Marketing Challenges in the New Generation

Marketing Challenges in the New Generation

• The global landscape is changing and presents challenges for marketing professionals, rendering older strategies obsolete.
• The world economy has shifted from American and European dominance to Asian countries.
• Countries are now contending with economic competition due to these economic shifts.

Rapid Product Globalization

• The General Agreement on Tariffs and Trade (GATT) allows products to enter member countries with reduced tariffs and taxes.
• Reduced tariffs and taxes makes global products more widely available to consumers.
• Countries can expand their production and marketing market coverage, but the marketing system becomes more complex.
• Both small and large companies must adapt new marketing strategies to compete effectively.

Rapid Change in Global Economy

• The purchasing power of currency has changed over time.
• Unemployment is caused by the increasing population and scarcity of job opportunities.
• Wages have increased, there has been no equivalent increase in purchasing power, and the cost of living has risen
• Marketing strategies have evolved from products in large packaging like bottles to smaller containers like sachets.
• The use of computers and modern production methods has led to job losses for unskilled labor, contributing to unemployment.

Social Problems and Marketing Ethics

• Pollution caused by new products is an issue for marketing professionals.
• Improper waste disposal has caused flooding in areas like Metro Manila and other developing cities.
• Environmental pollution necessitates stricter demands on marketing to modify packing materials, which increases costs for consumers.
• Advertising and promotional ethics have eroded cultural and moral values in the Filipino context.

Changing Marketing Strategies

• Modern communication technologies have transformed the marketing landscape.
• The modern telemarketing system has greatly expanded product distribution.
• Expedited delivery systems have changed the marketing system, so consumers do not need to physically go out to purchase goods they want.
• Products can now be sold globally via the internet.
• Advertising and promotional activities must adapt to the evolving marketing landscape.
• Rapid communication networks enable product delivery to consumers quickly, within days or hours.

Strategic Planning and Forecasting

• Marketers can anticipate and act responsively to business and marketing difficulties by using sound planning.

Planning Overview

• Formal planning identifies and decides upon marketing activities.
• It recognizes customer wants and anticipates their future needs.
• Formal planning benefits both small and large organizations, encouraging systematic thinking and leading to better coordination with clearer standards.

Annual Plan

• Identifies the current marketing situation and sets goals to address the current marketing environment.
• Involves creating an annual marketing budget that supports the action program, which will be implemented.
• Establishes control mechanisms to evaluate performance.

Long-Range Plan

• Covers a period of five years or more, setting the company's long-term direction, which will be updated annually.
• Target goals are futuristic, anticipating the company's position.
• Budgets and targets are defined within a five-year framework.

Strategic Planning Process

• Anticipates and develops long-range objectives.
• Maintains strategic fit between the company's goals, capabilities, and the changing marketing environment.
• This encompasses all planning activities to define vision, mission, company portfolio, and attendant strategies.
• Targets are set with detailed strategies to achieve specific goals.

Strategic Company Planning

• Involves defining the organization's mission and vision, setting long-range goals, and creating brand strategies.
• Provides direction for all functional areas, including production, finance, human resources, research and development, and marketing.

Four Essential Steps in Company Strategic Planning

• Define the organizational mission.
• Analyze the marketing situation.
• Set the organizational objectives.
• Define the strategies to achieve the desired objectives.

Strategic Marketing Planning

• Higher management sets the goals and strategies for the marketing organization.
• The company-wide planning process involves all executives in roundtable discussions about the company's direction, targets, and strategies.

Five Steps in Marketing Planning

• Conduct situation analysis.
• Develop specific marketing objectives.
• Determine product positioning and establish differential advantage.
• Select target market and measure market demand.
• Design a strategic marketing mix.

Strategic Annual Planning

• Short-term plans are made on an annual basis.
• Strategic marketing plans created by top executives are developed into achievable steps within a shorter one-year period.
• Marketing managers prepare annual budgets, analyze target markets, and develop specific marketing strategies.

Responsibilities of Managers in Annual Planning

• Define annual specific target objectives.
• Develop measurable and achievable plans.
• Develop strategies and tactics to achieve the plans.
• Prepare annual budgetary requirements.
• Assign responsible personnel to carry out the plan.
• Develop evaluation strategies for implementation.

Factors to Consider in Preparing Annual Planning Strategies

• Managers aim to generate reasonable profits for their organizations.
• Factors must be understood to ensure the program's success.
• The financial aspects of the marketing program, including promotion, advertising, and distribution channels, must be covered.

Tips for Better Results

• Analyze Previous Year Performance
• Learning comes from experience and previous year performance must be analyzed.
• Analyze the allocation of resources and the success or failure in the implementation of the program objectives.
• Managers must bear in mind that Variances occur and must be corrected when planning new programs.
• Set Accurate Timelines
• The timing of the season of the year is an important factor to consider.
• The marketing industry must consider, Christmas, New Year, fiestas, wedding months, Valentine's Day or many occasions in the local calendar.
• The retail or wholesale business must allocate needed resources to finance inventory requirements and their marketing strategies to capture the need of the season

Develop Distribution Strategies

• Marketing channels and promotional programs should be revised to offer a fresh perspective.
• New activities like coupons, raffles, discounts, special prizes, and other strategic campaigns should be developed annually to attract more customers.
• Social media and emails can be used as additional campaign strategies.

Create a Workable Financial Budget

• Budgeting resources requires time and careful analysis.
• Marketing success depends on proper fund allocation.
• The expected Return On Investment (ROI) must exceed program expenses.
• Promotions budgets should increase sales and develop more customer loyalty.

Contents of the Annual Marketing Plan

• Executive Summary
• Contains the program's annual goals prepared by higher management to guide junior executives.
• Details of the program are stated in other sections.

Situation Analysis

• Examines the relevant events from the previous year's program in detail.
• Managers of each brand or strategic business unit (SBU) analyze implementation variances and budgetary expenditures.
• Includes past, present, and future plans regarding prevailing conditions, and the future of the marketing industry.

Program Objectives

• The program objectives are specific and detailed goals.
• Derived from the annual program objectives prepared by top executives.
• They contain specific program objectives and the activities necessary to carry out the program successfully including timetable and the budgeted requirements.

Program Strategies

• The strategies must specify the target market in terms of the marketing mix.
• The marketing mix strategies include product, price, the place of distribution and the promotional programs necessary to carry out the annual plan

Program Tactics

• Differ from strategies and cover action-oriented activities.
• Tactics are divided into action plans answering what to do, who is responsible, and how to carry out activities.

Financial Schedule

• The program need financial support.
• The financial program defines sales targets, expenses, and profitable index.

Program Timetable

• All programs must contain specific timeframes.
• Managers should prepare a time chart or diagram for their activities.

Evaluation Procedure

• The evaluation procedure measures the total completion of a program.
• Successful programs are measured by sales volume, profit index, and marketing personnel performance.
• Evaluation results guide program revisions and re-planning.

Forecasting Future Demand

• Accurate demand forecasting is the cornerstone of successful marketing planning.
• Demand forecasting establishes product sales for the future or a one-year period.
• Marketing managers estimate market share for their product, projecting its competitiveness.
• Demand forecasting guides strategic plans, annual marketing budgets, and allocation of resources for marketable goods.
• The finance department prepares a budget to sustain marketing needs.
• Accurate and must be properly defines the target market is essential.

Defining the Market

• The modern town and city, has superseded the old definition of the market as "a physical place where consumers meet."
• The the economics definition has broadened how the market is defined.
• A market is comprised of buyers, while the company handling distribution is comprised of sellers.
• Market size depends on the number of buyers of a particular product or service.
• MARKET POTENTIAL quantifies what the total sales volume all organizations selling a product during a specified time achieve under ideal sales condition.
• SALES POTENTIAL defines just what portion a market share the marketing organization anticipates to penetrate.

Market Share

• Market share is a proportion of sales of an organization compared to the total market.
• A company might set a plan towards acheiving 50% of the share for the market.
• A sales forecast is an estimate of probable sales an organization hopes to achive over a period of a year.
• It is prepared by determining the total market along with the competitors.

Methods of Forecasting Demand

• Top-Down Approach
  • Performed mainly by top management through analysis of market conditions.
  • This approach entails developing a general economic forecast, determining the market potential, and measuring the share of the current profit.
• Bottom-Up Approach
  • Involves management collecting info directly from customers.
  • Gathers info from all salespeople exposed to the market and analyses previous sales.

Forecasting

• The art of estimating future demands by anticipating wants under a given set of circumstances
• Key factor in the success of product sales, crucial because demand is always unstable
• Unstable market results in accurately and elaborately designed procedures to follow when estimating demand

Environmental Forecasting

• Projects the country's inflation rate, which determines pricing strategies.
• Employment situation affects product demand, so those who are employed can spend for their needs and wants.
• Market demand is often affected by government spending and taxes.

Marketing and Industrial Forecasting

• Market forecasting is the art of determining peoples needs and wants.
• Gathering info from people to see what they do.

Company Sales Forecasting

• Assures that brand of products in the market are present
• Marketing people understand the audience as precieved by their customers.
• Customer needs change over time.
• Considers the trends of consumer spending habits and more.

Acronyms

• ROI - Return On Investment
• SWOT - Strengths, Weaknesses, Opportunities, Threats
• GATT - General Agreement In Trade And Tariffs
• SBU - Strategic Business Unit