Post on 18-Feb-2016
description
SME BUSINESSLINK SEMINAR PRESENTATION
HIGH MARKETING THAT BRINGS RESULTS –
2011
INTRODUCTIONGODFREY J. DUBE - MBA, MA Mkt, BBA Mkt, PGDipM, PGDMS, PGCM, Grad Dip MKT, CSM, CGLI, MCIM, MZIM, DBA Fellow,
President Marketers Association of Zimbabwe, MBCPhone 0775 502 173 , 0772 402 466, email godfreyjdube@yahoo.co.ukLecturer- MBA marketing NTU, CIM, WUA, ZIM.
INTRODUCTION
• Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others”
• Doyle (2002:36)
INTRODUCTIONDelivering Value requires :• Understanding customers (their entire purchase and
consumption experience) + predicting future needs & wants
• Understanding and exploiting sources of competitive advantage to be better than the Competition
• Understanding own organisation; costs, operations, profitability
= A market oriented or customer-centricbusiness
INTRODUCTION
Traditional View of Marketing•The right product•At the right price•At the right place•With the right communications support
Based upon the 4Ps of the Marketing Mix…
INTRODUCTION
• Marketing Concept =Customer Orientation + Integrated Effort + Goal Achievement
Achievement of corporate goals through meeting and exceeding customer needs better than the competition
– Customer OrientationActivities focused on providing customer satisfaction
– Integrated EffortAll staff accept responsibility for creating customer satisfaction
– Goal AchievementBelief that corporate goals can be achieved via customer satisfaction
Jobber,1995)
IntroductionMarket Orientation Defined
"the organizational culture that most effectivelyand efficiently creates the necessary behavioursfor the creation of superior value for buyers and,thus, continuous superior performance for thebusiness"
Narver & Slater (1990:20)
Strategic Marketing
Marketing Strategy 1:Analysis, Objectives &
Strategic Choices
May 2011
STRATEGIC MARKETING• Strategic Marketing“… is concerned with adapting the organization to a
changing environment. Organisations succeed when they meet the needs of customers more effectively thancompetitors. The problem is that the needs of customers change, new technologies appear and competitors generally get better. As a result, successful companiesdecline if they do not continually change and adapt.”
Doyle (2002:92)
STRATEGIC MARKETINGThe Marketing Planning Process• Business mission• Marketing audit• SWOT analysis• Marketing objectives• Core strategy• Competitive advantage• Marketing mix decisions• Organisation and implementation• Control
Clarifying the Mission
Hooley, Cox & Adams (1992)
• POLITICAL/LEGAL– Regulation/deregulation– (Ideology, motivation) & stability– Attitudes towards competition, social responsibility,
environmental matters, customer protection– Legislation on the organisation, employment & wages,
profits, marketing tactics
Employment law, advertisingcontrols etc..
Futurepolicy?
Level of control?shape
MACRO-ENVIRONMENT
• TECHNOLOGICAL– Rate of change– Protection of innovation– Availability of technology
• ECONOMIC– Income & wealth (PDI)– Employment– Growth & demand– Interest & exchange rates
Personal DisposableIncome
All these affect PDI
The Internet isa good example
MACRO-ENVIRONMENT (2)
• SOCIAL– Culture– Demographics– Family & social patterns– Psychographics (Lifestyle, AIO)
• PHYSICAL– Social costs of consumption– Natural forces– Environment
All impact onnature ofdemande.g. needs
Social Responsibility
e.g. seasonality
MACRO-ENVIRONMENT (3)
MICRO ENVIRONMENT• Market
– size, growth rates, trends– market structure, critical success factors
• Customers– customer profile, choice criteria, when, where, how they buy,
benefits sought – buyer behaviour – influences (buying situation, personal and
social influences), involvement, trends– how they rate us against our competition (on product, price,
promotion & distribution)
• Competitors– actual/potential competitors, strengths/weaknesses– size, market share, profitability– entry barriers to new competitors, trends
Purchase importance(perceived risk)
CSFs - what it takes to besuccessful in this market
• Distributors– channel attractiveness, distribution decision
making unit, process, choice criteria– strengths and weaknesses, power changes– physical distribution methods, trends
• Suppliers– who they are, location– strengths and weaknesses, power changes,
trends
MICRO ENVIRONMENT (2)
• Operating results audit– sales, market share, profit margins, costs
• Strategy audit– appropriateness of marketing objectives– market segmentation– competitive advantage– core competences and resources– positioning– portfolio analysis
INTERNAL ENVIRONMENT
• Marketing mix audit– effectiveness of operational marketing
• Marketing structures audit– marketing organisation– marketing training– intra- and inter-departmental communications
• Marketing systems audit– marketing information systems (MIS)– marketing planning system– marketing control system
INTERNAL ENVIRONMENT (2)e.g. how well are brands built & maintained?
i.e. the overall framework
e.g. structure
The Marketing Audit
should aid evaluation by doing the following:
• describe current events• gather information that might affect marketing strategy• explore opportunities (and improve marketing strategy)• create database to aid evaluation of goals/ objectives
(Kotler - in Dibb et al, 1994)
• Operating results audit– sales, market share, profit margins, costs
• Strategy audit– appropriateness of marketing objectives– market segmentation– competitive advantage– core competences and resources– positioning– portfolio analysis
Internal marketing audit
• Marketing mix audit– effectiveness of operational marketing
• Marketing structures audit– marketing organisation– marketing training– intra- and inter-departmental communications
• Marketing systems audit– marketing information systems (MIS)– marketing planning system– marketing control system
Internal marketing audit (2)e.g. how well are brands built & maintained?
i.e. the overall framework
e.g. structure
Situation analysis then allows organisation to consider…
1) Likelihood of change in the marketplace?
2) The drivers of change?
3) Likely response of main rivals? What would their approach do to their overall positioning?
4) What response can organisation make realistically? How to develop weaknesses, turn into strengths, threats into opportunities?
SWOT
• Strengths• Weaknesses• 0pportunities • Threats
Objectives
Consider:-• Are they compatible?• Are they consistent?• Nature of business• Organizational culture
• Are they SMART?– Specific– Measurable– Achievable – Realistic – Timely
• More detailed than the mission statement• Derived from the mission or strategic vision
Objective setting (general vs specific)
• Optimise sales
• Gain a foothold in the Zambian market
• Ensure target market is aware of product/service Increase sales by 5% per annum in 2011 and 2012
Achieve 2% market share of target market in Zambia by end of 2011/12
Increase awareness from 5% to 7.5% of target market in Harare by the end of 2011/12
Marketing strategies• means by which marketing objectives achieved• strategic choice:
– understanding the bases upon which strategies are built, – generating options for evaluation and selection
• focus: – definition of target markets, – competitive advantage, – future direction,– marketing mix decisions for each market segment
Jobber (2006)
Generic Strategies
COSTLEADERSHIP DIFFERENTIATION
FOCUS
Low Cost Differentiation
Industry
wide (broad
)Singlesegment (narrow)
SOURCE OF COMPETITIVE ADVANTAGE
COM
PETI
TIV
ESC
OPE
Ansoff’s Growth Matrix
PresentProduct
New
Present
NewMar
ket Market
penetration
Marketdevelopment
Productdevelopment
Diversification
Growth Strategy• MARKET PENETRATION There are four main ways of increasing sales of
existing products to existing customers
Gaining more purchase and usage from existing types of customers
Update your services more frequently in order to stimulate extra sale
Increase advertising expenditureIntroduce new sales promotionsReduce prices
Growth Strategy
• MARKET PENETRATION Cont,Gain customers from competitorsReduced price incentivesIntroductory offersSales force incentivesRecruit sales/marketing people from
competitors
Growth Strategy• MARKET PENETRATION Cont,Convert non-usersPersuade distributors to stock more productsIncrease distributorsHave direct salesReduce loss of customers to competitors Build barriers restrict new rivals from entering
marketEnter a segment the rival has ignored
Growth Strategy
• MARKET DEVELOPMENTNew market segments
New distribution channels
New geographical areas
Growth Strategy• PRODUCT DEVELOPMENT Product modificationChange the product slightly to meet the different
needs of segments of existing customersDifferent quality levelsChange the product more drasticallyEntirely new productsNew product development (NPD)
Growth Strategy• DIVERSIFICATION New products for new markets Mergers/integration and acquisitions Horizontal Integration By a similar business or competitor Vertical integration Buy backwards or forward into the supplier or distributors Concentric Diversification Buy another business with technical or marketing
synergies Conglomerate Diversification Completely new/fresh challenge
Marketing Mix: Operational Marketing
MARKETING MIX
Marketing Elements – The 7Ps • Product• Price• Promotion – Personal selling, Sales promotion,
Advertising, publicity• Place
• People• Physical Evidence• Process
MARKETING MIX• Product ; A product (goods or services) in anything that
satisfies a need or want. It is not a ‘thing’ with features but a package of benefits
• Price; The price elements of the marketing mix is the only one which brings in revenue and price is influenced by many factors
• Promotion: Promotion is the element of the marketing mix over which the marketing department generally has most control- Advertising, sales promotion, personal selling, direct marketing and merchandising
• Place; Place deals with how the product is distributed and how it reaches its customers
MARKETING MIX• People. The attitude of staff, appearance,
internal relations, behaviour, accessibility of people, B2B contacts
• Process. Systems, production and operations, process of product/service delivery
• Physical Evidence. (S) Buildings, furnishings, lay-outs, goods associated with the service like carrier bags, tickets and brochures, ambience – the environment or atmosphere (P) packaging, store location, accessibility, merchandising, ins-tore display, point of sale materials, brochures, leaflets all below the line support
PLC strategies
Product
Price
Distribution
Advertising
Sales Promotion
Offer a basic product
Use cost-plus
Build selective distribution
Build product awareness among
early adopters, dealers
Use heavy sales promotion to entice trial
Offer product extensions,
service, warranty
Price to penetrate market
Build intensive distribution
Build awareness and interest in the
mass market
Reduce to take advantage of
heavy consumer demand
Diversify brands and models
Price to match or beat competitors
Build more intensive
distribution
Stress brand differences and
benefits
Increase to encourage brand
switching
Phase out weak items
Cut price
Go selective:phase out
unprofitable outlets
Reduce to level needed to retain hardcore loyals
Reduce to minimal level
Pricing Approaches
Cost-based pricing:
cost-plus (in manufacturing) and mark-up (in retailing)
Competitor-based pricing:
skimming; penetration pricing; predatory pricing
Customer-based pricing:
demand pricing; psychological pricing; discounting; product-mix pricing
Non-market-based pricing
Market-based pricing
Customer-based pricing
• Demand pricing (focuses on customer responsiveness to different price levels)
• Psychological pricing (relationship between price and quality perception)
• Discounted pricing (cash, seasonal, trade-in allowances, segmented)
• Product-mix pricing
Channels of distribution
Producer Consumer
Producer Retailer Consumer
Producer Wholesaler Retailer Consumer
Producer Agent Wholesaler Retailer Consumer
Promotion -marketing communications
Implementation & Control
Defining Implementation
“Marketing strategy concerns the issues of what should happen and why it should happen.
Implementation focuses on actions: who is responsible for various activities, how the strategy should be carried out, where things will happen and when actions will take place.”
Jobber (1998)
Key Issues
• IMPLEMENTATION– Success is dependent on the ability to translate a
marketing strategy into a series of practical & actionable steps (tactics)
• CONTROL– Success is maintained by continually monitoring
progress to ensure that the plan still fits the prevailing market conditions
Effective implementation
• Success is dependent on the ability to translate a marketing strategy into a series of practical & actionable steps (tactics)
• “THE ABILITY TO DO THINGS”– Capabilities, core competences in key functional area(s)
• “THE ABILITY TO GET THINGS DONE”– Having the required resources (resource allocation)– Support of key decision makers in the organisation – Interrelationships i.e. SBU-corporate relations– Cooperation of departments needed to implement the plan (e.g.
R&D and production)– Commitment of “front-line” individuals and departments (e.g.
marketing, sales and distribution)
Factors for the success of implementation
• Leadership• Marketing-oriented culture• Supportive, effective structure• Internal marketing• Resources• Evaluation and control procedures
Internal Marketing• Deals with internal customers - an important
stakeholder group
• Provides communication to help employees identify with corporate objectives - the common goal
• Marketing techniques can help to motivate staff and increase level of ‘involvement’
• Should precede external marketing
“A coordinated set of activities and policies designed to build employee relationships within the organisation and reinforce internal commitment to the marketing plan and to good customer service.”
Burk-Wood (2003)
“If the staff won’t buy it why should the customer?”
Barnes (1989)
“40% of customers stated that poor service was the main reason for switching to the competition.”
Blume (1988)
Internal Marketing
Why do we need it?
Internal Marketing can help by:• Focusing on the customer• Building employee knowledge• Encouraging cooperation & commitment to the
plan• Boosting pride in performance
Internal Marketing to Support Implementation
Wider conception of IM• It is NOT simply the application of marketing
concepts within the organisation• It should NOT be seen as a specialist function,
but should converge with, for e.g.:– HR development– strategic management – quality management– corporate communications
• It should be seen as an integrative process of internal relationship management
• To effect change, must involve many levels and departments in development of IM plan
Praise reward
promote advise
train discipline
Marketing Control SystemDecide marketing
objectives
Set performance standards
Locateresponsibility
Evaluate performance against standards
Take corrective/supportive action
Alter standards
Alter objectives