Basic Marketing, 13th edition

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For use with Shapiro, Wong, Perreault, and McCarthy texts. Copyright © 2002 McGraw-Hill Ryerson Limited. Chapter 2: Strategic Market Planning and the Evaluation of Marketing Opportunities

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Transcript of Basic Marketing, 13th edition

  • 1. Chapter 2: Strategic Market Planning and the Evaluation of Marketing Opportunities
  • 2. A.The Management Job In Marketing
    • 1. Marketing management process
    • ---is the process of (1) planning marketing activities,(2)directing the implementation of the plans, and (3)controlling these plans.
    • 2.See exhibit 2-1
  • 3. The Marketing Management Process 2-2 Whole-Company Strategic Management Planning Adjust Plans as Needed Exhibit 2-1 Marketing Planning Implement Marketing Plan(s) and Program Control Marketing Plan(s) and Program
  • 4. Marketing managers should seek new opportunities
    • ----- Marketing managers must seek attractive new opportunities, as customers needs change or as the organizations ability to meet customers needs changes.
    • ----- We should match resources to market opportunities.
  • 5. Strategic management planning concerns the whole firm
    • Strategic (management) planning is the managerial process of developing and maintaining a match between an organizations resources and its market opportunities.
    • ---- Strategic (management) planning is a top-management job that includes planning not only for marketing activities but also for production, research and development, and other functional area.
  • 6. NOTE
    • ** In this text well focus on marketing strategic planning . It is not on wholecompany planning
    • ** We will use the term strategic planning and strategic market planning to mean the same thing.
  • 7.
    • B. WHAT IS STRATEGIC MARKET PLANNING
    • Strategic market planning means finding attractive opportunities and developing profitable marketing strategies.
  • 8.
    • What is a marketing strategy
    • Marketing strategy Specifies a target market and a related marketing mix.
  • 9.
    • (1) Target marketA fairly homogeneous group of customers to whom a company wishes to appeal.
    • (2)Marketing mixThe controllable variables that the company puts together to satisfy a target group. We also call it 4Ps
  • 10. Marketing mix --- 4Ps
    • Product: everything the target group receives
    • Price: everything the target group gives up to receive it
    • Place: everything that is done to give the customer possession
    • Promotion: everything the customer hears about the other three Ps
  • 11. C. Selecting A Marketing-Oriented Strategy Is Target Marketing
    • Target Marketing---A marketing mix is tailored to fit some specific target customers.
  • 12.
    • Mass Marketing---The typical production-oriented approach that aims at everyone vaguely with the same marketing mix.
    • ----It assumes that everyones need are some.
  • 13. NOTES
    • 1) Mass marketing and mass marketers are different
    • 2) Target marketing can still mean big markets and profits.
    • --Target marketing is not limited to small market segmentsonly to fairly homogeneous ones.
  • 14. A Marketing Strategy 2-3 Exhibit 2-2 The Marketing Mix C
  • 15. D. Developing Marketing Mixes For Target Markets
    • The four Ps make up a marketing mix
    • See exhibit 2-3
    • # Customer is not part of the marketing mix
  • 16. The Four Ps of the Marketing Mix 2-4 Exhibit 2-3 Product Place Price Promotion C
  • 17. Lets see the 4Ps
    • ProductThe good or service for the targets needs
    • The product area is concerned with developing the product for target market. This offering may involve a physical good, a service, or a blend both. Keep in mind that product is not limited to physical good
  • 18. PlaceReaching the target
    • Place is concerned with all of the decisions involved in getting the right product to the target markets place.
    • ** channel of distribution---is any series of firm or individuals who participate in the flow of product from producer to final user or consumer.
    • See exhibit 2-5
  • 19. Four Examples of Basic Channels of Distribution for Consumer Products Manufacturer or Producer Consumer Procter & Gamble Del Monte Nissan CIBC Wholesaler Wholesaler Retailer Wholesaler Retailer Retailer 2-6 Exhibit 2-5
  • 20. Promotion---Telling and selling the customer
    • Promotion is concerned with telling the target market about the right product.
    • Promotion includes personal selling, mass selling( advertising and publicity), sales promotion.
  • 21.
    • Price--- making it right
    • *Each of the four Ps contribution to the whole
    • See exhibit 2-4
    • Strategy jobs must be done together.
  • 22. Strategy Decision Areas Organized by the Four Ps 2-5 Exhibit 2-4 Product Physical Goods Service Features Quality Level Accessories Installation Instructions Warranty Product Lines Packaging Branding Place Objectives Channel Type Market Exposure Kinds of Middleman Kinds and Locations of Stores How to Handle Transporting and Storing Service Levels Recruiting Middlemen Managing Channels Promotion Objectives Blend Salespeople Kind Number Selection Training Motivation Advertising Targets Kinds of Ads Media Type Copy Thrust Who Prepares? Sales Promotion Publicity Price Objectives Flexibility Level over Product Life Cycle Geographic Terms Discounts Allowances
  • 23. E . The Marketing Plan Is A Guide to Implementation and Control
    • Marketing plan fill out marketing strategy
    • Marketing planis written statement of a marketing strategy and the time-related detail for carrying out the strategy.
  • 24.
    • Implementation puts plans into operation
    • Implementationputting marketing plans into operation.
    • Operational decisionsshort-run decisions to help implement strategies.
    • Control is analyzing and correcting what youve done
  • 25.
    • Several plan make a whole marketing program
    • Marketing program Blends all of the firms marketing plans into one big plan.
  • 26. Elements of a Firms Marketing Program A Firms Marketing Program 2-7 Exhibit 2-7 Target Market Marketing Mix Marketing Strategy Time-Related Details and Control Procedures Marketing Plan Other Marketing Plans + + + = = =
  • 27. Marketing Managers Framework C Product Place Price Promotion Cultural and social environment Resource and objectives of firm Competitive environment Economic and technological environment Political and legal
  • 28. YOUR HOMEWORK
    • READ THE CASE OF PAGE 43,
    • --- Strategic marketing planning --- The watch industry .
    • Question :
    • What do you think form the case?
  • 29. Distribution of Different Firms Based on Marketing Performance 2-8 2% 2% 14% 14% Total Failure Poor Fair Good Exceptional (Well below average) (Below average) (Well above average) (Above average) 68% (Average Marketing Program) Death-wish marketing Best-practices marketing Exhibit 2-9
  • 30. G. What are attractive opportunities?
    • 1. Breakthrough opportunities are best
    • Opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time.
    • Its hard to continue providing superior value to target customers if competitors can easily copy your marketing mix.
  • 31.
    • 2. Competitive advantage is needed--- At least
    • A firm has a marketing mix that target market see as better then a competitors mix.
    • There are three basic types of advantage: lower cost, higher quality, and customer focus.
  • 32. Types of Opportunities Market Penetration Market Development Product Development Diversification Present Products New Products Four Basic Types of Opportunities Present Markets New Markets 2-9 Exhibit 2-10
  • 33. H. Types of opportunities to pursue
    • 1. Market penetration
    • ----Trying to increase sales of a firms present products in its present markets, probably through a more aggressive marketing mix.
  • 34.
    • 22. Market development
    • ---Trying to increase sales by selling present products in new market.
    • Firms try advertising in different media to reach new target customers. Or they may add channels of distribution or new store in new area.
    • Example: McDonalds, KFC
  • 35.
    • 3. Product development
    • ----means offering new or improved products for present markets.
    • By identifying the present markets needs, a firm may see way to add or modify product features, create several quality levels ,or add more types or size to better satisfy customers.
    • For example: Microsoft
  • 36.
    • 1. Diversification
    • ---Means moving into totally different lines of businessperhaps entirely unfamiliar products, market, or even levels in the production-marketing system.
  • 37. I. HOW TO EVALUATE OPPORTUNITIES
    • Developing and applying screening criteria
    Criteria Quantitative Qualitative ----Sales, profit, ROI ( return on investment ) ----Some kind of statement
  • 38. Sales and Cost Curves of Two Strategies In this graphic, a too-narrow focus on the first years results might cause the marketing manager to abandon this product as too costly. 2-10 Dollars Total cost Years Sales 0 1 2 3 4 5 Product A
  • 39. Use Panning Grids To Evaluate A Opportunities
    • We use General Electric (G E) method to evaluate a portfolio of opportunities
    • BUSINESS STENGTHS
    • - --- size, growth, share, position, profitability margins, technology position, image, pollution ,strength/weakness .
    • INDUSTRY ATTRACTIVENESS
    • - ---size, market growth, price, market diversity, competitive structure, industry profitability, technical role, environment factors .
  • 40. Evaluating Opportunities 2-11 Business Strength Industry Attractiveness High Medium Low High Medium Low No Growth Borderline Growth Exhibit 2-13
  • 41. Multi-product firms have a difficult strategic planning job
    • ----Multi-product firms use
    • Strategic business unit
    • ----- An organizational unit that focuses its efforts on some product-market and is treated as a separate profit central.
    • Portfolio management
    • --- An approach, It Treats alternative product, division, or strategic business unit as though they are share investments to be bought and sold using financial criteria.
  • 42. Considering International Opportunities 2-12 Better Trends? Smaller World Competitive Advantage Early Start
  • 43. Continuum of Environmental Sensitivity 2-13 Exhibit 2-14 Insensitive Sensitive Basic commodity-type consumer products Industrial products Consumer products that are linked to cultural variables
  • 44. QUIZ
    • List the four types of marketing opportunities and define each type:
    • A
    • B
    • C
    • D