Lesson 03 - Introduction to Marketing Management

Process - 1

3.1. The process of marketing management.

In practice, corporate strategy and marketing are closely related, and much
of corporate strategy is derived from marketing. The development of an
organization’s mission and objectives largely determines its marketing
strategy. Therefore, this lesson first examines marketing planning,
marketing strategies, and strategic marketing. Marketing management
process basically involves planning marketing activities, directing the
implementation of the plans and controlling the plans. Planning at
corporate, business and functional levels is an integral part of the marketing
management process.

‘The process of planning and executing the conception,

pricing, promotion, and distribution of ideas, goods and
services to create exchanges that satisfy individual and
organizational goals.’
Philip Kotler

3C’s Customer Competitor Company

STP Segmentation Targeting Positioning
4P’s Product, Price, Place, Promotion
‘Integrated Marketing’

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Management process involves basically planning, marketing activities,
directing the implementation of the plans and controlling these plans.
Marketing management process is appears in Figure 3.1.

Figure 3.1 Marketing Management Process

Marketing Planning

Implementation Control Marketing Plans

Planning at the corporate, business and functional levels is an integral part

of the marketing management process; but to fully understand that process
we must look at how a company defines its business. It is a clear fact that
the task of any business is to deliver customer value at a profit. It is called
the value delivery process. There are at lest two views of the value delivery
process. The traditional view (shown in Figure 3.2) is that the firm makes
something and then sells it. Here marketing take place in the second half of
the process.

It is important that you recognize the complexity that lies

behind corporate objectives

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 Figure 3.2 Traditional View of the Value Delivery Process

Make the product Sell the product

Design Procure Make Price Promote Distribution Service
product Sell

This traditional view has been replaced by the value creation and delivery
sequence (shown in Figure 3.3), which places marketing at the beginning of
the planning process. This sequence consists of three parts. In the first
phase, choosing the value, through segmenting, targeting and develop the
offering’s value positioning. In the second phase it is delivering the selected
value. The third phase is for communicating the value.

Figure 3.3 Value Creation and Delivery Process

Choose the value Provide the value Communicate the

value
Custom Marke Value Product Service Pricing Sourci Sale Sales Advert
er t positio develop develop ng s promo ising
segmen selecti n ment ment Makin force tion
tation on g
focus

The detailed Marketing Management Process consists of analyzing marketing

opportunities, researching and selecting target markets, designing marketing
strategies, planning marketing programs and organizing, implementing and
controlling the marketing effort. It is shown in Figure 3.4

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 Figure 3.4: Marketing Management Process

Step 1: Analyzing Market Opportunities

Scanning marketing environment to identify the market
opportunities.
Develop and maintain effective Management Information System
(MIS), which supports for scanning the marketing environment and
identifying opportunities.
Understand the consumer market and industrial market and identify
the buyer behavior in consumer market.

Step 2: Developing Marketing Strategies

Market segmentation:

Segment the market

Develop segment profiles.

Market targeting:

Evaluating the segment

Select the target segments

Marketing Positioning:

Identify possible positioning options

Select, develop and communicate the chosen positioning strategy.

Product strategies
Pricing strategies
Place strategies
Promotion strategies

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Step 3: Planning Marketing Programs
Determine the budget to be used to accomplish marketing
objectives
Allocate budget to the various part of the marketing mix
Allocate budget within each element of the marketing mix to
achieve the best use of resources.

Step 4: Managing the Marketing Effort

Organize marketing activity
Implement marketing plan
Control marketing effort to ensure that plans are executed in a
manner that accomplishes the plan’s stated objectives.

3.2 Marketing Plan

The need for planning is almost universally accepted by managers, even

though it is not so widely put into practice. Some of the benefits of planning
include the following:

Consistency. The individual marketing action plans need to be

consistent with the overall corporate plan and with the other
departmental or functional plans. They should also be consistent with
those of previous years, minimizing the risk of management
‘firefighting’, i.e. incoherent, case-by-case actions plans.
Responsibility. Those who have responsibility for implementing the
individual parts of the marketing plan will know what their
responsibilities are and can have their performance monitored against
these plans.

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 Communication. Those implementing the plans will also know what
the overall objectives are, the assumptions that lie behind them, and
the context for each of the detailed activities.
Commitment. Assuming that the plans are agreed upon by those
involved in their implementation, as well as by those who will provide
the resources; the plans should stimulate a group commitment to their
implementation.

Plans must be specific to the organization and to its current situation. There
is not one system of planning but many systems, not one style but many
styles, and a planning process must be tailor-made for a particular firm in a
specific set of circumstances. Therefore, a marketing plan is one of the most
important outputs of the marketing management process. Each product level
(product line, brand) must develop a marketing plan for achieving its goals.

The validity of the whole marketing plan relies on the accuracy of

the input from (the marketing) system.

3.2.1. Contents of a Marketing Plan

1. Mission statement

2. Executive summary: It is a brief overview of the proposed plan, which

contains main goals and recommendations for quick management skimming.

3. Current market situation: This section presents relevant background

data on sales, costs, profits, the market; product; competition; distribution
and forces in the macro environment. This information is essential to carry
out a SWOT (strengths, weakness, opportunities, and threats) analysis.

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4. Opportunity and issue analysis: It consists of the main opportunities/
threats/ strengths/ weakness found in SWOT analysis and issues faced by
the product.

5. Objectives: It is an outline of the goals the plan wants to achieve in the

area of sales volume, market share, profit and other relevant terms.

6. Marketing strategies: It presents the broad marketing strategies that

will be used to achieve the plan’s objectives. It consists of the definition of
target market, positioning strategies, product, price, place and promotion
strategies intended to execute for achieving objectives.

7. Action programs: It refers the actual marketing programs derived from

the marketing strategies to be used in achieving stated marketing
objectives. Further it provides answers for;

a) What will be done?

b) Who will do it?
c) When will it be done?
d) How much will it cost?
e) How progress be measured?

8. Financial projection: This section consists of expected financial

outcomes from the plan. It includes forecasted sales revenue, and
production, promotion and related expenses as well as projected profits.

9. Implementing controls: The last section of the marketing plan outlines

the controls for monitoring and adjusting implementation of the plan. Based
on these controlling mechanisms the above stated goals and strategies are
subjected to make adjustments as needed.

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 Step Purpose
01 Mission statement Enlightens the overall company existence
to the market and stakeholders
02 Executive summary Presents a brief overview of the plan for
quick management skimming.
03 Current marketing Presents relevant background data on the
situation market; product; competition;
distribution and micro environment.
04 Opportunity and issue Identify the main opportunities/ threats/
analysis weakness/ strengths and issues facing by
the product.
05 Objective(s) Define the goals the plan wants to
achieve in the areas of sales volume,
market share and profit.
06 Marketing strategy Presents the broad marketing strategies
that will be used to achieve the plan’s
objectives.
07 Action programs Answers: What will be done? Who will do
it? When will it be done? How much will it
cost?
08 Project profit and loss Forecasts the expected financial
statement outcomes from the plan.
09 Controls Indicates how the plan will be monitored.

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Marketing managers are the key responsible persons for the marketing
management process. For the purpose of carrying out their responsibilities
marketing managers, at corporate, business or functional level, follow a
marketing planning process.

Nothing drives progress like a strong VISION.

Activity - 01

1. Observe the new products/services that you see in the

market and list them.
2. Prepare a simple marketing plan for a new product that
you have observed in the market.

3.3 Marketing Planning Process

Marketing planning is the process of making a coordinated set of decisions

that constitute a marketing strategy for one or more target markets. Simply,
it is the process of deciding what marketing actions to undertake, why they
are necessary, when and where they will be carried out as shown is Figure
3.5.

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 Figure 3.5: Steps in Marketing Planning Process

Step 01: Analyzing market opportunities

Step 02: Developing marketing strategies

Step 03: Planning marketing programs

Step 04: Managing the marketing effort

Marketing planning is indeed the crux of the whole marketing

process.

Step 01-Analyzing market opportunities

The first step in the marketing planning process is analyzing the market.
This includes evaluating opportunities and threats in the product-markets of
interest to the firm and determining the firm’s strengths and weaknesses,
understanding buyers competition and environmental forces. To identify and
evaluate the market opportunities it is essential to maintain a reliable
marketing research and information system. One particularly useful
technique in the analysis of the material contained in the marketing audit is
that of a SWOT (Strengths, Weaknesses, Opportunities, and Threats)
analysis. It groups some of the key pieces of information into two main
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categories (internal factors and external factors) and then sorts by their dual
positive and negative aspects (strengths and opportunities as the positive
aspects with weaknesses and threats representing the negative aspects):

Internal factors: Strengths and weaknesses internal to the

organization, its strategies, and position in relation to its
competitors.
External factors: Opportunities and threats presented by the
external environment and the competition.

SWOT is just one aid to categorization. It is not the only

technique.

Activity - 02

1. Compare a Toyota Automobile (e.g. Toyota Corolla) in 1980s and

2000s and identify the similarities and differences.
2. Conduct a SWOT analysis on yourself and on a person whom you
admire a lot and compare the similarities and differences.
3. Conduct a SWOT analysis of your own organization.

Step 02-Developing marketing strategies

As James Quinn points out, ‘Goals or objectives state what is to be achieved

and when results are to be accomplished, but they do not state how the
results are to be achieved.’ That is where the marketing strategies enter the

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picture. A marketing strategy is essentially a pattern or plan that integrates
an organization’s major goals, policies, and action sequences into a cohesive
whole. Therefore, the second step is developing marketing strategies to
achieve objectives in each target market. It consists of identifying target
markets and develops product strategy, positioning strategy, pricing
strategy, distributing strategy and promotion strategy. Further the
positioning strategy must initiate new product development, testing and
launching and after launching positioning strategy should be modified
different stage in the product life cycle.

Product strategies: Developing new products, repositioning or re-

launching existing ones, and scraping old ones, adding new features
and benefits, balancing product portfolios.
Pricing strategies: Setting the price to skim or to penetrate,
pricing for different market segments, deciding how to meet
competitive pricing.
Promotional strategies: Specifying the advertising platform and
media, deciding the public relations brief, organizing the sales force
to cover new products and services or markets.
Placement strategies: Choosing the channels, deciding levels of
customer service.

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 ‘Goals or objectives state what is to be achieved and when results are
to be accomplished, but they do not state how the results are to be
achieved.’

Step 03-Planning marketing programs

As the third step, the marketing strategy needs to be transformed into a

marketing program. Designing the marketing program consists of three
interrelated action.

a. Determining the budget to be used to accomplish marketing objectives.

b. Allocating budget to various parts of the marketing mix (product, price, place,
promotion).
c. Allocating budget within each element of the marketing mix to achieve the best use
of resources.

As a result, these marketing programs are the most important, practical

outcome of the whole planning process. These plans should therefore be:

Clear – they should be unambiguous statements of exactly what

is to be done.
Quantified – the predicted outcome of each activity should be,
as far as possible, quantified, so that its performance can be
monitored.
Focused – the temptation to proliferate activities beyond the
numbers that can be realistically controlled should be avoided.
Realistic – they should be achievable.
Agreed upon – those who are to implement them should be
committed to them and agree that they are achievable.

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 The focus of marketing strategies must be the objectives to be
achieved – not the process of planning itself.

Step 04-Managing the marketing effort:

The final step in the marketing planning process is organizing the marketing
resources and then implementing and controlling the marketing plan.
Organizing marketing activity is a process of building a marketing
organization that is capable of implementing marketing plan. Implementing
is a process that turns marketing plans into action. In the controlling process
it ensures that plans are executed in a manner that accomplishes the plan’s
stated objectives as shown in the following figure.

2.
Developing
marketing
strategies
1. 3.
Analyzing Planning
market marketing
opportunities programs
4.
Managing
marketing
effort

However, the marketing planning process is involved at all levels of

planning, i.e. corporate, business and functional, are shown in figure 3.6.

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 Figure 3.6 Planning Hierarchy

Corporate
planning
anning
Business planning

Functional planning

In any stage of planning process, it is required to analyze the situation for

identification of opportunities, set the objectives, and develop strategies to
achieve such objectives, implement and make sure such objectives are
achieved. Therefore, in each level there are separate objectives, strategies
and controlling tools. Therefore, it is a clear fact that strategy development
involves at all levels of planning.

Please do the Self Assessment Lesson 03

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 Summary

The starting point of the marketing management process is to analyze

the marketing opportunities followed by SWOT analysis and other
activities. A SWOT analysis may be used to collect the most important
information about the organization’s strengths and weaknesses and the
opportunities and threats of the environment in which it operates.
What ever the form of analysis, the inherent assumptions must be
spelled out.

In general, the use of marketing plans conveys a number of

advantages: consistence, responsibility, communication, and
commitment. A marketing plan basically consists of a mission
statement, an executive summary, the current marketing situation,
opportunity and issue analysis, objective(s), marketing strategy, action
programs, project profit and loss statement and control mechanism. All
of these detailed plans should be, as far as possible, number based and
dead lined, briefly described, and practical. These programs must be
controlled, particularly by the use of budgets, for which the overall
figures may be derived by affordable, percentage of revenue, zero-
based budgeting, etc.

Marketing planning process includes analyzing marketing opportunities,

developing marketing strategies, planning marketing programs, and
managing the marketing effort. Based on the knowledge on marketing
management process in this lesson, next lesson will explore the detailed
of corporate, business and functional level marketing planning and
strategy formulation.

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Now please go to lesson review questions & try to answer them
by yourself to complete this lesson.

Additional Reading

www.redcross.org www.microsoft.com
www.ibm.com www.motorola.com
www.intel.com www.panasonic.co.jp
www.honda.com www.ford.com.www.bmw.com

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