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STRATEGIC MARKETING & PLANNING

For some a harrowing experience! For others, like Siemens

an opportunity to reinvent themselves. HOW & WHAT DID SIEMENS ACHIEVE?


1. Clear goals for management, 2. More transparent operation, 3. Turn around of semiconductor

business, 4. Mobile phone handset business back on track, & 5. Increase in share value.

The

right Corporate Strategy to survive in a complex & more demanding business environment.

Corporate strategy consists of deciding on

...the scope and purpose of the business,


setting clear objectives, taking initiatives & investing resources to achieve the companys objectives.

Corporate

strategy is the way by which a company creates value through the configuration and coordination of its multi-tier market activities.

Having a strategy is a matter of discipline. It requires a strong


focus on profitability rather than just growth, an ability to define a unique value proposition, and a willingness to make tough tradeoffs in choosing what not to do.

Michael E. Porter

Dell Computers direct PC sales & built-toorder process succeeded;

IBMs transition from being a manufacturer of computer hardware only, to a solutions provider, to the provider of a smarter planet succeeded.
Tapal created a new category in Tea and succeeded. WHAT DO THESE COMPANIES HAVE IN COMMON?

1. Unique competitive position


2. Activities tailored to strategy... 3. Clear trade-offs & choices vis--

vis competition 4. Competitive advantage backed by relevant activities 5. Sustainability & 6. Operational effectiveness.

Airbus A380: PanEuropean plane; capacity: 555 passengers. Wingspan as tall as a 9-storey building;

Boeing NOT producing SuperJumbo;


Boeings assumption? US airlines want smaller planes for direct routes hence market limited.

Weight 560 tons;


Cost: $250 million per plane.

Airbus counting on long-haul flights

Boeing counting on point-to-point

Corporate Strategy requires a Framework consisting of


1. Vision
2. Objectives 3. Capabilities 4. Business Composition 5. Structure, Systems &

Processes.

Why Vision?

To answers the question - What is the corporation about, what does it do? To provide overall guideline & direction to the business; Vision needs periodic review: Why? 1. Changes in the environment & 2. Need to sustain competitive advantage.

Why objectives?
To

measure performance e.g.

market share growth, quality improvements, employee training & development, earnings growth. At what levels are objectives set? Several levels - but aligned with corporate objectives. How does one keep track of performance?

What does a Balanced Scorecard do? 1. Translate vision into operational goals; 2. Communicate & link vision with individual performance; 3. Help in business planning & index setting; 4. Provide feedback, learning for adjusting strategy as needed.

Why assets, skills, & capabilities?

1. To create potential for an

organization to compete in different markets,


2. To provide value to customers, &
3. To create barriers against

competitive entry.
ANY EXAMPLE???

Sonys distinctive capability in

miniaturization of electronic products resulted in the creation of Sony Walkman, and later, Sony VAIO personal computers. The Internet links computer users to Sonys music & entertainment business.

Why business composition?


Provides direction for Corporate & Marketing strategy design.

Allows grouping of similar businesses to form Strategic Business Units (SBUs), & to facilitate decision-making.

SBU = Single product or brand, or a line

of products, or a mix of related products, that meet a similar market need, or a group of related needs.
SBU = a cohesive organizational unit

with a dedicated team & a separate set of objectives.


SBU strategies are specific to the SBU.

Why structure, systems, &

processes?
To control & coordinate the activities of various business units & Dell Computers offers superior value staff functions. through customization and prompt service.
easyJet, in Europe offers no-frills

service in the airline, auto- rental & allied areas.

Creating Competitive Advantage but

HOW? Assessing how every business unit contributes (positively) to the corporation; Evaluating them against other businesses, for allocation of resources & investments for the future.

Does

selection of a sound strategy lead to business success? the uncontrollable external environment (demand, competition, government policies) influence business success?

Does

Business & Marketing strategies reflect overall corporate strategy.

A key measure of success is the impact they have on results. Factors that influence the result:
1. Strategic choices a business or function makes; 2. Environmental factors.

Role of the Marketing Director/ CMO: 1. Strategy formulation & 2. Ensuring consistency with business priorities & 3. Ensuring integration with other functional strategies.

From a customer perspective, strategy must: Have market attractiveness, Possess clear customer orientation,
Communicate

value advantage.

The Marketing Strategy Process


Strategic situation analysis

Implementing and Managing Market-Driven Strategy


Market-Driven Program Development

Designing Market-Driven Strategies

Strategic Situation Analysis:

1. Market vision, structure and analysis:


Analyzing markets/ forecasting changes; Evaluating competitive strategies strengths, limitations & plans; Deciding when to enter new markets, how to serve existing markets, when to exit unattractive markets.

Strategic situation analysis: 2. Segmenting/ creating market segments Examine differences in customers needs & wants, & Identify buyers with similar characteristics. HOW? Use information on peoples past behavior, preferences, reasons for buying Q: What kind of people consume Red Bull?

Strategic situation analysis:


3. Continuous Learning about Markets: Sensing what is happening or likely to happen. Adjusting to (or pre-empting) changing customer preferences or competitive initiatives or threats.

What is involved?
1. Market targeting & strategic positioning; 2. Building marketing relationships; & 3. Developing & introducing new products.

1. Market targeting and strategic positioning Influence of situational factors e.g. industry type, nature of business & extent of product differentiation. The challenge: Deciding how, when, & where to compete. Segment selection: Calculating segment potential & identifying importance for firm.

1. Market targeting and strategic positioning Deciding on positioning strategy what is positioning strategy?

Combination of the 4Ps - product, price, promotion, value-chain


In the best competition. Seekingrelation tomatch between value requirements of the target & the organizations distinctive capabilities.

1. Market targeting and strategic positioning Frozen food is a very competitive supermarket/ retail category because retail space is limited. Brands by K&N have invested in a chain of retail outlets to gain competitive advantage and continue to capitalize on it.

2. Marketing Relationship Strategies:


A collaborative effort between customers, channel members, suppliers, & internal teams for the common good. General Mills and Nestle, competitors in business, collaborated to form Cereal Partners Worldwide (CPW) their compatible management style led to success.

IBM competes in software with Oracle, but partners with them in business consulting competes with Microsoft in software, but partners with the company in some regions to sell Intel severs. Cisco Systems, longtime IBM partners now compete in areas that were seen as IBMs domain.

3. Developing & introducing New Products: Finding & evaluating ideas, Selecting/ developing those most promising, Designing marketing programs, Market testing, and Market introduction. Innovation plays a major role in new product development the 3M example

Minnesota Mining and Manufacturing (3M) has a reputation for innovation. What are their Core Strategies? Keep business units small; Encourage experimentation/ risktaking; Motivate & rewarding innovators; Stay close to the customer; Share technology with other firms; & Avoid killing projects that staff supports.

1. Preparing the Marketing Plan & Budget;


2. Implementing the Plan;

3. Using plan to Manage & Control Strategy.

1. Preparing the Marketing Plan & Budget; Plan outline: A. Strategic Situation Summary B. Market Target (Description) C. Objective for Market Target (Sales, Profits, Position) D. Marketing Program Positioning Strategy E. Forecasts & Budgets.

Marketing Program Positioning Strategy: 1. Product strategy 2. Distribution strategy 3. Price strategy 4. Promotion strategy 5. Marketing Research 6. Coordination with Other Business Functions.

1. Escalating globalization. 2. Technological diversity & uncertainty.

3. The Internet Era: Web 2.0.


4. Increased focus on ethical business

behaviour & CSR.