Chapter 2: Developing Marketing Strategies and a Marketing Plan PDF

Chapter 2 Developing Marketing Strategies and a Marketing Plan © 2023 McGraw Hill Limited 2-1  Chapter 2: Developing Marketing Strategies and a Marketing Plan...

Chapter 2 Developing Marketing Strategies and a Marketing Plan © 2023 McGraw Hill Limited 2-1  Chapter 2: Developing Marketing Strategies and a Marketing Plan LEARNING OBJECTIVES LO1 Define a marketing strategy LO2 Describe the elements of a marketing plan LO3 Analyze a marketing situation using a SWOT analysis LO4 Explain how a firm chooses what consumer group(s) to pursue with its marketing efforts LO5 Outline the implementation of the marketing mix as a means to increase customer value LO6 Describe how firms grow their businesses © 2023 McGraw Hill Limited 2-2  Looking for Opportunities ⚫ PepsiCo finds opportunity in the growing groups of consumers who search for healthy options ⚫ They also pursue value through novel packaging, such as smaller packages to help consumers limit their calorie or sodium consumption. ⚫ Desirous of sustainable sourcing ⚫ Such versatility and diversity represent key strengths of the broad corporate brand. © 2023 McGraw Hill Limited 2-3  What is a marketing strategy? Marketing strategy identifies: a firm’s target market (s) a related marketing mix –the four P’s and the bases upon which the firm plans to build a sustainable competitive advantage Leads to sustainable competitive advantage! © 2023 McGraw Hill Limited 2-4  Sustainable Competitive Advantage Strong brand Innovative capabilities Extensive distribution network Loyal customers © 2023 McGraw Hill Limited 2-5 Developing Customer Value Macro Strategies for Developing Customer Value © 2023 McGraw Hill Limited 2-6  Customer Excellence Retain loyal customers Provide outstanding customer service © 2023 McGraw Hill Limited 2-7 Operational Excellence Efficient operations Strong Excellent supplier supply chain relationships management © 2023 McGraw Hill Limited 2-8  Product Excellence High perceived value + Effective branding and positioning © 2023 McGraw Hill Limited 2-9  Locational Excellence Starbucks The three most important things in retailing are location, location, location. Tim Hortons © 2023 McGraw Hill Limited 2-10 Multiple Sources of Advantage Multiple approaches: Customer value Customer service Customer relations Great prices Good service = Good value © 2023 McGraw Hill Limited 2-11 Developing a Marketing Plan © 2023 McGraw Hill Limited 2-12  Step 1: Define the Business Mission & Objectives Defining the Mission Tim Hortons states: “We work hard to deliver the highest- quality products and services and strive to be a leader in everything we do. It’s that simple.” © 2023 McGraw Hill Limited 2-13 Another example: non-profit The Heart and Stroke Foundation mission: Promote health. Save lives. Enhance recovery. © 2023 McGraw Hill Limited 2-14  Step 2: Conduct a Situation Analysis (using SWOT) Environment Evaluation Positive Negative Internal Strengths Weaknesses Superior resources and capabilities Little or no brand recognition Superior management, marketing, technical talent Lack of financial resources Strong brand Lack of other resources and capabilities Superior product offerings Lack of marketing, management, and technical talent Extensive marketing reach Limited market reach or distribution network Wide distribution networks (national/global) No proprietary technology Strong financial resources Poor location Excellent geographic location Limited customer base or loyalty Proprietary technologies/intellectual property Lack of credibility Strong base of loyal customers External Opportunities Threats CDSTEP changes that offer opportunities for the Political or regulatory changes (e.g., new laws affecting firm to serve new markets with existing products business or products) and/or pursue completely new market New entrants into the industry or market opportunities New technology that could render existing technology Existing firms exit the market because of financial or or business practices obsolete other difficulties (i.e., reduced competition) Natural or human-made disasters Acquiring another firm and gaining market access, Recession or economic downturn that affects new customers, new technology and expertise, and consumers’ purchasing power and confidence financial resources Changes in sociocultural or demographic trends © 2023 McGraw Hill Limited 2-15  Step 3: Identify and Evaluate Opportunities by using STP Segmentation Targeting Positioning © 2023 McGraw Hill Limited 2-16  An example: Hertz Market Segmentation Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segments Single thrill Business Environment Families Commercial seekers and customers ally customers gear heads and families conscious on vacation who prefer a customers luxurious ride Adrenaline Prestige Green SUV/ Commercial Collection Collection Collection crossover/4 van/truck ×4 Cars Offered Corvette ZHZ Infiniti QX56 Toyota Prius Toyota Rav 4 Ford cargo van Chevrolet Cadillac Ford Fusion Ford Explorer Camaro Escalade © 2023 McGraw Hill Limited 2-17 Step 4: Implement Marketing Mix and Allocate Resources © 2023 McGraw Hill Limited 2-18 Product and Value Creation How does Dyson deliver value based upon the products it creates? © 2023 McGraw Hill Limited 2-19 Price and Value for Money Exchange: product = money Customer perception of value Price is only a part of value! © 2023 McGraw Hill Limited 2-20 Place and Value Delivery Product must be readily accessible When and where the customer wants it Why is this retailer growing? © 2023 McGraw Hill Limited 2-21  Promotion and Value Communication Marketers communicate the value of their offering, or the value proposition, to their customers through a variety of media, including: ⚫ Television ⚫ Radio ⚫ Magazines ⚫ Sales force ⚫ Internet © 2023 McGraw Hill Limited 2-22  Step 5: Evaluate Performance by Using Marketing Metrics Outcomes need to be evaluated. Metrics are used to explain why things happened and to project the future. In particular: ⚫ Who Is Accountable for Performance? © 2023 McGraw Hill Limited 2-23  Evaluate Performance by using Marketing Metrics It can be difficult to find one measure to evaluate performance. ⚫ Performance Objectives and Metrics – hard to find a single metric ⚫ Financial Performance Metrics ⚫ Social Responsibility Performance Metrics © 2023 McGraw Hill Limited 2-24  Strategic Planning Is Not Sequential The actual planning processes can move back and forth among the five steps in the marketing plan due to environmental forces. © 2023 McGraw Hill Limited 2-25 Growth Strategies © 2023 McGraw Hill Limited 2-26  Market Penetration ⚫ Existing marketing mix ⚫ Existing customers Market penetration refers to the strategy of increasing the market share of an existing product within its current market. This can be achieved through various methods, such as lowering prices, increasing advertising, expanding distribution channels, or improving the product. Example: Apple iPhone: Apple's iPhone is one of the most popular smartphones globally. Despite already having a significant market share, Apple often employs market penetration strategies to further increase its dominance in the smartphone market. © 2023 McGraw Hill Limited 2-27  Market Development Strategy ⚫ Existing marketing offering ⚫ New market segments (domestic, international) not currently being served © 2023 McGraw Hill Limited 2-28  Product Development ⚫ New product/service ⚫ Current target market © 2023 McGraw Hill Limited 2-29 Diversification ⚫ New product/service ⚫ New market segment not currently being served © 2023 McGraw Hill Limited 2-30