The Synergistic Marketing Planning Process

by Tilan Wijeyesekera

The marketing planning process

Structure of a typical Marketing Plan 1. 2. Marketing Analysis / Audit Macro audit (PESTEL) Micro audit (5 Forces) Internal audit (systems, organization, strategy, productivity, functions) SWOT Analysis

3. Objectives Corporate (Org Mission, Broad aims and goals) Marketing (Sales volume & value, Market share, launch of new products, entry in to new markets/segments, customer retention, product profitability)
4. 5. 6. 7. Marketing Strategies Segmentation, Targeting and positioning (STP) Growth Strategies (Ansoff) Competitor Branding Marketing Mix Tactical Plan 7 S, tasks and responsibility Control and Evaluation Monitoring performance Financials / Budgets

Why is marketing planning necessary

Identify Opportunities, threats, weaknesses and strengths To give direction Create a competitive advantage Increasing turbulence, complexity and competitiveness The speed of change Resources and work allocation process To get support from other functions

The Purpose of marketing planning

Adapting to change Resource allocation Consistency Integration Communication and motivation Control

Objectives
Objectives should look at the future and be widely understood by the organization and closely related to the organizations financial, physical and human resource capability as well as the environment.

Setting Objectives
S M A R T Specific Measurable Achievable/Aspirational Realistic Time Bound

Corporate Objectives
The higher most objectives which stem from the Vision, Mission and goals and mainly focussed on the long term profitability of the organization and usually expressed in financial terms eg. To increase operating profits by 15% To achieve a 20% return on Capital employed To achieve a 10% growth in earnings per share
Objectives virtual stratgist

Business Objectives
These are functional or operational level objectives which define performance at business unit level.
eg. To increase the skilled element of the work force by 15% To reduce staff turnover by 10% To reduce debtors by 10% To increase machinery productivity by 10%

Marketing Objectives
Marketing objectives are mainly about market, product, pricing, promotional and distribution objectives.
eg. To launch 2 new variants of Daily Milk which would contribute 5% of the business by end of 2010 Increase market share of Ninja mosquito coils by 8% by the end of 2010 To increase the customer retention of credit cards at HSBC by 10% by the end of 2010 To increase sales of Full Option Motor policies by 35% by the end of 2010 To Increase awareness of Lysol by 20% by end of 2010

Internal Influences on Objectives

Internal stakeholder expectations
Shareholders (profits, dividends, risk)

Employees (Job security, better terms)

Trade Unions (Protecting jobs, employment conditions)

Management style
Attitude towards risk and return

Organizational culture
Response to change, innovative.

Internal Resources
Financial, staff, machinery.

External Influences on Objectives

The Macro environment
PESTLE

The Micro environment

Competition Pressure groups New entrants Alternatives

Hierarchy of objectives
Objectives
Corporate 2010-2013 Increase operating profit by 25%

Strategy
Increasing market share to 20% in regional markets

Marketing 2010-2013

Achieve 20% Market share in regional markets

By providing the best range of products to key segments, Providing high service standards Positioning our brand as a regional player

Marketing Mix
Product Provide wide range of products for key segments Upgrade centre facilities with restaurants and leisure activities Create awarness of the lesure activities Re-launch

Promotion

Physical evidence

Create and environment which conveys quality

Refurbish hotels and add value

Service

Provide excellent service

Moticate and retain staff

Competitive Advantage

What is Competitive Advantage by definition.

Competitive advantage is a companys ability to perform in one or more ways that competitors cannot or will not match. Philip Kotler
If you dont have a competitive advantage, dont compete.
Jack Welch, GE

What is a competitive advantage

Its a basis to compete in the market and what you do better than your competitors It differentiates you from your competitors It gives a consumer a reason to come to you It helps you to make more profits

Other Characteristics of Competitive Advantage

Substantiality
Is it substantial enough to make a difference?

Sustainability
Can it be neutralized by competitors quickly?

Ability to be leveraged into visible business attributes that will influence customers

What makes a competitive advantage sustainable

When your competitive advantage has value creating products, services and processes that cannot be matched by competition If your competitors cant or even wont match your advantage Relevant now & in the future to customer needs, company resources and capabilities Defensible eg. Patent, technology, brand

Barriers which protect a competitive advantage

Asset Based barriers
Location Plant & machinery

Finance
Brands

Skills based barriers

Product designing Quality management Brand development

Bases of competitive advantage

Porter identified three sources of competitive advantage
Cost leadership Differenciation

Niche/focus
Source of competitive advantage How
Product performance Perception of product Low cost operations Legal advantage Alliances & Relationships Superior Skills Flexibility Attitude Strong, easy to use and economic Product positioning, Brand image Location, economies of scale, buying power Patents, copyrights, contracts Networking R & D, Design Custommized solutions Focus on delivering value, innovation

Example
MS Windows Intel, Coke Walmart Viagra Raja Pauwla 3M Dell Ritz Carlton

Competitive Advantages Summary

Positions of advantage
Superior customer value Lower relative total cost

Performance advantages
Customer satisfaction, Loyalty, Market Share, Profit

Sources of advantages
Superior skills & knowledge, Superior resources, Superior business process

Strategies Vs. Tactics

Strategic Marketing Tactical Marketing

Time Frame

Long term

Short term

Focus

Broad

Narrow

Key Tasks

Defining Marketing competitive positioning

and

Daily marketing activity / operational activity

Information problem

and

Unstructured, speculative

external

and

Structured, repetitive

internal

and

Example Market Growth, NPD, Segmentation, positioniing Advertising, promotions, discounting..

Strategic levels
Corporate Strategy
STP Growth Strategy Market Position Strategy Marketing Mix Strategy

Generic(Porter)
Seg & Positioning Ansoffs Lead/Chal/Foll/Niche 7 Ps

Porters generic Strategies

The generic strategies are the strategic choices available to any business when assessing their competitive position in the market place.
CL

Differentiation

Dif

Nic

Cost Leadership

Focus Differentiation

Cost Focus

Dialog, HSBC(Differentiation), Sunlight,CTC, Walmart, BOC(Cost Leadership), Hutch, NSB(Cost focus), Paradise Road, Citibank(Focus Differentiation).

Cost Leadership
Focus is to maintain a low cost structure in everything the organization does The pursuit of economies of scale to achieve the above will be through,
Applying new technology Global or alternative sourcing Minimizing R & D expenditure Control on overheads

This is a tough strategy to maintain unless you have an extremely domineering position eg. CTC

Differentiation
Based on the premise of differentiating the organization in some manner vs. competition and being unique. This has to add value to the customer. Opportunity to charge a premium Sources of differentiation,
Product Perception Processes

Focus
Aim is to specialize in a specific market segment and develop a detailed knowledge of customer needs. It can be mostly based on,
Geographic area End-user focus Specialist products

Generic Strategies combating Competition

Airtel(India) Maruti Sunlight

Dialog, Honda Surf-excel

Hutch, Ferrari Comfort

Marketing Strategy

Key Elements of Marketing Strategy Formulation

The strategic 3 Cs

Customers, Competitors & the Corporation Where to compete How to compete When to compete

Environment analysis -- PESTLE Strategic Marketing Decisions

Marketing Strategy Formulation

Marketing strategies are responses by organizations to changing environmental conditions (Or proactive) in order to achieve set objectives, as well as achieve a sustainable competitive advantage. Fit Vs. Stretch(i Phone) Change the environment(MS Windows)

A Viable Marketing Strategy

Must have a clearly defined market Must have a good match between corporate strengths and market needs Must have significant positive differentiation in the key success factors of the business

Growth strategies / Ansoffs Matrix

Ansoff developed this model with a basis of product and market relationships and provided four alternatives for an organization to consider when looking at growing the businesses.
Products Existing New

Penetration
Existing Marketing New (Usage & Usership)

Product Development

Market Development

Diversification

Penetration(HSBC -Supplementary card, New customers/ Signal/Panadol), Mkt Dev (More Branches outstation, EGB from Stomach relief to with food), Prod Dev(Sony Walkman, PS 123, Signal Herbal, Internet Banking, i phone),

Diversification (HSBC restaurant/HSBC stockbrokers/HSBC insurance)

Market Position Strategies

This looks at giving the organization an identity within the industry. There are four main position options. Market Leaders Dialog Market Challengers Janashakthi Market Followers Seylan Market Niches Paradise Road

Four insurance companies are in competition.

One comes up with the slogan "Coverage from the cradle to the grave."
The Second one tries to improve on that with "Coverage from the womb to the tomb. "Not to be outdone, the third one comes up with "From the sperm to the worm.

"The fourth insurance company really thought hard and almost gave up the race, but finally came up with "From the erection to the resurrection."

Gap Analysis
The strategic planning gap or gap analysis is used to asses the gap between the corporate objectives and the current business performance based forecast and based on which this tool would be used to identify the strategic drift and as such new strategies would have to be formulated to bridge the gap.
Objectives determined from corporate goals The performance gap Forecasts from existing strategies

Gap Analysis simplified

Gap analysis is a tool for helping marketers to decide upon marketing strategies and tactics. The simple tools are the most effective. There's a straightforward structure to follow.
The first step is to decide upon how you are going to judge the gap over time. For example, by market share, by profit, by sales and so on.

This will help you to write SMART objectives. Then you simply ask two questions
Where are we now?

and where do we want to be? The difference between the two is the GAP

Gap Analysis simplified

The lower line is where you'll be if you do nothing. The upper line is where you want to be.

Gap Analysis simplified

Your next step is to close the gap. Firstly decide whether you view from a strategic or an operational/tactical perspective. The diagram below uses Ansoff's matrix strategies to bridge the gap:

Gap Analysis simplified

You can close the gap by using tactical approaches. The marketing mix is ideal for this. So effectively, you modify the mix so that you get to where you want to be. That is to say you change price, or promotion to move from where you are today (or in fact any or all of the elements of the marketing mix).