CH 5 SETTING GOALS AND OBJECTIVES IDENTIFYING STRATEGIES

CH 5 - SETTING GOALS AND OBJECTIVES, IDENTIFYING STRATEGIES AND TACTICS

INTRODUCTION • Use the results of situation analysis to get goals in order to answer: “ where do we want to go? ” • To set these goals, need to create objectives that answer: “ how do we reach our goals? ” • Once objectives are set, planner selects its target market/s and designs marketing mix strategies to attract the targeted market, which requires market segmentation.

SETTING GOALS AND OBJECTIVES • GOAL- a broad statement of direction, describing what you want to achieve. All employees of the bank contribute to the achievement of said goal by using their strengthens and specialties. • OBJECTIVE- speaks of a measureable result that are to be attained in the pursuit of a broader corporate or financial goal. Objectives must support and help maintain the marketing goal.

A goal may be supported by one or many objectives. To be able to develop goals and objectives, banks must first develop strategies and tactics. -STRATEGY- describes the route the bank will take to achieve the objective. Defines what will be done. -TACTICS- specific actions to be taken. Define how it will be done. The strategy and tactics form the bank’s action plan

IMPORTANCE OF SETTING GOALS AND OBJECTIVES 1) THEY SERVE AS A GUIDE FOR PLANNING STRATEGIES AND TACTICS. 2) OBJECTIVES FORM THE BASIS FOR MARKETING BUDGETING PROCESS. 3) OBJECTIVES FORM THE BASIS FOR EVALUATING PERFORMANCE. 4) WITHOUT OBJECTIVES THE BANK WOULDN’T KNOW IF THE STRATEGIES AND TACTICS WERE WORKING. 5) OBJECTIVES CAN HELP BUILD TEAM SPIRIT.

HIERARCHY OF GOALS IN BUSINESS • The hierarchy establishes the identity of the financial plan and marketing vision of the bank which includes; mission statement, corporate or finanical goals and marketing goals. MISSION STATEMENT- governs the overall direction and purpose of the bank. It is a statement developed by bank’s board of directors, that is supported by the goals and objectives of the bank. It is used to establish the banks short and long term goals.

CORPORATE GOALS(FINANICAL)- Set by bank’s executive management and are based on their financial statements. Tend to be quantitative and long range in focus. Need to be communicated throughout bank to establish a common purpose and to form basis for setting marketing goals.

MARKETING GOALS- set by middle and senior management and are based on financial goals and bank’s situation analysis. Can be similar to corporate/financial goals. Marketing objectives that support marketing goals are statements of measurable results that the marketing effort is expected to produce. Market objectives require marketing expertise in; pricing, personal selling, promotion and production and distribution strategy.

CHARACTERISTICS OF MARKETING OBJECTIVIES 1) THEY SHOULD BE MEASURABLE 2) SHOULD COMPLEMENT BANK’S FINANCIAL GOALS 3) SHOULD BE APPROPRIATE FOR THE LEVEL OF JOB 4) THEY SHOULD BE FLEXIBLE 5) SHOULD STRETCH THE BANK AND DEPARTMENTS TO EXCELLENCE

DEVELOPING A STRATEGY Once the manager has decided “where it wants to go” and as set goals and objectives to reach that destination, they must develop an action planknown as market strategy This part answers: “how are we going to get there? ” when developing the market strategy, marketers create a specific mix of product, price, promotion and place to meet the need of the market segment.

Creating a market strategy is a two step process: 1) Selecting/segmenting the target market/s 2) Designing the market mix to attract SEGMENTATION AND TARGET MARKET SELECTIONsegmentation allows them to specialise to meet the needs of the segment rather than satisfying the whole market, allowing them to tailor their marketing approach. Segmentation is to divide the market into groups of people with similar needs, wants and preferences. Done successfully with the use of marketing customer information file(MCIF) system.

NECESSARY ATTRIBUTES OF A MARKET SEGMENT MUST BE: • MEASUREABLE- must be able to measure the size of the market • ACESSIBLE- must be feasible to reach the members of the segment • SUBTANIAL- must be able to generate a profitable volume.

MARKETING STRATEGY AND TACTICS Once target market/s are identified, market mix and tactics are determined in a two stage operation: 1. MARKET STRATEGY- once its determined what will be sold to whom, the pricing, promotion, and distribution strategies are formed. Product/market expansion matrix- used to identify alternative product and segmentation. It indicate how the bank can grow by selling more of the current product to new customers or by selling a new product to their current customers.

The product/market expansion matrix provides 4 options: 1) Market penetration- selling present products to the present market 2) Market expansion- selling present products to a new market 3) Product expansion- developing new products to sell to present market 4) Diversification or product/market expansiondeveloping and selling new products to a new market

2. MARKETING TACTICS- are actions performed by employees that achieve results. Tactics are specific instructions that are oriented towards reaching bank’s objectives. All employees should have specific, measurable, personal goals and objectives that relate to achieving the bank’s objectives. The bank may use incentives to motivate their employees to reach or exceed their objections.

STRATEGY FORMULATION IN ACTION Planning process varies from bank to bank. Although, there is an 8 step model for establishing objectives, strategies, and tactics within a bank.

THE 8 STEP PROCESS STEP 1: bank’s corporate objectives reviewed by all managers STEP 2: review corporate objectives and situation analysis with all management personnel (all departments) STEP 3: managers and their departments, refine their objectives and overall strategy in addressing the targeted market STEP 4: review managers objectives to check if they’re consistent with bank’s mission and corporate objectives

STEP 5: meet with managers to finalize objectives for each departments of the bank STEP 6: managers go back to their departments, work on their strategies and tactics for accomplishing their objectives STEP 7: managers submit their budgets and form a projected net income STEP 8: department heads develop specific tactics/objectives for each staff member’s role in executing the strategy

APPLYING STRATEGY TO A BANK MARKETING PLAN All objectives are specific, quantifiable and can be used to measure performance. An action plan is formed for the achievement of those objectives. A strategy is set and the tactics needed to implement it are spelled out. Measurement, evaluation and control are all important elements in the planning process. Bank needs this to know it’s “arrived”. The plan must include a control mechanismmonitoring system, carried out through the use of reports.

APPLYING STRATEGY TO A PRODUCT MARKETING PLAN Planning process is the same regardless of the scope of the plan. Situation analysis is carried out to summarise the problems and opportunities. Market objectives and goals are determined. Detailed marketing strategy spells out the product, pricing, promotion and distribution strategies and tactics. Finally, plan specifies how progress will measured and reported.