MK2 9 9 2013 Marketing strategy outlines the specific actions a firm intends to implement to appeal to Marketing plan provides a blueprint for implementing the marketing strategy Chapter 2 potential customers What is a marketing Strategy A marketing strategy identifies o A firm s target market s o A related marketing mix 4 Ps o The bases on which the firm plans to build a sustainable competitive advantage Sustainable competitive advantage advantage over the competition that is not easily copied and thus can be maintained over a long period of time Strategies that focus on aspects of the marketing mix to create and deliver value and to develop sustainable competitive advantages o Customer excellence focuses on retaining loyal customers and excellent customer service and positioning o Operational excellence achieved through efficient operations and excellent supply chain and human resource management o Product excellence having products with high perceived value and effective branding o Locational excellence having a good physical location and Internet presence Customer Excellence Customer excellence achieved when a firm develops value based strategies for retaining loyal customers and provides outstanding customer service Retaining loyal customers o Strong brand unique merchandise superior customer service sustainable competitive advantage o Loyalty customers reluctant to patronize competitive firms o Should think of customers in life time value Customer service can help build competitive advantage but is a lot less consistent Operational Excellence Operational excellence efficient operations excellent supply chain management and strong relationships with their suppliers Firms with good relationships may gain exclusive rights to o Sell merchandise in a particular region o Obtain special terms of purchase that are not available to competitors o Receive popular merchandise that may be in short supply Product Excellence Product excellence provides products with high perceived value and effective branding and positioning Requires investing in brand itself positioning their product or service using a clear distinctive brand image and constantly reinforcing that image through their merchandise service and promotion Locational Excellence Location particularly important for retailers and service providers Important because it s not easily duplicated Multiple Sources of Advantage Firms require multiple approaches to build a sustainable competitive advantage The Marketing Plan Marketing plan written document composed of an analysis of the current marketing situation opportunities and threats for the firm marketing objectives and strategy specified in terms of the four Ps action programs and projected or pro forma income Three major phases of marketing plan are planning implementation and control Five steps chart on pg 36 o Step 1 of the planning phase marketing executives with other top managers define the mission and or vision of the business o Step 2 of planning phase evaluate situation by assessing how various players affect the firm s potential for success SWOT analysis o Step 3 of implementation phase marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation targeting and positioning STP o Step 4 of implementation phase implement the marketing mix using the 4 Ps o Step 5 of the control phase evaluate performance using marketing metrics o Steps 3 and 4 are part of marketing strategy Step 1 Define the Business Mission to undertake Mission statement a broad description of a firm s objectives and the scope of activities it plans o Answers What type of business are we and What do we need to do to accomplish our goals and objectives Step 2 Conduct a Situation Analysis SWOT analysis o Internal environment with Strengths and Weaknesses o External environment with Opportunities and Threats CDSTEP assesses opportunities and uncertainties in marketplace o Cultural o Demographic o Social o Technological o Economic o Political Step 3 Identifying and Evaluating Opportunities Using STP Segmentation Targeting and Positioning First divides marketplace into subgroups or segments determines which of those segments it should pursue or target and finally decides how it should position its products and services to best meet the needs of those chosen targets Segmentation o Market segment consumers who respond similarly to a firm s marketing efforts o Market segmentation the process of dividing the market into groups of customers with different needs wants or characteristics o Target marketing targeting the firm evaluates each segment s attractiveness and Targeting Positioning decides which to pursue o Market positioning involves the process of defining the marketing mix with variables so that target customers have a clear distinctive desirable understanding of what the product does or represents in comparison with competing products o Most successful when focused on opportunities that build on their strengths relative to those of their competition Step 4 Implement Marketing Mix and Allocate Resources Implement the 4 Ps for each product and service on the basis of what they believe their target markets will value Product and value creation products o Firms attempt to develop products and services that customers perceive as valuable enough to buy Price and value capture Place and value delivery o Value based marketing required that firms charge a price that customers perceive as giving them a good value for the product they receive o Making the product or service readily accessible when and where the customer wants it Promotion and Value Communication o Communicate value of their offering o Media new options such as deal websites like Groupon Step 5 Evaluate Performance Using Marketing Metrics Metric a measuring system that quantifies a trend dynamic or characteristic o Used to explain why things happened as well as predict future o Compare results across regions strategic business units SBUs product lines and time periods Who is accountable for performance o Business unit and manager should only be held responsible for revenues expenses and o Expenses that affect several levels of organization shouldn t be arbitrarily assigned to profits they can control lower levels o Performance evaluations to pinpoint problem areas o Even if things happen that managers can t control can assess how they react to it Performance Objectives and Metrics o Compare to