Marketing Management

Marketing Plan. Click to edit Master subtitle style

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Topics to be covered

Marketing Planning : Meaning, Concepts of Marketing Plan, Steps involved in Planning. Organization : Evolution of Modern Marketing Department, Factors influencing the size of the marketing organization, Various types of marketing structures/organization.
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Marketing

Marketing Plan
The marketing plan is the central instrument for directing and coordinating the marketing effort. Market Planning is the managerial process of developing and maintaining a viable fit between the organizations objectives, skills and resources and its changing market opportunities. The aim of 5/18/12
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The marketing plan operates at two levels. The strategic marketing plan develops the broad marketing objectives and strategies based on an analysis of target market and value proposition. The tactical marketing plan outlines specific marketing tactics, including advertising, merchandising, pricing, channels, service and so on.
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The Strategic Planning, Implementation and Control Process

Planning Corporate Planning Division Planning Business Planning Product Planning Implem enting Organi zing Implem enting Controlli ng Measu ring Result Diagn s osing Result s Taking correcti ve action

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Corporate and Division Strategic Planning

All corporate headquarters must undertake four planning activities :
Defining

the corporate mission strategic business

Establishing

units (SBUs)
Assigning Planning

resources to each SBU

new businesses
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Define the Corporate Mission

Corporate

Mission of 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 : to do this so as to earn an adequate profit which is required for the total enterprise to grow ; and by so 5/18/12 doing provide the opportunity for
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Peter Drucker has mentioned the following questions to be asked for setting corporate mission
What is our business? What should our busines s be? What will our busines s be? Who is the custo mer? What is of value to the custom er?
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Good mission statements have three major characteristics

Focus

on a limited number of

goals.
Stress

the companys major policies and values. the major competitive spheres within which the company will operate. memorable and meaningful.
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Define

Short,

Large companies with multi product lines create SBUs to facilitate planning and general operations.An SBU can be one specific product, product line or a specific business. An SBU has three characteristics:
Single

Establishing SBU

business or a collection of related business, that can be planned separately from the rest of the company.
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Own

Assigning Resources to each SBU Resources are assigned based on the

performance of the SBU in the past, its current market position, and future potential in generating revenue for the firm. BCG / GrowthShare Matrix is an efficient tool for assigning resources.

Maruti Swift, SX4 Alto, Wago 5/18/12 nR

Ritz

Maruti 800,

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BCG Matrix

The market growth rate on the vertical axis indicates the annual growth rate of the market in which the business operates. Relative market share, measured on the horizontal axis, refers to the SBUs market share relative to that of its largest competitor. It is divided into four cells, each indicating a different type of 5/18/12

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Stars

If the question mark business is successful, it becomes a star.A star is the market leader in a high-growth market. The company must spend substantial funds to keep up with the high market growth and fight off competitors attacks. Cows When a markets annual growth rate falls, the star becomes a cash cow if it still has 5/18/12 the largest relative http://www.facebook.co market share.

Cash

Strategies for SBU

Companys next task is to determine what objective, strategy and budget to assign to each SBU. Four strategies can be pursued :
Build

Objective is to increase the SBUs market share, even forgoing short term earnings to achieve this objective. Appropriate for question marks whose market shares must grow if they are to become stars. 5/18/12
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Harvest

Objective is to increase the SBUs short-term cash flow regardless of long term effect. Harvesting generally involves eliminating R&D expenditures, not replacing sales people, reducing advertising expenditures. Appropriate for cash cows whose future is dim and from which more cash flow is needed. 5/18/12 Objectivehttp://www.facebook.co is to sell or

Divest

Assessing Growth opportunities Intensive Growth First course

of action should be a review of whether any opportunities exist for improving its existing businesses performance. Ansoff has proposed Product/ MarketCurrent Expansion Grid for the 1. Market 3. Product same. Products
Penetration Strategy 2. Marketdevelopment strategy 5/18/12

Curr ent Mark ets New Mark ets

Development Strategy Products New 4. Diversification strategy

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Ansoff Model
Market

Penetration Strategy For a music cassette co, they can try to encourage current customers to buy more cassettes, attract competitors customers or convince nonusers of cassettes to start using them.

Market-Development

Strategy Seeking additional distribution channels in its 5/18/12

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Integrative

Growth Company might acquire one or more of its suppliers (such as plasticmaterial producers)- backward integration. Acquire some wholesalers or retailers forward integration. Finally, acquire one or more competitorshorizontal integration. Growth Makes sense when good 5/18/12 opportunities can be found http://www.facebook.co

Diversification

Steps in Marketing Plan

Designing Business Mission Analysis of the Market situation Formulation of Marketing Strategies Preparing Action Programs and Budgets Developing Control Procedures
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Designing

Business Mission Each business unit needs to define its specific mission within the broader company mission. Analysis SWOT Analysis- A business unit has to monitor key external macroenvironment forces and significant microenvironment actors.Company should capitalize on its key strengths, overcome its 5/18/12 major weaknesses, http://www.facebook.co avoid

Situation

SWOT Analysis
Inter nal Fact ors Strengths Weakn Technological skills esses Absence of Important Leading Brands Distribution Channels skills Weak Brands Customer Loyalty/Relationship Illogical Distribution Low customer Quality of Retention Product/Service Unreliable Economies of Scale Opportu Threats product/service nities

Exter nal Facto rs

New Distribution Channels Changing customer 5/18/12 Positive

Changing customer tastes Closing of Negativ http://www.facebook.co

Developing

Marketing Objectives Company sets the objectives and then Manages by Objectives based on Profit, Market share, growth or diversity. Objectives must meet four criteria: hierarchically from the most to the least important. be quantitative whenever possible. be realistic and time 5/18/12
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Arranged Should Should

Formulating

Marketing Strategies- Goals indicate what a business unit wants to achieve, strategy is a game plan for how to get there.Michael Porter has considered three generic strategies: Overall cost leadership Business works hard to achieve the lowest production and distribution costs so that it can price lower than its competitors and win 5/18/12 a large market share.
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1.

Preparing

Action Programs and Budgets Company must work out detailed action programs and the marketing people must evaluate the program costs. Budget is the allocated for each. For eg. If the airlines has decided for lowest fare, it must plan programs for online ticket booking, No Frills service and cutting down the cost of staff.
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Contents of a Marketing Plan Executive Summary

Marketing Plan should open with a brief summary in a few pages of the plans main goals and recommendations.
Situation

Analysis Presents relevant background data on the market, customers, competitors, product, distribution and company. 5/18/12
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Contd.

Financial

Projections Financial projections in terms of sales revenue, net profits, ROI, cash flow etc are then done. Programs Plan must specify the broad marketing programs designed to achieve the business objectives. Allocation Budget is 5/18/12

Action

Budget

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Marketing Audit
A marketing audit is a comprehensive, systematic, independent and periodic examination of a companys or business units marketing environment, objectives, strategies and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the companys5/18/12 marketing performance.
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Characteristics of Marketing Audit

Comprehensive

The marketing audit covers all the major marketing activities of a business, not just a few trouble spots. Excessive sales force turnover, for eg could be a symptom not of poor sales force training or compensation but of weak company products and promotion.
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Independent

A marketing audit can be conducted in six ways self-audit, audit from across, audit from above, company auditing office and outsider audit. Self-audits, in which managers use a checklist to rate their own operations, lack objectivity and independence. Typically, firms initiate marketing audits only after sales 5/18/12 have turned down, http://www.facebook.co sales force

Periodic

Components of a Marketing Audit Part I Marketing Environment

Audit Macroenvironment
A.

Demographic What major demographic developments and trends pose opportunities or threats to this company? Economic What major developments in income, prices, savings and credit will affect the company? 5/18/12
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B.

Task Environment
A.

Markets What is happening to market size, growth, geographical distribution and profits? Customers What are the customers needs and buying processes? Competitors Who are the major competitors? What are their objectives, strategies, strengths and weaknesses?
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B.

C.

Part A.

II Marketing Strategy Audit Business Mission Is the business mission clearly stated in market-oriented terms? Marketing objectives and Goals Are the marketing objectives and goals stated clearly enough to guide marketing planning and performance management? Strategy Has the management articulated a clear marketing 5/18/12
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B.

C.

Part IV Marketing Systems Audit

A.

Marketing Information System Is the marketing intelligence system producing accurate, sufficient and timely information? Marketing Planning Systems Is the marketing planning system well conceived and effectively used? Marketing Control System Are 5/18/12
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B.

C.

Part VI Marketing Function Audits

A.

Products What are the companys product line objectives? Price What are the companys pricing objectives, policies, strategies and procedures? Distribution What are the companys distribution objectives and strategies?
5/18/12 Advertising, Sales http://www.facebook.co Promotion

B.

C.

D.

Evolution of Modern Marketing Department

Stage

I Simple Sales Department

President

Sales VP

Sales Force
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Simple

Sales Department Small companies typically appoint a sales vice president, who manages a sales force and also does some selling. When the company needs marketing research or advertising, the sales vice president hires help from the outside. Department with Ancillary Marketing Functions 5/18/12 As the company expands, it http://www.facebook.co

Sales

Stage

II - Sales Department with ancillary Marketing Functions

President Sales VP

Sales Force

Marketing Director Other Marketing Functions (Internal staff 5/18/12 and external http://www.facebook.co support

Stage

III Separate Marketing Department

President

Sales VP Sales Force

Marketing VP Other Marketing Functions

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Separate

Marketing Department - The continued growth of the company will warrant additional investment in marketing research, new product development, advertising and sales promotion.Yet, the sales vice president normally focuses time and resources on the sales force. Eventually, the CEO will see the advantage of establishing a separate marketing department headed by a marketing vice 5/18/12 president, who reports, along http://www.facebook.co

Stage

IV & V Modern / Effective Marketing Company

President Executive VP of Marketing and Sales Sales VP Sales Force
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Marketing VP Other Marketing Functions

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Modern

Marketing Department /Effective Marketing Company-

If there is too much friction between sales and marketing, the company president might place marketing activities back under the sales vice president, instruct the executive vice president to handle conflicts, or place the marketing vice president in charge of everything, including the sales force. This 5/18/12 basis of the is the
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Stage

VI Process and Outcome Based Company

Cross Disciplinary Team with Process Leaders Marketin g Departm ent

Marketing Personnel

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Stage

VI Process and Outcome based Company

Many companies are now refocusing their structures on key processes rather than departments.To achieve customerrelated process outcomes, companies appoint process leaders who manage cross disciplinary teams. Marketing and sales people spend an increasing percentage of their time as process team members. 5/18/12
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Various Factors affecting the size of the organization of the company Financial status
Number

of products or product lines carried by the company coverage

Geographical

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Types of Organizations
Functional

Organization The most common form of marketing organization consists of functional specialists reporting to the marketing vice-president, who coordinates their activities. main advantage of a functional marketing organization is its administrative simplicity. 5/18/12
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The

Functional Organization
Marketing vicepresident

Marketin g Administr ation Manager

Advertis ing and salespromoti on Manage r

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Sales Mana ger

Marketi Newng produ Researc cts h Mana manage ger r

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Product-oriented Organization
In

large companies with multiple products, individual managers look after each brand, product or product-line. In such organizations, product managers develop and implement a complete strategy and marketing program for specific products, brands or product lines.
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General manager

Manufact uring

Marketin g

Finance

Marketi ng researc h Product manager (Swift)

Product Managem ent Product Manager (Wagon 5/18/12 R)

Public Relations and Corporate Communi Support cations

Product Manager ( Alto)

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Geographic Organization (Market oriented)

Most

of the companies that sell across the country or internationally often use a geographic or market-oriented or territory-oriented organization. In such an organization, marketing and sales people are assigned to specific territories, geographic locations, countries, regions or market segments.
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General Manager

Manufac turing

Marketi ng

Finance

Manager South India

Manager East India

Public Relations and Corporate Communic ations Manager West India

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Matrix Organization
Companies

that produce many products flowing into many markets may adopt a matrix organization. At the head office, they have many staff departments specializing in different functions. They use a combination of functional, geographic, product and market organization forms.
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Mens Wear Ray Produ on ct Mana Nylo gers n Cott on Dacro n

Market Managers Wome Home ns Furnis Wear hings

Industri al Market s

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