Strategic Market Management

Reference : David A. Aaker, Strategic Marketing Management . Seventh Edition, A.Nag, Strategic Marketing , Second Edition

2005 John Wiley & Sons

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Corporate Plan and Marketing Plan

Relationship between the two Planning and Controlling Two separate factions of management but closely related without one meaningless. Planning proceeds controlling and controlling succeeds planning. Activities are put on rails by planning and they are kept at right place through controlling. Planning and controlling are integral parts of an organization as both are important for smooth running of an enterprise. Planning and controlling reinforce each other. Each drives the other function of management.

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Planning and controlling are inseperate functions of a business enterprise.

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Types of Plan
Corporate Plan- The result of a process in which an organization, institution or business analyzes its objectives, priorities, strategies and environment in light of its directives. A corporate plan looks at the present as well as the future.

Strategic Plan- A long-term flexible plan that does not regulate activities but rather outlines the means to achieve certain results, and provides the means to alter the course of action should the desired ends change.
Functional Plan - A program of action, that effectively provides for present and future demands for movement of people and goods in any organization. It defines an operationally sound and flexible ultimate strategic plan along with more detailed plans for interim stages.

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Contingency Plan- It is an alternative for action if things don't go as planned or if an expected result fails to materialize. Term Plan (Short/Medium/Long) - A plan for which can be short, medium and long duration in action.

Corporate plan
The corporate plan is the overall strategy that analyzes, governs and steers the company. All functional units -including finance, operations, human resources and marketing -- fall under the corporate plan. The plan answers two important and fundamental questions: what business are we in? And what business should we be in? A corporate plan sets objectives so management may make informed decisions, such as where to commit resources. It also creates benchmark goals to help motivate management as well as employees and assess how the company is performing
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Marketing Plan
Traditionally, marketing plans are based on the objectives detailed in the corporate plan and do not encompass other nonrelated functional units, such as human resources. However, marketing is so critical to a business that the marketing plan should be the start of any business plan. Most marketing plans, though, serve to define the corporate plan in greater detail as it pertains to marketing. For example, a marketing plan may include customer and marketplace analysis, promotion, pricing, positioning and packaging strategies, as well as define expected results of sales.

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Strategic Market Management-Introduction and Overview

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What is a Business Strategy?

The Product-Market Investment Strategy where to compete

The Customer Value Proposition

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Assets and Competencies Functional Strategies and Programs

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Business Strategy
Where to Compete
The product-market investment decision

A Business Strategy
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How to Compete
Value proposition Assets & competencies Function area strategies and programs
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The Product-Market Investment Strategy

Invest to grow (or enter a product market) Invest only to maintain the existing position

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Milk the business by minimizing investment

Recover as many of the assets as possible by liquidating or divesting the business

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Product-Market Growth Directions

Present Products Present Markets
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New Products

Market Penetration Market Expansion

Product Expansion Diversification

New Markets

Figure 2.4

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The Customer Value Proposition

Perceived benefit to customer:
Functional Emotional
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Social

Self-Expressive

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Customer Value Proposition Examples:

A good value Excellence on an important product or service attribute The best overall quality

Product line breadth

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Innovative offerings A shared passion for an activity or a product Global connections and prestige

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Assets and Competencies

Strategic Competency:
What a business unit does exceptionally well Has strategic importance to the business
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Based on knowledge or a process

Strategic Asset:
A resource

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Functional Strategies and Programs

Manufacturing strategy Distribution strategy Brand-building strategy
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Global strategy Logistical strategy Quality program Customer relationship program

Communication strategy Information technology strategy Sourcing Strategy

Social technology strategy

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Criteria to Select Business Strategies

Is the ROI attractive?

Is there a SCA?
Will the strategy have success in the future?

Is the strategy feasible?

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Does the strategy fit with the other strategies of the firm?

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 The overall purpose of strategic marketing, and its principal focus is the identification and creation of sustainable competitive advantage.
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A HISTORICAL PERSPECTIVES OF SMM

Historical perspective of strategic marketing Management emphasis Budgetingfrom 1900s Long range planning from 1950s Anticipate growth and manage complexity Strategic planning from1970s Change strategic thrust and capability Strategic marketing man-from 1990sgement Cope with strategic surprises and fast-developing threats/oportuni ties

Control deviations and manage complexity

Assumption

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The past repeats

The past trend will continue

New trends and Planning cycle discontinuities inadequate to are predictable deal with rapid changes Periodic and from 1970s Real time and from 1990s

Process and time period

Periodic and from 1900s

Periodic and from 1950s

Strategic Marketing
Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage. John Scully This is a system approach of facilitating the timely exchange of values within the business relations while coping with a network of complexities (Gabriel, 2006)

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 Strategic Marketing requires Detailed understanding of market needs, and Proactive use of competitive intelligence at the
corporate as well as SBUs levels

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Strategic Marketing Focuses on what the firm do best at the SBU level To secure and maintain a sustainable
competitive advantage

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 It is proactive approach whereas marketing reactive approach It requires high degree of innovation and creativity Decision making more often from bottom to top but mkt from top to bottom and senior mgr pass on plans and strategies to junior mgrs for implementation.
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Allows greater participation by people who are direct contact with customers and market but making operational level mgr support strategies. Scans and analyses the environment to for new O&T and pass the result to MM to understand and operate

Purpose or main aim of accepting SM

Create Superior performance Sustain Superior performance Understand your core business
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Know your Competitor as you know yourself Make sure you are sophisticated Understand your Internal and External Target market and react to the feedback
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OVERVIEW OF STRATEGIC MARKET MANAGEMENT

External Analysis
Customer Analysis Competitor Analysis Market/submarket Analysis Environmental Analysis

Internal Analysis
Performance Analysis Determinants of strategic options

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Strategic Analysis Outputs Creating, Adapting, and Implementing Strategy

EXTERNAL ANALYSIS
Customer analysis Segmentation, motivations, unmet needs Competitor analysis Identity, strategic groups , performance , image objectives, strategies and weakness
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Market analysis emerging mkt, sub mkt, size, growth, profitability , entry barriers, cost structure, distribution systems, trends, KPA, key success factors.

INTERNAL ANALYSIS
Performance analysis- Determinants of Profitability, sales, strategic option- Past shareholders value and current strategies, analysis, customer strategic problems, satisfaction, relative organization cost, new products, capabilities and employee capability constraints, financial and performance , resources and product portfolio constraints and S&W analysis

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STRATEGIC ANALYSIS OUTPUT

O&T Trends Strategic uncertainties Strategic S&W Problems Constraints and uncertainties
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CREATING, ADAPTING, AND IMPLEMENTING STRATEGY

1.Identify business strategy alternatives -The Product-Market Investment Strategy -The Customer Value Proposition -Assets and Competencies -Functional Strategies and Program 2.Select strategy 3. Implement the operating plan 4. Review strategies
Strategic Market Management

The strategic marketing process: actions and information

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The strategic marketing phases and corresponding output reports

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Vision

Aspiration of the organization

Vimal seeks a dominant position in all the four segments suitings, shirting, saris, dress materials Vimal(RIL) wishes to become the leader in the indian textile market

Mission

Over riding purpose in line with values or expectation of stake holders General statement of aim or purpose Specific statement of the goal Specific statement of the goal A blue print of objectives, resources, time-frame Action plan or scheme of execution of plan Sub-strategy : use or application in individual cases

Goal Objectives Target Plan

Vimal seeks to enter all the four segments simultaneously Vimal seek to offer the most contemporary fabrics and design Same as above

The project proposal critically examines/ analyses viability

Strategy Tactics

JV with Du pont, US, value of moneypricing, etc.. Individual showrooms have flexibility

FACTORS
Scope Time frame

STRATEGIC MARKETING
Competitive strategies and product market decisions. long term.

MARKETING MANAGEMENT
Marketing mix Management. Short-term; routine.

Environmental analysis

Tracking and scanning on

continuous basis.

Operation related
view; periodic. Fixed for the planning period. Top-down.

Planning process

Evolving to incorporate New new development .

Decision making process Strategic approach

Bottom-up .

creativity and originality .

Situational;

incrementalism.
Strategic posture Impact
Strategic Market Management

proactive. Strategic; long-term.

Reactive. Operational; purely. short-term.

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Components of Strategic Marketing

Why Strategic Market Management?

Precipitate the consideration of strategic choices. Help a business cope with change. Force a long-range view. Make visible the resource allocation decision.
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Aid strategic analysis and decision making. Provide a strategic management and control system. Provide both horizontal and vertical communication and coordination systems.
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Marketing Strategy and 4Ps Of Marketing consideration

Marketing Strategy specifies a target market and a related marketing mix. Marketing Mix - the controllable variables the company puts together to satisfy this target group (see list below).
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Marketing Mix application in Marketing strategy

Culliton Called it Marketing Mix Jerome McCarthy described 4Ps of Marketing Product Differentiation strategy Promotion Strategy Pricing strategy Place and distribution strategy Competition strategy Market LCF and Niche strategy
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Components of Marketing Mix

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The 4Ps of marketing technique in strategic marketing is widely used by organizations today and refer to a set of controllable variables the company use to influence buyers response. It consists of tactical marketing tools and integrated into the overall marketing strategy to deliver the intended value proposition to target customers. In essence, it is everything the company can do to influence the demand for its product or service. Vary to case by case or Industry to industry
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 2005 John Wiley & Sons

4Ps of marketing is the fundamentals of understanding strategic marketing and to aid management in making marketing decisions. Product: combination of physical product and service provided to target customers Price: amount of money customers must pay to obtain the product or service Place: activities for getting the product or service available to target customers Promotion: modes of communication of product or service information to customer
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What does 4Ps of Marketing does

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The 4Ps of marketing are often decision variables to help management control their marketing strategies for specific target markets. There is no one-size fits all 4Ps of marketing designed to cater for all customers. First of all, marketing managers need to tailor made each of the areas to suit their customers needs. An effective marketing plan integrates all of the marketing mix elements designed to achieve the companys marketing objectives by delivering value to customers.
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Objectives

Marketing Strategy

4Ps of Marketing Price

Increase target market share by 5 percent in first quarter Launch improved services in x Market in 2013

Reduce price of product A by 10 percent

Redesign declining services according to new customers expectation Expand distribution to spot concession to reach more youth and men Aggressive sampling campaign using point Promotion purchase and coupons to encourage trying new product

Product

Introduce new product B in target mkt

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Place

Increase product awareness of new product Z in target market by 25 percent in one year

Promotion

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