Marketing tools

How to write a marketing report

The Kiss management strategies
The marketing mix
PESTEL analysis
Marketing control
Direct Marketing mix
SWO T analysis
Perceptual Map
Two-way communications model
0. Product life cycle(s)
1. Ansoffs matrix
2. Boston Consulting group
3. The leaky bucket
4. Porters’ 5 forces
5. The environment and factors of change
6. Independent & Dependent variables
7. The consumer buying- decision making process and its influencing factors
8. The family as a decision-making unit
 How to write a marketing report

Title page:
Contains, for example, report title; client; research company; date, references

Contents:
Shows clearly the structure and content of the report and where in the report to find it.

Preface:
Sets the background to the report defining the marketing problem; summarises the researchers’ interpretation of the
original brief.

Executive Summary:
Summarises the main points of the report, including conclusions and recommendations.

Research methods:
Explains how the research was done and why, with respect to te objectives of the research.

Findings:
Present and collates the data collected.

Conclusions:
Interprets the data: draws out the key points

Recommendations:
Identifies action and priorities arising from the conclusions and examines their implications.

Appendices:
Contain the fine detail that is not needed for the main body of the report or that would clutter up the report too much, e.g. a
copy of the questionnaire, raw data, primary and secondary sources.
Report writing and presentation

Crouch suggests that the key elements in a research

report
are as follows.

1. Title page
2. List of contents
3. Preface-outline of agreed brief, statement of
objectives, scope and methods of research
4. Summary of conclusions and recommendations
5. Previous related research: how previous research
has had a bearing on this research.
6. Research method
7. Research findings
8. Conclusions
9. Appendices
 Keep It Simple & Straight
(for a banker)

Keep It Simple & Sexy

(appealing for investors)

Keep It Sugar Sweet

(maintain interest with facts)
 When marketing their products, firms need to create a successful
mix of:

• The right product

• Sold at the right price
• In the right place
• Using the most suitable promotion
PLACE
PRICE
PROMOTION

PRODUCT
 Marketing Mix

PRODUCT PLACE

Extensions Channels
Quality Coverage
Design Assortme
Features nt
Brand name PRICE Locations
PROMOTION
Packaging Inventory
Sizes List price Transport
Sales promotion
Warranties Discounts Advertising
Returns Allowances Sales force
Payment period Public Relations
Credit terms Direct Marketing
 Marketing Mix (wider elements)

PEOPLE

PARTNERSHIPS
PRODUCT

PROMOTION
PROCESSES

PLACE PRICE

PHYSICAL EVIDENCE
Legal
Environmental

Political
Economical Uncontrollable
constraints

Social

Technological

Competition
• Ethnic groups: Malay and other indigenous 58%, Chinese 26%, Indian 7%, others 9%
• Religions: Islam, Buddhism, Daoism, Hinduism, Christianity, Sikhism; note - in addition,
Shamanism is practiced in East Malaysia
• Languages: Bahasa Melayu (official), English, Chinese dialects (Cantonese, Mandarin, Hokkien,
Hakka, Hainan, Foochow), Tamil, Telugu, Malayalam, Panjabi, Thai; note - in addition, in East
Malaysia several indigenous languages are spoken, the largest of which are Iban and Kadazan
• Literacy: definition: age 15 and over can read and write total population: 83.5% male: 89.1%
female: 78.1% (1995 est.)
• Telephones: main lines in use: 4.4 million (1998) Telephones - mobile cellular: 2.17 million
(1998) Telephone system: international service good domestic: good intercity service provided on
Peninsular Malaysia mainly by microwave radio relay; adequate intercity microwave radio relay
network between Sabah and Sarawak via Brunei; domestic satellite system with 2 earth stations
international: submarine cables to India, Hong Kong, and Singapore; satellite earth stations - 2
Intelsat (1 Indian Ocean and 1 Pacific Ocean)
• Radio broadcast stations: AM 56, FM 31 (plus 13 repeater stations), shortwave 5 (1999)
Radios: 9.1 million (1997) Television broadcast stations: 27 (plus 15 high-power repeaters) (1999)
Televisions: 3.6 million (1997) Internet Service Providers (ISPs): 8 (1999) Merchant marine: total:
361 ships (1,000 GRT or over) totaling 5,000,706 GRT/7,393,915 DWT ships by type: bulk 61,
cargo 119, chemical tanker 34, container 55, liquified gas 19, livestock carrier 1, passenger 2,
petroleum tanker 57, refrigerated cargo 1, roll-on/roll-off 6, specialized tanker 1, vehicle carrier 5
(1999 est.) Airports: 115 (1999 est.) Airports - with paved runways: total: 32 over 3,047 m: 5 2,438
to 3,047 m: 4 1,524 to 2,437 m: 11 914 to 1,523 m: 6 under 914 m: 6 (1999 est.)
 Answer - Malaysia - PEST Analysis

• Political Factors
• Controls on immigration
• A fairly new country formed in 1957 (Malaysia) and 1963 (Malay, Sabah, Sarawak, and
Singapore)
• Parliament and hereditary rulers
• Economic Factors
• Recovering from a very severe recession
• High government spending
• Very low inflation and unemployment
• Favorable prediction for growth in the economy
• Lack of corporate reform (high corporate debt and competition)
• Socio-cultural Factors
• Mixture of Chinese, Indian, and Malaysian
• Variety of religions
• Low rates of literacy among women
• Technological
• Good national and international lines
• A variety of TV and radio stations
• ISPs and airports available
 PEST Analysis – Exercise
Source: www.odci.gov/ October 2000

Consider the following information and conduct a PEST analysis.

• Government type: constitutional monarchy note: Malaya (what is now Peninsular
Malaysia) formed 31 August 1957; Federation of Malaysia (Malaya, Sabah, Sarawak,
and Singapore) formed 9 July 1963 (Singapore left the federation on 9 August 1965);
nominally headed by the paramount ruler and a bicameral Parliament consisting of a
nonelected upper house and an elected lower house; Peninsular Malaysian states -
hereditary rulers in all but Melaka, Penang, Sabah, and Sarawak, where governors are
appointed by the Malaysian Government; powers of state governments are limited by
the federal constitution; under terms of the federation, Sabah and Sarawak retain
certain constitutional prerogatives (e.g., the right to maintain their own immigration
controls); Sabah - holds 20 seats in House of Representatives, with foreign affairs,
defense, internal security, and other powers delegated to federal government;
Sarawak - holds 28 seats in House of Representatives, with foreign affairs, defense,
internal security, and other powers delegated to federal government
• Economy - overview: Malaysia made a quick economic recovery in 1999 from its
worst recession since independence in 1957. GDP grew 5%, responding to a dynamic
export sector, which grew over 10% and fiscal stimulus from higher government
spending. The large export surplus has enabled the country to build up its already
substantial financial reserves, to $31 billion at yearend 1999. This stable
macroeconomic environment, in which both inflation and unemployment stand at 3%
or less, has made possible the relaxation of most of the capital controls imposed by
the government in 1998 to counter the impact of the Asian financial crisis. Government
and private forecasters expect Malaysia to continue this trend in 2000, predicting GDP
to grow another 5% to 6%. While Malaysia's immediate economic horizon looks bright,
its long-term prospects are clouded by the lack of reforms in the corporate sector,
particularly those dealing with competitiveness and high corporate debt.
 Marketing Control
Marketing Plans

Actions

Outcome Goals

Compare outcomes with goals

Analyse deviations

sj
Solve Problem Exploit success

Learn & revise

 Direct Marketing Mix
Offer (10%)

Creative LIST 50%

(5%) Media (5%)

Customer
Timing/
service
sequence
(10%)
(20%)

OFFER> Product /service, price incentive other elements

CREATIVE> Copy & graphics, personalisation

CUSTOMER
SERVICE> Develop a product into a service, build relationship

TIMING> One shot, campaign, seasonal, repetitive

MEDIA> Above/Below
 SWOT analysis

Strengths Weaknesses

Opportunities Threats
 What has contributed to the success
of McDonalds?

Process Management
1. Quality
2. Service
3. Value
4. Cleanliness
How to effectively use a SWOT analysis

1. Strengths &
Weaknesses – where
are we now?
S W 2. Opportunities & Threats
– where do we want/not
to be?
3. Only useful when
O T specific and unique
information used
 SWOT Analysis - Exercise.
Highly Brill Leisure Centre
Highly Brill Leisure Centre has hired you to help them with their marketing decision making.
Perform a SWOTanalysis on Highly Brill Leisure Centre, based upon the following issues:

1) The Centre is located within a two-minute walk of the main bus station, and is a fifteen-minute ride away from the local
railway station.
2) There is a competition standard swimming pool; although it has no wave machines or whirlpool equipment as do
competing local facilities.
3) It is located next to one of the largest shopping centres in Britain.
4) It is one of the oldest centres in the area and needs some cosmetic attention.
5) Due to an increase in disposable income over the last six years, local residents have more money to spend on leisure
activities.
6) There has been a substantial decrease in the birth rate over the last ten years.
7) In general people are living longer and there are more local residents aged over fifty-five now than ever before.
8) After a heated argument with the manager of a competing leisure centre, the leader of a respected local scuba club is
looking for a new venue.
9) The local authority is considering privatizing all local leisure centres by the year 2000.
10) Press releases have just been issued to confirm that Highly Brill Leisure Centre is the first centre in the area to be
awarded quality assurance standard BS EN ISO 9002.
11) A private joke between staff states that if you want a day-off from work that you should order a curry from the Centre's
canteen, which has never made a profit.
12) The Centre has been offered the latest sporting craze.
13) Highly Brill Leisure Centre has received a grant to fit special ramps and changing rooms to accommodate the local
disabled.
14) It is widely acknowledged that Highly Brill has the best-trained and most respected staff of all of the centres in the locality
Answer - Highly Brill
Leisure Centre -
SWOT Analysis

Answer: As you can see

Marketing Teacher's
answer does not
completely agree
with yours. This does not
mean that you are wrong.
It simply means that the
results of your analysis
are represented in a
different way. Points 2
and 10 are difficult to
place. Point 2 depends on
whether or not wave
machines or a whirlpool
have a distinct
competitive advantage
over a competition
standard pool. Point 10 is
an internal strength and
an external opportunity.
Example of a SWOT analysis

West Coast Fish Products is a small fish processing company in Ireland, which smokes salmon, trout and mackerel, using a special
blend of woods, herbs and spices to achieve a distinctive flavour. Although its main market is in Ireland, it is looking towards
European markets, especially Germany and Switzerland. Even though it is a small company, it uses a formal approach to
marketing planning, identifying priorities for marketing strategy development. Its SWOT analysis revealed the following issues:

1> Strengths

(a) Reputation fir quality in raw materials and processes

(b) Value added products using herbs
(c) Knowledge of the market and contacts in Germany, France & Switzerland
(d) Good location for accessing raw material

2> Weaknesses

(a) No formal organisation for marketing

(b) Emphasis on quality and production rather than on systematic market development
(c) Buyers tend to initiate contact- company no proactive enough
(d) Limited resources for intensive market development
(e) Remote European location means higher transport costs and reduces shelf life of products by up to 7 days
(f) Retail and catering trade dominated by a few large customers

3> Opportunities

(a) Increasing European consumption of smoked salmon

(b) Fish seen as a healthy product, low in fat and cholesterol
(c) Contract catering sector relatively underdeveloped
(d) The rural, green image of Ireland reflects positively on Irish food products
(e) Government aid programmes for small businesses in exporting
(f) New potential in US and Japanese markets

4> Threats

(a) Seasonal demand, peaking at Christmas

(b) Domestic Irish market relatively small
(c) Smoked salmon regarded in Ireland as luxury speciality food
(d) Pressure on prices in domestic market from retail & catering buyers
(e) Low levels of supplier loyalty
(f) Highly competitive European market (80 competitors in Ireland alone) with strong competition from Norway and Denmark in particular
(g) Markey pressure to raise quality standards, especially with smoked salmon
(h) Business vulnerable to impact of disease and pollution in sigh stocks
(i) Tougher European legislation affecting processing, additives, handling, marketing
(j) Variety of tastes and demands across different markets (colour, saltiness, dryness etc)
• SWOT Analysis - POWER SWOT.
• Marketing Teacher's Approach to SWOT Analysis.
• Why is there a need for an advanced approach to SWOT Analysis?
• SWOT analysis is a marketing audit that considers an organization's strengths, weaknesses, opportunities and threats. Our
introductory lesson gives you the basics of how to complete your SWOT as you begin to learn about marketing tools. As you
learn more about SWOT analysis, you will become aware of a number of potential limitations with this popular tool. This lesson
aims to help you overcome potential pitfalls.
• Some of the problems that you may encounter with SWOT are as a result of one of its key benefits i.e. its flexibility. Since
SWOT analysis can be used in a variety of scenarios, it has to be flexible. However this can lead to a number of anomalies.
Problems with basic SWOT analysis can be addressed using a more critical POWER SWOT. POWER is an acronym for
Personal experience, Order, Weighting, Emphasize detail, and Rank and prioritize. This is how it works.
• P = Personal experience.
• How do you the marketing manger fit in relation with the SWOT analysis? You bring your experiences, skills, knowledge,
attitudes and beliefs to the audit. Your perception or simple gut feeling will impact the SWOT.
• O = Order - strengths or weaknesses, opportunities or threats.
• Often marketing managers will inadvertently reverse opportunities and strengths, and threats and weaknesses. This is because
the line between internal strengths and weaknesses, and external opportunities and threats is sometimes difficult to spot. For
example, in relation to global warming and climate change, one could mistake environmentalism as a threat rather than a
potential opportunity.
• W = Weighting.
• Too often elements of a SWOT analysis are not weighted. Naturally some points will be more controversial than others. So
weight the factors. One way would be to use percentages e.g. Threat A = 10%, Threat B = 70%, and Threat C = 20% (they
total 100%).
• E = Emphasize detail.
• Detail, reasoning and justification are often omitted from the SWOT analysis. What one tends to find is that the analysis
contains lists of single words. For example, under opportunities one might find the term 'Technology.' This single word does not
tell a reader very much. What is really meant is:
• 'Technology enables marketers to communicate via mobile devices close to the point of purchase. This provides the
opportunity of a distinct competitive advantage for our company.'
• This will greatly assist you when deciding upon how best to score and weight each element.
• R = Rank and prioritize.
• Once detail has been added, and factors have been reviewed for weighting, you can then progress to give the SWOT analysis
some strategic meaning i.e. you can begin to select those factors that will most greatly influence your marketing strategy albeit
a mix of strengths, weaknesses, opportunities and threats. Essentially you rank them highest to lowest, and then prioritize
those with the highest rank e.g. Where Opportunity C = 60%, Opportunity A = 25%, and Opportunity B = 10% - your marketing
plan would address Opportunity C first, and Opportunity B last. It is important to address opportunities primarily since your
business should be market oriented. Then match strengths to opportunities and look for a fit. Address any gaps between
current strengths and future opportunities. Finally attempt to rephrase threats as opportunities (as with global warming and
climate change above), and address weaknesses so that they become strengths. Gap analysis would be useful at this point i.e.
where we are now, and where do we want to be? Strategies would bridge the gap between them.
• In SWOT, strengths and weaknesses are internal factors. For example:A strength could be:
• Your specialist marketing expertise.
• A new, innovative product or service.
• Location of your business.
• Quality processes and procedures.
• Any other aspect of your business that adds value to your product or service.
• A weakness could be:
• Lack of marketing expertise.
• Undifferentiated products or services (i.e. in relation to your competitors).
• Location of your business.
• Poor quality goods or services.
• Damaged reputation.
• In SWOT, opportunities and threats are external factors. For example: An opportunity could be:
• A developing market such as the Internet.
• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer improved profits.
• A new international market.
• A market vacated by an ineffective competitor.
• A threat could be:
• A new competitor in your home market.
• Price wars with competitors.
• A competitor has a new, innovative product or service.
• Competitors have superior access to channels of distribution.
• Taxation is introduced on your product or service.
• A word of caution, SWOT analysis can be very subjective. Do not rely on SWOT too much. Two people rarely come-up with the same final version of SWOT. TOWS analysis is extremely similar. It
simply looks at the negative factors first in order to turn them into positive factors. So use SWOT as guide and not a prescription.
• Simple rules for successful SWOT analysis.
• Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis.
• SWOT analysis should distinguish between where your organization is today, and where it could be in the future.
• SWOT should always be specific. Avoid grey areas.
• Always apply SWOT in relation to your competition i.e. better than or worse than your competition.
• Keep your SWOT short and simple. Avoid complexity and over analysis
• SWOT is subjective.
• Once key issues have been identified with your SWOT analysis, they feed into marketing objectives. SWOT can be used in conjunction with other tools for audit and analysis,
such as PEST analysis and Porter's Five-Forces analysis. So SWOT is a very popular tool with marketing students because it is quick and easy to learn. During the SWOT
exercise, list factors in the relevant boxes. It's that simple. Below are some FREE examples of SWOT analysis - click to go straight to them
• Do you need a more advanced SWOT Analysis?
• Some of the problems that you may encounter with SWOT are as a result of one of its key benefits i.e. its flexibility. Since SWOT analysis can be used in a variety of
scenarios, it has to be flexible. However this can lead to a number of anomalies. Problems with basic SWOT analysis can be addressed using a more critical POWER SWOT.
• SWOT Analysis Examples
• A summary of FREE SWOT analyses case studies are outlined as follows (those in the table above are far more detailed and FREE!):
• Example 1 - Wal-Mart SWOT Analysis. Strengths - Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all
in one store.Weaknesses - Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the
huge span of control.Opportunities - To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the
Greater China Region. Threats - Being number one means that you are the target of competition, locally and globally.
• Example 2 - Starbucks SWOT Analysis. Strengths - Starbucks Corporation is a very profitable organisation, earning in excess of $600 million in 2004.Weaknesses -
Starbucks has a reputation for new product development and creativity. Opportunities - New products and services that can be retailed in their cafes, such as Fair Trade
products. Threats - Starbucks are exposed to rises in the cost of coffee and dairy products.
• Example 3 - Nike SWOT Analysis. Strengths - Nike is a very competitive organisation. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without
bullets.'Weaknesses - The organisation does have a diversified range of sports products. Opportunities - Product development offers Nike many opportunities. Threats - Nike
is exposed to the international nature of trade.
• Strengths.
• Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.
• Wal-Mart has grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA).
• The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products
are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient procurement.
• A focused strategy is in place for human resource management and development. People are key to Wal-Mart's business and it invests time and money in training people,
and retaining a developing them.
• Weaknesses.
• Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.
• Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not have the flexibility of some of its more focused competitors.
• The company is global, but has has a presence in relatively few countries Worldwide.
• Opportunities.
• To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region.
• The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer
markets, such as China and India.
• New locations and store types offer Wal-Mart opportunities to exploit market development. They diversified from large super centres, to local and mall-based sites.
• Opportunities exist for Wal-Mart to continue with its current strategy of large, super centres.
• Threats.
• Being number one means that you are the target of competition, locally and globally.
• Being a global retailer means that you are exposed to political problems in the countries that you operate in.
• The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost
regions of the World. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat
 'Wal-Mart Stores, Inc. is the world's largest retailer, with $256.3 billion in sales in the
fiscal year ending Jan. 31, 2004. The company employs 1.6 million associates worldwide
through more than 3,600 facilities in the United States and more than 1,570 units . .
.more? Go to Wal-Mart Facts
• Strengths.
• Starbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year.
• It is a global coffee brand built upon a reputation for fine products and services. It has almost 9000 cafes in almost 40 countries.
• Starbucks was one of the Fortune Top 100 Companies to Work For in 2005. The company is a respected employer that values its workforce.
• The organization has strong ethical values and an ethical mission statement as follows, 'Starbucks is committed to a role of environmental leadership in all facets of our business.'
• Weaknesses.
• Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time.
• The organization has a strong presence in the United States of America with more than three quarters of their cafes located in the home market. It is often argued that they need to
look for a portfolio of countries, in order to spread business risk.
• The organization is dependant on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise.
• Opportunities.
• Starbucks are very good at taking advantage of opportunties.
• In 2004 the company created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett Packard, where customers create their own music CD.
• New products and services that can be retailed in their cafes, such as Fair Trade products.
• The company has the opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge.
• Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.
• Threats.
• Who knows if the market for coffee will grow and stay in favour with customers, or whether another type of beverage or leisure activity will replace coffee in the future?
• Starbucks are exposed to rises in the cost of coffee and dairy products.
• Since its conception in Pike Place Market, Seattle in 1971, Starbucks' success has lead to the market entry of many competitors and copy cat brands that pose potential threats.
• 'Starbucks' mission statement is 'Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.' The
following six guiding principles will help us measure the appropriateness of our decisions' more?
•
•
Strengths. Nike
Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that
'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the Atlanta Olympics,
Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top
athletes and gained valuable coverage.
• Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a
very lean organization. Nike is strong at research and development, as is evidenced by its evolving
and innovative product range. They then manufacture wherever they can produce high quality product
at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere (to the
same or better specification), Nike will move production.
• Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly
recognisable, and Phil Knight even has it tattooed on his ankle.

• Weaknesses.
• The organization does have a diversified range of sports products. However, the income of the
business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable
if for any reason its market share erodes.
• The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most
of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to
the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as
retailers try to pass some of the low price competition pressure onto Nike.
• Opportunities.
• Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike
is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport.
Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product
could become unfashionable before it wears out i.e. consumers need to replace shoes.
• There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend
to have associated with them, high profits.
• The business could also be developed internationally, building upon its strong global brand recognition. There are many
markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China
and India have a new richer generation of consumers. There are also global marketing events that can be utilised to support
the brand such as the World Cup (soccer) and The Olympics.

• Threats.
• Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not
stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is
an issue that faces all global brands.
• The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business
School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a
basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike's market share.
• As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are
shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store
along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price
sensitivity is a potential external threat to Nike.
• 'If you have a body, you are an athlete' - Bill Bowerman said this a couple of decades ago. The guy was right. It defines how he
viewed the world, and it defines how Nike pursues its destiny. Ours is a language of sports, a universally understood lexicon of
passion and competition. A lot has happened at Nike in the 30 years.
 ‘High’ Price

Premium
Cowboy Brands
brands

‘Low’ ‘High’
quality quality

Bargain
Economy brands
Brands

‘Low’ Price
 Sender Receiver
(company) (customer)

Noise
factors outside
senders control

Feedback
 Word of mouth
Promotional influences on the customer

on
Bra

oti
Pe

r om
r

din
so
na

sp
g
l se ns
o

le
l li a t i
c re l

Sa
ng li
Pub

Advertising The Me r
chan
Customer D d is i n
g
i re
h ip ct
rs m
o ar

I nt e
ns ke
Corporate image
o
Sp t in
ng

r na l
g
i
kag

mar
Pac

ke t i
ng
 The Corporate identity mix
‘Painting the lavatory door won’t cure the plumbing’. David Bernstein

Logo

Corporate I.D is a symbolic uniform that acts as a flag expressing everything

about the organisation
 Production

Production Finance

MARKETING

nce
HR

Fina
Marketing HR

Prod
Finance u ctio
n
Production HR

HR CUSTOMER

nce
Fina
M
ar
Marketing ke
t in
g
 Kotler’s 3x3 matrix identifying
different competitive positioning
strategies

PRICE
Product High Medium Low
quality
Premium Penetration Superbargain
High strategy strategy
strategy

Overpricing Average quality Bargain

Medium strategy strategy strategy

Shoddy goods Cheap goods

Low Hit and run
strategy strategy
strategy
Efficiency versus Effectiveness

Ineffective Effective

Goes out of Survives

Inefficient Business quickly

Dies Thrives
Efficient Slowly
 Production

Marketing

The customer as the

Customer controlling function

nce
and marketing as the
HR

Fina
integrative function

Organisations do not make products which they then try to sell to customers, but that they
research what customers want and then try to make and market a range of those wants. This is
the crucial difference between:

product orientation Putting the product 1st

market orientation Putting the customer 1st

 sales
Sales

profit
Introduction Growth Maturity Decline

Time
Any company selling more than one product must achieve
Continuous growth by introducing products in a well
timed way

The idea of a portfolio is to balance growth, cash flow

and risk
Gap Analysis
• Gap analysis is a very useful tool for helping marketing managers to decide upon marketing
strategies and tactics. Again, 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 - this is how you are going to get there .
Take a look at the diagram below. The lower line is where you'll be if you do nothing. The upper
line is where you want to be.
• Your next step is to close the gap. Firstly decide whether you view from a
strategic or an operational/tactical perspective. If you are writing strategy, you
will go on to write tactics - see the lesson on marketing plans. The diagram
below uses Ansoff's matrix to bridge the gap using strategies:
• 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).

This is how you close the gap by

deciding upon strategies and
tactics - and that's gap analysis.
 Diffusion of innovation
Number of new adopters

Innovators Early Early Late Laggards

adopters Majority majority
(2.5%) (16%)
(13.5%) (34%) (34%)

Some people/companies are always prepared to buy new products, while others
wait until things are tried and tested. All products and services have customers
which fall into these categories.
 Current New
products products

Current
markets

New
markets
Market Penetration
• Here we market our existing products to our existing customers.
This means increasing our revenue by, for example, promoting the
product, repositioning the brand, and so on. However, the product is
not altered and we do not seek any new customers.

Market Development
• Here we market our existing product range in a new market. This
means that the product remains the same, but it is marketed to a
new audience. Exporting the product, or marketing it in a new
region, are examples of market development.
Product Development
• This is a new product to be marketed to our existing customers.
Here we develop and innovate new product offerings to replace
existing ones. Such products are then marketed to our existing
customers. This often happens with the auto markets where
existing models are updated or replaced and then marketed to
existing customers.

Diversification
• This is where we market completely new products to new
customers. There are two types of diversification, namely related
and unrelated diversification. Related diversification means that
we remain in a market or industry with which we are familiar. For
example, a soup manufacturer diversifies into cake manufacture
(i.e. the food industry). Unrelated diversification is where we
have no previous industry nor market experience. For example a

soup manufacturer invests in the rail business.

 Ansoff's Matrix Exercise

Colorado Ricardo Mountain Bikes.

Colorado Ricardo Mountain Bikes was founded by Ricardo Francisco in 1992.

He was a keen cyclist who spent his weekends with many friends cycling and
having fun in the mountains of Colorado. He was very competitive and loved to
take his bike off-road to test his strength and endurance. However he found that
the bikes themselves kept on breaking-down under the strain. So Ricardo
designed and built a number of bikes to overcome this problem. Many failed but
eventually he came up with the ultimate in off-road bike, which he called the
'Colorado Ricardo'. People liked Ricardo's bike and he was asked to build and
sell them to other cyclists in the Colorado region. It went so well that soon he
was able to give up his own job as a DJ to focus on the construction of the
bikes. As the mountain bike sport took off, Ricardo's business grew to produce
10,000 units in 1996. However sales have fallen annually since then and
forecasted sales for 2000 are only 4,000 units. Ricardo's company needs
strategies for growth before it is too late. Use Ansoff's matrix to examine the
options for Colorado Ricardo.
 Ansoff's Matrix Answer
Colorado Ricardo Mountain Bikes.

As you can see there are many strategic options for Ricardo. As a
marketer you now have to decide upon which strategy or
strategies the company should actually implement. This is based
upon a number of factors such as competitive activity, available
resources, the good old 'gut feeling', and others.
 Boston Consulting Group Matrix

High

Market STARS PROBLEM CHILD

growth

Low
CASH COWS DOGS
High Low
Relative Market share
 If both the company's competitive
These products are market position and the industry's
attractiveness and growth rate are
leaders within mature
strong, then the company occupies a
markets that are no longer as fortunate position and is known as a
demanding in marketing "star." Stars require constant grooming
terms. They therefore on their way to success. These
generate healthy cash products may generate major cash
reserves, in excess, in of the inflows through their market share. A
particular product’s resource star is the market leader in a high-
requirements, whilst reducing growth market. A star does not
the overall expenditure on necessarily produce a positive cash flow
for the company. The most appropriate
these products, in essence
strategy for star companies is to exploit
the idea is to milk the cash their competitive advantage and protect
cow and to limit spending. themselves against new competitors
entering the industry.
Most new products start off as ‘problem
children’, as the company tries to enter
a high-growth market in which there is
already a market leader. The business
owners have important strategic
decisions to make. Although there is
strong future potential in the industry,
the company's weak position means
that it will have to make a significant
investment to take advantage of the
opportunity presented. In this case, it is
particularly important for the business
owner to understand his or her
customers and competitors to
determine whether it will be possible for
the company to develop a competitive
advantage.
Dogs are businesses that have
weak market share in low growth
markets. They typically generate
low profits or losses. Dogs often
consume more management
time than they are worth. The
potential for market growth is
limited, and the company's future
prospects in the industry do not
appear promising. The most
appropriate strategy for a dog
company is to limit spending,
generate as much cash as possible
in the short term, and consider
exiting the industry.
 Problems with The Boston Matrix

1. There is an assumption that higher rates of profit are directly related

to high rates of market share. This may not always be the case. When
Boeing launch a new jet, it may gain a high market share quickly but it
still has to cover very high development costs.

2. It is normally applied to Strategic Business Units (SBUs). These are

areas of the business rather than products. For example, Ford own
Landrover in the UK. This is an SBU not a single product.

3. There is another assumption that SBUs will cooperate. This is not

always the case.

4. The main problem is that it oversimplifies a complex set of decision.

Be careful. Use the Matrix as a planning tool and always rely on your
gut feeling.
 cash cow - The rather crude metaphor is based on the idea of 'milking' the returns from previous investments which established
good distribution and market share for the product. Products in this quadrant need maintenance and protection activity, together with
good cost management, not growth effort, because there is little or no additional growth available.
dog - This is any product or service of yours which has low market presence in a mature or stagnant market. There is no point in
developing products or services in this quadrant. Many organizations discontinue products/services that they consider fall into this
category, in which case consider potential impact on overhead cost recovery. Businesses that have been starved or denied
development find themselves with a high or entire proportion of their products or services in this quadrant, which is obviously not
very funny at all, except to the competitors.
problem child - These are products which have a big and growing market potential, but existing low market share, normally
because they are new products, or the application has not been spotted and acted upon yet. New business development and
project management principles are required here to ensure that these products' potential can be realised and disasters avoided. This
is likely to be an area of business that is quite competitive, where the pioneers take the risks in the hope of securing good early
distribution arrangements, image, reputation and market share. Gross profit margins are likely to be high, but overheads, in the form
of costs of research, development, advertising, market education, and low economies of scale, are normally high, and can cause
initial business development in this area to be loss-making until the product moves into the rising star category, which is by no
means assured - many problem children products remain as such.
rising star - Or 'star' products, are those which have good market share in a strong and growing market. As a product moves into
this category it is commonly known as a 'rising star'. When a market is strong and still growing, competition is not yet fully
established. Demand is strong; saturation or over-supply do not exists, and so pricing is relatively unhindered. This all means that
these products produce very good returns and profitability. The market is receptive and educated, which optimises selling
efficiencies and margins. Production and manufacturing overheads are established and costs minimised due to high volumes and
good economies of scale. These are great products and worthy of continuing investment provided good growth potential continues
to exist. When it does not these products are likely to move down to cash cow status, and the company needs to have the next
rising stars developing from its problem children.
After considering your business in terms of the Ansoff matrix and Boston matrix (which are thinking aids as much as anything else,
not a magic solution in themselves), on a more detailed level, and for many businesses just as significant as the Ansoff-type-options,
what is the significance of your major accounts - do they offer better opportunity for growth and development than your ordinary
business? Do you have a high quality, specialised offering that delivers better business benefit on a large scale as opposed to small
scale? Are your selling costs and investment similar for large and small contracts? If so you might do better concentrating on
developing large major accounts business, rather than taking a sophisticated product or service solution to smaller companies which
do not appreciate or require it, and cost you just as much to sell to as a large organization.
 Boston Matrix Exercise
Manor Way Tools

Manor Way Tools began life as a small steel company at the end of the 19th
Century. It was one of the first companies to put carbon into regular iron to
create steel. It was strong and flexible. Their first products were fish hooks
which were made from the flexible wire that they were able to produce.
Over the years the product portfolio grew to include anything that their
operation could turn its hand to such as javelins and railings. Today they focus
their operations on the manufacture of tools for the professional, production,
and the enthusiastic amateur. Core products include handsaws, drill bits,
screwdriver, bowsaws etc.
The tool trade is very complex and competitive. Manor Way's main competitor
is Oliver Tools. They are the market leader in many similar areas of the market.

Analyze your product portfolio using the Boston Matrix.

The Boston Matrix - Answer
Manor Way Tools

As you can see, each of the products is positioned upon the

Matrix. You'll notice that the Javelins do not appear - they were
thrown away long ago.
 Bowman's Strategy Clock
The Strategy Clock: Bowman's Competitive Strategy Options

The 'Strategy Clock' is based upon the work of Cliff Bowman (see C. Bowman and D. Faulkner
'Competitive and Corporate Strategy - Irwin - 1996). It's another suitable way to analyze a company's
competitive position in comparison to the offerings of competitors. As with Porter's Generic Strategies,
Bowman considers competitive advantage in relation to cost advantage or differentiation advantage.
There a 8 core strategic options:

Option one - low price/low added value

likely to be segment specific
Option two - low price
risk of price war and low margins/need to be a 'cost leader'.
Option three - Hybrid
low cost base and reinvestment in low price and differentiation
Option four - Differentiation
(a) without a price premium
perceived added value by user, yielding market share benefits
(b) with a price premium
perceived added value sufficient to to bear price premium
Option five - focussed differentiation
perceived added value to a 'particular segment' warranting a
premium price
Option six - increased price/standard
higher margins if competitors do not value follow/risk of losing
market share.
Option seven - increased price/low values
only feasible in a monopoly situation
Option eight - low value/standard price
loss of market share
Value Chain Analysis
The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in
his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in
the total value delivered by an organisation. The 'margin' depicted in the diagram is the same as added value. The organisation is
split into 'primary activities' and 'support activities.'
Primary Activities
Inbound Logistics
Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods
are moved around the organisation.
Operations
This is where goods are manufactured or assembled. Individual operations could include room service in an hotel, packing of
books/videos/games by an online retailer, or the final tune for a new car's engine.
Outbound Logistics
The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer.
Marketing and Sales
In true customer orientated fashion, at this stage the organisation prepares the offering to meet the needs of targeted customers.
This area focuses strongly upon marketing communications and the promotions mix.
Service
This includes all areas of service such as installation, after-sales service, complaints handling, training and so on.
Support Activities
Procurement
This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for
purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be
done in-house are done by other organisations), and ePurchasing (using IT and web-based technologies to achieve procurement
aims).
Technology Development
Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and
sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing,
Customer Relationship Management (CRM), and many other technological developments.
Human Resource Management (HRM)
Employees are an expensive and vital resource. An organisation would manage recruitment and selection, training and
development, and rewards and remuneration. The mission and objectives of the organisation would be driving force behind the HRM
strategy.

Firm Infrastructure
This activity includes and is driven by corporate or strategic planning. It includes the Management Information System (MIS), and
other mechanisms for planning and control such as the accounting department.
 Acquisition
LEAKY BUCKET

Storage
De-selection

Retention
McKinsey’s Seven S’ model
1. Cost Leadership
The low cost leader in any market gains competitive advantage from being able to
many to produce at the lowest cost. Factories are built and maintained, labour is
recruited and trained to deliver the lowest possible costs of production. ‘cost
advantage’ is the focus. Costs are shaved off every element of the value chain.
Products tend to be ‘no frills.’ However, low cost does not always lead to low price.
Producers could price at competitive parity, exploiting the benefits of a bigger margin
than competitors. Some organization, such as Toyota, are very good not only at
producing high quality autos at a low price, but have the brand and marketing skills to
use a premium pricing policy.

2. Differentiation
Differentiated goods and services satisfy the needs of customers through a
sustainable competitive advantage. This allows companies to desensitize prices and
focus on value that generates a comparatively higher price and a better margin. The
benefits of differentiation require producers to segment markets in order to target
goods and services at specific segments, generating a higher than average price. For
example, British Airways differentiates its service. The differentiating organization will
incur additional costs in creating their competitive advantage. These costs must be
offset by the increase in revenue generated by sales. Costs must be recovered.
There is also the chance that any differentiation could be copied by competitors.
Therefore there is always an incentive to innovated and continuously improve.
3. Focus or Niche strategy
The focus strategy is also known as a ‘niche’ strategy. Where an organization can
afford neither a wide scope cost leadership nor a wide scope differentiation strategy, a
niche strategy could be more suitable. Here an organization focuses effort and
resources on a narrow, defined segment of a market. Competitive advantage is
generated specifically for the niche. A niche strategy is often used by smaller firms. A
company could use either a cost focus or a differentiation focus. With a cost focus a
firm aims at being the lowest cost producer in that niche or segment. With a
differentiation focus a firm creates competitive advantage through differentiation within
the niche or segment. There are potentially problems with the niche approach. Small,
specialist niches could disappear in the long term. Cost focus is unachievable with an
industry depending upon economies of scale e.g. telecommunications.

4. The danger of being ‘stuck in the middle.’

Make sure that you select one generic strategy. It is argued that if you select one or
more approaches, and then fail to achieve them, that your organization gets stuck in
the middle without a competitive advantage.
 Threat of new entrant

Intensity of
Competition
INDUSTRY Rivalry
Threat of
PROFITS
Substitutes

Power
Power Of
Of Customers
Suppliers
• Five Forces Analysis helps the marketer to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but
tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. For example, Dell would analyse
the market for Business Computers i.e. one of its SBUs.
• Five forces analsysis looks at five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.
• The threat of entry.
• Economies of scale e.g. the benefits associated with bulk purchasing.
• The high or low cost of entry e.g. how much will it cost for the latest technology?
• Ease of access to distribution channels e.g. Do our competitors have the distribution channels sewn up?
• Cost advantages not related to the size of the company e.g. personal contacts or knowledge that larger companies do not own or learning curve effects.
• Will competitors retaliate?
• Government action e.g. will new laws be introduced that will weaken our competitive position?
• How important is differentiation? e.g. The Champagne brand cannot be copied. This desensitises the influence of the environment.
• The power of buyers.
• This is high where there a few, large players in a market e.g. the large grocery chains.
• If there are a large number of undifferentiated, small suppliers e.g. small farming businesses supplying the large grocery chains.
• The cost of switching between suppliers is low e.g. from one fleet supplier of trucks to another.
• The power of suppliers.
• The power of suppliers tends to be a reversal of the power of buyers.
• Where the switching costs are high e.g. Switching from one software supplier to another.
• Power is high where the brand is powerful e.g. Cadillac, Pizza Hut, Microsoft.
• There is a possibility of the supplier integrating forward e.g. Brewers buying bars.
• Customers are fragmented (not in clusters) so that they have little bargaining power e.g. Gas/Petrol stations in remote places.
• The threat of substitutes
• Where there is product-for-product substitution e.g. email for fax Where there is substitution of need e.g. better toothpaste reduces the need for dentists.
• Where there is generic substitution (competing for the currency in your pocket) e.g. Video suppliers compete with travel companies.
• We could always do without e.g. cigarettes.
• Competitive Rivalry
• This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control. This is why it is
always seen in the center of the diagram.
Analysing the environment - Five Forces Analysis - Exercise
'The market for on-line education'
Place the following eight points onto the five
forces model

1. Start up costs are very low

2. Students have access to books, videos, and
paper-based distance learning packs
3. Companies, governments, and self funding
students invest huge amounts in their
education
4. There are very few high quality web sites
available.
5. Traditional colleges and universities are
adapting their products for on-line learning.
6. Government legislation in the US and
Europe encourages on-line learning.
7. The more innovative learning sites give
lesson for free just for the love of it.
8. More people with access to the web every
second.
 Analysing the environment
- Five Forces Analysis - Answer
• Start up costs are very low (threat of entry - low barriers to entry)
• Students have access to books, videos, and paper-based distance
learning packs (product-for-product substitution)
• Companies, governments, and self-funding students invest huge
amounts in education. (High bargaining power of suppliers)
• There are very few high quality web sites available (high bargaining
power of suppliers)
• Traditional colleges and universities are adapting their products for on-
line learning (threat of new entrants - learning curve effects)
• Government legislation in the US and Europe encourages on-line
learning (threat of entry reduced - by legislation).
• The more innovative learning sites give lesson for free just for the love
of it (threat of entry - differentiation)
• More people with access to the web every second (bargaining power
of buyers)
 The relative effectiveness of communications tools
High

Advertising

Personal
Selling

Sales Promotion

Low
awareness interest conviction purchase post-purchase
 The environment and the factors of change

competition
Technology
Market Conditions

Legal
requirements
Modify: PR & marketing or
restrictions
Political
environment
Economic influences
 CLASSIFICATION OF BUSINESS ORGANISATIONS

PRIVATE PUBLIC SECTOR

SECTOR
SMALL
SOLE TRADER LOCAL
AUTHORITIE
LOCAL S
AUTHORITY
CO-OPS DIRECT
LABOUR
PARTNERSHIP ORGS
NATIONALISE
CHARITIES D INDS

PRIVATE QUANGOS
LIMITED CO
BUILDING
SOCIETIES

GOVT DEPTS

PUBLIC
LIMITED CO LARGE
QUANGOs

• QUANGO’s
• Quasi-Autonomous Non-Government Organisations
• Established by acts of parliament
• Operated be private individuals
• Free from government interference, daily decisions made
by organisation.
• E.g. Office of Fair Trading, the Arts Council
• Generally designed to implement of further government
policy
‘‘Distribution is described as the process of delivering,
storing, and selling goods so that they can be used by
customers’’

There are 4 operators in the Distribution Sector:

WA
R EH ING
OU AL
SI L ES
N G H O
W

NG
TI RE
R TA
P O ILE
NS RS
A
TR
 M
g y ar
o ke

The independent and the dependent variables

ol tc
n
ech on
T di
ti on
s

Pr o

se et
du

re ark
ch
ct

ar

Legal requirements
M
influences
Political

or restrictions
Pricing

company Sales
l es s force
Sa otion
m Ad
pr o v er
Ec tisi
on n
om
g
ic
in n
fl u t i o
en peti
c es om
C
SJ
 situational
influences
Individual Decision-making
• sociocultural
influences Process
• technological
Problem Recognition • economic
• personality • political
• perception
• motivation information search
• attitude

information evaluation Marketing

Mix
Group
influences • product
decision • price
• social class • place
• culture/subculture • promotion
• reference groups post-purchase evaluation
• family

The consumer buying- decision making process and its influencing factors
 Initiator
child asks
The family as a decision-making unit

for new toy

Influencer
End-user
mum thinks it would
Child be a good birthday
present

Purchasing
decision

Purchaser Decider
mum and dad buy the toy. mum & dad agree
Dad pays for it to buy. Child chooses
the toy
 Case Studies
1. Harvard Referencing: a guide with examples
2. Research skills
3. Guideline for effective report writing
4. Good approaches for assignment planning
5. Presenting the information correctly
6. The learning styles questionnaire – Honey &
Mumford
 Surinder Juneja
e lf
urs
y o
ush
…p
e l f
ur s
y o
e st
T
(A) Define marketing
(B) Draw the exchange process
(C) Identify the 7 Ps
(D) What are the uncontrollable constraints?
(E) Name the four stages in the Product Life
Cycle?
(F) What is the difference between a product
orientated and a market orientated company?

(G) What is AIDA? and where is it used?

(H) What is segmentation?
(I) Why is it necessary to divide subgroups into
segments?
(J) What is Geographic segmentation?
(K) What is Demographic segmentation?
(L) How is social classes divided?
(M) What is Psychographic segmentation?
(N) What is Benefit segmentation?
(O) List three methods of positioning
(P) Draw a perceptual map for Ford and BMW comparing price and
quality of their motors).
(Q) What does SPADE stand for?
(R) What is ACORN and what can it be used for?
(S) Draw the 2-way communication model
(T) How does a marketer encode the message?
(U) List the Communications Mix
QUICK REFERENCE GUIDE BY SURINDER JUNEJA 1996©
SWOT ANALYSIS- Internal analysis (stren & Weaks)> Look at…*marketing *products *distribution *r&d * plant & equip *finance *employees *structure. External analysis (opps & threats)> Look at…
*economic climate *demographic change *market *technology *competitive activity *channel pressure *politics. MARKETING OPPORUNTITY-a mkt opp exists whenever there is a gap, an unfilled demand e.g.
drink drive laws in Europe led to increase in low alcoholic beers. (External Audit PEST) (Internal Audit SWOT), 4Ps & 5 ms. When looking at the Micro environment look at Porters 5 forces, when looking at Macro
environment look at SLEPT. 5 M’s – (1)men+women (2)money (3) Materials-supply sources + products (4) Machines-production facilities, fixed assets, capacity (5)markets-reputation, position and market prospect
PORTER 5 FORCES- (identifies 5 forces which influence the state of competition in an industry) (1)threat of new entrants to industry (2)threat of substitute products or services (3)bargaining power of customers
(4)bargaining power of suppliers (5) rivalry amongst current competitors in industry. SEGMENTING> identification of individuals with common characteristics. Characteristics of individual customers are
understood, then segments are created on basis of similar characteristic and then mkt mix is designed for target market. Psychographic segmenting> lifestyle-activities, interests and opinions, Personality- self
expression, you are able to predict purchasing power e.g. Martini. Profile segmenting> Demographic variables- consumer profiled by common characteristics. Socio-economic variables-social class – education –
income. Geographic variables-geography and taste, north vs south, geo-demographics, ACORN. Behavioural segmenting>-benefits sought, purchase behaviour, perceptions and beliefs, usage & purchase occasions.
Requirements for effective market segment> (1)measurability- refers to what degree of info exits or is cost effectively obtainable on the particular buyer characteristic of interest. A car manufacturer may have access to
info about location of a customer, however personality traits of buyers are more difficult to obtain. (2)Accessibility-refers to the degree to which the company can focus effectively on the chosen segments using
marketing methods (3)substantiality-refers to the degree to which the segments are large enough to be worth considering for separate marketing development. Benefits> identification of new marketing opportunities
as a result of better understanding of consumer needs in each of the segments. Specialists can be developed and appointed to each of the companies major segment. Operating practices then benefit from the expertise
of staff with specialist knowledge of the segments business. The total marketing budget can be allocated more effectively, according to needs and the likely return from each segment. Specialist knowledge and extra
effort may enable company to dominate particular segments and gain competitive advantage. Improved segmentation allows more highly targeted marketing activity. e.g. the sales team develops an in-depth
knowledge of needs of a particular group of consumers and can get to know a network of potential buyers within the business. TARGETING>limited resources, competition and large markets make it ineffective and
inappropriate for companies to sell to the entire market, that is, every market segment. They must select target markets. (1) Undifferentiated marketing- aims to produce a single product and get as many customers as
possible to buy it, segmentation is ignored. (2)Concentrated marketing-attempts to produce the ideal product for a single segment of the market (e.g. Rolls- Royce, Mothercare) (3)Differentiated marketing- attempts
to introduce several versions of a product, each aimed at a different market segment (e.g. the manufacture of several different brands of washing powder). POSITIONING> positioning by specific product features- on
price and specific features. Ford advertise a combination of ABS, power steering, sunroof and all for $9,999 on the road! Positioning by benefits- problems, solutions or needs Crest toothpaste – cavity fighter.
Positioning for specific usage- cognac on special occasions, Johnson’s baby shampoo everyday. Positioning for user category> 7-up’s FIDO DIDO. Positioning against another product> Avis no.2 (Hertz). Product
class disassociation> lead-free vs lead free. Hybrid Basis>a positioning strategy may be founded on several of these alternatives, incorporating elements from more than one positioning base. Porsche use a
combination of the product benefit and user characteristics. FAMILY LIFE CYCLE> ‘Family Decision Making Units’ represents a widely accepted classification of consumer ‘units’ which make buying decisions.
(1)Bachelor Stage-young, single not living at home (2)Newly married couples-young, no children (3)Full nest 1- youngest child under 6 (4)Full nest 2-youngest child 6 or over (5)Full nest 3- older married couples
with dependent children (6)Empty nest 1- older married couples, no children living with them, head of family still in labour force (7)Empty nest 2- older married couple, no children living at home, head of family
retired (8)Solitary Survivor 1- in labour force (9)Solitary survivor 2- retired. Upward mobile ambitious> people seek a better, more affluent lifestyle, through better pay and more interesting work, prepared to try
new products. Traditional & Sociable>complaince and conformity to group norms being social approval and reassurance to the individual. Purchasing patterns are traditional. Security and status seeking> ‘safety’
needs and ‘ego’-defensive needs are stressed. This lifestyle links status, income and security. Hedonistic preference>the emphasis is on ‘enjoy life now’ and the immediate satisfaction of wants and needs. Little
consideration is given to the future. MARKETING CONTROL PROCESS> The control process is vital if management is to ensure that planning targets are achieved. Control info generated within the organisation
is referred to as feedback. The control process involves 4 underlying components… 1> development of objectives- discuss, develop and decide upon marketing objectives 2>Establish performance measures and
standards 3>Evaluate actual performance against established standards 4> Take corrective action as necessary. Performance should be measured by obtaining data about actual results for a direct comparison with the
targets or standards set. MARKETING PLANNING PROCESS> Stage 1 analysis/assessment, Stage 2 opportunities, Stage 3 strategic implications, Stage 4 make a choice, Stage 5 Implementation, plans and controls
to be used. In this process look at time duration you want to use. MARKETING AUDIT>examination of marketing groups’ objectives, strategies which looks at co’s past performance and evaluates how effectively
the marketing organisation has performed to assigned function e.g. how each cost center performs in the marketing department, and whether or not performance rate needs to be changed. If the results are acceptable
then continue, if not then re-assign new functions to all departments. It is conducted very regularly and is very precise, describes current activities and gathers as much environment influences as possible and it
explores opportunities. MARKETING PLAN> Either SOSTAC…(1) Exec summary (2)objectives (SMART) + mission statement (3)product background (4)marketing analysis-where you are in the market compared
to competitors (5)marketing strategies to be used-what target market? Brand positioning? (6)expected result (7)program for implementation (8)control &evaluation SEE ABOVE FOR MARKETING CONTROL
PROCESS. (9) How will it be financed? (10)operational considerations-how product to be made and what resources to be allocated (11)Appendix. MARKETING STRATEGY>looks at specific target markets, and
what types of competitive advantages to be developed. Involves evaluating the environment in which you are operating in (Porter’s 5 Forces). Efficiency and effectiveness are 2 fundamental ways of measuring
performance. ‘Efficiency is concerned with doing things right…Effectiveness is doing the right thing’ Efficiency can be defined as the ration of output quantities to input resources. Efficiency and inefficiency are
measures along the same scale, with ‘efficiency’ referring to a higher ration of output to input than the norm or standard and ‘inefficiency’ referring to a lower ratio. Effectiveness can be defined as success in
producing a desired result. Generally an organisation is effective if it meets the needs of its chosen client groups and deploys its resources in the best possible way. ENVIRONMENTAL SCANNING &
ANALYSIS> STAGE (1) collect info (2)assess and interpret (3) predict future (4)change is advancing. CENTRALISED>an organisation that has little delegation + major decisions are made by head office (big
bosses) DECENTRALISED> more effective and speedier delegation. MARKET LED>a co. that is obsessed with mkt and gets continuous info on customers. PRODUCT LED> a co. that is continuously looking on
how to improve their product (innovation). ‘’Myopia’’ forgotten the need for customers. SALES LED> sales dept dominates i.e. to increase sale of product, lets reduce the price. A good company would combine all
3 aspects. POST-TESTING>involves finding out how well people can recall an advertisement and the product it advertises, and whether attitudes to the product have changed since the advertising campaign. Post-
testing would help to establish whether an organisation is succeeding in getting the corporate image it is trying to build up in the public mind. MARKET RESEARCH> primary methods-(all based around a
questionnaire)…personal interview, postal & telephone interview, the panel, focus group. Secondary info- govern stats, internal company data, sales records, competitor analysis etc. Types of market research –
exploratory, descriptive and causal. Sampling – random, stratified, cluster, convenience, judgment, ADVERTISING inform, reinforce, persuade, tripartite relationship exists with agencies, advertisers & media
buyers. AIDA-attention, interest, desire and action. Push strategy-use of personal selling/Pull-use of advertising