Strategic planning

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition.Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.Where does marketing planning fit in with the overall strategic planning of a business?Strategic planning (which you will cover in your studies of “strategy” is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!).However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for well-organised marketing planning.What are the key issues that should be addressed in marketing planning?The following questions lie at the heart of any marketing (or indeed strategic) planning process:• Where are we now?• How did we get there?• Where are we heading?• Where would we like to be?• How do we get there?• Are we on course?Why is marketing planning essential?Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services.A marketing plan is useful to many people in a business. It can help to:• Identify sources of competitive advantage• Gain commitment to a strategy• Get resources needed to invest in and build the business• Inform stakeholders in the business• Set objectives and strategies• Measure performance 0 nhận xét

Người đăng: Sophie vào lúc 15:22

pricing

Setting the right price is an important part of effective marketing . It is the only part of the marketing mix that generates revenue (product, promotion and place are all about marketing costs).Price is also the marketing variable that can be changed most quickly, perhaps in response to a competitor price change.Put simply, price is the amount of money or goods for which a thing is bought or sold.The price of a product may be seen as a financial expression of the value of that product.For a consumer, price is the monetary expression of the value to be enjoyed/benefits of purchasing a product, as compared with other available items.The concept of value can therefore be expressed as:(perceived) VALUE = (perceived) BENEFITS – (perceived) COSTSA customer’s motivation to purchase a product comes firstly from a need and a want:e.g.• Need: "I need to eat• Want: I would like to go out for a meal tonight")The second motivation comes from a perception of the value of a product in satisfying that need/want (e.g. "I really fancy a McDonalds").The perception of the value of a product varies from customer to customer, because perceptions of benefits and costs vary.Perceived benefits are often largely dependent on personal taste (e.g. spicy versus sweet, or green versus blue). In order to obtain the maximum possible value from the available market, businesses try to ‘segment’ the market – that is to divide up the market into groups of consumers whose preferences are broadly similar – and to adapt their products to attract these customers.In general, a products perceived value may be increased in one of two ways – either by:(1) Increasing the benefits that the product will deliver, or,(2) Reducing the cost.For consumers, the PRICE of a product is the most obvious indicator of cost - hence the need to get product pricing right.Factors affecting demandConsider the factors affecting the demand for a product that are(1) within the control of a business and(2) outside the control of a business:Factors within a businesses’ control include:• Price (assuming an imperfect market – i.e. not perfect competition)• Product research and development• Advertising & sales promotion• Training and organisation of the sales force• Effectiveness of distribution (e.g. access to retail outlets; trained distributor agents)• Quality of after-sales service (e.g. which affects demand from repeat-business)Factors outside the control of business include:• The price of substitute goods and services• The price of complementary goods and services• Consumers’ disposable income• Consumer tastes and fashionsPrice is, therefore, a critically important element of the choices available to businesses in trying to attract demand for their products. 0 nhận xét

Người đăng: Sophie vào lúc 15:20

Promotion

Direct marketing is concerned with establishing an individual relationship between the business offering a product or service and the final customer.Direct marketing has been defined by the Institute of Direct Marketing as:The planned recording, analysis and tracking of customer behaviour to develop a relational marketing strategiesThe process of direct marketing covers a wide range of promotional activities you may be familiar with. These include:• Direct-response adverts on television and radio• Mail order catalogues• E-commerce (you bought this marketing companion following tutor2u’s direct marketing campaign!)• Magazine inserts• Direct mail (sometimes also referred to as “junk mail”)• TelemarketingDirect mailOf the above direct marketing techniques, the one in most widespread use is direct mail.Direct mail is widely thought of as the most effective medium to achieve a customer sales response.Why?• The advertiser can target a promotional message down to an individual level, and where possible personalise the message. There are a large number of mailing databases available that allow businesses to send direct mailing to potential customers based on household income, interests, occupation and other variables• Businesses can first test the responsiveness of direct mailing (by sending out a test mailing to a small, representative sample) before committing to the more significant cost of a larger campaign• Direct mailing campaigns are less visible to competitors – it is therefore possible to be more creative, for longerHowever, direct mail has several weaknesses:• A piece of direct mail is less “interactive” than a television or radio advert, although creative packaging can still stimulate customer response• Lead times to produce direct mailing campaigns can be quite long• There is increasing customer concern with “junk mail” – the receipt of unsolicited mail which often suggests that the right to individual privacy has been breached.The Direct marketing databaseDirect mailing is based on the “mailing list” – a critical part in the direct marketing process. The mailing list is a database which collects together details of past, current and potential customers. A properly managed mailing database enables a business to:• Focus on the best prospective customers• Cross-sell related products• Launch new products to existing customersHow is the mailing database compiled?The starting point is the existing information the business keeps on its customers. All forms of communication between a customer and the business need to be recorded so that a detailed, up-to-date profile can be maintained.It is also possible to “buy” mailing lists from elsewhere. There are numerous mailing list owners and brokers who sell lists of names. The Internet, directories, associations and other sources are good sources. 0 nhận xét

Người đăng: Sophie vào lúc 15:18