1. Four General Stages
a. Goal Setting
i. Mission:
1. The challenge
2. The purpose and direction of the
organization
ii. Corporate objectives
1. Business objectives that shape the plan
b. Situation Review
i. Marketing audit
1. Gathering and organizing the information
ii. SWOT analysis
1. Assessment of organization’s current
position
iii. Marketing assumptions
1. Interest rates, tax, market trends
c. Strategy Development
i. Marketing objectives
1. Market share, profitability, revenue,
ROI, product awareness, brand recognition, customer loyalty, new markets, new
products
ii. Marketing strategies
1. The marketing mix (internal controllable)
iii. Expected results
1. Forecasting
iv. Alternative plans and mixes
1. Dealing with assumptions, contingency
planning
d. Control
i. Resource allocation, implementation and
monitoring
1. Detailed budget for one year, outline
budget for two-three years
2. Detailed implementation plan
3. Techniques for control
2.
The Audit: macro, micro and internal
a. Macro audit: external, non-controllable factors; long
term: have influence/harm; companies should look at them to mitigate threat or
take opportunities
i. Political/legal (stability, govt,
approach, law)
1. Political stability/change
2. War/conflict
3. Terrorism
4. Trade tariffs and regulations
5. Favored trading partners
6. Tax rates and incentives
7. Funds and grants
8. Pressure groups on government
9. European law
10. Advertising regulations
11. Pricing regulations
12. Employment law
13. Import/export regulation
14. Wage legislation
15. Health and safety legislation
16. Product labeling requirements
17. Environmental issues
ii. Economic factors (stage of development,
disposable income)
1. Government intervention
2. Comparative advantage of host country
3. Exchange rates
4. Currency stability
5. Business cycle stage (prosperity,
recession, recovery)
6. Consumer confidence
7. Economic growth rate
8. Interest rate
9. Inflation rate
10. Taxation
11. Employment levels
12. Disposable income
13. Credit levels
14. Education levels
15. Labor costs
16. Unemployment rate
17. Infrastructure
18. Seasonality/weather issues
iii. Social factors (population distribution
and trends, culture)
1. Demographics
2. Class structure
3. Education
4. Culture
5. Customer attitudes and opinions
6. Leisure interests
7. Lifestyle trends
8. Buying patterns
9. Ethical issues
10. Current trends
a. Singles market
b. Celebrity culture
c. Materialism/consumerism
d. Work life balance
e. Environmentalism
f. Diet/health
g. Changes in TV viewing/internet
usage/mobile
iv. Technological factors (stage of
development, infrastructure)
1. Recent technological developments
2. Rate of change/technical diffusion
3. Technology’s impact on product
development
4. Impact on cost structure
5. Maturity of technology
6. Customer buying mechanisms
7. Global communications
8. Cloud computing
9. 3d printing
b. Micro audit: Competitors—Porter’s Five Forces
i. Threat of new entrants
1. Cost of entry
2. Specialist knowledge required
3. Economics of scale
4. Barriers to entry (patents, etc)
5. Market attractiveness, profitability
ii. Bargaining power of buyers
1. Buyer choice number of firms
2. Number of buyers
3. Ease to switch
4. Product/service/brand loyalty
5. Price sensitivity (elasticity)
iii. Threat of substitutes (fill the same
need)
1. Availability of substitutes
2. Ease of substitution
3. Buyer propensity to substitutes
4. Switching costs
iv. Bargaining power of suppliers
1. Number of suppliers
2. Brand loyalty
3. Relationships with customers
4. Degree of differentiation
5. Low switching costs
v. Rivalry
1. Number of competitors
2. Market growth rate
3. Potential profitability
4. Exit barriers
5. Level of product differentiation
6. Fixed costs
c. Internal Audit:
i. Strategy
1. Review current objectives and strategy
ii. Organization
1. Structure, functional efficiency,
inter-functional efficiency
iii. Systems
1. To what extent do out systems support the
marketing plan
iv. Productivity
1. How well is each element of the current
marketing plan performing?
v. Marketing mix: 7Ps
1. Product/Service (3 levels product)
a. Core product
b. Physical—feature, brand, packaging,
material, design
c. Augmented (not essential, but add
comparative advantage)—after sale service, delivery, guarantee, payment plans
2. Price (4 pricing strategies)
a. Skimming
i. Innovators want to pay high prices
ii. Skim top of the market
iii. Profit per unit sale is high
iv. Provide flexibility for price later
v. Not benefit from economics of scale
b. Penetration
i. At low price
ii. Low economics of scale
iii. Establish brand loyalty right away
iv. Hard to raise price later
v. Risk price quality perception
c. Premium
i. Quality perception
ii. Threat of new entrances is high
d. Economy
i. Affordable pricing
ii. Mass economics of scale
iii. Have to sustain through heavy promotion
3. People
a. Staff
i. Are the touch points
ii. Deliver the brand promise
iii. Drive word-of-mouth
b. Internal marketing
i. Employees are customers
ii. Developing cooperation and commitment
iii. Attracting, motivating and retaining the
best employees
iv. Make employees feel different from other
employees
v. Get them associated with the brand
vi. Constant internal communication, update
and persuade them
4. Process
a. Utilize the customer
b. Appointment systems & queuing
i. Disney “snake queue”: advertising along
the way, hide the true lineà people line up for longer actually but enjoy more
satisfaction
c. Website experience
i. Ease of checking availability
ii. Simple form filling
iii. Simple menus
iv. Instant follow-up emails
v. Tracking process (if relevant)
vi. After sales service
d. Good process
i. Add value to the customer experience
ii. Reduce variability
iii. Create competitive advantage
iv. Improve efficiency
e. Poor process
i. Reduce sales
ii. Damage brand perception
5. Physical evidence
a. Support the value proposition/brand image
through
i. Premises
ii. Leaflets/brochures
iii. Staff uniforms
iv. Cleanliness
v. Customer facilities
vi. Décor/building brand
recognition/promotion alignment
b. Consistency
c. How products are displaced
d. Layouts
6. Place (distribution)
a. Intensive distribution
i. FMCG e.g. Tesco
ii. Make it widely available
iii. Economy price product
iv. Vending machines: impulse purchase
b. Selective distribution
i. Easily available
ii. Quality image
iii. E.g. John Lewis
iv. E.g. Clinique (only in department stores)
c. Exclusive distribution
i. Make limited products
ii. High end
iii. Premium price goods
iv. E.g. Rolex, Porches
d. Direct channel: MÃ Consumer
e. Indirect channels:
i. MÃ RÃ Customer
ii. MÃ WÃ RÃ Customer
iii. Mà Agent/Distributerà Wà Rà Customer
iv. Mà Dà Wà Rà Customerà Consumer (customer as a channel; customer is the person who
buys; consumer is the person who uses)
7. Promotion (5 promotional strategies)
a. Advertising (paid, non-personal)
b. Direct marketing (planned activities and
analysis of response behavior)
i. Creating a personal, and
intermediary-free, dialogue with customers
1. Mail
2. Email
3. Mobile
4. Inserts
5. Catalogues
6. Door-to-door
7. Telemarketing
8. Direct response advertising
9. On-line marketing communications
ii. Advantages
1. Better targeting
2. Powerful personal communications
3. Flexibility
4. Creative opportunities
5. Controlled timing
6. Controlled output
7. Ability to measure
c. Sales promotion (short-term incentives)
d. Publicity/PR (planned effort to maintain
goodwill with publics)
i. Activities
1. Media relations
2. Editorial and broadcast material
3. Face-to-face events
ii. Considerations
1. High credibility
2. Low control
3. Low cost
4. Difficulties in measuring effectiveness
5. PR useful in relationship marketing
6. PR may support other promotional activity
7. Generates media space, unlike advertising
who buys media coverage
8. Have to build strong relationship with
journalists
e. Personal selling (direct communication)
i. Obtain orders
ii. Make presentations
iii. Demonstrate products/equipment
iv. Give advice
v. Run exhibition stands
vi. Provide literature
vii. Merchandising
viii.
Establish
goodwill
ix. Obtain leads
x. Face-to-face sales interviews
xi. Deliver goods
xii. Collect payment
xiii.
Negotiate
discounts/payment terms
xiv. Relationship marketing
f. Push strategy
i. Push demand down the channel
ii. Make products available
iii. Promote to channel members (businesses)
iv. Personal selling
v. Cash discounts
vi. Credit facilities
vii. Direct mail shots
viii.
Intermediary
competitions
ix. Free gifts
x. POS (point of sale: displays at
check-outs for impulse people) material
xi. Demonstrations
xii. Training schemes
xiii.
Trade
exhibitions
xiv. Sales force incentives
g. Pull strategy
i. Manufacture pull directly to customers
ii. Heavy advertising and sales promotion
(FCMG)
iii. Reduced process and/loss leaders
iv. Vouchers
v. Samples
vi. BOGOF
vii. Percentage extra free
viii.
Money-back
offers
ix. Multi-packs
x. Packaging
xi. Demonstrations
xii. Trade-in deals
xiii.
Guarantees
xiv. Credit facilities
xv. Sponsorship
xvi. POS displays
xvii.
Celebrity
endorsement
h. High involvement
i. A lot is stake
ii. Extended problem solving
iii. Detailed and rigorous
i. Low involvement
i. Impulse buying
ii. Limited problem solving
iii. Superficial and quick
j. High involvement when
i. An ego relationship exists (reflects own
self image)
ii. There is a risk of negative consequences
iii. There is a need for social sanction from
reference groups
iv. The purchase is emotionally significant
3. The Target Marketing Process
a. Segmentation: identification of groups of customers
with similar needs, based on variables for segmenting the market
i. Grouping similar people together
ii. Stereotyping
iii. Consumer Segmentation Bases
1. Geographic
a. Location, country, region, climate,
population density
2. Demographic
a. Age, generation, sex, family life stage,
socio-economic grouping, income, class, religion, ethnicity (Geo-Demographic,
ACORN, MOSAIC)
b. ACORN: wealthy achievers, urban
prosperity, comfortably off, moderate means, hard-pressed
c. Age: builders, baby boomers, Gen X Y Z
3. Psychographicà buying motivations
a. Interests, opinions, personality, values,
attitudes
4. Behavioral
a. Usage rate, benefits sought, brand loyalty,
occasions
iv. Segments should be:
1. Measurable
2. Accessible
3. Substantial
4. Meaningful
v. Benefits of segmentation
1. More precise market definition
2. Better analysis of competition
3. Rapid response to changing market needs
4. Efficient resource allocation
5. Effective strategic planning
b. Targeting: the process of selecting one or more
market segments and then developing a product or service that is aimed
specifically at those segments.
i. Undifferentiated marketing
1. Mass marketing
2. Assumes customers are homogeneous
3. Generic marketing mix
ii. Differentiated marketing
1. Multi-segment
2. Tailored mix for each segment
3. Cadbury, coke
iii. Concentrated/Niche marketing
1. To one clearly-defined segment
2. Developing high degree of expertise and
insight
3. Rolls Royce, Porsche, Rolex==>luxury brand particular
iv. Customized/Micro-Marketing
1. A very specific, narrowly defined segment
2. One-to-one marketing
3. Cars: design your own/customize your own
marketing
c. Positioning: reason to buy, brand image in the
marketplace
i. Cost leadership
ii. Product differentiation
iii. Concentration/niche marketing
4.
Complexities of International Marketing
a.
Global
macro trends
i. An uncertain future
ii. Emerging middle class
iii. Disaffected youth
iv. The rich/poor divide
v. Climate change
vi. An aging world
vii. The urban transition
viii.
People
on the move
ix. A more connected world
x. China goes global
b. International Market Entry Strategies
i. Indirect exporting: sales to
intermediaries within the UK who in turn resell to the customer abroad
1. Intermediary makes things overseas
2. Lose control over the marketing mix
3. High risk on turning reputation
ii. Direct exporting: sales to a customer
abroad, who may be the end-user of the goods or an intermediary
1. Deal with overseas intermediary
2. Intermediary deal with local customers
3. Manage many intermediaries
4. Cant gain local customer knowledge
iii. Direct investment: financial investment
overseas
1. Manufacturer directly invests overseas
2. Use low labor cost worldwide
3. High cost—investment
4. High payback
5. Full control of the marketing mix
6. Get full local customer knowledge
a. Acquisition
i. High financial risk
b. Joint venture
i. Shared costs and risk
ii. Less control (general)
iii. Less decision making ability
c. Wholly Owned Subsidiaries
i. Full strategic control
ii. Keep all the profits
iii. Take all the risks and gains
iv. Sustain losses on oneself
v. Exit barriers are very high
c. International Marketing Mix Strategies
i. Extend = Standardize
1. Ethnocentric: sell the same things
worldwide
2. E.g. Body Shop, but now starts
geocentric; Laura Ashley in UK
ii. Adapt = Customize/Modify
1. Polycentric: pulled by companies
2. Create a modified mix for each country
e.g. P&G
iii. Globalize
1. Geocentric: every country is equally
important
2. Look for commonality worldwide at a
strategic level
3. Used by some big brands e.g. Rolex
4. E.g. McDonald
THE END.
