Strategic Marketing Management

Welcome to all of you!

Khalid Jamil Ansari kjansari1@yahoo.com khalidjansari@gmaiiol.com 03002265808 03312510453

December 23, 2012

Course Introduction

Welcome
About Me About You (why you?) Why Strategy? Overview of Topics Expectations Introduction of Concepts

Who are You? Self Introduction

Name Company / Business / Student Work experience, if any? Your claim to fame? What do you hope to gain from this course?

Why You?

You will be principals in firms

You will have to decide what to do:
What markets?

What services?
Where to dedicate your time? What kinds of people?

You probably will be part of a team.

An Overview of the Subject

An Overview of the Subject

Introduction to Strategic Marketing Management Introductory Modules , Introduction to Case Analysis, Writing Case Analysis Strategy Formulation Strategy Implementation Strategic Control Environment Scanning (SWOT Analysis) Target Marketing Business Strategy

An Overview of the Subject

Market Dominance Strategy Promotion Strategy Distribution Strategy Pricing Strategy Marketing Warfare Strategy Market Segmentation The Marketing Process Marketing Positioning , Marketing Research Presentations/Revision

Resources Needed For This Class

Recommended Book: Doyle P. (2003), Marketing Management and Strategy, Prentice-Hall Europe 3rd Edition. West, D. C., J. B. Ford, and E. Ibrahim (2006), Strategic marketing: creating competitive advantage: Oxford University Press. Reference Book: Strategic Management and Business Policy, 12th Edition, Thomas L. Wheelen, J. David Hunger

Requirements

Home work Assignments, Class Participation, Quizzes, Case Studies, and Developing of a Project Report 4 Quizzes MCQs, True/False, Fill in the blanks, and Short Questions

Midterm
Final Exam

The conventional definition of management is getting work done through people. But real management is developing people through work.

Agha Hasan Abedi

What is Strategic Management?

Strategic Management Defined

Art & science of formulating, implementing, and evaluating, crossfunctional decisions that enable an organization to achieve its objectives

Strategic Management
In essence, the strategic management is a companys game plan

What is Strategy?

Means by which long-term objectives are achieved

What is meant by Strategies?

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What is meant by Strategies?

Strategies are plans to achieve long term business aims and objectives of the organization. Numerous major or minor business strategies which organizations use to manage their business operations. Some minor strategies could be the pricing, promotion, distribution strategies organizations use in day to day activities.
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What is meant by Strategies?

Some long term major strategies could be to:
- acquire new business or open new branch - start manufacturing plant in some other country - close down factory, merge with another organization - acquire a small business to improve competitive position
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What is Marketing??

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What is Marketing??
Selling? Advertising? Promotions? Making products available in stores? Maintaining inventories?

All of the above, plus much more!

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Marketing = ?
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals
American Marketing Association

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Marketing Management = ?

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Simple Marketing System

Communication

(a collection of sellers)

Industry

Goods/services

Money

(a collection of Buyers)

Market

Information
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Marketing = ?

Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about push.

Marketing is all about managing the four Ps Product Price Place Promotion

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The 4 Ps & 4Cs?

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The 4 Ps & 4Cs

Marketing Mix Product Customer Solution Convenience Place

Price Customer Cost

Promotion Communication

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Difference Between - Sales & Marketing ?

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Difference Between - Sales & Marketing ?

Sales
trying to get the customer to want what the company produces

Marketing
trying to get the company produce what the customer wants
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What do we market?

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What do we market?

Goods

Services
Events Experiences

Personalities
Place Organizations

Properties
Information Ideas and concepts
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Core Concepts of Marketing

Based on : Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships Markets, Marketing & Marketers.

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Core Concepts of Marketing

Need food ( is a must ) Want Pizza, Burger, French fry's ( translation of a need as per our experience ) Demand Burger ( translation of a want as per our willingness and ability to buy )

Desire Have a Burger in a five star hotel

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Core Concepts of Marketing

Needs, wants demands Products Utility, Value & Satisfaction

Markets

Marketing & Marketers

Xchange, Transaction Relationships

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In order to understand Marketing let us begin with the

Marketing Triangle
Customers

Company
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Competition

Who is a Customer ??
CUSTOMER IS . . . . .
Anyone who is in the market looking at a
product / service for attention, acquisition, use or consumption that satisfies a want or a need

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Customer
CUSTOMER has needs, wants, demands and desires Understanding these needs is starting point of the entire marketing These needs, wants arise within a framework or an ecosystem

Understanding both the needs and the ecosystem is the starting point of a long term relationship

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How Do Consumers Choose Among Products & Services?

Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product. Satisfaction - Based on a comparison of performance and expectations.

Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction

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Customers - Problem Solution

As a priority , we must bring to our customers WHAT THEY NEED We must be in a position to UNDERSTAND their problems Or in a new situation to give them a chance to AVOID the problems

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Customer looks for Value

Value
Benefit

= Benefit / Cost
= Functional Benefit + Emotional Benefit

Cost

= Monetary Cost + Time Cost + Energy Cost + Psychic Cost

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What is Strategic Marketing Management?

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What is Strategic Marketing Management?

It is the managerial process that helps to develop a strategic and viable fit between the firms objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products.

Strategic Marketing Management

Strategic marketing management is concerned with how we will create value for the customer Asks two main questions
What is the organizations main activity at a

particular time? Customer Value

What are its primary goals and how will these be

achieved? how will this value be delivered

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How to go about it?

Defining the corporate mission Establishing SBUs Allocating resources for SBUs Planning for new business

What is Vision Statement?

What is Vision Statement?

Think: leading with inspiration and courage, obsessed with future possibility, in a love affair with change. VISION creates that momentum of growing anticipation about the future, where change is embraced as a step closer to that very compelling picture of whats coming next. The excitement about the future trumps any apprehension about the uncertain change is recognized as the catalytic converter it is.

What is Mission Statement?

What is Mission Statement?

Think: managing with greatness and untamed strength, improving everything daily. MISSION will feed into the confidence of your organization by feeding this ever-present selftalk: We can do this, and we are the ones ordained to do this, for we are the best at it. Mission will churn out revolutionary ideas about the mundane, banishing mediocrity.

Corporate Mission?

Corporate Mission

This seeks to embody the entire goals of the organization and the objective of its existence. It seeks to provide a sense of purpose, direction and opportunity

5 questions that the firm must ask itself?

5 questions that the firm must ask itself

What is our business? Who is our customer? What does our customer need? What will our business be? What should our business be?

Marketing Myopia

Industry is a customer satisfying process not a goods producing process. It is important therefore how you redefine your business.

Good mission statements have three characteristics

They focus on a limited number of goals It stresses the major values and policies the firm desires It defines the major competitive scope of operation

SBU?

SBU

It is a company within a company The business is differentiated from the rest of the company It has its own set of competitors It is a separate profit centre

The BCG Matrix?

The BCG Matrix

The BCG Matrix is a business method that was created by the Boston Consulting Group in the 1970s. This business method bases its theory on the life cycle of products. Also known as the Boston Box or Grid, BCG Charts are divided into four types of scenarios, Stars, Cash Cows, Dogs and Question Marks.

The BCG Matrix

???

Stars

Dogs

Cash Cows
Mkt Share

SBU strategies

Build Hold Harvest Divest

SWOT Analysis

Strengths Weaknesses Opportunities Threats

The GE Model
Weak Medium Strong
Strong

Medium

Weak Business Strength

Ansoffs ProductMarket Grid?

Ansoffs Product-Market Grid

The Ansoff product/ market matrix is a tool that helps businesses decide their product and market growth strategy. Ansoffs product/ market matrix suggests that a business attempts to grow depend on whether it markets new or existing products in new or existing markets.

Ansoffs Product-Market Grid

Current products Current Mkts Mkt penetration strategy New products

Product development strategy

New Mkts

Mkt development strategy

Diversification strategy

The Planning Process

Analysing Market opportunities Developing Marketing strategies Planning Marketing Programs Managing the Marketing Effort

Porters Generic Strategies

Overall cost leadership Product Differentiator Focus

Marketing Control

Annual Plan control Profitability control Strategic Control

Strategic Planning
Strategic Planning is the managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities.

Also called Strategic Management Process

All organizations have this

Can be Formal or Informal

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The Strategic-Planning, Implementation, and Control Process

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Business Strategic-Planning Process

External environment (Opportunity &

Threat analysis)

Business Mission

Goal Formulation

Internal Environment
(Strength/ Weakness analysis)

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Strategy Formulation
Environmental Analysis Competitor Customer Supplier Regulatory Social/ Political Internal Analysis Technology Know-How Manufacturing Know-How Marketing Know-How Distribution Know-How Logistics Opportunities & Threats Strength & Weaknesses Identity Core Competencies

Identify opportunity

Fit internal Competencies with external opportunities

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Firm Strategies

The Marketing Plan

A written document that acts as a guidebook of marketing activities for the marketing manager

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CONTENTS of MARKETING PLAN

Business Mission Statement Objectives Situation Analysis (SWOT) Marketing Strategy Target Market Strategy Marketing Mix
Positioning Product Promotion Price Place Distribution People Process

Implementation, Evaluation and Control

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The Marketing Process

Business Mission Statemen t Objective s Situation or SWOT Analysis

Marketing Strategy
Target Market Strategy

Marketing Mix
Product Promotion Place/Distribution Price

Implementation Evaluation, Control

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Why a product like radio declined and now once again emerging as an entertainment medium ?

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What Were the Drivers of This Change ?

Technology ?
Government policy ? Other media substitutes ?

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Factors Influencing Companys Marketing Strategy

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External Marketing Environment

External Environment is not controllable
Demographics Social Change Ever-Changing Marketplace

Product Distribution Promotion Price

Physical / Natural

Economic Conditions

Competition

Target Market
Political & Legal Factors

Environmental Scanning

Technology

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The macro-environment

is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities
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P r o d u c t?

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Product is . . . . .
Anything that is offered to the market for attention, acquisition, use or consumption that satisfies a want or a need

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Types of Products
PRODUCTS

Consumer Products

Services

Industrial Products

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Product Items, Lines, and Mixes

Product Item

A specific version of a product that can be designated as a distinct offering among an organizations products. A group of closely-related product items.

Product Line

Product Mix

All products that an organization sells.

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Product Mix
Width how many product lines a company has
Length how many products are there in a product line Depth how many variants of each product exist within a product line Consistency how closely related the product lines are in end use

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Gillettes Product Lines & Mix

Depth of the product lines Width of the product mix
Blades and razors
Fusion 5 blade Mach 3 Turbo Mach 3 Sensor Trac II Atra Swivel Double-Edge Lady Gillette Super Speed Twin Injector Techmatic

Toiletries
Series Adorn Toni Right Guard Silkience Soft and Dri Foamy Dry Look Dry Idea Brush Plus

Writing instruments
Paper Mate Flair S.T. Dupont

Lighters
Cricket S.T. Dupont

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What is a Service? Defining the Essence

An act or performance offered by one party to another (performances are intangible, but may involve use of physical products) An economic activity that does not result in ownership A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets
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Some Industries - Service Sector

Banking, stock broking Health care

Lodging
Restaurants, bars, catering

Education
Wholesaling and retailing Laundries, dry-cleaning

Insurance
News and entertainment Transportation (freight and passenger)

Repair and maintenance Professional (e.g., law, architecture, consulting)

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Classification of Services
Banking Good Transportation Major Service with Minor Product Business Hotels Product = Service Computers Major Product with Minor Services Materials / Components

Pure Intangible Service

Pure Tangible Product

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Major Characteristic of Services

Intangibility Services are intangibility cannot be seen,

tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed

simultaneously.

Variability or Heterogeneity Services are highly variable Perishability Services cannot be stored.

Non Ownership - Services are rendered but there is no

transfer of title

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The Marketing Mix

The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion. Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence

Marketers today are focused on virtually all aspects of the firms operations that have the potential to affect the relationship with customers.
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The 8Ps of Integrated Service Management vs. the Traditional 4Ps

Product elements
Place, cyberspace, and time Process Productivity and quality People Promotion and education

Physical evidence
Price and other user outlays

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The Give and Get of Marketing

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Great Words on Marketing

1. The purpose of a company is to create a 2.
customerThe only profit center is the customer. A business has twoand only twobasic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs. The aim of marketing is to make selling unnecessary. While great devices are invented in the Laboratory, great products are invented in the Marketing department. Marketing is too important to be left to the marketing department.

3.
4. 5.

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Drivers of Customer Satisfaction

Many aspects of the firms value proposition contribute to customer satisfaction:

The core product or service offered Support services and systems

The technical performance of the firm

Interaction with the firm and it employees The emotional connection with customers

Ability to add value and to differentiate as a firm focuses more on the top levels
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Marketers and Markets

Marketers are focused on stimulating exchanges with customers who make up markets B2C or B2B. The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers. It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants. Much happens before and after the sale to affect customer satisfaction
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Stages of Customer Interaction

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What Changed in Marketing

Old Economy
Organize by product units Focus on profitable transactions Look primarily at financial scorecard Focus on shareholders Marketing does the marketing Build brands through advertising Focus on customer acquisition No customer satisfaction measurement Over-promise, under-deliver

New Economy
Organize by customer segments Focus on customer lifetime value Look also at marketing scorecard

Focus on stakeholders Everyone does the marketing Build brands through performance Focus on customer retention Measure customer satisfaction and retention rate Under-promise, over-deliver

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What is customer centric?

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Myth 1 The larger the range of products, the more customercentric I am.
Mythbuster The range of products has emerged from being competition-centric.

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Myth 2 Better technology (read CRM) leads to better customer service.

Mythbuster Technology alone does not deliver, helps people do.

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Myth 3 Launch a product and the customer will start using instantly. - Give a customer a card and he will learn how to play with it immediately
Mythbuster Customers need To be educated too

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Myth 4 The only way to get a customer is from competition.

Mythbuster Customers are not only present where competition is.

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Myth 5 Just advertise and - You will sell.

Mythbuster Advertising will only sell, Not retain customers.

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Myth 6 No difference between marketing & selling

Mythbuster Selling focuses on the needs of the seller; marketing on the needs of the buyer.
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Myth 7 In the absence of relationships trust builds financial brands

Mythbuster Trust is not a differentiator at all it is the very minimum that the customer expects!!

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So what will the differentiators be :

Technology ? Brand ?

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The real differentiator of customer centricity in a commoditised world of financial

products -

Customer Service !

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Thank You kjansari1@yahoo.com

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