BGYBus and ManagementWeek 24,units 7,8 and 9

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• BGY-Bus and Management-Week 24,units 7,8 and 9
• Unit 7-Marketing strategy
• Unit 8-Marketing plans and budgeting
• Unit 9-Elasticity of demand

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Unit 7-Marketing Strategy

• Def Plan of activities that balances cos
  objectives, resources and mkt opportunities
• -Plan of medium to long term actions required
  to achieve cos goals.
• -Must look to the future
• -Must be achievable
• -Is company specific (each co is different)
• -Is different to tactics-which are s/term
  responses to opportunities/threats

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Developing a marketing strategy

• PROCESS
• 1.Define company objectives
• 2.Analyze the existing business
• 3.Understand the market (e.g. customers)
• 4.Analyze available resources
• Tools used to help analyze market
  business(23)
• 1.Statistical analysis-past performance data.
  e.g. Sales over the last 5 yrs
• 2.Market research

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Marketing tools cont.

• 3.SWOT Analysis
• Strengths, Weaknesses, Opportunities and Threats
  
• of the co.
• Internal review (inside co) for- S or W?
• 1.Company reputation-good/bad?
• 2.Strong or weak in which market segment /area?
• 3.Any strong brands/Any new products?
• 4.Are our products widely available?
• External review- for Opportunities or Threats
• 1.State of economy

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External review- O or T ?(cont)

• 2.Market-any gaps?
• 3.Technology-positive /negative effect on co?
• 4.Demography-Will a change in population
  structure e.g. increase in elderly population
  effect the co?

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Types of Marketing strategy

• 1.Mkt penetration
• increasing mkt share (aim to inc. sales)
• Concentrates on Existing markets existing
  Products (so safest method)
• May include
• Finding new customers e.g. new advertising to
  attract more people
• Taking customers from competitors (e.g. low
  prices)
• -Finding new uses for existing products e.g.
  Frequent wash shampoo

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Marketing strategy cont

• 2.Mkt development
• - new mkts for existing products
• -Slightly more risky
• May be done by
• 1.Repositioning the product-target a different
  market segment e.g. by advertising/diff. pricing
• 2.Moving into new markets- moving into another
  country/opening outlets abroad

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Marketing strategy cont

• 3.Product development
• -New products for existing markets
• By
• Changing existing product e.g. chunky kit Kat
• Developing new product e.g. Mars Ice cream

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Marketing strategy cont

• 4.Diversification
• -new products and new markets
• -The most risky
• -e.g. Virgin Corporations many interests

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Marketing strategy a risky business? Asnoffs
Matrix
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The strategic cycle (should be a constant review
/updating and feedback of strategies)
Determine Objectives (goals)
Review/ Evaluate outcomes Of plan
Review int. ext. env.
Develop strategy /Plans
Implement plans
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Unit 8-_The Marketing plan

• DEF A detailed statement of the companys
  marketing strategy.
• Explains how the strategy is determined and how
  it will be carried out.
• Why is it NB (important) ?
• 1.Focuses marketing activities
• 2.Everyone knows his/her task
• 3.Co. can take adv. of market opportunities
• 4.Helps prepare for possible problems
• 5.Prepare for unexpected events

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The Marketing Plan the steps

• Overview background

Introduction

• ( e.g. co wants to make profit, so marketing
  objective create a new product)

Corporate and marketing objectives
Marketing strategy

• Outlines the strategy we will use e.g. product
  development

• Details of individual activities, including
  timings

Action Plans

• Breakdown of revenue and costs by departments

Detailed budgets
Control tools (e.g. supervision)

• For budget and plans (making sure they are
  working)

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Pros and Cons of Market planning

• PROS-ANTICIPATE CHANGES HELPS SET DIRECTION
  FOR GOALS
• CONS-TIMELY,MARKET UNPREDICTABLE
• Marketing Budgets
• DEFA quantified plan (in money terms) for the
  marketing dept.
• Will be diff for each co.
• Should result from planning process (
  first-corp. objectives, then Marketing strategy
  ,then the budget)

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Methods of setting budgets

• Incremental last year plus a bit (e.g.
  2003-100,2004 - 110 (10 ? )
• Sales related proportional to sales (e.g. sales
  inc by 10,then each dept. can spend extra 10)
• Task-based costing for EACH activity required
  to reach objective (e.g. objective-create new
  product, then 100 for product design)
• 4.Competitor parity - match competitors budget
• 5.For small businesses-what ever they can afford

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Marketing expenditure

• Def Costs associated with marketing the product
  e.g. promotion, design of packaging, market
  research and distribution
• Two types of promotion
• Above-the-line media advertising
• e.g. Television, Radio, Cinema
• Below-the-line In store advertising
• e.g. Competitions, Special offers, direct mail
  shots

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Unit 9

• Elasticity of Demand measures how responsive
  demand is, to a change in1) price or 2) income
• Price elasticity of demand formula
• .change.Q (DEMAND)
• ------------------
• .change.P (PRICE)
• E.G. if product price rises 10,then demand
  falls by 20
• -20
• ------ - 2
• 10
• (This figure of -2 indicates that for every 1
  change in price, demand is likely to change by
  2)

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Uses of elasticity

• Sales forecasting ( sales units?)
• Pricing strategy effect of price changes on
  profits?
• To reduce price elasticity
• 1.Product differentiation (special product)
• 2.Horizontal integration e.g. merging with
  competitors
• 3.Price fixing monopoly etc.

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Income elasticity of demand

• Def change in peoples spending power changes
  demand?
• Formula .change .Q (quantity demanded )
• ------------------
• .change.Y ( real income)
• Classifying income elasticity
• Normal goods (e.g. coke) demand rises with
  incomes
• Luxury goods (e.g. Porsche) - demand rises with
  incomes
• Inferior goods( e.g. goods from Pound land)
  demand falls as incomes rise