Marketing Planning Strategic Marketing Marketing Planning n Good

Marketing Planning Strategic Marketing

Marketing Planning n Good marketing requires good planning ¡ To plan accordingly a company must examine itself & its business environment ¡ Companies conduct a SWOT Analysis to accomplish this

Marketing Planning n What is a SWOT Analysis? ¡ ¡ ¡ A SWOT Analysis occurs when a company looks at their strengths and weaknesses and analyzes the opportunities and threats that surround them. Helps handle weaknesses Prepares for threats

Strengths & Weaknesses n Strengths & weaknesses are internal factors that affect a business n Internal Analysis centers on the 3 C’s ¡ Company n ¡ Customers n ¡ Customer feedback/surveys Competition n What a company does well & what don’t they do well What is your company market share vs. your competitors? What products, promotions, etc. . do they offer that are successful? Must evaluate these components fairly ¡ Sometimes done by outside strategists

Strengths & Weaknesses n Organizational Resources help identify internal factors ¡ ¡ ¡ Production costs Marketing skills Financial Resources Employee Capabilities Available Technology

External Opportunities & Threats n Opportunities and Threats are external factors that affect a company n Examine what your competition is doing n Conduct Environmental Scans

External Opportunities & Threats n Environmental Scan: Examine outside influences that impact your company n Political/Legal: Laws, Regulations, Foreign Policy, etc. . n Economic: Robust Economy v. Recession n Socio-Cultural: Lifestyle, Attitudes, Opinions, & Demographics of customers n Technological: Taking advantage of the latest & greatest

Mc. Donald’s SWOT Example List at least two examples from the information given

Competitive Advantage n Competitive Advantage is a set of unique features of a company and its products ¡ ¡ Target Market views them as significant or superior to the competition There are 3 types of competitive advantages n n n Cost Product/Service Differentiation Niche Strategies

Cost Competitive Advantage n Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins. ¡ Obtain inexpensive raw materials ¡ Efficient manufacturing facilities ¡ Avoid marginal customers n Wal-mart is a company with a cost-competitive advantage ¡ Strong Buying Power Relationships

Cost Competitive Advantage n Costs can be reduced for a company through…. ¡ ¡ ¡ Experience Curves: Costs will decline as experience with a product increases. Prices are set based on anticipated costs versus current costs Efficient Labor: Labor costs are typically higher in lowskill, labor-intensive industries such as product assembly & apparel merchandise n Nike, Levi’s, & Liz Clairborne all produce overseas

Cost Competitive Advantage n No frills goods & services ¡ Eliminate extras to reduce costs ¡ Example Southwest & Allegiant Airlines n Government Subsidies ¡ Government provides grants & interest free loans to target industries ¡ Example agriculture industry $10 - $30 billion a year

Cost Competitive Advantage n Product Design ¡ Cutting-edge design technology offsets labor costs ¡ Examples are BMW & Companies using Reverse Engineering n Reengineering ¡ Rethinking & redesigning a process to increase profits ¡ Often done by reorganizing specific departments

Cost Competitive Advantage n Product Innovations ¡ Done to lower production costs (new technology) n New Methods of Service Delivery ¡ Medical expenses have been lowered due to outpatient surgery & walk-in clinics ¡ Airlines promote online purchasing & kiosks ¡ Banks charge for using a teller

Product/Service Differentiation n Product/Service Differentiation exists when a firm provides something unique that is valuable to buyers beyond simply offering a low price ¡ More sustainable than Cost Competitive ¡ Examples of how it occurs n Brand Name (Lexus) n Strong Dealer Network (Caterpillar Tractor) n Product Reliability (Maytag) n Image (Neiman Marcus) n Service (Fedex)

Niche Differentiation n Niche Differentiation seeks to target & effectively serve a single segment of the market ¡ ¡ ¡ Allows smaller companies to compete Take the “leftovers” of a giant corporation Usually occurs by targeting a specific geographic area n Jack in the Box only on West Coast

Competitive Advantage n A sustainable competitive advantage exists when it cannot be copied by the competition ¡ Nike, Rolex, Nordstrom, Southwest Air, etc… ¡ Building your competitive advantage versus copying it allows for more growth

Strategic Decisions n The end result of a SWOT Analysis & identification of a competitive advantage is to evaluate the strategic direction of the firm n There are three strategic decisions to choose from

Strategic Decision n Market Penetration is based off of trying to increase market share among existing customers. n Example ¡ Maxwell house creates an aggressive coffee campaign with advertisements & price promotions such as coupons to existing customers. ¡ The goal is to increase sales by adding more customers

Strategic Decision n Market Development means attracting new customers to existing products. ¡ ¡ ¡ New uses for old products Mc. Donalds opening new restaurants in Russia, China, & Italy Coke & Pepsi growing faster overseas

Strategic Decisions n Product Development strategies involve the creation of new products for present markets. n Clothing manufacturers are typically product developers ¡ Designing a suit that is better in hot weather

Strategic Decisions n Diversification is a strategy of increasing sales by introducing new products into new markets n Example ¡ ¡ Sony buys Columbia Pictures Coca-Cola manufacturers water treatment & water conditioning equipment

Assignment n Create a SWOT analysis for a competitor of your research company ¡ Identify the target market of your competition ¡ Each aspect of the SWOT needs to have at least two identifiers n Explain to me how your company has created a competitive advantage & what they could do to create a competitive advantage using a different approach ¡ Cost ¡ Product/Service Differentiation ¡ Niche

Assignment n Of the 3 Strategic Directions a company can take, which approach does your company currently use. Explain answer. n Of the 3 Strategic Directions a company can take, what could your company do to fulfill those ¡ Market Penetration, Market Development, Product Development

Marketing Planning