Marketing Strategy and Planning

1. MARKETING
STRATEGY AND
PLANNING
Dilip S. Mutum PhD
Nottingham University Business School
dilip.mutum@nottingham.edu.my
twitter: @admutum

2. Learning Outcomes
 To define strategy, strategic planning
and to understand the key concepts of
the marketing planning process.
 To understand the differences between
strategic and tactical marketing
planning.
 To understand the key concepts and
some strategic marketing analysis tools.

3. History of Lexus
 http://youtu.be/MEbcA0NDOkg

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.
Strategy is indeed a process!!

5. Strategy
 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.

6. Strategic Planning
Strategic planning is the process of
developing and maintaining a
strategic fit
between the organization’s goals
and capabilities and its changing
marketing opportunities.

7. 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

8. THE STRATEGY-TACTICS MATRIX
Effective Ineffective
Efficient Thrive
1
Die-Quickly
2
Inefficient
Survive
3
Die-slowly
4
Tactics – doing things right
Strategy–doing the right things

9. Strategic Planning
- External environment,
- Business unit goals
- Business unit strength &
weaknesses
Product/Market
Analysis

10. Strategic Planning, Implementation,
& Control Processes

11. The Marketing Planning Process, McDonald, 2007:49

13. 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

14. Managing the Marketing Effort
Analysis
Marketing Analysis – SWOT Analysis

15. Porter’s Generic Strategies
Overall Cost Leadership
The lowest production and distribution costs so they can
under price competitors 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 market
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 segment

16. Five Forces Determining Segment
Structural Attractiveness

17. 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:

18. Porter’s Five Forces – Buying a Farm
Threat
of New
entry
Supplier
Power Buyer
Power
Threat of
substitutio
n
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 (-)
Competitive rivalry
-Vary many competitors
-Commodity products
-Low switching costs
-Low customer loyalty
-High costs of leaving
market
High competition (- -)
Buyer Power
-Few, large supermarkets
-Vary large orders
-Homogeneous product
-Extreme price sensitivity
-Ability to substitute
High buying power (- -)
Supplier power
-Moderate number of suppliers
-Suppliers large
-Able to substitute
-Able to change
Neutral supplier power
Threat of
substitution
-Some cross-products
-Ability to import food
Some substitution (-)_
Competiti
ve
Rivalry

19. Industry Concept of Competition
 Number of sellers and degree of
differentiation
 Entry, mobility, and exit barriers
 Cost structure
 Degree of vertical integration
 Degree of globalization

20. 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 )

21. 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

22. 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
 Company division
 Product line within a division
 Single product or brand

23. Strategic Planning
Strategic planning is the
process of developing and
maintaining a strategic fit
between the organization’s
goals and capabilities and
its changing marketing
opportunities.

24. 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.

26. Strategic Planning
Problems with Matrix Approaches
 Difficulty in defining SBUs and
measuring market share and growth
 Time consuming
 Expensive
 Focus on current businesses, not future
planning

27. 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.

28. 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

29. Jaguar XE

30. JLR Sales first 8 months 2013
Source: JLR Media Centre (10 Sept. 2013)
(http://newsroom.jaguarlandrover.com/en-in/jlr-corp/
news/2013/09/jlr_record_sales_performance_in_august_1009
13/)

31. Ansoff’s Product-Market
Expansion Grid (Intensive Growth)

32. 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)

33. 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 company’s
current products and markets – Virgin
group of Companies

34. Expanding the Total Market
New
customers
More usage
•those who might use it but do
not
•those who have never used it
•those who live elsewhere
To increase the amount, level, frequency of product consumption
-Through packaging or product redesign, larger packages increase
the amount consumer use at one time (impulse buying)
-Increasing 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

35. Expanding the Total Market
New customers
More usage
Promo Segmen Nona Planta
Resipi Warisanku @ Tv3! (Setiap
Ahad)
Planta, Mayonnaise

36. New Ways to Use a Brand
Arm and Hammer – not a baking soda…..

37. 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

38. Categories of Marketing Alliances
Product or Service Alliances
Credit card
Promotional Alliances
Visa and Olympic
Logistics Alliances
3PL & Businesses
Pricing Collaborations
Travel web – hotel, car rental,
admission ticket etc

39. Hypothetical Market Structure

40. Market Challenger - Pepsi buys Gatorade in a
Bypass Strategy
Bypass attack – diversify into
unrelated products
- New geographical market
- Leapfrogging into new technologies

41. Market Follower Strategies
Counterfeiter
Duplicate the leader’s product and packages and sells it on the
black market
Cloner
Emulates the leader’s 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 leader’s product and adapts or improve
them

42. Market Nicher Strategies

43. Niche Specialist Roles
 End-User
Specialist
 Vertical-Level
Specialist
 Customer-Size
Specialist
 Specific-Customer
Specialist
 Geographic
Specialist
 Product-Line
Specialist
 Job-Shop
Specialist
 Quality-Price
Specialist
 Service-Specialist
 Channel
Specialist

44. Brand Leadership
 Consumer Insights: Dulux
• ‘Paint’ is not consumer friendly
• Don’t think of paint not until we have to
paint our house
• We choose the color but painter will decide
the brand
• Low involvement, no interaction, not ‘thrill’
about shopping for paint
• recommend by contractor, painter
• boring functional value (cold hard facts) –
fungus free, color doesn’t fade

45. Nippon - Brand Leadership
Nippon - What Color Are You
•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

46. Thanks www.dilipmutum.com