MARKETING

STRATEGY AND
PLANNING

JLR Sales first 8 months

2013

Source: JLR Media Centre (10 Sept. 2013) (

http://newsroom.jaguarlandrover.com/en-in/jlr-corp/news/2013/09/j
lr_record_sales_performance_in_august_100913/
)

History of Lexus

http://youtu.be/MEbcA0NDOkg

Excellent Companies

In Search of Excellence (Tom Peters and

Robert Waterman,1982)
43 excellent companies
8 years later - only 6 excellent companies
left (Pascale, 1990)
Fixation with excellent tactics at the
expense of strategy

Pascale, R.T. (1990), Managing on the edge, New York:

Simon and Schuster, 352 pp

THE STRATEGY-TACTICS MATRIX

Strategydoing the right things
Tactics doing things right

Efficient

Effective

Thrive
1

Inefficient

Survive
3

Ineffective

Die-Quickly
2
Die-slowly
4

Strategy

A strategy is a plan of action designed to achieve certain

defined objectives

Strategy is a plan that aims to give the enterprise a

competitive advantage over rivals.
Strategy is about understanding what you do,
Knowing what you want to become,
and most importantly
Focusing on how you plan to get there.

NCH

Strategy is indeed a process!!

Strategy

NCH

Strategies are developed at multiple levels in the

organizations corporate, divisional, business
unit, and departmental. They form an integrated
plan for the organization as a whole.

Corporate strategies are the sum of business unit

strategies plus any plans for new business
initiatives.

Strategic Planning
Strategic planning is the
process of developing and
maintaining a

strategic
fit between the
NCH

organizations goals and

Strategic Planning

- External environment,
- Business unit goals
- Business unit strength &
weaknesses
NCH

Product/Market
Analysis

The Strategic Planning, Implementation,

and Control Processes

NCH

The Marketing Planning Process, McDonald, 2007:49

KEY OUTPUTS

Mission Statement
Financial Summary
Market Overview
SWOT Analyses
Portfolio Summary
Assumptions
Marketing Objectives and Strategies
Three Year Forecasts and Budgets
One-Year Short Term Plan

Strategic Planning

All corporate headquarters undertake four planning

activities:
Defining the corporate mission.
Establishing strategic business units (SBUs).
Assign resources to each SBU. (attractiveness)
Assessing growth opportunities.
(strategic fit )

NCH

Strategic Planning
The business portfolio is the collection
of businesses and products that make up
the company
Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses
that make up the company

NCH

Strategic Planning
Analyzing the Current Business Portfolio

Strategic business unit (SBU) is a

unit of the company that has a
separate mission and objectives
that can be planned separately
from other company businesses

NCH

Company division
Product line within a division
Single product or brand

Strategic Planning
Strategic planning is the process of
developing and maintaining a
strategic fit between the
organizations goals and capabilities
and its changing marketing

opportunities.

NCH

Strategic Planning
Assessing Growth
Opportunities

Assessing growth opportunities include planning

new businesses, downsizing and terminating
older businesses.

If there is a gap between future desired sales

and projected sales, corporate management will
need to develop /acquire new businesses to fill
in.

To release needed resources for other use, and

to reduce costs, companies must be carefully
prune, harvest or divest tired old businesses.

NCH

Strategic Planning Assessing Growth

Opportunities
BCG Matrix

NCH

Strategic Planning
Problems with Matrix Approaches

NCH

Difficulty in defining SBUs and

measuring market share and growth
Time consuming
Expensive
Focus on current businesses, not future
planning

The Strategic Planning Gap - Assessing

Growth Opportunities

Integrative - horizontal, backward and forward integration - Identify opportunities within current business,
build/acquire businesses related to current business
NCH
Diversification - identify opportunities to add businesses unrelated to current businesses.

Strategic Planning
Intensive Growth
Developing Strategies for Growth and Downsizing

Product/market expansion grid is a

tool for identifying company growth
opportunities through
market penetration
market development
product development or
diversification
NCH

Ansoffs Product-Market
Expansion Grid (Intensive Growth)

NCH

Strategic Planning
Market penetration is a
growth strategy increasing
sales to current market
segments without
changing the product (new

stores/branches, get people to shop

more often (improvement in prices,
communication mix, selection of
menu, etc)

Market development is a
growth strategy that identifies
and develops new market
segments for current
products (overseas market,
demographic profile)

NCH

Strategic Planning
Product development is a growth
strategy that offers new or modified
products to existing market
segments (bank, new menu)
Diversification is a growth strategy
through starting up or acquiring
businesses outside the companys
current products and markets Virgin
group of Companies
NCH

The Strategic Planning Gap - Assessing

Growth Opportunities

Integrative - horizontal, backward and forward integration - Identify opportunities within current business, build/acquire
businesses related to current business
Diversification - identify opportunities to add businesses unrelated to current businesses.

NCH

Ansoffs Product-Market
Expansion Grid (Intensive Growth)

NCH

Expanding the Total Market

New
customers

-those who might use it but do not

-those who have never used it
-those who live elsewhere

More usage

increase the amount, level, frequency of product consumption

rough packaging or product redesign, larger packages increase
he amount consumer use at one time (impulse buying)
creasing frequency of consumption
to identify additional opportunities to use the brand in the same way
to identify completely new and different way to use the brand

NCH

Expanding the Total Market

New customers
More usage
Promo Segmen Nona Planta
Resipi Warisanku @ Tv3! (Setiap
Ahad)

NCH

Planta, Mayonnaise

New Ways to Use a Brand

Arm and Hammer not ju

a baking soda..

NCH

Victorinox Adapts

More than 130 years old company

Core product: Swiss Army Knife
Post 9/11 and aircraft bans
Sales drop by 30%
What did Victorinox do?
Adapt products without knife blades with USB
memory sticks, etc.
Diversified into new product categories:
watches, luggage and fashion
Moved into new markets: Russia, India and China

Managing the Marketing Effort

Analysis
Marketing Analysis SWOT Analysis

NCH

Porters Generic
Strategies
Overall Cost Leadership

The lowest production and distribution costs so they can under price com
and win market share

Differentiation

The business concentrates on achieving superior performance in an

important customer benefit areas valued by a large part of the marke

Focus

The business focuses on one or more narrow market segments, get to know them
intimately, and pursue either cost leadership or differentiation within the target
NCH

Five Forces Determining Segment

Structural Attractiveness

NCH

Example

Mat Ramli is deciding whether to switch

career and become a farmer
He's always loved the countryside, and
wants to switch to a career where he's
his own boss.
He creates the following Five Forces
Analysis as he thinks the situation
through:

Porters Five Forces Buying a Fram

Threat of new entry
-Not too expensive to enter
the industry
-Experience needed, but
training easily available
-Some economies of scale
-No technology protection
-Low barriers to entry
New entry quite easy (-)

Supplier
Power

Supplier power
-Moderate number of
suppliers
-Suppliers large
-Able to substitute
-Able to change
Neutral supplier power
Threat of
substitution
-Some crossproducts

Threat
of New
entry

Competiti
ve
Rivalry

Threat of
substituti
on

Competitive rivalry
-Vary many competitors
-Commodity products
-Low switching costs
-Low customer loyalty
-High costs of leaving
market
High competition (- -)

Buyer
Power
Buyer Power
-Few, large supermarkets
-Vary large orders
-Homogeneous product
-Extreme price sensitivity
-Ability to substitute
High buying power (- -)

Industry Concept of
Competition

NCH

Number of sellers and degree of

differentiation
Entry, mobility, and exit barriers
Cost structure
Degree of vertical integration
Degree of globalization

Categories of Marketing Alliances

Product
Product or
or Service
Service Alliances
Alliances
Credit card
Promotional
Promotional Alliances
Alliances
Visa
Logistics
Logistics Alliances
Alliances

and Olympic

3PL & Businesses

Travel web hotel, car rental,

admission ticket etc

Pricing
Pricing Collaborations
Collaborations

NCH

Hypothetical
Market Structure

NCH

Market Challenger - Pepsi buys Gatorade in a

Bypass Strategy

Bypass attack diversify into unrelated produ

-New geographical market
- leapfrogging into new technologies

Market Follower Strategies

Counterfeiter
Duplicate the leaders product and packages and sells it on the black market

Cloner
Emulates the leaders product, name and packaging with slight variations e.g.cereal

Imitator

The imitator copies some things from the leader but differentiates on packaging

Adapter

The adapter takes the leaders product and adapts or improve them

NCH

Market Nicher Strategies

NCH

Niche Specialist Roles

NCH

End-User
Specialist
Vertical-Level
Specialist
Customer-Size
Specialist
SpecificCustomer
Specialist
Geographic
Specialist

Product-Line Specialist

Job-Shop Specialist

Quality-Price Specialist

Service-Specialist

Channel Specialist

Balancing Orientations

CompetitorCentered

NCH

CustomerCentered

Brand Leadership

Consumer Insights:
Dulux
Paint is not consumer friendly
Dont think of paint not until we have to paint our
house
We choose the color but painter will decide the brand

NCH

Low involvement, no interaction, not thrill about

shopping for paint
recommend by contractor, painter
boring functional value (cold hard facts) fungus free,
color doesnt fade

Nippon - Brand Leadership

Nippon - What Color Are You

Bre
a
dow k
n
the
min
ds e
t

Target 25 years and above (young adults)

show happy, easy to paint, icon (blobby),
fashionable to paint more often
a new need : odorless, spotless, solar reflect
(product names reflect the benefits)
Contemporary, fun, engaging (website),
modern, colorful
Nippon Paint Superheroes

Brand presence, intense brand

engagement
Educate through advertisement
Manage to charge premium price
NCH

Dilip Mutum PhD

Dilip.mutum@nottingham.edu.my