1-1

Chapter Three

Developing Marketing
Strategies and Plans
 1-2

Developing Marketing
Strategies and Plans
 Many marketers face challenging
situations in meeting the needs of
their customers as their
competitiors are trying to capture
the interest of the same audience.

 Consumers will choose a product

that they preceive will gave then
the highest value.

 If they satisfied with the product

choice they have made, the may
become loyal to the product and
the marketer.
 1-3

VALUE, SATISFACTION
AND LOYALTY
 Value: Value relates to preference
among the alternative available before a
consumer makes a purchase decision.

 Satisfaction: Satisfaction is the

evaluation by a consumer during or after
a product has been consumed.

 Loyalty: Loyalty has been used to

describe a customer’s willingness to
continue purchase a firm’s product over
the long terms and recommending the
firm’s product to friend and associates.
1-4
 1-5

STRATEGIC MARKETING
PLANNING
Strategic marketing planning refers to an
organization’s effort to develop and maintain
a strategic fit between the organization’s
objectives, available resources, meeting
target markets needs through value offering
around the evolving market opportunities.
The aim of strategic planning is to mold and
remold the company’s business and product
so that they yield target profits and growth.
Strategic marketing planning is a process
that charts out the course that the company
will taken in relations to marketing for
overall corporate planning.
 1-6

STRATEGIC MARKETING
PLANNING
 Some benefits of the planning include:
 Minimizes conflicts on direction of the
company,
 Encourages better coordination of
people, resources, and activities,
 Provides control of action against set
objectives,
 Increases preparedness to resolve the
unexpected, and
 Increases discussion and
communication.
 1-7

Corporate Strategic
Marketing Planning
Process
 For larger companies, strategic
marketing planning occurs at different
levels of the organization.
 The strategic marketing planning process
includes defining a clear company
mission which is market oriented setting
companywide objectives based on the
mission, and developing a competitive
approach within the market.
 The stages in the corporate strategic
marketing planning process are
illustrated in Figure 2.1.
 1-8

Corporate Strategic
Marketing Planning
Process
 1-9

Corporate Strategic
Marketing Planning
Process
 The firm’s mission statement, establishes
boundaries for all subsequent decisions,
objectives, and strategies. At the
beginning of a company’s operations, the
company mission or purpose tends to be
clear.
 For example, Sime Darby in Malaysia
initially focused its business on
plantation; then evolved into an
international conglomerate with interest
in many industries such as consumer
services, heavy equipment, insurance,
packaging and property
 In 2007, Sime Darby merged with Golden
Hope and Guthrie Berhad to form Sime
Darby Berhad. The core businesses of the
merger are plantations, property, motor,
heavy equipment, energy and utilities.
 1-10

SPECIFYING THE
MARKET-ORIENTED
BUSINESS MISSION
Need to define a business mission statement.
A business mission statement is stated to
reflect the organization’s purpose that is
what it want to accomplish.
The mission statement should be clear,
realistic and provide motivations for the
company to reach its objective.
A well rounded mission statements answers
the following questions: who are our
customer, what is our business, where are
going.
A good mission statement has a number of
characteristics: Focus, Scope, Motivations,
Vision, Policies.
 1-11

SPECIFYING THE
MARKET-ORIENTED
BUSINESS MISSION
 Focus: Focus on limited number of goals
 Scope: Define the major competitive
scopes within which the company will
operate.
 Motivation: A good mission statement
can trigger sense of motivation among
employees. Thus, it is vital for employees
to feel that their work is significant and
contribute to people’s lives.
 Vision: Missions are at their best when
they are guided by a vision and direction
for the company for the next ten to
twenty years.
 1-12

SPECIFYING THE
MARKET-ORIENTED
BUSINESS MISSION
 Policies: The corporate mission should
emphasize on the company major
policies and values to honour such as
how employees should deal with
customers, suppliers, distributors,
competitors and other important
groups.A business mission statement is
stated to reflect the organization’s
purpose that is what it want to
accomplish.
1-13
 1-14

DEVELOPING MEASURABLE
COMPANYWIDE OBJECTIVE
 The business mission set at the corporate
level will breakdown into companywide
objectives.
 Strategic marketing planning at business
units and product level involves
development of measurable companywide
objectives and market oriented strategies.
 The next question is how a company goes
about setting its companywide objectives.
 Financial objectives
 Earn an annual rate of return on
investment over the next five years
of 15% after taxes.
 Produce net profits of RM200,000 in
2016.
 iProduce a cash flow of RM300,000
in 2018.
 1-15

DEVELOPING MEASURABLE
COMPANYWIDE OBJECTIVE
 Marketing objectives
 Introduce one new brand and five
new flavours to cater to the needs of
ten new town markets in the next
two years.
 Expand to another 20 new dealers in
order to go into the new town
markets within two years.
 1-16

ESTABLISHING A
BUSINESS PORTFOLIO
A business can be define in three terms:
customer group, customer needs and
technology.
For example, a small company that designs
incandescent lighting systems for television
studios: the customer group is television
studios, the customer need is lighting and
the technology is incandescent lighting.
 1-17

Analyze Current Business

Portfolio
 The objective of analyzing the current
business portfolio is to ensure the firm is
using its strength to match with the
available business opportunities.
 Many companies use portfolio techniques
to evaluate alternative strategies, and
allocate resources across a number of
businesses. It allows a firm to maximize
its business and to ensure satisfactory
profits.
 The most common methods used to select
a strategic alternative are the Boston
Consulting Group portfolio (BCG) growth-
matrix approach (Boston Consulting
Group, 2009).
 The BCG approach evaluates its strategic
business unit (SBU) in terms of it current
market share position and its growth
potential. This evaluation in terms of
market share and growth potential will
help a firm to decide on the next best
strategic move.
 1-18

Analyze Current Business

Portfolio
 Using the BCG approach, a firm classifies
all its SBUs according to the growth-share
matrix. (See Figure 2.3.)
 1-19

Develop Future Business

Portfolio
After evaluating current business portfolio, a
firm might want to decide on which business to
focus more or less in the future.
Expansion strategies
The management can use the strategic
opportunity matrix which has four growth
alternatives: market penetration, market
development, product development and
diversification. (See Figure 2.4.)
 1-20

Develop Future Business

Portfolio
 Market penetration: Firms would try to
increase their market share among existing
customers. For example, to increase its
shampoo sales, Johnson & Johnson might
cut prices, increase advertising or obtain
better store displays.
 Market development: This strategy attracts
new customers to existing products by
expanding the target market or expanding
geographically. The ideal solution is finding
new uses for existing products to stimulate
additional sales while also bringing in new
buyers. For example, Johnson & Johnson
reviews the demographic markets, which
include infants, preschoolers, teenagers,
young adult and senior citizens, to see if
any of these groups can be encouraged to
buy more of Johnson & Johnson products.
 1-21

Develop Future Business

Portfolio
 Product development: This strategy entails
the creation of new products for present
markets. For example, Johnson & Johnson
could launch new products to appeal to
existing customers.

 Diversification: This strategy is the riskiest

strategy as the firm is attempting to
increase sales by introducing new products
into new markets. It is most typically
adopted within the nature product industry
where growth cannot be achieved in any
other way. For example, Johnson & Johnson
has diversified into selling hospital supplies
and prescription drugs on top of its usual
products.
 1-22

Develop Future Business

Portfolio
 Downsizing strategies
 Irrelevant products due to changes in
consumers preferences,
 Lack of-experience in certain businesses,
and
 Product obsolescence due to changes in
technology.
 1-23

DEVELOPING STRATEGIES
AT BUSINESS UNITS,
MARKET AND PRODUCT
LEVEL
•To manage the marketing plans at the
business units, market or the product level, a
company has to implement the four functions
of management i.e. analysis, planning,
implementation, organization of the
marketing department, and control of the
outcome. (See Figure 2.5.)
 1-24

DEVELOPING STRATEGIES
AT BUSINESS UNITS,
MARKET AND PRODUCT
LEVEL
•Conduct Situation Analysis. The firm has to
conduct a situation analysis in order to
determine the performance of their business
and products. This situation analysis is also
known as the SWOT analysis. The firm also
has to identify the environmental factors
influencing their business and products.
 1-25

SWOT Analysis
• A situation analysis helps the firm
understand the current and potential
environment that the product will be
marketed in. In the situation analysis, the
firm would need to identify its internal
strengths (S) and weaknesses (W), and
also, examine external opportunities (O)
and threats (T). This is why situation
analysis is also referred to as SWOT
analysis. (See Figure 2.6.)
 1-26

Environmental Scanning
• A marketer analyses the political,
economic, social, technological, legal and
environmental factors.
 Political factors—the political situation of a
country and government’s involvement in
the economy.
 Economie factors—the economic condition
of a country including levels of income,
expenditure, economic growth, inflation,
and interest rates.
 Social factors—the changes in the society
in relations to society’s interaction.
Consumers’ concern on environmental
issues or going into organics is part of
social factor.
 Technological factors — innovation
breakthroughs, product improvements, or
reduction in costs may result from new
technology.
 1-27

Environmental Scanning
• Legal factors—rules and regulation set to
control marketing activities of various
companies.
• Environmental factors—the protection and
preservation of the earth’s nature from
pollution and disasters.
 1-28

DEVELOPING MARKET-
ORIENTED STRATEGIES.
The company needs to divide the population
into segments (market segmentation),
choose the segment it wishes to serve
(market targeting) and decide on the value
to offer to the selected market (market
positioning).

•Market Segmentation: the whole population

can be divided into various groups with
similar needs and wants who may want
specific product and services to fulfill those
needs.

•Market Targeting: the company will then

evaluate the attractiveness of each segment.

•Market Positioning: the company has to

decide on the value that it wishes to offer to
target group.
 1-29

DEVELOPING MARKET
MIX STRATEGIES
A marketing plan is done at the business unit
level, a product level or a brand level.
Marketing planning involves 11 stages:

1)Executive Summary: this short summary is

typically not more than two pages and
presented the plan’s main goals and
recommendations.

2)Tableof Contents: the table of contents

should follow the executive summary.

3)Introduction:the introduction is the

explanation of the details of the project.

4)SituationAnalysis: the situation analysis

describes the relevant background data.

5)TargetMarket Statement: the product will

be targeted at one-to-four person household.
 1-30

DEVELOPING MARKET
MIX STRATEGIES
6) Objective Setting: the objective describes
where you intended the product to go in
the future.

7) Marketing Strategy: present a list of

statement that describes the market
positioning, product level, product line,
price etc.

8) Action Programs: the next step is to

translate broad strategy statements into
specific actions and tactics for a year.

9) Anticipated Results: managers are in a

position to forecast the results of the
new marketing plan.

10) Summary: summarize the advantages,

cost and profits.

11) Appendices: include all supporting

information that you consider relevant in
developing the plan.
 1-31

MARKETING PLAN
IMPLEMENTATION
Implementation is the process of translating
broad strategy statement into specific
actions and tactics so that the objectives set
earlier are achievable.

•Implementation of plan is challenging

especially when the size of the company
increases, the customers and product are
more diverse and the environment becomes
more complex.

•Each marketing strategies element must be

elaborated in an action programme to
answer: (i) what will be done. (ii) when will
it be done, (iii) where will it be done, (iv)
who will do it, (v) how will it be done, (vi)
how much will it cost to implement the
strategy.
1-32
 1-33

MARKETING DEPARTMENT
ORGANIZATION
 The organization chart of a marketing
department needs to incorporate
mechanisms for resolving conflicts. The
marketing department can be arranged
according to:
 Functional organization
 Under this department, the organization
is arranged according to the functions it
performs. (See Figure 2.11.) Each
function is responsible for allocating and
coordinating marketing resources and
activities and utilizing them efficiently
and effectively. The main focus of this
marketing organization is to achieve the
company’s objective within a particular
market.
 1-34

MARKETING DEPARTMENT
ORGANIZATION

 Product or brand management

organization
 The marketing department is arranged
according to the different products or
brands in the company. (See Figure
2.12.) Different companies have various
approaches in managing their products
or brand. They may focus on one product
or brand, in certain set of related
products or brands, and some in
industrial goods, consumer goods, or
services. Hence, these companies will
need to define the range of products
they will supply.
 1-35

MARKETING DEPARTMENT
ORGANIZATION

 Market or.customer management

organization
 The department is divided according to
the market or customers the company
serves. (See Figure 2.13). When a
company serves diverse customer
groups, they commonly employ
customer-oriented organizational
structure. Hence, it is vital for company
representatives to specialize in certain
areas that match each customer type.
Marketing activitics and procedures vary
significantly with different types of
customers.
 1-36

MARKETING DEPARTMENT
ORGANIZATION

 Geographic organization
 When a firm operates in various
geographic area or regions, the
departments maybe divided in according
to geographic territory. (See Figure
2.14). Some companies run in specific
city or state, some companies are
multinationals which operate in almost
every country around the globe.
 1-37

MARKETING DEPARTMENT
ORGANIZATION

 Combined organizations
 Larger organizations may require
marketing departments which maybe
organized in a combination of any two of
the other organizations mentioned
earlier to ensure that the combined
areas are given attention equally.
Companies may have a combination or
matrix organizational structure which
combines two or more type of
structures. A company can have both
product- and customer-oriented
structure in order to benefit from both.
 1-38

MARKETING CONTROL

• During the implementation of marketing

plans, the marketing department must
practice constant marketing control.

• This involves measuring the results,

diagnosing or evaluating the results of
marketing strategies and plans and taking
corrective action to meet the objectives.
 1-39

SUCCESSFUL MARKETING
IMPLEMENTATION
At times, great marketing plans may fail due
to poor implementation. Therefore,
implementation has to be done meticulously
to ensure company goals can be successfully
attained within the stipulated time
•CostEstimation: As financial area plays an
important element in marketing
implementation.
•Stockholders Versus Stakeholders: While
most business tend to only focus on
stockholders, companies should not neglect
their multiple stakeholders and their needs.
•RelationshipWith Stakeholders: Maintaining
dynamic relationship with the stakeholders
can be huge challenge for most business.
•Internal Culture: To implement a marketing
plan successfully, the firm must ensure that
the marketing strategies fit in with its
company culture, that is, the system of value
and belief shared by people in the company.
 1-40

SUCCESSFUL MARKETING
IMPLEMENTATION
• Customer Complaints: There are times
that implementation of marketing plan can
go astray.
• Contingency Plans: Can also be
implemented if something happen or
arises outside of the marketing plan.