Life and Health Marketing (LOMA) - Chapter 5 - PLANNING MARKETING GOALS AND STRATEGIES
Marketing Management - process of planning, organizing, implementing and controlling a company's marketing activities in order to create effective and efficient exchanges
Marketing Management Process
- Planning
- - Set Marketing objectives
- - establish guidelines for implementation and control of mktg activities
- Organizing
- - establish a framework for carrying out mktg plans
- Implementation
- Control
- - analyze results
- - evaluate performance
- - make necessary changes
Types of Planning
- +Corporate Planning
- primarily strategic
- consists of establishing company's overall business plan
- top-down. begins by deining the company's mission - defines scope of org's business activities and business direction
- Establishs Corp objectives - long term results co hopes to achieve
- Outlines Coprorate Strategies - long term methods used to achieve objectives
- must regularly evaluate plans to make sure still appropriate
- +Marketing Planning
- bottom up portion of planning process
Stategic Marketing Planning
- 1-5 years into the future. review and update as necessary. as oftern as every 6 months. focus on long term
- - establishes marketplace objectives
- - defines the target market
- - develops mktplace stategies
- - defines resource needs
Tactical Marketing Planning
- 1-2 years into the future - focus on the day-to-day
- - develops action-oreineted product, price, distribution and promotion tactics
- - describes when activities will take place, how they will be performed and who will perform them
The Planning Process
- 3 primary activities: analyze situation, establish objectives, develop course of action
- Conducting a Situation Analysis
- 3 primary parts: environmental analysis, environmental forcast, internal assessment
- Environmental Analysis - ongoing exam of outside events/relationships that can influence strategic decion making
- Key environmental areas for Financial Services Corp (fig 5-3 p 105)
- - current target markets
- - competition
- - economy
- - society
- - technology
- - regulation
- - labor
- - distributors
- - international conditions
- Environmental Forcast - prediction of major environmental trends that will affect a companies business activities
- several types of forcasts available from businesses, universities, governments and industry associations
- commercial forcasts are a good starting point
- Internal Assessment - exam of co's current activities, strenghts, weekenesses and ability to respond to potential threats & opportunities in environment
- internal factors that have greatest effect on co's mktg planning:
- - mission
- - fin, tech, human resources
- - current distribution systems
- - product lines
- - operational efficiency
- Tools of Analysis
- SWOT Analysis
- Strengths, Weaknesses, Opportunities and Threats
- Mktg Opportunity arises when right combo of circumstances allows co to use its strenghts to take advantage
- Strategic Window - time period where optimum fit between co's distinct capabilities and key requirements of mktg opportunity
- Business Portfolio Analysis
- allows co to evaluate business units according ot their potential contribution to co
- determines units potential for:
- - generating financial resources
- - requiring financial resources
- SBU - strategic business unit
- - operated as a separate profit center
- - own seperate set/share of customers adn competitors
- - own mgmt (generally)
- - owm mktg strategy
- Marketshare/Mkt Growth matrix - Boston Consulting Group
- - Star - high mkt share, high growth mkt - becomes a cash cow when mkt growth slows
- - Cash Cow - high mkt share, low growth mkt
- primary role - provide income to cover corp overhead, pay divs, finance R&D
- - Question Mark (aka Problem Child) - low mkt share, hight growth mkt
- requires more cash than they generate
- - Dog - low mkt share, low growth mkt
- generate enough revenue to cover their own expenses
- unlikely to become stars or cash cows
- many SBUs have the following life cycle
- Question Mark -> Star -> Cash Cow -> Dog -> sold/discontinued
- Market Attractiveness/Business Strength Matrix - GE and McKinsey & Co
- created to address problems w/ mktshare/mkt growth matrix
- 9 matrix cells
- business strength - strong/average/weak (x-axis)
- mkt attractiveness - high/medium/low (y-axis)
- "A" - good investment/growth opportunity
- "B" - average opportunities
- "C" - little growth/investment potential
- mkt attractivness - composite index - uncontrollable env factors
- - market size - market growth rate
- - gov't regulation - mkt stability
- - competitive intensity - tech reqmnts
- business strength - composite index - controllable factors
- - price competitivness - product quality
- - customer loyalty - mktg skills
- - sales growth rate - relative cost advantages
- - tech and fin resources
Establishing Objectives
- objectives s/b
- - clearly stated
- - specific and measurable
- - realistic
- - actionable
- objective shoudl specify (in quantifiable terms) what is to be accomplished and time period to accomplish it
- Corp Objectives - normally 1-5 years
- Marketing Objectives
- primary - describe overall mkt response they hope to achieve in target mkt
- secondary - cover mktg functionnnnnnns needed to carry out plan
Developing Stategies and Tactical/Action Programs
- Corporate Strategies
- - intensive growth strategy - usually requires significant financial resource
- + Market Penetration - increasing sales of current products to current mkts
- + Mkt Development - increasing sales of current products to new mkts
- + Product Development - increasing sales of new/modified products to current mkts
- - diversified growth strategy - venture beyond normal business domains
- + Horizontal Diversification - intro diff products to co's current mkt
- + Concentric Diversification - new mkts, new products similar to current products or current mktg methods
- + Conglomerate Diversification - new mkts, new products that bear no relationship to curernt products
- same product related new product unrelated new product
- new mkt mkt development concentric diversification conglomerate diversification
- same mkt mkt penetration product development horizontal diversification
- - Integrated Growth Strategy - taking over another level of industry or dist channel
- + Forward Integration - control of distribution channel
- + Backward Integration - upstream (manufacturer or supplier)
- + Horizontal - competitor
- Marketing Strategies
- focus w/r to SBU's mkt share
- + Build Strategy - increase mkt share. usually S/T loss (capital outlay) for L/T gain
- most appropriate w/ relatively low mktshare in relatively high growth rate mkts
- Question Marks or "A"s
- + Hold Strategy - maintain mkt share
- Cash Cows or "B"s
- appropriate for high mkt shares in low growth mkts
- + Harvest Strategy - maximize S/T earnings and cash flow
- appropriate for weak growth potential
- weak Cash Cows, Qeustion Marks, Dogs adn "C"s
- + Withdrawal Strategy - selling/discontinuing a SBU
- appropriate for weakest growth and inv potential
- Tactical/Action Programs
- - what activites are to be performed
- - how/when/where they are to be performed
- - who is responsible for performing each activity
- - how much each activity will cost
- - type and magnitude of results expected from each activity
- - main elements of uncertainty involved
- - how results will be monitored and evaluated
- Benchmarking - identify best practices adn outcomes
- - emulate best practices to equal/surpass best outcomes
- avoids reinventing the wheel
- programs must be coordinated and integrated to be successful
- formed for each marketing area and combined to form annual mktg plan
- Setting Budgets
- tell Sr Mgmt how much and when - bottom up
- sometimes top down and funds need to be allocated. Proposed programs scaled up/down as necessary
- budgets provide feasibility info
The Marketing Plan
- written document that specifies marketing goals for a product/product line and describes strategies and implementation and control efforts co intend to use to achieve those goals
- focuses on target markets and elements of marketing mix
- Benefits
- - facilitates communications among all levels of org and among function units
- - allows mgmt to monitor consistency of actions across units
- - focuses EE on right issues
- - keeps poeple focused on overall goals
- - provides basis of performance comparison
- Elements
- - executive summary
- - situation analysis
- - mktg objectives
- - mktg strategies
- - tactical/action programs
- - budgets
- - control mechanisms