MARKETING FUNDAMENTALS: LECTURE 2: RAZZAQUE

MARK1012: LECTURE 2A
MarketingStrategy

Introduction
to Marketing

Strategy
Marketing
Environment

Marketing
Research

Consumer
and
Business
Market

MohammedARazzaque

Lectureobjectives
1.
2.
3.

4.
5.

Explaincompanywidestrategicplanninganditsfoursteps
Discusshowtodesignbusinessportfoliosanddevelop
growthstrategies
Explainmarketingsroleinstrategicplanningandhow
marketingworkswithitspartnerstocreateanddeliver
customervalue
Describetheelementsofacustomerdrivenmarketing
strategyandmix,andtheforcesthatinfluenceit
Listthemarketingmanagementfunctions,includingthe
elementsofamarketingplan,anddiscusstheimportance
ofmeasuringandmanagingreturnonmarketing
investment
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Strategicplanning:Atask andaprocess
Thetask ofselectinganoverallcompanystrategyforlong

runsurvivalandgrowth.
Theprocess ofdevelopingandmaintainingastrategicfit
betweentheorganisationsgoalsandcapabilitiesandits
changingmarketingopportunities.
Setsthestagefortherestoftheplanninginthefirmsuchas
annualplansandlongrange planswhichdealwiththe
companyscurrentbusinessesandhowtokeepthemgoing.
Strategiesfollowahierarchy
Corporatelevel
StrategicBusinessUnit(SBU)Level
FunctionalLevelofSBU(eg MarketingStrategy)
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Thestepsinthestrategicplanningprocess

Designingthe
business
portfolio

Settingcompany
objectivesand
goals

Like the
marketing
strategy,
broad
company
strategy must
be customer
focused

Definingthe
company
mission

C O R PO RAT E LE VE L

Strategies follow a hierarchy

Corporate level
Strategic Business Unit (SBU) Level
Functional Level of SBU ( eg Marketing Strategy)

SBU, product
and market
level

Planning
marketing
and other
functional
strategies
Companywide
strategic
planning guides
marketing
strategy and
planning

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Define the Mission

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EXAMPLES OF MISSION STATEMENTS

V8 Supercars Mission Statement

BHPBilliton
Ourpurposeistocreate
longtermvaluethroughthe
discovery,developmentand
conversionofnatural
resources,andtheprovision
ofinnovativecustomerand
marketfocusedsolutions

NAB
Weareaninternationalfinancialservicesorganisationthat
providesacomprehensiveandintegratedrangeoffinancial
productsandservicesthroughourgroupofbanks.
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Definingamarketorientedmission
Marketorientedand
basedonsatisfying
customerneeds

Meaningfuland
specificyetmotivating

Mission
Statement
Emphasise companys
strengthsinthe
marketplace

ShouldNOTbestatedin
salesorprofits

Copyright 2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781442531109/Kotler/POM/5e

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Setting Objectives
The company turns its mission into detailed supporting
objectives for each level of management.

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MARKETING FUNDAMENTALS: LECTURE 2: RAZZAQUE

The Business Portfolio :

the collection of businesses and products that make up the company.

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DesigningtheBusinessPortfolio
Thebestbusinessportfolioistheonethatbestfitsthe

companysstrengthsandweaknessestoopportunities
intheenvironment.
Businessportfolioplanninginvolvestwosteps.
Analysingitscurrent businessportfolioanddeciding
whichbusinessesshouldreceivemore,less,orno
investment.
Shapingthefutureportfoliobydevelopingstrategies
forgrowthanddownsizing.

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The BCG GrowthMarket Strategy Matrix

Hold

Invest

Harvest

Divest

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1.
2.
3.
4.

Thecompanycaninvesttobuild itsshare.
Itcaninvestjustenoughtohold itsshare.
Itcanmilkitsshorttermcashflow,orharvest.
Itcandivest bysellingitorphasingout.

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FourpossiblestrategiesforeachSBU

EachSBUhasalifecycle;SBUschangetheirpositionsinthe
growthshare matrix withthepassageoftime.

Matrixapproaches
canbedifficult,timeconsuming,andcostlytoimplement.
generallyfocusonclassifyingcurrent businessesanddonot

provideadviceforfuture planning.
Manycompanieshavedroppedmatrixmethodsinfavourof

customisedapproachesbettersuitedtotheirspecificsituations.
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Develop Growth (Downsizing) Strategies: Marketing has the main

responsibility for achieving profitable growth for the company

Strategy = Market
penetration
Seektoincreasesalesof
existingproductsto
existingmarkets

Strategy = Product
development
Create growth by selling
new products in existing
markets

Strategy = Market
development
Introduceexisting
productstonewmarkets

Strategy = Diversification
Emphasise both new
products and new
markets to achieve
growth

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Product market Expansion Grid

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Planningmarketing:I
Partneringtobuildcustomerrelationships

StephenCoburn|Dreamstime.com

Othercompanydepartments

Othersinthemarketingsystem

Internalvaluechain

Valuedeliverynetwork

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Planning marketing: II
Partnering to build customer relationships
Marketingplaysakeyroleinthecompanysstrategicplanning
byprovidingaguidingphilosophythemarketingconcept;
byprovidinginputs tostrategicplanners;and
bydesigningstrategies forreachingtheunitsobjectives.

Inadditiontocustomerrelationshipmanagement,marketersmust

alsopracticepartnerrelationshipmanagementwith
othercompanydepartmentstodevelopaneffectivevaluechain;
othersintheMarketingSystemtoimprovetheperformanceofthecustomer

valuedeliverynetwork.
Guidedbythestrategy,thecompanydevelops:
Customerdrivenmarketingstrategies(segmentation,targetmarketing,

positioning,differentiationetc.)
Integratedmarketingmixproduct,price,placementlogistics,people,

process,physicalevidenceandpromotion.
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Marketingstrategyandthemarketingmix

Copyright2012PearsonAustralia(adivisionofPearsonAustraliaGroupPtyLtd) 9781442531109/Kotler/POM/5e

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Marketingstrategyandthemarketingmix
Customerdriven
marketingstrategy

Developinganintegrated
marketingmix
Product

Market
Segmentation

Physical
Evidence

Price

Market
Targeting
Process

Market
differentiation
andpositioning

Placement

People

Promotion

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Managingthemarketingeffort

Managing
themarketing
effortrequires
fourmarketing
management
functions
namely
analysis,
planning,
implementation,
andcontrol.

MarketingAnalysisisperformedto
understandthemarketsandmarketing
environmentthecompanyfaces.
SWOTanalysisisusedtoevaluatethe
companysstrengths (S),weaknesses
(W), opportunities (O),andthreats(T).
Strengthsincludecapabilities,resources,

andpositivesituationalfactors.
Weaknessesincludenegativeinternal

factorsandnegativesituationalfactors.
Opportunitiesarefavourableexternal

factors.
Threatsareunfavourableexternalfactors.
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SWOT Analysis

PEST Analysis
Technological

Political

PEST
Analysis of external
environment that
can affect the
company

Economic

Social

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MarketingPlan SituationAnalysis

Product features
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Contents of Marketing Plan

Section
I.ExecutiveSummary
andTableofContents
II.Current Marketing
Situation
III.SWOTandIssue
Analysis
IV.Objectives
V.MarketingStrategy
VI.ActionPrograms

Description
Briefoverviewoftheproposedplan
Backgrounddataonthemarket,product,competition,
distributionandmacroenvironment
Identifymain:strengths,weaknesses,
opportunities,threats facingtheproductline
Definefinancialobjectivesandmarketinggoalssuch
assalesvolume,marketshareandprofit
Presentbroadmarketingapproachthatwillbeusedto
achievetheplansobjectives
Presentspecialmarketingprogramsdesignedto
achievethebusinessobjectives

VII.Projectedprofitand
Forecasttheplansexpectedfinancialoutcomes
LossStatement
VIII.Controls

Indicateshowtheplanwillbemonitored
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Implementing Marketing Plan

Marketingimplementationistheprocess that
turnsmarketingstrategiesandplansinto
marketingactionsinorderto accomplishstrategic
marketingobjectives.
involvesdaytoday, monthtomonthactivities
thateffectivelyputthemarketingplantowork.

Marketingplanningaddressesthe:whatandwhy
ofmarketingactivities; implementation addresses
thewho,where,whenandhow
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Marketing Organisation for Implementation

Marketing Department s must be designed so it can carry out

the strategies/plans that are developed.

Small companies: one person may perform all the marketing

functions.
Large companies: there is a Chief Marketing Officer (CMO),
assisted by many specialists to deal with marketing
Marketing departments can be arranged as a:
functional organisation in which different activities are headed

by a functional specialist, such as sales, advertising, etc;

geographic organisation if a company sells nationally or globally;
product management organisation if the company has many

different products or brands;

market or customer management organisation, in companies that
sell one product to different kinds of markets /customers;
combination of all these forms if the company is very large.
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ControllingandEvaluatingPerformance
Marketingcontrol istheprocess ofmeasuringand
evaluatingtheresultsofmarketingstrategiesandplans,
andtakingcorrectiveactiontoensurethatmarketing
objectivesareattained.
Setmarketing
goals

Evaluates
causesof
differences

Measures
performance

Take
corrective
actions

Operatingcontrol involvescheckingongoingperformance
againsttheannualplanandtakingcorrectiveactionwhen
necessary.
Strategiccontrol ischeckingthatthecompanysbasic
strategiesarewellmatchedtoitsopportunities.
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The Relationship Between Analysis, Planning,

Implementation and Control

Planning
Develop strategic
plans

Analysis
Implementation
Carry out the
plans

Develop marketing
plans

Control
Measure results

Evaluate results

Take corrective
action
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Measuring and Managing

Return on Marketing Investment
Marketingmanagersmustensurethattheir

marketingdollarsarebeingwellspent.
Returnonmarketinginvestment(ormarketingROI)isthenet

returnfromamarketinginvestmentdividedbythecostsofthe
marketinginvestment.Itmeasurestheprofitsgeneratedby
investmentsinmarketingactivities.
MarketingROImaybemeasuredintermsofbrandawareness,sales,

ormarketshare.
Manycompaniesaredevelopingmarketingdashboardssetsof

marketingperformancemeasuresinasingledisplayusedtomonitor
strategicmarketingperformanceusingcustomercentredmeasuresof
marketingimpact,suchascustomeracquisition,customerretention,
andcustomerlifetimevalue.
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ReturnonMarketingInvestment

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Strategic Planning Summary

Planning can help making sense of
changing environment
Most organisations operate according to formal plans
Managers are often too busy and have no time for
planning

Organisations failing to plan are planning to

fail
The need for flexibility has led
to a resurgence in the process
of scenario planning.
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MARK1012: LECTURE 2B
MarketingEnvironment
MohammedAbdurRazzaque

Learningobjectives
Objective1
Objective2

Objective3
Objective4
Objective5

Describetheenvironmentalforcesthataffect
thecompanysabilitytoserveitscustomers
Explainhowchangesinthedemographicand
economicenvironmentsaffectmarketing
decisions
Identifythemaintrendsinthefirmsnatural
andtechnologicalenvironments
Explainthekeychangesinthepoliticaland
culturalenvironments
Discusshowcompaniescanreacttothe
marketingenvironment

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MicrovsMacroEnvironments
LINK
Microenvironment

Macroenvironment

Theforcesclosetothe

Thelargersocietal

organisationthataffectits
abilityto serveits
customers:

forcesthataffectthe
organisationswhole
microenvironment:

1. The Marketing
2.
3.
4.
5.
6.

Demographicforces ,

Organisation
Suppliers
Marketing
Intermediaries
Customers
Competitors
Publics

Economicforces ,
Naturalforces ,
Technologicalforces ,
Politicalforces.

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ActorsinMicroenvironment

Company
Marketing
Intermediaries

Suppliers

Customers

Competitors

Publics
[stakeholders/interestgroups]
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Marketingmanagementisresponsibleforattracting
andbuildingrelationshipswithcustomersbycreating
customervalueandsatisfaction.
Seniormanagement

Indesigningmarketing

plans,marketing
managementtakesother
organisationgroupsinto
accountsuchas:

setstheorganisations

mission,objectives,
broadstrategiesand
policies.
mustapprovemarketing
plansbeforetheycanbe
implemented.

topmanagement,
finance,
researchanddevelopment

Marketingmanagers

(R&D),

mustmakedecisions

purchasing,

withintheplansmadeby
seniormanagement.

manufacturingand
accounting.
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Suppliers
Animportantlinkintheorganisationsoverall

customervaluedeliverysystem.
Marketingmanagersmustwatchfor:
supplyavailability.
supplyshortagesordelays,
labourstrikes
pricetrendsofsupplies

asallofthesecandamagecustomersatisfactioninthe
longrun.
Risingsupplycostsmayforcepriceincreasesthatcan
harmtheorganisationssalesvolume.
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Marketing Intermediaries
Intermediaries

linkthefirm
withits
customers.
Marketing
intermediaries
helpan
organisationto
promote,sell
anddistribute
itsgoodsto
finalbuyers.

Resellers
Findandselltocustomers

PhysicalDistributionFirms
Stockandmovegoods

Marketingservicesagencies
FacilitatingAgenciessuchas
Research,advertising,media,
andconsultingservices

Financialintermediaries

Makingtheexchangepossible

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Customers
Themarketing

organisationmuststudy
itscustomermarkets
closely.Theorganisation
canoperateinfivetypes
ofcustomermarkets:

Business
Markets

Consumer
Markets
Reseller
Markets

1. Consumermarkets

COMPANY

2. Businessmarkets
3. Resellermarkets
4. Governmentmarkets

International
Markets

5. Internationalmarkets

Government
Markets

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Competitors
Everyorganisationfacesawiderangeof

competitors.
Tobesuccessful,anorganisationmustprovide

greatercustomervalueandsatisfactionthanits
competitors(Recallthemarketingconcept)
Nosinglecompetitivemarketingstrategyisbestforall

organisations.
Eachmarketershouldconsideritsownsizeandindustry
positioncomparedwiththoseofitscompetitors.

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Publics
Publicsareanygroupthathasanactualorpotentialinterestin

orimpactonanorganisations abilitytoachieveitsobjective

Courtesy of Harris Farms

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Types of Publics
Publicsareanygroupthathasan
actualorpotentialinterest,or
impacton,anorganizational
abilitytoachieve
Internal
itsobjectives.

Financial

Media

Company

General

Government

Local

Citizen
Action

Source: Kotler, Brown, Adam, Armstrong, Marketing 5th Edition: Prentice Hall
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MajorForcesintheorganisationsMacroEnvironment

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Demographic Environment
Growing
Ethnic
Diversity

Education

Age
Structures

Key
Demographic
Trends
Changing
Family
Structure

Geographic
Shifts

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The Macro environment I

Demographic

ChangingAgestructure

Economic

Geographicshiftsin

Social & Cultural

population
Bettereducated,more
whitecollar
GrowingEthnicDiversity

Political and Legal

Technological
Natural

TheChangingFamily

Source: Kotler, Brown, Adam, Armstrong, Marketing 5th Edition: Prentice Hall
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Demographicenvironmentchangingagestructure

Generation Y

PostWWII194619641965197619772000
BirthBoomBirthDearth

Domarketersneedtopracticegenerationalmarketing?
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The Macro environment II

Political & Legal

Economic
Economic

Legislation regulating

Development
Changes in income

Business
Changing Government
agency enforcement
Increased emphasis on
ethics
Globalization & trade
agreements

inflation

Changing consumer

spending pattern

discretionary spending

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Macroenvironment III
Natural

Technological
Fast pace of change

Shortage of raw materials

Increased cost of energy

High R&D Budget

Increased pollution

Concentration on

Resource preservation by

minor improvement
Increased regulation

Government

A need for environmental

sustainability
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Cultural Environment
Made up of institutions and

Culturalcharacteristics

other forces that affect

societys basic values,
perceptions, preferences,
and behaviours.

thatcanaffect
marketingdecisions.
Persistenceofcultural

values

People grow up in a

particular society that

shapes their basic beliefs
and values and help them
develop a world view that
defines their relationships to
themselves and others.

Corebeliefs
Secondarybeliefs

Subcultures
ShiftsinSecondary

culturalvalue.

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Respondingtothemarketingenvironment

Ratherthansimply
reacting,companies
shouldtake
proactivestepswith
respecttothe
marketing
environment
Pascalepics | Dreamstime.com

Copyright 2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781442531109/Kotler/POM/5e

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