Lecture 2

• Business planning and strategic planning are important in marketing.
• Planning determines how a business will operate.

Business Planning

• Business planning forms the base for an organization's strategies and tactics.
• Planning helps establish the best approach to meet organizational goals.
• It is a continuous process which identifies objectives and determines actions.
• Planning sets up a blueprint for all members of the organization.

Marketing Planning

• Marketing planning includes:
  • Repetitive, key marketing messaging
  • Advertising objectives
  • Communication/PR objectives
• Marketing plans are also focused on:
  • Sales objectives
  • Brand awareness objectives
• Marketing planning is a key element, that helps a corporation achieve growth, market share, and EBITDA goals.
• A large part of marketing planning is on building/maintaining customer relationships.
• Establishing long-term, cost-effective relationships with customers & suppliers.
• Those that benefit are the end product, customer, suppliers, component manufacturers, and process participants.
• Strategic planning determines primary objectives of an origination.
• Strategic planning adopts directions for decision makers that will achieve broad objectives.
• Tactical planning implements detailed activities in the strategic plan.
• Tactical planning focuses on specific, short-term actions of the planning process.

Planning at Different Management Levels

• Top Management
  • Focuses on strategic planning.
  • This includes organization-wide objectives, fundamental strategies, long-term plans, and total budget.
• Middle Management
  • Emphasizes tactical planning.
  • This includes quarterly/semiannual plans, business unit budgets, and divisional policies and procedures.
• Supervisory Management
  • Involves operational planning.
  • This includes daily/weekly plans, unit budgets, departmental rules and procedures.

Marketing Planning Process

• The first step is defining the organization's mission and objectives relating to company goals.
• A mission statement differentiates one company from another and helps define the company.

Example Mission Statements

• Sephora's mission is to be known as "The beauty authority".
• IBM's mission is to be "Welcome to the decade of smart”.
• Pokémon's mission is to "enrich both the real world and the virtual world with the Pokémon characters".
• Nintendo of America's mission is to improve their products and services by listening to their consumer base.

Goals and Objectives in Marketing

• Goals and objectives of the board of companies will change over a specific amount of time
• A goal describes a destination.
• An objective measures the progress to that destination.
• Goals are normally longer term.
  • Example: Build to #2 market share position within 3 years
• Objectives can be short to mid-term.
  • Example:
    • Generate a +15% profit over the next 12-month period
    • Add 5 new points of distribution by mid-term.

Factors Influencing Marketing Strategies

• According to Harvard scholar Michael Porter, there are 5 forces.
  • These help determine an organization's ability to effectively compete in the market.
  • Potential of new entrants
  • Bargaining power of buyers
  • Bargaining power of suppliers
  • Rivalry among competitors
  • Threat of substitute products
• Marketing strategy is implemented by selecting and satisfying targeted markets through the marketing mix.
• Measuring performance ensures objectives are met.
• Impacts are not determined if marketing is not measured.

SWOT

• SWOT is an imperative element to understand the competition
• SWOT stands for Strengths, Weaknesses, Opportunties and Threats
• Managers use SWOT to view critical/ longer term action
• SWOT compares internal strengths/weaknesses and external opportunities/threats
• SWOT tells the company to determine a "go" or "no go".

Marketing Mix and Target Markets

• There are marketing mix elements, also known as the 4 Ps:
  • Product.
  • Place (distribution).
  • Promotion.
  • Pricing.
• Blending these four strategic elements fits a specific's needs and preferences.
• A target market is the demographic that a company aims marketing efforst and R&D towards.
• Walmart's target market is "Mom".
• The Hispanic population is the largest ethnic group in the US.

Marketing Mix Variables

• Marketing mix variables are more easily controlled than Environmental Framework

Product Strategy Factors

• Factors include:
  • Deciding goods/services to offer.
  • New-product development.
  • Product positioning.
  • Lifecycle of a product.
  • Package design.
  • Customer service.
  • Brand names, trademarks, patents, and warranties.
• Place strategy involves:
  • Deciding which classes of trade to sell your products.
  • Ensuring you can service the classes of trade.
• Place strategy does not involve:
  • Modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels
• Distribution strategy is about product placement, not supply chain.
• Promotion strategy links sellers (companies) and buyers (retailers and customers) to push growth and fight competition.
• Companies use product promotion through sales people and advertisements.
• Many companies use multifaceted marketing campaigns.
• Pricing strategy focuses on profitable and justifiable prices.
• Value is created for customers and shareholders through good pricing strategies.
• Customer relationships with a company, suppliers, and the end consumer are strenghened by pricing.
• Pricing strategy operates under federal regulation and scrutiny.

Business Portfolio Analysis

• Business portfolio analysis evaluates a company’s products and divisions to determine its strongest and weakest aspects.
• Companies must know when to enter/leave a market (industry or category).
• This is focused around marketing research, the most difficult role within marketing.
• General Electric had a mantra to be a top three market share leader, or to leave the business.

Strategic Business Units (SBUs)

• SBUs are key business units within diversified companies
• Each SBU:
  • Has its own structure, resources, objectives, and competitors
  • Pusues its own mission and develops its own plans independently
• SBUs roll into a P & L statement
• Companies will redefine SBUs as market conditions dictate

The BCG Matrix

• Developed by the Boston Consulting Group
• A market share/market growth based matric
  • Plots market share against market growth potential
• It defines a product or category's place and whether to invest
• It needs detailed industry analysis to make sure companies invest resources effectively

Questions cover the marketing mix, target market identification, distribution strategies, the marketing environment, and the relationship between business planning and organizational strategy. The focus is on marketing plans, objectives, and overarching company goals.