CHAPTER 12MARKETING PLANNING

part four: managing marketing

an opening challengeYour 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 N. England

S. England

function or product/brand

product/brand

board

frozen food

baked goods

confec-tionery pet food

functions

matrix organisation

marketing HR accounting

head ugstudies

head pgstudies

researchdegrees

how to planAQ – re-set figure type

blocks to marketing planning

• hierarchical management structures• vertical communications• horizontal communications• turf battles• power struggles • functional silos

McKinsey 7S modelAQ – 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. where do we want to be? 5. how are we going to get there? 6. are we getting there?7. have we arrived?

the strategic gap

planning period

strategicgap

objective

currentprojection

marketing planning

where are we now?

how are we goingto get there?

are we getting there?

have we arrived?

wheredo we want to be?

marketing analysis

marketing objectives

marketing strategy and tactics

marketing evaluationand control

marketing analysis

e.g. PRESTCOM

e.g. SWOT

e.g. capability analysisor Porter’s five forces

e.g. segmentation

Porter’s five forces

industry attractiveness

barriers to entry

threat of

substitutes

inter-rivalry of competitors

power of suppliers

power of

buyers

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 competitorsthe 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

SMART

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

(Porter, 1985)

broad segments niche

cost focus different-iation cost focus different-

iation

stuck inthe middle

Ansoff’s matrix

products

markets

existing

existing new/related

new/related

marketpenetration

marketdevelopment

productdevelopment diversification

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

• economies of scale• consumer mobility• communications

technology• cost of investment• falling trade barriers• cultural insensitivity

• income levels• culture and language• climate• differing use conditions• governments• local market conditions• local skills• company history and

operations

drivers: restrainers:

marketing implementation (tactics)

moneymenminutes

implementation:McKinsey’s seven Ss

sharedvalues

skills

strategy

style

systems

staff

structure

typical marketing plan headings

1. executive summary2. current marketing situation3. objectives4. target markets5. marketing strategies6. marketing programmes7. resources and budgets8. implementation controls

evaluation and control

plan

correct compare

measureact

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)