Situation Analysis & Segmentation, Targeting and Positioning (STP)

1

Marketing Management

Objectives and Marketing Strategy

Dr Marian Makkar Week 3

2

Today’s Agenda

• Check in: How are you doing?

• Topics of discussion – Micro-environment / Internal Analysis: SWOT/TOWS – Objectives setting

• Activities – Porter’s Five Forces + Porter’s Generic Strategies – group work = 35 mins – Personal TOWS/SWOT (individual work) = 15 mins – Company objectives (group work) = 15 mins

• Assignment work – Group: finalise decisions for Q1 = 30 mins – Write up your individual discussion points on PESTEL + Porter’s Five Forces + SWOT = 30

mins

• Are you in a group for the online simulation?

3

Semester schedule – MKTG1100

Week Topic/Chapter(s) Activity

3 Marketing objectives & strategy - Ch. 2

• Five Forces/Generic Strategies/SWOT • Quiz 1 (based on ch. 1, 3, 4) • Simulation Q1 – closes 21/3/21

4 Segmentation, targeting & positioning Ch. 6 & 9

• Consumer journey maps (drawing/LEGO) • Quiz 2 (ch. 6 & 9) • Simulation Q2 – closes 28/3/21

5 Building brands Ch. 10 & 5

• Brand positioning, Personal branding • Quiz 3 (ch. 5 & 10) • Simulation Q3 – closes 11/4/21

Mid-Semester Break (1-7 April) * week 5 Friday class is on 9.3.21

6 Marketing mix: Product Ch. 13

• Assignment 2 DUE (Sunday 18 April) Quiz 4 (ch. 13)

4

Semester schedule – MKTG1100 (contd/..)

Week Topic/Chapter(s) Activity

7 Marketing mix: Pricing Ch. 16

• Assessment discussion • Quiz 5 (ch. 16) • Simulation Q4 – closes 25/4/21

8 Promotion P1 – Managing IMC - Ch. 19 & 21

• Quiz 6 (ch. 19 & 21) • Guest speaker

9 Promotion P2 – Managing Digital/Personal Communication - Ch. 20 & 22

• Quiz 7 (based on ch. 20 & 22) • Simulation Q5 – closes 9/5/21

10 Marketing channels & services Ch. 14, 17 & 18

• Quiz 8 (ch. 14, 17 & 18) • Simulation Q6 – closes 16/5/21 • Guest speaker

11 Globalisation & responsible marketing Ch. 8 & 11

• Brand positioning, Personal branding

• Simulation Q7 – closes 19/5/21 • Simulation Q8 – closes 23/5/21

12 A holistic marketing organisation approach Ch. 23

• Assignment 3 DUE (w/c 24 May)

5

Let’s watch! Euromonitor International: Economic, Consumer and Industry Trends for 2021

6

An open discussion

1. How do you see the economy in Melbourne adapting to these forecast changes to consumer behaviours?

2. Which of PESTEL’s factors will be very important for current retailers in Melbourne?

3. What does the future of urban mobility look like in 2024? How should automotive companies react to these changes?

4. What impact can these forecasted trends have on government planning during and after the pandemic?

7

Central role of strategic planning

• Managing the businesses as an investment portfolio

• Assessing the market’s growth rate and the company’s position in that market

• Establishing a strategy

8

Figure 2.1: Strategic Planning, Implementation, Control Processes

9

10

1) Design a corporate strategic plan to guide the whole enterprise + make decisions on the amount of resources to allocate each division

2) Establish a plan covering the allocation of funds to each business unit within the division

3) Develop a strategic plan to carry that business unit into a profitable future.

4) Each product level (product line, brand) develop a marketing plan for achieving its objectives.

11

Marketing plan

• This is the central instrument for directing and coordinating the marketing effort

– Strategic (lays out target markets + the firm’s value proposition, based on an analysis of the best market opportunities).

– Tactical (specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service)

12

Strategic formulation: Porters Generic Strategies

OVERALL COST LEADERSHIP

DIFFERENTIATION

FOCUS

* Michael Porter has proposed three generic strategies that provide a good starting point for strategic thinking. The firm that carries out the strategy best will make the most profits.

- lowest production & distribution costs to underprice competitors & win market share.

- achieving superior performance

- one or more narrow market segments, gets to know them intimately, & pursues either cost leadership or differentiation within the target segment.

13

Generic Strategic Position - for competitive advantage

P R I C E

DIFFERENTIATION

highlow

high

low

Cost leadership (cost focus)

DifferentiationUnsustainable

Lost in the middle

Break-through

D'Aveni, R. A., & Gunther, R. E. (1994). Hypercompetition: Managing the dynamics of strategic maneuvering. New York: The Free Press.

14

Porter’s Five Forces – Group work 20 mins

15

Porter’s Generic Strategies - Group work (15 mins)

16

External Environment

Marketing opportunity sources: 1. offer something that is in short supply. 2. supply an existing product or service in a new or

superior way. 3. a totally new product or service

Environmental threat: challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales or profit. So, create a contingency plan

17

Internal Environment

• Strengths

• Weaknesses

18

Resource for Internal Analysis

• Professional Analysis in library databases – MarketLine company profiles – Passport GMID company profiles – IBIS company profiles (Australian companies only) – Mergent (global) – for financial performance – Hoovers (US) – for financial performance, short analysis – DAT/FIN (Australian ASX listed public) – for financial performance, historical data

• Media Press – Business sources (Bloomberg, The Economist, HBR, Marketing) – Technical analysis of product features e.g. in Consumer Reports (available in

Business Source Complete)

• What Companies say about themselves – Website – Annual reports, earnings calls – Advertising, promotional materials, press releases

19

SWOT It is completed last - after you have understood the industry, competitors, and the environment.

20

SWOT Analysis: monitoring external + internal marketing environment

21

Individual Activity: Personal SWOT-TOWS (15 mins)

22

Remote Environment

Near Environment

The Firm

External Analysis (Near + Remote)

• Business Scope • PEST • Industry Analysis • Competitor Analysis • Consumer Analysis

Internal analysis • Performance Analysis • Value chain • Portfolio matrices

Critical Success Factors

Critical Success Factors & Internal Analysis

23

Break

24

Goal formulation

• Unit’s objectives must be arranged hierarchically • Objectives should be quantitative • Goals should be realistic • Objectives must be consistent

25

Marketing objectives (group work) = 15 mins

** This statement will guide your thinking around your company mission statement and KPIs.

Marketing objectives are focused on a few simple areas: • Sales (both dollars and volume) • Market Share (% both dollars and volume); or • Profit (% or $)

Other objectives may be written within the plan that will assist to deliver the sales, share or profit, but they are not marketing objectives. For example: • Building brand awareness is a communication objective • Securing a new customer is a distribution objective

SMART Marketing: To increase [market share, volume, sales, profit] of [product or brand name] from [amount] to [amount] in the category of [product or brand category] by [date].

• To increase sales of xyz brand from $1m to $1.1m in the category of sportswear by the end of 2018.

26

Summary

• Identify the objectives of your strategic analysis

• Understand your generic strategy and competitive position

• Select the most appropriate growth strategy

27

Week summary + homework

1) Sunday 21st March 11:59pm

• Assessment 1 Quiz 1 (based on ch. 1, 3, 4) • Simulation Q1 decisions

2) Assessment 2:

By now you should have basic points on - PESTEL, Porter’s Five Forces, Porter’s Generic Strategies - SWOT + strategy and objectives – work on it week 3

28

Goals

• To play MyMarketingExperience successfully, teams must create and manage the marketing strategy of a company selling their own brand of jeans in competition with others in their own unique marketplace.

• The winners are the owners of the most successful company at the end of the simulation.

• Their ‘success’ will depend on how well they have met their chosen KPIs, which they decide upon at the beginning of the simulation:

Success in this simulation does not depend solely on profit –you are awarded points for making good marketing decisions.

29

Each quarter…

1. Check Metrics & Analysis for research data and previous performance data. 2. Check the News Bulletins. 3. Discuss, take and save Strategic Decisions. 4. Discuss, take and save Tactical Actions.

* Remember to click ‘save’ before leaving the Strategic Decisions and Tactical Actions pages. If they don’t, this reminder will appear:

30

Team Roles

• Team Leader: All team members are expected to contribute to the decision-making as part of MMX, rather than one member making all of the decisions on behalf of the team.

• It is, however, suggested that a team leader is nominated to manage and organise the team decision-making process before the decision rollover period concludes.

31

Team Roles

Suggestions and Tips: • All members make decisions together but each week one member manages the

meeting (takes minutes of the meeting) and has to make the changes online before roll-over time/date.

• Have weekly meetings. • Each member has the responsibility to watch a video, read a report and understand

the manual (especially FAQs before asking your lecturer) and brief the others. • Each week one member is responsible for the research of key concepts (e.g.,

situation analysis, positioning etc.) and should explain it to the rest when making final yearly decisions.

• One team member enters all of the decisions - this could be the team leader; another who reviews the results of each rollover; another does the market research; another creates and keeps track of finances and their budget.

• Keep a close eye on your marketing budget and marketing contributions. • Keep a journal reflecting on the impact your decisions have made on sales,

contributions.

32

Weekly Roll-overs

Simulation Quarters Closing Dates

Quarter 1 21/03/2021 @ 23:59 (Sunday)

Quarter 2 28/03/2021 @ 23:59 (Sunday)

Mid-Semester Break 1-7 April

Quarter 3 11/04/2021 @ 23:59 (Sunday)

Quarter 4 25/04/2021 @ 23:59 (Sunday)

Quarter 5 09/05/2021 @ 23:59 (Sunday)

Quarter 6 16/05/2021 @ 23:59 (Sunday)

Quarter 7 19/05/2021 @ 23:59 (Wednesday)

Quarter 8 23//05/2021 @ 23:59 (Sunday)

33

Simulation game – 30 mins

34

Assignment 2 – Individual work 30 mins

35

The Process of Strategy Development

Corporate Objectives

Strategic Position

Marketing Strategies

Competitive Position

36

Strategic Gap & Growth Strategies

• Strategic gap and growth strategies

Sales/ profits

Sale s ob

jecti ve

Time

Intensi ve grow

th

Integrative growth

Unrelated diversification growth

37

Portfolio Matrices – BCG

Your market share divided by your closest competitor’s share

Purpose

How to use it

Business’s competitive position

Industry/ market attractiveness

Henderson, B. D. (1970). The product portfolio (BCG Perspectives series), http://www.bcg.com/documents/file75140.pdf..

38

Strategic Implications

Business’s competitive position

Industry/ market attractiveness