Market%20Strategy

1
Market Strategy

• the financial implications of marketing

2
Market Strategy

• Your task is to prepare a five year plan
• You must explore several strategies
• Set and quantify objectives
• You must balance profitability with growth and
  survival
• You will be helped by a computer
• Leaving you to think and discuss

3
The Business Situation

• A typical manufacturing company
• The current, domestic market has stagnated
• So you must investigate new markets
• Exporting the current products
• Selling directly using your own staff
• Selling via non-exclusive agents
• Selling via non-exclusive dealers
• Launch New Domestic Products

4
Performance Measures

• Profitability
• Return on Investment
• Growth
• Sales (units value)
• Market Share (unit cash)
• Worth (residual profit)
• Survival
• Cumulative Cash Flow
• Long Term
• Discounted Cash Flow (I.R.R. N.P.V.)

5
Market Structure

• Total Market
• Total potential sales
• Growing over time
• Served (penetrated) Market
• Where the company is selling
• Penetration of total market increases
• Competitive Share
• Proportion of served market that buys
• Influenced by your marketing decisions

6
Market Influences

• Price
• Promotion
• Performance
• Inventory Availability
• Debtor Policy
• Launch Year

7
Using the Computer

• Choose enter a team name
• The Planning Options
• Review Current Plan
• Compare Plans
• What-If Analysis
• Change Working Plan
• Recess Planning

8
Review Current Plan

• Select from several reports
• Detail Results
• Summary Results
• Combined Detail
• Combined Summary

9
Detail Results

• Shows for each of the five years
• Sales Revenue
• Unit Market Share
• Cash Market Share
• Profit
• Profit to Sales
• Capital Employed
• Cumulative Cash Flow
• Return on Investment
• Residual Profit

10
Summary Results

• Shows for the five years as a whole
• Served Market Share
• Total Sales Revenue
• Average Unit Market Share
• Average Cash Market Share
• Total Profit
• Average Profit to Sales
• Worst Cash Flow
• Internal Rate of Return
• Net Present Value

11
Observations

• Think before you act
• (do not waste your plans)
• Ask for help if you need it
• There is no right or wrong answer
• (your best plan will be the one that best meets
  the financial objectives you decide)
• Enjoy the challenge