Transcript Principles of Marketing (Mkt571)

Topic 2: Company and Marketing Strategy
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Learning Outcomes
Be able to set measurable objectives
o Understand three dominant planning philosophies: Synoptic
[Textbook] Planning that emphasises formal process, structure and
organised direction. Incremental Planning that emphasises informality
and gradual adaptation. Critical Point Planning that combines the best of
the previous two approaches.
o Be able to explain a practical Business and Marketing Planning method
that uses Planning
Gap Analysis to help select the firm's Marketing Strategy.
o Understand the four primary Marketing Strategies: Market Penetration,
Market Development Product Development and Diversification.
o Be able to then understand the tight link connecting the firm's overall
Marketing Strategy to its day-to-day Marketing Tactics in the form of
the Marketing Mix.
o Describe various common means of implementing and controlling the
firm's Marketing
Plan with particular emphasis on Marketing Metrics and Key Performance
Indicators (KPI’s)
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Critical Point Planning: 1st described by Dutch researchers
in late 1990’s after studying Dutch SME’s.
Combines best qualities of textbook and Incremental
Planning.
Most of the time the business develops and implements
plans on an informal basis [incrementally].
However when faced with a major issue or decision [a
‘Critical Point’], management have the awareness and
expertise to adopt a highly structured ‘Textbook’ planning
approach – which does a lot to ensure that the best
possible planning decisions are taken through carefully
considered, properly researched & formally organised
planning process.
Once the Critical Point has been resolved the firm switches
back into its normal, informal Incrementalist mode.
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Coined by H. Igor Ansoff (1957) who provided
the four growth strategies of a business:
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Market Penetration
Product Development
Market Development
Diversification
Ansoff used SYNERGY to explain the idea that there
must be a logical “common thread” between
strategy, strengths and capabilities that are part
of the business today and the new strategy
selected for the future.
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Ansoff reasoned that the only way a new
strategy makes commercial sense is if it adds
more value to the existing business than the
investment cost of taking up the new
strategy.
Therefore Ansoff called synergy the 2+2=5
effect i.e. the existing strategy and strengths
plus the new strategy and its fresh
commercial opportunities yields a greater
result than the simple sum of the parts.
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A detailed plan specifying tactical marketing
mix and marketing support activities,
budgets and accountabilities.
It usually spans an annual cycle and is broken
down by month.
The primary means of setting priorities and
exercising control over marketing actions.
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The process of turning plans and strategies
into concrete results and action.
Many organisations are very good at
developing marketing plans but their
performance does not improve because they
are chronically bad at implementation.
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Because implementation problems arise when
a strategy is actioned, it is strongly
recommended that implementation issues are
addressed upfront in the planning process so
that the strategy itself can be developed
around known implementation issues: that
way a feasible and realistic strategy has an
improved chance of being developed e.g.
SAS.
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There are only four ways to grow a business
1. Market Penetration
2. Product Development
3. Market Development
4. Diversification
◦ Each way is called a strategy
◦ Choosing a strategy is a big decision – total
commitment
◦ Very similar firms can choose differing strategies
◦ SOME FIRMS DON’T HAVE A STRATEGY
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Knowing when to stick with your strategy and
when to change is vitally important
Strategic “Windows” – Timing
Strategic Resources – these must be
◦ Adequate
◦ Concentrated
◦ Competitive
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ANSWER THE FOLLOWING:
 Why are we here?
 What’s this business supposed to do for us?
 Why does it exist?
 What’s its purpose? Why are we putting
ourselves through this everyday?
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Our long term purpose is …………… (Vision)
◦ Sell off to retire? Pass onto to Kids? Make a fortune?
Have a lifestyle? What????????????????
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Where have we come from? (How did we end
up here?)
LIGHT
DARK
Successes
Values
Beliefs
Attitudes
Capabilities
Failures
Mistakes
Fears
Tensions
Unresolved
Lessons Learnt: Values & Culture, Options
open, Avenues closed, Open spaces, Out of
bounds!
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Usually a ‘full on’ exercise!
Honest, objective and candid
Triangulate your data
Expect systems problems with SME’s
Information Gaps – Customers, productmarket performance, management
accounting
Immediately obvious issues
Less obvious issues
Team-based assessment – Strongly
recommended!
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“Turning our Strategy into Action”
[Implementation]
1. Market Penetration
2. Market Development
3. Product Development
4. Diversification
Plus: Productivity Projects and Cost Reduction
Actions
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MARKETING PLAN FOR YEAR 1
 Product Actions
 Pricing Actions
 Promotion Actions
 Distribution Actions
 Process Actions
 People Actions
 Physical Evidence Actions
 Marketing Support Actions (e.g. Marketing Research Project)
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Set out for each month e.g. wall planner
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Set budget for each action
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Set ‘Start’ & ‘Deadline’ for each action
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Set Accountability for each action
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KEEP IT SIMPLE, FOCUSED & PRACTICAL
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Don’t be ‘Plan Bound’ – Things can change
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Key Performance Indicators, also known as KPI or
Key Success Indicators (KSI), help an organisation
define and measure progress toward
organisational goals
These are usually long term; why?
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Extracted from Management.about.com (2012)
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If the company objective was to be a good
employer within the industry, how do you
think I would measure success?
Hint (Turnover Rates)
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