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MARK 1012: LECTURE 2 – Marketing Strategy and Marketing Environment

Learning Objectives:

Introduce you to marketing process


Marketing process is about:
• Analysing market opportunities
• Selecting target markets
• Develop marketing mix (produce, price, promotion, placement) for selected markets
• Use STRATEGY and TACTICS [managing marketing efforts]
Strategy: explicit statement of firm’s vision of its future, objectives and purpose, providing long
term direction for decisions, includes corporate policies, resource allocations, customer markets
and competitive environment, essentially being how to compete for the future.
Tactics: serve as guidelines for implementing the intent of strategic plan, basis for day-to-day
operating decisions, having a shorter-term planning horizon than STRATEGIC PLANNING
Discuss strategic planning
Strategic planning: process of developing and maintaining a strategic fit between the
organisation’s goals and capabilities in the light of changing marketing opportunities. It relies on
developing a clear:
• Company mission
• Objectives
• Sound business portfolio
• Coordinated functional strategies
Summary of SP: planning helps to make sense of changing environment (orgs operate according to
formal plans and managers are too busy for planning) and the need for flexibility has led to the
resurgence of scenario planning.
The strategies following a HIERARCHY:

Introduce marketing plans and explain how to


develop it
Marketing plan: vary considerably among companies and the plan is variously called a ‘business
plan’ and an ‘operating plan.’ The plan focuses on customer acquisition, retention and the
resources required (needed to implement specific marketing functions – selling, advertising, sales
promotion and market research). Most cover only one year, and their length (pages wise vary).
• Shortcomings of the plan are due to lack of realism, insufficient market and competitive
analysis and a short-run focus.
Business plan: incorporate the plans of all functions [production, R&D, finance, HR, IT and
marketing].

EVALUATION of the marketing plan:


Objectives needs to relate directly to
1. Company’s strategic initiatives
2. What you learned in situational analysis
3. Capacity of current marketing mix to handle
4. Business’ strength and the opportunities available
5. Business’ weaknesses and the threats that endanger it
6. Objectives need to be clear, measurable statements of what is to be achieved
7. Objectives, strategies and tactics need to relate to each other
8. Each strategy contain cost/benefit evaluation
9. Every person is involved in implementation, including marketing planning process
10.Clearly visible on your desk (?)
11.Business vision is a ‘shared vision’?
IMPLEMENTATION of the marketing plan:
• Process that turns marketing strategies and plans into marketing actions in order to
accomplish strategic marketing objectives.
• Involve day-to-day, month-to-month activities which effectively put marketing plan to work.
• Addresses the who, where, when and how as oppose to what and why of marketing activities
Poor implementation:
• Isolated planning
• Tradeoffs between long and short term objectives
• Natural resistance to change
• Lack of financial and marketing integration
• Overemphasis on the document
CONTROLLING AND EVALUATING performance:
Marketing control: process of measuring and evaluating the results of marketing strategies and
plans, taking corrective actions to ensure objectives are attained.
Operating control: checking ongoing performance against the annual plan and taking corrective
action when necessary
Strategic control: checking that the company’s basic strategies are well matched to its opportunities
List and explain the broad concept of the organisation’s micro and macro environment
Micro-environment: forces close to the org which affect its ability to serve customers (the org,
channel firms – resellers, retailers, customer markets,
competitors and publics)
Marketing MGMT is responsible for attracting and
building relationships with customers by creating value
and satisfaction. Success in this depends on the
following actors in the org’s micro-environment:
1. MARKETING ORG
Senior management sets the org’s missions, objectives,
strategies and policies and they must approve plan
before implementation – whilst also influencing
marketing managers. Marketing plans also take into
consideration the top management, finance, R&D,
purchasing manufacturing and accounting sectors of
org.
2. SUPPLIERS – marketing managers need to be
aware of supply availability, supply shortages/
delays, labour strikes, price trends of supplies
(which may collectively damage customer
satisfaction). The change in supply costs also
harms org’s sales.
3. MARKETING INTERMEDIARIES – link the firm with
its customers, helping the org to promote, sell
and distribute its goods to final buyers.
Resellers – help org find customers or make sales to them
Physical distribution firms – help org stock and move goods from their points of origin to their
destinations
Marketing services agencies – such as marketing research companies, advertising agencies, media
firms, export consulting agencies and marketing consulting firms that help org target and promote
its products to the right markets
Financial intermediaries – banks, credit org, insurance org and other businesses that help finance
transactions or sure against risk associated with buying and selling of goods.
4. CUSTOMERS – consumer markets, business markets,
reseller markets, government markets and international
markets
5. COMPETITIORS – org must provide greater customer value
and satisfaction than its competitors, no single competitive
marketing strategy is best for all org and each marketer
should consider its own size and industry position
compared with those of competitors.
6. PUBLICS – any group that has actual or potential interest, or
impact on an org’s ability to achieve objectives.
Macro-environment: larger societal forces that affect org’s whole micro-environment
(demographic forces, economic forces, natural forces, technological forces, political forces)
Outline the key changes occurring in the organisation’s macro environment
1. DEMOGRAPHIC environment:
• Growing ethnic diversity, age structure,
education, geographic shifts and changing
family structure.
2. ECONOMIC forces: economic
developments, changes in income
(inflation), change in consumer spending
patten (discretionary spending)
3. TECHNOLOGICAL forces: fast pace of
change, high R&D budget, concentration on minor improvements, increased regulation
4. NATURAL forces: shortage of raw materials, increased cost of energy, increased pollution,
resource preservation by the government
5. POLITICAL & LEGAL reasons: regulating business,
changing in government agency enforcement,
increased emphasis on ethnics globalisation and trade
agreements
6. CULTURAL environment: made up of institutions and
other forces that affect society’s basic values,
perceptions, preferences and behaviours.
• People grow up in society which shapes their basic
beliefs and values and help them develop a world view
that defines their relationships to themselves and
others.
• Things which affect marketing decisions are core and secondary beliefs, sub-cultures and
shifts in secondary cultural values.