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MRM - (2010-12)
Tapas Kumar Mandal
UNDERSTANDING MARKETING STRATEGY
GENESIS OF MARKETING STRATEGY
To Grasp Marketing Planning we have to start with corporate strategy planning Nature, Importance and Scope of Strategy Planning Strategy Planning and Value delivery Process Clarifying the Mission Defining the business Surveying the Environment Internal Appraisal of the Farm Setting Corporate objectives Formulating the Corporate Strategy Drawing heavily from both Logic and Intuition
LEVELS OF A MARKETING PLAN Strategic Tactical Target marketing decisions Value proposition Analysis of marketing opportunities Product features Promotion Merchandising Pricing Sales channels Service 2-4 .
CORPORATE HEADQUARTERS’ PLANNING ACTIVITIES Define the corporate mission Establish SBUs Assign resources to each SBU Assess growth opportunities 2-5 .
GOOD MISSION STATEMENTS Focus on limited number of goals Stress major policies and values Define major competitive spheres 2-6 .
MAJOR COMPETITIVE SPHERES Industry Products Competence Market segment Vertical channels Geographical 2-7 .
” 2-8 . and by doing so. provide the opportunity for our employees and shareholders to achieve their personal objectives. to do this so as to earn an adequate profit which is required for the total enterprise to grow.MOTOROLA “The purpose of Motorola is to honorably serve the needs of the community by providing products and services of superior quality at a fair price to our customers.
DIMENSIONS THAT DEFINE A BUSINESS Customer groups Customer needs Technology 2-9 .
CHARACTERISTICS OF SBUS It is a single business or collection of related businesses It has its own set of competitors It has a leader responsible for: Strategic planning Profitability Efficiency 2-10 .
MARKET OPPORTUNITY ANALYSIS (MOA) Can the benefits involved in the opportunity be articulated convincingly to a defined target market? Can the target market be located and reached with cost-effective media and trade channels? Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits? 2-11 .
MARKET OPPORTUNITY ANALYSIS Can the company deliver the benefits better than any actual or potential competitors? Will the financial rate of return meet or exceed the company’s required threshold for investment? 2-12 .…..
Why is marketing planning necessary? • Systematic futuristic thinking by management • better co-ordination of company efforts • development of better performance standards for control • sharpening of objectives and policies • better prepare for sudden new developments • managers have a vivid sense of participation .
Objectives of the marketing plan • Acts as a roadmap • assist in management control and monitoring the implementation of strategy • informs new participants in the plan of their role and function • to obtain resources for implementation • to stimulate thinking and make better use of resources .
opportunities and threats Essential marketing information may have been missing if implementation is not carefully controlled by managers.……….Objectives of the marketing plan Assignment of responsibilities. the plan is worthless! . tasks and timing Awareness of problems.
EVALUATING A MARKETING PLAN Is the plan simple? Is the plan specific? Is the plan realistic? Is the plan complete? 2-16 .
THE CONTENTS AND STRUCTURE OF THE MARKETING PLAN The executive summary table of contents situational analysis and target market marketing objectives marketing strategies marketing tactics schedules and budgets financial data and control .
Use your judgement as well Don’t ever assume that past trends can be exploited into the future forever if drawing conclusions from statistical data.CAUTIONARY NOTES FOR EFFECTIVE PLANNING Don’t blindly rely on mathematical and statistical calculations. make sure the sample size is sufficiently large .
how do we ensure arrival? Control .are we on the right track? .where do we want to be? Strategies .STANDARD PLANNING FRAMEWORK Analysis .where are we now? Objectives .which way is best? Tactics .
BOSTON CONSULTING GROUP MATRIX (BCG ) .
INTRODUCTION BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s. According to this technique. . businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.
.RELATIVE MARKET SHARE AND MARKET GROWTH To understand the Boston Matrix you need to understand how market share and market growth interrelate.
• .MARKET SHARE • Market share is the percentage of the total market that is being serviced by your company. the higher proportion of the market you control. measured either in revenue terms or unit volume terms. • • RELATIVE MARKET SHARE RMS = Business unit sales this year Leading rival sales this year The higher your market share.
and there’s plenty of opportunity for everyone to make money.MARKET GROWTH RATE Market growth is used as a measure of a market’s attractiveness.individual sales this year last year Individual sales last year Markets experiencing high growth are ones where the total market share available is expanding. MGR = Individual sales . .
THE BCG GROWTH-SHARE MATRIX It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories: Stars Question marks Cash cows Dogs It is based on the combination of market growth and market share relative to the next best competitor. .
. to maintain its large market share. Attempts should be made to hold the market share otherwise the star will become a CASH COW.STARS HIGH GROWTH. They also require heavy investment. HIGH MARKET SHARE Stars are leaders in business. It leads to large amount of cash consumption and cash generation.
They generate more cash than required. . not growing or declining. High market share They are foundation of the company and often the stars of yesterday.CASH COWS Low growth . They extract the profits by investing as little cash as possible They are located in an industry that is mature.
DOGS LOW GROWTH. Number of dogs in the company should be minimized. . Business is situated at a declining stage. LOW MARKET SHARE Dogs are the cash traps. Dogs do not have potential to bring in much cash.
. (low).QUESTION MARKS HIGH GROWTH . Investments should be high for question marks. Why question marks? Question marks have potential to become star and eventually cash cow but can also become a dog. LOW MARKET SHARE Most businesses start of as question marks. They will absorb great amounts of cash if the market share remains unchanged.
WHY BCG MATRIX ? To assess : Profiles of products/businesses The cash demands of products The development cycles of products Resource allocation and divestment decisions .
Assessing and comparing the prospects of each SBU according to two criteria : 1. SBU’S relative market share. . Developing strategic objectives for each SBU. Growth rate OF SBU’S industry. 2. Classifying the SBU’S on the basis of BCG matrix.MAIN STEPS OF BCG MATRIX Identifying and dividing a company into SBU.
BCG MATRIX WITH CASH FLOW .
BENEFITS BCG MATRIX is simple and easy to understand. It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability. It helps you to quickly and simply screen the opportunities open to you. . and helps you think about how you can make the most of them.
Business with low market share can be profitable too. . Problems of getting data on market share and market growth. Relative market share and market growth rate. High market share does not mean profits all the time.LIMITATIONS BCG MATRIX uses only two dimensions.
PRACTICAL USE MAHINDRA & MAHINDRA .
BCG MATRIX scorpio Jeep balero .
Though BCG MATRIX has its limitations it is one of the most FAMOUS AND SIMPLE portfolio planning matrix . .used by large companies having multi-products.
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