MAP

R. Nagaraj

Marketing Planning & Strategies

When businesses construct their marketing strategies they will usually engage in a number of different activities. These includes Analyzing the markets in which they operate where r u now? Setting marketing objectives-what r v aiming for? Selecting marketing tactics and strategiesmaking choice Developing & implementing marketing plan

Marketing Planning

A marketing Plan is a set of proposed marketing actions to be undertaken over a period of time which, if carried out, should enable the business to achieve its marketing objectives.

The marketing plan is likely to contain the following

Marketing Objectives to increase market share by 5% over next year A marketing Budget-hw will the marketing department shall spend its funds Sales forecasts sales shall increase by 20% over next 2 yrs. Marketing strategies-price, product, promotion, and place shall be at the core of actions detailed in the marketing plan

The marketing plan is likely to contain the following

Target within the marketing plan- sales target in units or in value. Market share can be an important target indicator of competitiveness. Market spending and market profitability analysis-one of the criticism of marketing spending is that it is impossible to work out whether it has had an effects sales, sales revenue and profits.

The marketing plan is likely to contain the following

Market profitability analysis is concerned with the relationship between profits and cost. In the marketing planning, profitability analysis is calculated by subtracting the marketing costs of a product from the revenue gained from the product : Marketing profit sales revenue of product (quantity sold x price) marketing costs marketing research, advertising, distribution, promotion etc

Marketing Objectives
MO are the goals that a business is trying to achieve through its marketing. MO are often more effective if they hv a target and time limit. Eg: increase to market share by 10% in next 3 yrs.

Business Objective commonly focuses upon

Growth & Profitability A business might want to increase sales, revenue, profit, through marketing. It might b able to increase its revenue by selling more products. Or it might b able to charge a higher price. Both should lead to higher profit. Eg: businesses that have grown rapidly as a result of marketing include the low cost flight companies GoAir & Indigo.

Business Objective commonly focuses upon

Gaining and maintaining sales and market share a business may attempt to prevent losses and declining sales, and maintain market share, through its marketing. There r reasons why a business might do this. When a new product is launched. New products often require marketing and promotion to break into market and sales to take off.

Business Objective commonly focuses upon

Product Differentiation it is possible to differentiate products from those of competitors by changing the marketing mix, such as charging a lower or higher price, changing the packaging,, design & ingredients, advertising, and other forms of promotions or selling the product in different types of retailer.

Business Objective commonly focuses upon

Product Introduction - the marketing objective of a business might be to launch new products onto the market. Market research must have indicated that this product would be successful. Some businesses introduce products regularly, such as new versions of computer s/w, and games. Car producers regularly introduce new versions of cars to replace older models. Eg: ford mondeo replaced the Sierra and ford focus replaced the escort.

Business Objective commonly focuses upon

Product Innovation some products are genuinely new and innovative. Eg: It might be that new technology has created a new product or research has found a new medicine. Consumer Knowledge consumers needs to know what products are available from businesses. Without awareness of products they may not buy a product. Raising the awareness of products for eg: through a variety of promotional measures can be an imp objective.

Business Objective commonly focuses upon

Customer Satisfaction consumers also need to be happy about the products they buy. Businesses which hv satisfied consumers are more likely to gain brand Loyalty. There is a relationship between the different marketing objectives. Eg: ADIDAS found its market share under threat in European sports market due to NIKE promotional campaign. ADIDAS attempted to regain market share by own marketing campaign with the objective of differentiating its product. It promoted its trainers as having street Credibility. ADIDAS launched a number of new product ranges with a retro 1970 look in an attempt to increase sales & win market share.

Relationship between MO and Marketing Tactics

There is relationship between MO and Marketing Tactics. MT r short term, small scale method a business might use to achieve its MOs. eg: a furniture business with Objective of increasing sales revenue after Christmas might hv a 30 day offer where consumers can choose a free chair with any 3 seater sofa they buy. It is often argued that MOs a business sets should be SMART in the same way as overall objectives of business. They should be specific, stating exactly what is trying to be achieved, able to be measured to decide if they have been achieved, which usually involves setting targets, agreed by everyone involved, realistic and able to be achieved within the constraints of the business and time specific, stating exactly when they should be achieved.

26% Cadbury

28% Nestle
18% 5 Star

What Marketing Objective they might set

Internal Influences on marketing objectives

Corporate aim and objectives a cos MOs will be influnced by the corporate aims and objective of business. Eg the aim of DVD and video rental chain might be to become the most well known name in the market. Its objective might be to increase the sale TO by 20% over 2 yrs to achieve this. So its marketing objectives could be to spend an extra 100 crs on promotion to teenagers in magazines and product tie-ins to make them

Internal Influences on marketing objectives

Finances the availability of finances will influence what it is that a business aims to achieve. Limited finances and access to small pools of additional finances may find that some MOs are beyond its realizable ambitions Operational and organizational issues: the operation & organization of a business may influence its MOs. eg: a business operating in many countries might make differently from

Internal Influences on marketing objectives

Human Resources : to some extend the nature of a businesss MOs will reflect the human resources of that business. Eg: a new business staffed by recent graduates may well opt for marketing methods different to a more established business with a wider range of employees.

External Influences on marketing objectives

Factor outside can also influence its MOs. Competitors actions- eg: take a large & dominat business operating in a market where it is seeking to gain market share. In such conditions a less dominant business may seek to defend & maintain its mkt share.

External Influences on marketing objectives

Technological change : businesses operating in markets characterized by fast changing technologies are likely to set themselves ambitious MOs possibly with large increases in sales volume. This is because such markets are often relatively open with new businesses able to gain large slices of market share quickly. Many a web based networking businesses like Facebook hv been able to realize ambitious MOs in this way.

External Influences on marketing objectives

Market factors: one of the main market factors influencing a business MOs is the degree of competition faced by a business. In a mature market with a little or no room for new entrants, businesses are likely to set modest MOs given that they are constrained by the intensity of competition & relatively few opportunities to grow significantly. Eg: the global market for cars is saturated with many producers competing. This means that car business cant expect the kind of growth experienced by Google when they entered a new market, for Internet searches, with few competitions.

Other External Influences on marketing objectives

Political factors Economic factors increases in spending, low lending rates & low inflation improves business and its profitability. Social factors- change in tastes can effect spending. Technological factors- new pdt can also be created as tech develops. Legal factors- legislation from government. Eg: laws might restrict the type of advertisement . Environmental factor: eg: a development of businesses selling managed wood as an alternative to other wood or plastic products. *** Pestle analysis

Marketing Audit
Both internal and external factors are often found by carrying out a Marketing Audit. It helps in finding out SWOT. MOs goals that the business attempts to achieve through its marketing Marketing tactics short terms, small scale methods a business can use to achieve its MOs

Marketing Budgeting
A budget is a plan of operations for a future accounting period. They are quantifiable, i.e expressed in numerical terms; Linked to the objectives of the business; A plan showing what the business wants to achieve and is different from a forecast.

Methods of setting Budgets

Historical budgeting also know as incremental budgeting where the budget in next time period is based on the outcome of the previous time period. Eg: if sales were 220 crs this year, the budget might allow 5% increase in sales to 230 crs. It rely upon past trends. Drawback because past trends are not always accurate predictors

Methods of setting Budgets

Affordable budgeting : businesses have many costs, including new material costs and Labour costs. Affordable budgeting method bases planned marketing expenditure on what is left over after all other most sentential costs hv been paid. The impact is seen when boom economy moves to recession. Advantage is u only spend what u can afford. Disadvantage is that there is no attempt to match spending with its effect on sales and profit.

Methods of setting Budgets

Sales based budgeting marketing expenditure on individual products, product ranges or sales areas in the budget is based on sales achieved. Eg: product which sold 10 crs would hv 10 times the amount of marketing expenditure allocated to it than a product which only sold 5 crs.

Methods of setting Budgets

Competitors budgeting or parity budgeting allocates marketing expenditure according to what rival businesses are spending on competitative products.

Methods of setting Budgets

Objectives and task budgeting allocates marketing budget expenditure according to the objectives of the business and the tasks that must be carried out to meet these objectives Eg: if an obj is to increase the sales by 20% over 3 yrs, then extra resources will probably hv to be allocated to that product in the budget.

Marketing Strategy(MS)
MS is a set of plans about marketing which are designed to fulfill the objectives of a business. Eg: set out plans about pdt development, pricing, and promotion to achieve MOs such as breaking into new markets or increasing sales of existing products.

Stages of preparing MS

Carrying out marketing audit Conducting a SWOT

Defining marketing objectives Developing marketing strategies

Implementing Marketing Plan

Reviewing and evaluating outcomes

Competitive MS
Many a business r finding that the markets in which they r operating r increasingly competitive. Many market r dominated by domestic business r now open for foreign market. Government attempts throughout the world to release market forces have led to many market being privatized and liberalized. Eg china in the year 2000, opened up its economy so that foreign business could operate in the country.

3 main competitive strategies

Cost leadership : the aim of following a cost leadership stratergy is to gain a cost advantage over competition, The lower the cost, lower the price with higher productivity and more efficient suppliers, & distribution networks.

3 main competitive strategies

Differentiation : this strategy is where a business offers consumers something different from that which is offered by its competitors. In order to gain a competitive edge over them Focus : business adopting focus strategies concentrate upon particular market segments rather than on the market as a whole. Eg: there is a small but thriving market for handmade, made to measure suits.

Market positioning
Market leader strategies : eg : Microsoft in a s/w Market challenger strategies: market challenger are those who already having substantial market share. Eg: larger brewing business have increased their mkt share by taking over smaller breweries. Market followers: those who dont challenge the mkt leader like virgin cola. Mkt niche strategies : eg : sports car producers

Marketing strategies for growth

Many businesses operate in or intend to mkts where business growth is both desirable and possible. Growth may be inform of increased sales revenue or turnover, greater profits, increased capital or more land and employees. Growth oriented businesses are not suited to all businesses. In shrinking mkts, for example, a business may wish to maintain previous sales levels or just survive rather than aim for growth.

The ANSOFF MATRIX is useful tool for business aiming for growth
Mkt penetration : as suggested by the ANSOFF Matrix, the purpose of mkt penetration is to achieve growth in existing mkt with existing pdts.. There r no. of ways in which businesses can achieve this : Increase in brand loyalty of a customers so that they use substitute brands less frequently. Eh : kellogs corn flakes.

The ANSOFF MATRIX is useful tool for business aiming for growth
Encouraging the consumers to use the pdt more frequently, regularly. Eg: drink canned drinks at breakfast. Encouraging the consumers to use more of pdt. Eg: Colgate asking consumers to fill the entire tooth brush with Colgate toothpaste.

The ANSOFF MATRIX is useful tool for business aiming for growth
Pdt development: this is concerned with marketing new or modified pdts in existing mkts. Eg: development of ford focus, intended to act as a replacement for the ford escorts is a example for pdt development. Mkt development : this involves the marketing of existing pdts in new mkts. Eg: NIACL opening office in US for business.

The ANSOFF MATRIX is useful tool for business aiming for growth
Diversification : this occurs when new pdts r developed for new mkt. this allows a business to spread risk and increase safety. If one pdt faces difficulties or fails, a successful pdt in another mkt may prevent the business overall facing problems. Eg : move by mercedes benz into the mkt for small, high volume cars.

Change of direction @ Asian Airways The Finance director looked long and hard @ the latest profit data from Asian Airways He had to admit to his fellow directors that they did not make happy reading.. The reduction in Sales revenue despite the increase in passenger numbers was the most Worrying feature. The battle being fought out between the airline And new low cost budget airlines for economy class passengers was resulting in declining Revenue and profits. The price cutting and extensive advertising, designed to attack back customers Lost to the new operators, was leading to a serious problem. The Marketing Director, had to admit that we have always Priced ourselves on being the market leader in this region for air travel. Our desire to maintain share Is now starting to cost us dearly. We could continue to cut ticket prices and run expensive promotions in Daily press -but will the passengers we attract actually give us any profits?. I belive it is time

for a change in marketing strategy.-based on a new marketing objective. It is time v targeted the profitable business customers with a clear objective not just try to fill seats@ virtually any cost. Do u mean v pull out of the economy segment altogether?- that would lead to job losses and poor publicity remarked the operations director. Why not reduce prices once more to see if v can get rid of one of these new operations. My plan is to cut back capacity by removing many economy seats and fitting in new reclining seats, computer terminals and other facilities for the business class. With the Asian economizes booming at present there will be demand for this prestige service. We will need to look at a completely new marketing strategy to target this type of travelers. The other director agreed to allow marketing director time to develop the idea further and to come back to the board with projected passenger numbers.

Hw come sales revenue be declining even though passenger numbers are increasing? Undertake a brief SWOT analysis. Explain change being suggested for the business MO? Explain how this new objective will be likely to lead to changes in the marketing strategy of the business? Assess the factors that are likely to determine the success of this new strategy?