Basic Marketing, 13th edition

1
Chapter 2 Marketing Strategy Planning
2
The Marketing Management Process
Exhibit 2-4
2-9
3
Target Marketing vs. Mass Marketing

• TARGET MARKETING
• Marketing mix is tailored to fit specific target
  customer(s)
• MASS MARKETING
• Vaguely aims at "everyone" with the same
  marketing mix

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Marketing Strategy Planning
Exhibit 2-5
2-10
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The Four Ps of the Marketing Mix
Exhibit 2-7
2-11
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Strategy Decision Areas Organized by the Four Ps
Exhibit 2-8
2-12
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The Marketing Plan

• Marketing plan a written statement of a
  marketing strategy and the time related details
  for carrying out the strategy.
• Spells out, in detail
• What marketing mix is to be offered
• To what target market
• For how long
• What resources (costs) are needed at what rate
• What results are expected
• What control procedures will be used.

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Marketing Program

• Marketing program blends all of the firm's
  marketing plans into one "big" planwhich is an
  integrated part of the whole-company strategic
  plan
• Program requires an effective "building up"
  process
• A good program must be based on good plans
• Each plan must be carefully developed
• Each plan is based on a marketing strategy
• Each strategy is based on a marketing mix and a
  target market
• Plans in overall program should work together to
  enhance a competitive advantage

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Marketing Objectives

• Should Be in Writing
• Objectives must be clearly defined
  quantitatively measured
• Measures should be taken at regular intervals
• Measures must be useful to managers
• Measures should be linked to rewards
• Measures should directly relate to tactical and
  strategic goals of the firm

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Profits, Revenues Costs

• Marketing Concept meet the needs of the target
  market at a profit (C1, pg 16).
• Profits Total Revenues Total Costs
• What are Revenues?
• What are Costs?

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Revenues

• Total Revenues price x quantity sold
• Example Price 10 a unit. 50 Units sold
• Total Revenues 50 x 10 500

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Revenues

• Most companies sell multiple products and
  revenues are summed across products sold
• Example Company sells Product A Product B
• Product A price 10 B 20
• Units Sold A 50 B 100
• What is the total revenue?

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Total Revenue

• (10 x 50) (20 x 100)
• 2,500

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Costs

• Total Costs Fixed Costs Variable Costs
• Fixed Costs Costs that do not change over some
  time period or level of production
• Variable Costs costs that change when units
  produced or sold changes

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Costs Example

• Movie Theater monthly rent 4,000
• Monthly Utilities 1,000
• Labor Costs 3,000 if avg. number of people go
  to the movies
• 2,000 if people going to the movies is 25
  below average
• 5,000 if people going to the movies is 50
  greater than average
• What are fixed costs? Variable Costs?

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Movie Theater Costs

• Fixed Costs 5,000
• Variable Costs 2,000 3,000 or 5,000
  depending on attendance

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Customer Equity Differentiation

• Customer Equity is the expected earnings stream
  (profitability) of a firms current and
  prospective customers over some period of time
  (pg 43).
• Differentiation means that the marketing mix is
  distinct from and better than what is available
  from a competitor (pg 50)

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Only 3 Ways A Firm Increase Profits

• 1 Sell more units at the same price (if selling
  above costs)
• 2 Lower costs while maintaining price and
  quantity sold
• 3 Meet target market needs better than
  competitors and successfully charge a higher price

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Companies that are highly profitable

• May have higher or lower costs per unit than
  competitors
• May sell more or fewer units than competitors
• May have a higher or lower price than competitors
• We judge marketing success by profits NOT
  costs, units sold, price or total revenues ALONE

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Competitive Advantage

• Competitive advantage the firm has a marketing
  mix that the target market sees as better than a
  competitor's mix
• A better marketing mix offers target customers
  better customer value
• Note customers who are not in the target market
  may not see the marketing mix as offering better
  value
• Requires that the firm
• understand current competitors' offerings
• anticipate competitors' likely plans
• monitor effects of changes in competition
• REALLY understand the target customers' needs

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Marketing Strategy Planning Process
Exhibit 3-1
3-3
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Types of Opportunities
Exhibit 3-2
3-4
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Examples of Different Types of Opportunities

• Market Penetration
• Arm Hammer promotes new uses of its baking soda
• Market Development
• Marriott Hotels target families for weekend
  "get-aways" to rent rooms filled by business
  travelers during the week
• Product Development
• Microsoft develops a new version of its Windows
  operating system to appeal to the people who
  bought an earlier version but now want more
  features
• Diversification
• RJR, the cigarette producer, adds baked goods to
  its product line to appeal to new customers

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Considering International Opportunities
Competitive Advantage
Smaller World
Better Trends?
Early Start
3-5