ZeePedia buy college essays online


Principles of Marketing

<<< Previous PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process Next >>>
 
img
Principles of Marketing ­ MGT301
VU
Lesson ­ 7
Lesson overview and learning objectives:
All companies must look ahead and develop long-term strategies to meet the
changing
conditions in their industries. Each company must find the game plan that makes the most sense
given its specific situation, opportunities, objectives, and resources. Keeping in view this fact the
last Lesson was dedicated for the discussion to explore several growth alternatives within the
context of strategic planning and portfolio analysis. The product/market expansion grid shows
four avenues for growth: market penetration, market development, product development, and
diversification.
PORTFOLIO ANALYSIS
A. MARKETING PROCESS
Analyzing the Current Business Portfolio
We have discussed in last Lesson that in order to analyze the current business portfolio, the
company must conduct portfolio analysis (a tool by which management identifies and evaluates
the various businesses that make up the company). Two steps are important in this analysis:
1). The first step is to identify the key businesses (SBUs). The strategic business unit
(SBU) is a unit of the company that has a separate mission and objectives and which can be
planned independently from other company businesses.
2). The SBU can be a company division, a product line within a division, or even a single
product or brand.
3). The second step is to assess the attractiveness of its various SBUs and decide how much
support each deserves.
d. The best-known portfolio planning method is the Boston Consulting Group (BCG) matrix:
1). Using the BCG approach, where a company classifies all its SBUs according to the
growth-share matrix.
a). The vertical axis, market growth rate, provides a measure of market attractiveness.
b). The horizontal axis, relative market share, serves as a measure of company strength
in the market.
2). Using the matrix, four types of SBUs can be identified (Discussed in detail in last
Lesson)
a). Stars
b). Cash Cows
c). Question Marks
d). Dogs
Once it has classified its SBUs, a company must determine what role each will play in the future.
The four strategies that can be pursued for each SBU are:
1). The company can invest more in the business unit in order to build its share.
2). The company can invest enough just to hold at the current level.
3). The company can harvest the SBU.
4). The company can divest the SBU.
As time passes, SBUs change their positions in the growth-share matrix. Each has its own life
cycle. The growth-share matrix has done much to help strategic planning study; however, there are
problems and limitations with the method.
1). They can be difficult, time-consuming, and costly to implement.
32
img
Principles of Marketing ­ MGT301
VU
2). Management may find it difficult to define SBUs and measure market share and growth.
3). They focus on classifying current businesses but provide little advice for future planning.
4). They can lead the company to place too much emphasis on market-share growth or
growth through entry into attractive new markets. This can cause unwise expansion into hot, new,
risky ventures or giving up on established units too quickly. In spite of the drawbacks, most firms
are still committed to strategic planning. Based upon this analysis company designs the growth
strategies:
Developing Growth Strategies
Companies should always be looking to the future. One useful device for identifying growth
opportunities for the future is the product/market expansion grid. The product/market
expansion grid is a portfolio-planning tool for identifying company growth opportunities
through:
1). Market Penetration--making more sales to present customers without changing
products in any way. Market penetration means trying to increase sales of a firm's present products
in its present markets probably through a more aggressive marketing mix. The firm may try to
strengthen its relationship with customers to increase their rate of use or repeat purchases, or try to
attract competitors' customers or current
nonusers. New promotion appeals alone
may not be effective. A firm may need to
Current
New
add a home page on the Internet to make it
products
products
easier and faster for customers to place an
order. Or, it may need to add more stores
M arket-
Product-
Current
penetration
developm ent
in present areas for greater convenience.
markets
strategy
strategy
2). Market Development--a strategy
M arket-
New
for company growth by identifying and
(Diversification
developm ent
m arkets
strategy)
developing  new  markets  for  current
strategy
company products (example, demographic
markets). Market development means trying
to increase sales by selling present products in new markets. Firms may try advertising in different
media to reach new target customers. Or they may add channels of distribution or new stores in
new areas, including overseas.
3). Product Development--a strategy for company growth by offering modified or new
products to current markets. Product development means offering new or improved products for
present markets. By knowing the present market's needs, a firm may see new ways to satisfy
customers. Computer software firms like Microsoft boost sales by introducing new versions of
popular programs.
4). Diversification--a strategy for company growth by starting up or acquiring businesses
outside the company's current products and markets. Diversification means moving into totally
different lines of business perhaps entirely unfamiliar products, markets, or even levels in the
production-marketing system.
Planning Cross-Functional Strategies
The final step in the strategic planning process is planning functional strategies.
1). Once the strategic plan is in place, more detailed planning must take place within each
business unit.
2). Each department (such as marketing, finance, et cetera) provides information for strategic
planning.
Marketing plays a key role in the company's strategic planning process by:
33
img
Principles of Marketing ­ MGT301
VU
1). Providing a guiding philosophy.
2). Providing inputs to strategic planners by helping to identify attractive market
opportunities and by assessing the firm's potential to take advantage of them.
3). Within individual business units, marketing designs strategies for reaching the unit's
objectives.
4). Marketers are challenged to find ways to get all departments to "think customer."
Strategic Planning, Implementation, and Control Process
The process of developing and
maintaining a strategic fit between
the  organization's  goals  and
capabilities  and  its  changing
P la n n in g
Im p le m e n ta tio n
C o n tro l
marketing opportunities. It relies on
developing  a  clear  company
C o rp o rate
M e a su rin g
p la n n in g
O rg a n izin g
re su lts
mission, supporting objectives, a
D ivisio n
sound  business  portfolio  and
p la n n in g
D ia g n o s in g
coordinated functional strategies.
re su lts
B u sin e ss
Im p le m e n tin g
Business plans are more customers
p la n n in g
T a kin g
and competitor-oriented and better
co rrec tive
P ro d u ct
ac tio n
reasoned and more realistic than
p la n n in g
they were in the past. The plan is
variously called a "business plan," a
"marketing plan," and sometimes an
"operating plan." Most marketing plans cover one year, but some cover a few years. The plans
vary in their length from under ten pages to over 50 pages. Some companies take their plans very
seriously, while others see them as only a rough guide to action. The most frequently cited
shortcomings of current marketing plans, according to marketing executives, are lack of realism,
insufficient competitive analysis, and a short-run focus.
IMPLEMENTING THE MARKETING PLAN: Planning good strategy is only the start - it
counts very little if the organization fails to implement it correctly. Main reasons for the poor
implementation are isolated planning, Some organizations employ `professional planners' while
others leave the task of developing strategic plans to top management and leaving the details of
implementation to lower-level managers can spell poor or no implementation at all.
Marketing strategy and marketing performance are linked by an implementation system consisting
of five related elements. Finally
marketing
control
involves
Narrowing down to focused strategy with quantitative
evaluating
the
results
of
and qualitative screening criteria
marketing strategies and plans
and taking corrective action to
Customers
ensure  that  objectives  are
Needs and other
Segmenting
attained.  It then measures its
Dimensions
Targeting &
Segmentation
performance in the marketplace
S.
Company
and evaluates the causes of any
W.
Mission, Objectives,
O.
differences  between  expected
& Resources
T.
Positioning &
and actual performance. Finally,
Differentiation
management  takes  corrective
Competitors
Current &
action to close the gaps between
Prospective
its goals and its performance.
External Market Environment
34
img
Principles of Marketing ­ MGT301
VU
Marketing Strategy Planning Process
Whenever performing the marketing function company needs courses of the action known as the
strategies. Marketing strategies and the planning process are based on the It is based on the SWOT
analysis. SWOT analysis means to analyze the threats and opportunities that are part of external
environment and strengths and weaknesses of the organization, which are part of the internal the
environment. Based on this environmental analysis company formulates the strategies to find out
the target customers designs objectives and mission statements to fulfill the needs of the target
customers and strategies to respond to the competitive environment. After conducting SWOT
analysis companies decides strategies about the marketing mix i.e. 4Ps (Product, Price, Place and
Promotion) .
Marketing Process
The marketing process is the process of analyzing market opportunities, selecting target markets,
developing the marketing mix, and managing the marketing effort.
This process has following main steps:
1. Analyzing marketing opportunities
2. Selecting target markets
3. Developing the marketing Mix
4. Managing the marketing effort
35
Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Companyís Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five Mís of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE