want to be? how are we going to get there? are we getting there? have we arrived? the strategic gap objective strategic gap current projection planning period marketing planning where are we now? marketing analysis where do we want to be? marketing objectives how are we going to get there? marketing strategy and tactics are we getting there? marketing evaluation and control have we arrived? marketing analysis e.g. PRESTCOM e.g. capability analysis or Porter’s five forces e.g. segmentation e.g. SWOT Porter’s five forces power of suppliers industry attractiveness barriers to entry barriers to entry • • • • • • costs power of existing brands market size laws and regulations unavailability of key resources existing companies with significant economies of scale • competitor reactions threat of substitutes • the pricing of substitute products • switching costs • loyalty levels bargaining power of buyers customers (buyers) are powerful when: • there are few large buyers in the marketplace • products are commoditised or standardised • the company is not a key supplier from the customer’s perspective bargaining power of suppliers suppliers are powerful when: • there are few alternative sources of supply • suppliers could integrate along the supply chain and so become competitors • there are high switching costs • the company’s business is not key to the supplier inter‐rivalry of competitors the intensity of rivalry may depend on: • • • • • • number of competitors cost structure differential advantages of products/brands switching costs competitors’ strategic objectives exit barriers a good business mission statement • identify the company’s philosophy – i.e. its approach to business • specify its product–market domain • communicate its key values • be closely linked to critical success factors typical marketing objectives • increase market/brand share • become no. 1 brand in xxx market • launch new product • move into new market • increase awareness • re-position as… all objectives should be SMART! SMART specific measurable achievable relevant timed marketing strategy • has a broad view of how objectives will be reached • incorporates: – branding, targeting, positioning, growth, competitive stance • breaks down into strategies for individual marketing mix elements • follows on from objective setting • includes a framework for more detailed plans generic competitive strategies niche broad segments stuck in the middle cost focus (Porter, 1985) differentiation cost focus differentiation Ansoff’s matrix existing market penetration market development product development diversification products new/ related existing new/related markets reasons to trade in overseas markets • • • • • • as a growth strategy as part of a competitive strategy risk spreading the globalisation of markets to offload excess capacity to extend the product life cycle market selection criteria • • • • • • • • market’s potential for profit, sales legal system market accessibility marketing infrastructure product life cycle potential economies of scale strength of existing competitors level of risk market screening • company’s experience of similar markets • cultural matches – e.g. language • opportunities for standardisation – and thus reduced costs international strategy: standardisation drivers: • economies of scale • consumer mobility • communications technology • cost of investment • falling trade barriers • cultural insensitivity restrainers: • • • • • • • • income levels culture and language climate differing use conditions governments local market conditions local skills company history and operations marketing implementation (tactics) money men minutes implementation: McKinsey’s seven Ss structure strategy systems shared values skills style staff typical marketing plan headings 1. 2. 3. 4. 5. 6. 7. 8. executive summary current marketing situation objectives target markets marketing strategies marketing programmes resources and budgets implementation controls evaluation and control act measure correct compare plan summary • plans must be based on sound analysis – understand the market • plans should be flexible and monitored – the market changes • strategy is designed to meet objectives • objectives should be SMART • tactics are the detail of the strategy – how it will be implemented reference Porter (1985) – detail to be added (AQ)