Marketing Design and Operation Summary
1
Marketing Strategy:
Strategy that indicates the Opportunities, Target Market, and the Competitive advantages to be developed and
exploited.
Strategic Market Plan:
Plan that indicates the methods and resources required to achieve the organization's goals within a specific target
market.
It yields a marketing strategy which is the framework for a marketing plan.
Marketing plan:
The written document or blueprint that specifies, implements and controls the organization's marketing activities
and marketing mix. (7Ps : Product, Price, Place, Promotion, People, Physical evidence and Process)
Strategic market plan
Plan of all aspects of
organization's strategy
≠
Marketing Plan
implementing the market strategy as
it relates to target market and marketing programs
Strategic Business unit (SBU):
A division, Product line or any other profit centre within the parent company.
Its revenue, plan, cost and investment can be separated from the parent company.
Components of marketing strategy:
Organizational mission, goals and corporate strategy.
Organizational opportunities and capabilities.
 Scanning and analysis of environment, customers, and competitors.
 Opportunities.
 Resources.
Strategic objectives "explained on page 3"
 Intense growth.
 Diversified growth.
 Integrated growth.
 Maintenance.
Targeting market and brand positioning.
 Market segmentation.
 Brand positioning.
 Priorities.
Marketing objectives.
Implementation.
 Tactics.
 Control.
Performance assessment and benchmarking.
Marketing Design and Operation Summary
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Marketing programme:
The marketing strategy and marketing mix activities.
Forces affecting marketing strategy and market mix:
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Legal forces.
Regulatory forces.
Economic and competitive forces. ( oil prices with BMW , Volvo)
Political forces
Social forces.
Technological forces.
These forces can be constraints and can be opportunities.
Organization mission:
Broad, long-term goals that organization wants to accomplish.
Statement of clear mission has many advantages:
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Gives organization clear purpose and direction, keep it on the track and prevent drifting.
Differentiate organization from the competitors.
Keep organization focused on customer " externally focused more than internally"
Provides specific direction and guidelines for top managers " it helps them to decide which opportunity to
pursue and which one not to pursue"
Offer guidance to all the employees.
Acts as a glue that hold all the organization together.
Corporate strategy:
Strategy that determine the utilization of resources to achieve organization's goals.
Organization opportunities:
The right circumstances occur at the right time to allow taking the right actions to reach the target market. (e.g.
Quaker oat bran)
Strategic window:
Temporary periods of optimum fit between the competitive capabilities of an organization and the market
requirement.
Market requirement:
Customers needs and desired benefits. (Toyota and Lexus creation for prestige-led car )
Company's capabilities:
Distinctive company's competencies.
Marketing Design and Operation Summary
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Marketing assets:
Beneficially strong highlighting capabilities.
can be classified into:
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Customer based assets ( that are customer facing such as brand image, reputation and product quality )
"Lipitor , Nexium"
Distribution based assets ( marketing channels, geographical coverage, after sales services )
"AbdellatefGamel"
Internal marketing assets ( operational such as skills, technology, experience)
SWOT analysis:
Can be classified into:
Internal:
 Strength " on which to build"
 Weakness "to rectify"
External:
 Opportunities "to consider"
 Threats "to address"
Ansoff matrix: (market – product matrix)
It determines the competitive strategy and assets in decision making.
Hint:
Can help in determining growth that can be implemented through
When talking about
product introduction
to a market, think
about:
marketing strategies.
Ansoff's Matrix
Marketing Design and Operation Summary
Strategic objectives:
(according to ansoff's matrix)
Intense Growth:
( Current Product and Current Market )
Strategies:

Market Penetration: (current / current)
Existing Product and Existing Market.
Needs aggressive advertisement (Pepsi, Coca-Cola)

Market Development: (current / new )
Increasing sales of current product in a new market. (Airbus attack Boeing in USA,
Symbicort in COPD )

Product Development: ( new / current )
Increase sales by developing current product or new product in current market. (SeroquelXR, Pepsi-Max, Coca-Cola zero)
Diversified Growth:
(New Product in New Market)
Diversification has more advantage over single business as:
1. It spreads risk on different markets.
2. Better and wider use of management, financial and technical resources.
Forms of diversification:

Horizontal diversification: ( new / current )
New product not related to current product introduced in current market.
(Sony and Columbia pictures)

Concentric diversification: ( new / new )
New product related to current product introduced to new market.
(Apple notebook and iPad, Sony laptops and desktops)

Conglomerate diversification: (new / new )
New product not related to current technology, products or market introduced into a
market new to the company.
(Coca-Cola and casual wears)
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Marketing Design and Operation Summary
Integrated Growth:
5
(in the same industry that company is in)
Forms of integration:

Forward integration:
Taking ownership or increasing control on distribution system.
(Newspaper Co. purchases the distributer points)

Backward integration:
Taking ownership or increasing control on supplying system.
(newspaper Co. purchases paper mill)

Horizontally integration:
Taking ownership or increasing control on competitors.
(Chevrolet and Daewoo)
Brand positioning:
Is the creation of distinctive, memorable and desirable image of the brand that will have a strong appeal for the
customer in target market segment.
Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. (Zinnat with
wrong positioning in RTI)
Target Market Strategy:
The choice of which market segments that organization decide to prioritize.
Competitive Advantage:
(Porter's strategies)
Is the achieving of superior performance against rivals through:

Differentiation: ( pharmaceutical Co. )
Can be achieved through brand design, innovation or creation
Hint:
When talk about
competition, think
about:
to make the brand perceived by customers different than competitors.

Cost leadership: ( Sony and the electronic cat )
Developing a low cost base to get high contribution.
Porter's Generic
Routes of
Competitive
Advantages.
Needs very tight cost control.
Only one competitor is secured in adopting this strategy.

Focus (Niche) : (Porsche sports coupe)
Typically, small sized market and company is unable to adopt cost leadership or differentiate its brand.
Requires very close linking to the market.
Marketing Design and Operation Summary
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Succeed by
 Meeting customer needs that may be missed by other large companies in market.
 Gaining reputation for being experts and specialist.
Failure of
achieving any of
these three
strategies, keeps
company
becoming "Stuck
in the middle"
with no real
competitive
advantages.
Differentiation
Stuck in the
middle
Focus
Cost
leadership
Niche
Porter's Generic Strategies
Porter's Five Competitive Forces :
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Rivals existing in market.
Power of buyers. (Abdellatef Gameel and Toyota)
Power of suppliers.
Threats of new entries.
Threats of substitute products or services (laptop and desktops) (iPod and walkman)
Porter's framework
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Competitive set:
Includes all competing organizations and brands – irrespective size or history – and the substitutable solutions for
customer needs as defined by target market customers.
Competitors analysis :( six questions should be considered )
Identify competitors
Identify competitors
objectives
Identify competitors
strategy
Select competitors to
attack and avoid
Estimate competitors
reactions
Identify competitors
strengths and weakness
As competitors are outside of organization's control, the force of a competitor is classified as "environmental forces"
a part of "micro marketing environment".
Competitive positions proforma:
It is a tool to scope competitive set helping to detect the competitors’ positions and strategy and diagnose the
effectiveness of a marketing strategy
Competitive positions:
Market leader:
 Single competitor has the largest market share.
 It attains new customers by expanding new customer base or expanding the total market (e.g. Lipitor
with ACS) while retaining old customers “never grant old customers". (Attain and Maintain).
 Consider "Defensive warfare" as a strategic foundation. (Defensive Warfare : is balancing between
waiting for market development or competitors activity and proactively parrying competitors actions".
 Marketing mix should be continuously monitored and customer needs should be considered.
 New markets, products, and opportunities should always be evaluated.
 To remain leadership, three actions should be considered:
1. Expand total market "expanding total demand". By:
a) Finding new users by:
i.
Convincing new customers for using.
ii.
Finding new customers in new demographic segments. (perfumes for ♀,♂)
iii.
Finding new customers in new geographic segments.
(other countries)
b) Finding new uses for the product (Seretide in COPD)
c) Encourage the usage of the product. (SMART approach with Symbicort)
2. Protecting market share by:
a) Fix weaknesses that provide opportunities to rivals.
b) Fulfill value promises.
c) Work hard to keep strong relationship with key customers.
d) Consider that "best Defense is a good offence" and "best response is continuousinnovation".
3. Expand market share.
4. Defense and offense.
Marketing Design and Operation Summary
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Market challenger:
 Non-market leader that aggressively attack rivals including the market leader to get more market share
 It must be pro-active and aggressive in sales and marketing.
 Challenger can attack the market leader "high gain, but high risk" or attack others rivals with same size
and resources.
 Attack may be:
 Frontal attack (direct attack) depends on attacking the strength points of competitors rather than
weaknesses (outcomes depend on how has the greatest resources and strength)
 Indirect attack by focusing on weaknesses of rivals or its gaps in coverage. This is good for companies
with limited resources. Challengers must consider "Offensive Warfare" strategy. (Offensive Warfare
: is the policy of aggressively seeking for market share by identifying any weakness in marketing mix
of the leader and other challengers and developing genuine corresponding strength). (IBM and Dell)
Fast mover:
 Smaller rival not yet a market challenger but growing rapidly
 Should be monitored by market leader and challenger. ( Spranza and small cars in Egypt)
Market followers:
 Low share competitors without resources, R&D, market position and commitment to challenge for extra
market share or sales. (Liptis)
 Tends to be " me too " in the market.
 Struggle to achieve sales.
 Following strategy has advantages of lowering investment costs as they build their improvement on the
market development done by market leader, and followers get learned from experience of the leader.
 Followers are often a target for attacking by challengers, so they must keep their production costs low,
and the quality and services high.
Market nichers:
 Specialized and focusing on specific products (such as socks shops "sholl" ) or focusing on specific
targeted customers segment.
(such as Porsche).
 Vulnerable to market changes and new rivals entry as market may dry up or grow to a point that attract
major competitors.(Porsche and Japanese two-seats sports cars)
So that, companies go for
multiple niching by developing two or more niches to increase surviving chances
 Reason for success is that:
 Nicher is focusing on specific targeted customer, so, there is more meeting for their needs better
than larger firms.
 Specialization .
 It builds the skills and customer goodwill to defend itself against major rivals.
 Whereas mass producer has higher volume, nicher has high margin due to their added value introduced
to customers.
Market Leader
Strategy
Market Challenger
Strategy
Market Follower
Strategy
Market Nicher
Strategy
Expand total market
Expand market share
Protect market share
Full frontal attack
Indirect attack
Follow closely
Follow at a distance
By customer, market,
quality-price & service
By multiple niching
Competitive proforma should be analyzed every few months to detect the changes in position column
(market leader, challengers, followers……etc).
Marketing Design and Operation Summary
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Differential advantage:
An attribute to a brand, service or product desired by targeted customer and provided by only one supplier.
It should be:
 Unique to the company.
 Desirable by customers.
 Not only an internal perception of the marketers team.
Low price should be avoided as a differential advantage unless the company considers cost leadership
strategy.
Low price can be utilized as only a short-term tactic unless it can be defended against all rivals in the market.
(Sama airlines kicked out of market due to this strategy)
If there is no differential advantage, company should stress on strengths over rivals.
Basis for competing:
Is the combination between strengths and differential advantages of a company.
How to identify differential advantage ?!!
1.
2.
3.
4.
5.
6.
7.
8.
Identify market segments.
Identify which products or services are needed by each segment.
Identify if the organization offers this product or service desired by the segment.
Identify if the competitors offer this service or product.
Identify how the service or product supplied by competitors perceived by customers.
Identify whether any gaps between customer perception and service supplied by rivals.
Identify if these gaps can be fixed by tour products or services.
Consider sustainability of your differential advantage.(how easily and quickly can be caught up by rivals? Is it
possible for company to defend theses advantages? )
9. If there are no current advantages, consider if there is any future points for development to be differential
advantages.
Note that, strength is not the same as differential advantages. Differential advantage is only something targeted
and desired by customers and only one supplier can provide.
Marketing objectives:
After setting the target market and marketing opportunities, marketers should set the marketing objectives
including:
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Market segmentation.
Segmentation priorities.
Sales volume to be achieved.
Level or position expected to be achieved.
Performance measurements.
Customer satisfaction measurements.
Brand awareness measurements.
Profitability and financial contribution.
Development expected to achieve. (on brand, distribution, market and so on)
Marketing Design and Operation Summary
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Draft:
Core
marketing
analysis
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Market trends.
Environmental forces.
Customer buying behavior.
Competition.
Opportunities and capabilities.
2
Marketing
objectives
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Prioritization of market segments.
Targeted market share.
Targeted sales volume.
Performance measurements.
Prospected development.
3
Marketing
strategy
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Brand positioning.
Detection of competitive advantages.
Strategic objectives (ansoff's matrix)

Marketing Program (Whom, When,
How and What cost marketing mix
will be auctioned)
Monitoring performance.
1
3
Implementation
and performance
monitoring

Marketing Design and Operation Summary
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General economic conditions:
Business cycle is consists of four fluctuated phases:
Prosperity stage:
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High income.
High buying power.
Low inflation.
Low unemployment rate.
Marketing mix can be expanded.
Capture market share.
Intense promotion and distribution.
Recovery stage:
 Stationary phase between
recession, depression and
prosperity stage.
 Buying power increases.
 Income increases.
 Inflation decreases.
 Unemployment rate decreases.
 Marketing strategy should be as
much flexible as possible to make
the required adjustment.
Recession stage:
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Lower income.
Lower buying power.
Higher inflation.
Higher unemployment rate.
Customers are more price and values
oriented.
 It is a mistake to reduce marketing activity.
 Promotional effort should emphasise
values and utility.
Depression stage:
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Very low income.
Very low buying power.
High inflation.
Very high unemployment rate.
Customers lose confidence in the
economy.
N.B.
 Buying power depends on size of resources and the economic state.
 Disposal income = income after taxes.
 Discretionary income = disposal income after purchasing all basic needs such as food and clothes and used to
purchase other entertainments such as cars and furniture. So marketers for these products should monitor
discretionary income.
 Credits enable people to spend future discretional income. So, credits increase the power of buying on expense
of the future.
Types of competitive structures: (Market Structure)
Monopoly :
When a company produce a product that has no close substitution. So company has the full control on the
product and establishing barriers for any new entries.
Such as: railways, petrol companies (Aramco), electricity companies.
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Oligopoly:
Few sellers control supply of proportion of a product.
Barriers for new entries are exist to some extent, may be due to financial issues or technical or experience
issues.
Each seller should consider the reaction of the other seller.
Such as: cigarettes, steel manufacturing, cars manufacturing or oil refining.
Monopolistic competition:
Many companies exist and introducing same products, but one of them make very significant
differentiation through differential marketing strategy and establishing its own market shares.
Such as: Levi's blue jeans, fast foods "KFC , McDonalds"
Barriers for new entries are few
Perfect competition:
Many sellers are available, so no control for supplying or price.
No barriers for new entries.
Such as: supermarkets and pharmacies.
Consumer buying behavior:
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Consumer buying behavior is not concerned with the purchase of items for business use.
To find out what satisfies customers, marketers should look for:
o What?
o How?
Customers buy
o When?
o Where?
Pester = pressure exerted by children on their parents while shopping.
Types of consumer buying behavior:
Routine response behavior:
When consumer buy a product that,
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Routinely buy.
No differentiation between many brands.
Low cost
Low risk
Need very little time and effort for search and decision.
Such as bag of sugar, bar of soap.
Marketing Design and Operation Summary
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Limited decision making:
When consumer buy a product that needs,
 Moderate time and effort to gather information and make decision.
 Needs to obtain information about unfamiliar brands.
 Such as, a new computer software, well known brand in new form(MS-office 2007)
Extensive decision making: (most complex buying behavior)
When consumer buy a product that needs,
 Expensive.
 Not frequently bought.
 Unfamiliar brands.
 High risk.
 Comparison between different alternatives.
 Needs much time and effort to gather information and make decision.
 Such as home and cars.
Impulse buying: (my Samsung Omnia)
 No conscious planning but powerful, persistent urge immediately
 Some individuals have this behavior as a dominant buying behavior.
 Often provoke emotional conflict through regretting the expense.
 Research suggests that it is marked among young customers and 55-65 yrs people.
Consumer buying decision process:
Consumer buying decision process includes 5 stages:
1.
Problem recognition.
 Awareness of difference between the desired condition and current status.
 Sometimes customer is unaware, so marketers use advertising and promotion activity to
trigger such recognition.
 Speed of customer recognition varies according to the individual concern and which need is
triggered.
2.
Gathering information.
 The impact of the information depends on how the consumer interprets the information.
 Two aspects of information:
o Internal search:
 Memory search
o External search:
 Such as friends, internet, newspaper…..etc.
 Word-of-mouth has the stronger influence on customer decision that printed
advertisement.
Marketing Design and Operation Summary
Repetition:
14
Advantages:
Disadvantages:
Increase consumer
learning information.
"Wear-out" consumers pay
less attention to the
advertisement when
repeated specially when
making low-involvement
purchase.
Is a technique known to
advertisers which is repeating the
advertisement many times.
Involvement: level of interest, emotion and response to
a particular purchase.
Format of information transmitted to consumers may be verbal, visual, numerical or combination
of these sorts. The most effective format is the combination between pictures and words and the
customers remember pictures more than words.
Evoked Set: is the group of brands that buyer may see them as alternatives to choose after
information gathering. Such as choosing of CD-player may be “Sony, JVC, Toshiba or Hitachi"
3.
Evaluation of alternatives. (feedback)
 When evaluation starts, buyer makes criteria for evaluation.
 Buyer prioritizes the criteria or the brands according to its importance to his needs.
(Salience)
 Salience is the level of importance and varies from buyer to another.
 Marketers can influence the salience of the buyers by framing the alternatives. Such as
emphasizing the importance of whitening ingredients in toothpastes.
 Framing affect the inexperienced brands more that experienced ones.
Purchase.
Post-purchase evaluation.
4.
5.
Cognitive dissonance: is the buyer's doubt after purchasing about his decision (was it right
to buy or wrong decision)
 When a buyer experiences a cognitive dissonance, buyer either attempts to return the good or will
look for positive information about his it to justify the choice.
Note that,
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Not all decision processes lead to a purchase.
Not all consumers pass all the stages.
In extensive decision making, almost all the stages are done by the buyer. While in routine response and
limited decision, some stages may be omitted.
In impulse buying, almost all stages are omitted except 4 and 5.
Factors influencing the buying decision process:
Personal factors:
Marketing Design and Operation Summary
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Chapter 9: Marketing research and marketing information systems
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Marketing research : qualitative and quantitative
Managers can base their decisions according to Intuitive knowledge ( based on past experience) or scientific
decision-making
The marketing research process:
identify problem (decrease or increase in sales expense….etc) design research(objective- hypothesis –
reliability – validity  collect data (primary data or secondary data from trade associations, government
reports, www….etc)  interpret data  report research findings
Primary data( u collect your own data) sampling  probability – random- stratified- quota
Surveys telephone-online- personal – interviews
Questionnaire construction: open ended( easy but time consuming) – dichotomous( limited info) –
multiple choice - likert scale questions(popular and scale saving
A common mistake in constructing questionnaires is to ask questions that interest the researchers but do
not yield information useful in deciding whether to accept or reject a hypothesis.
Observation methods: either by human researchers or mechanical such as 15 cameras
Experimentation: can be used to determine which variable or variables caused an event to occur.
You should keep all the other variables constant.
Mystery shoppers: are marketing researchers who go under cover and act as customers for
marketing research goals.
Research findings reporting:
the report is usually formal, written document. It should contain the findings as well as the
recommendations.
Using technology to support marketing research:
Marketing support system MSS
Marketing decision support system MDSS
Sugging(selling under the Guise of research) is an ethical problem for marketing research
Marketing Design and Operation Summary
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Chapter 10: product decisions:
Products can be: good – service- idea
Products are either
1. Consumer products:
 Convenience products : minimal purchasing effort- high inventory turnover- low profit margin
 Shopping products: some effort in planning to buy- yet brand loyality is not that much
 Specialty products: possess one or more unique characteristics- buyers exert a considerable effort to obtain.
 Unsought products: purchased when a sudden problem arises or when aggressive selling obtains a sale that
otherwise would not take place . e.g. life insurance – car parts
2. Business products:
raw materials – major equipment- accessory equipment- component parts- process materials- consumable
supplies- industrial services.
Core product
+ features, capabilities, package, brand nameactual product
+customer service, warranty, deliver and after sales supportaugmented product
Product line and product mix:
A product item: specific version of a product .e.g. Lipitor
A product line: group of closely related products e.g. Cardiovascular
A product mix: total, group of products that a company makes available. E.g. personal care products
The product mix has a depth ( number of items in each line) and a width( number of lines)
Product life cycle:
1. Introduction
product first appearance
2. Growth
3. Maturity
4. Decline
Reason for products failure:
 The company fails to match product offerings to customer needs.
 Ineffective branding
 Technical or design problems. – poor timing- overestimation of market size , inefficient distribution. E.g.
Dasani launch in the UK.
 Product failure can range from absolute failure to not meeting the company’s market share objectives.
Marketing Design and Operation Summary
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Chapter 11: Branding and packaging

Brand: a name, term, design, symbol that distinguishes one seller’s goods or services from other sellers.
Brand name: the spoken part of the brand -Brand mark: non spoken part
trade mark: registered mark – trade name: company name

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
Benefits of branding:
buyers identify products
reduces the time required to purchase the product
helps buyers evaluate quality of product
The psychological reward that comes from owning the brand. e.g. rolex
sellers identify products
increases brand loyality

brand loyality: brand recognition 
brand preference 
brand insistence
Customer is aware that brand exists and views it as an alternative  customer prefers brand over
competitors but would accept a substitute if brand is not available  customer accepts no substitute
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Brand equity:
Brand name awareness (brand recognition- brand is in customers evoked set)
Brand loyalty (reduces brand vulnerability to competitors- retain customers)
Perceived brand quality (high perception allows marketer for a premium price)
Brand association – Volvo protection and safety- barbican this is my life
Brand personality – brand values – brand benefits are all 3 elements that help to determine a strong and
relevant brand image. Management should manage its portfolio in order to make sure that those aspects are
positioned in the customers’ minds.
Types of brands:
Manufacturer brands ( manufacturer involved in distribution, promotion and pricing)
Own label brands ( manufacturers are not identified on products- business is increasing- get cost
benefits)
Generic brands aspirin- aluminum foil- usually sold at lower prices than brands- business is
decreasing – seems like everybody is branding now.
Own- label brands now account for 40 percent of all supermarket sales.
By developing a new brand name for the same manufacturer, it can adjust various elements of a marketing
mix to appeal to a different target market. E.g. Tide &Ariel for P & G.
Choosing a brand name:
 Should be easy for customers to say and spell- one syllable is better(Mars)
 Should suggest in a positive way the product’s uses
 Should be distinctive to set it apart from competing brands
 It must be compatible with all products in the line.
 Geographic references can limit expansion E.g. northwest airways makes it harder to expand
somewhere else.
 Marketers should protect their brand by registration. If possible, they must also guard
against becoming a generic name as aspirin.
Marketing Design and Operation Summary
Chapter 23: marketing planning and forecasting sales potential:
 Marketing planning: a systematic process of assessing marketing opportunities and resources, determining
marketing objectives and developing a thorough plan for implementation and control. It’s usually a continuous
cycle of planning and revision.
 Marketing plan: a document or blue print detailing requirements for a company’s marketing activity.
 Usually businesses produce marketing plans annually, typically with a 3 year perspective.
 There are short, medium and long –range plans that last for 2,5 and up to 20 years. But long term plans are rare,
 Including an information system in the market plan help having a continuous feedback and becoming objective
oriented.
 Benefits of a marketing plan:
 Offers a road map for implementing a company’s strategies and achieving its objectives.
 Assists in management control and monitoring of implementation of strategy
 Informs new participants in the plan of their role and function
 Specifies how resources are to be allocated
The marketing plan:
1. Executive summary
Concise- one or 2 pages- key aims, overall strategies…
2. Marketing objectives
a. Company mission statement
b. Detailed company objectives
c. Product group goals
Objectives should be specific , measurable and with time frame.
3. Product/market background
a. Product range and explanation
b. Market overview and sales summary
c. ABC sales: contribution financial performance assessment
d. Directional policy matrix evaluation of the product portfolio
4. Marketing analyses
a. Marketing environment and trends
b. Customers’ needs and segments
c. Competition and competitors’ strategies
d. SWOT analysis (concise overview, with the details or the per country part in the appendix
5. Marketing strategies:
a. Segmentation and targeting
b. Basis for competing/differential advantage
c. Desired product/ brand positioning
6. Statement of expected sales forecasts and results- number of units and market share
7. Marketing programmes for implementation
gives details of the marketing activities required to achieve the marketing plan.
a. Marketing mixes
b. Tasks and responsibilities
8. Controls and evaluation: monitoring of performance
How when and who will measure.
9. Financial implications/required budgets
a. Delineation of costs
b. Expected returns on investment for implementing the marketing plan
10. Operational considerations
a. Personnel and internal marketing relationships and communications
b. Research and development/ production needs
c. Marketing information system
11. Appendices
a. SWOT analysis details
b. Background
c. Marketing research findings
18
Marketing Design and Operation Summary
19
Sales forecasting:
1. Executive judgement
When product demand is relatively stable and the forecaster has a lot of market experience.
2. Surveys.
a. Customer forecasting survey ( when u have few customers e.g. computer chip producer)
b. Sales force forecasting survey
c. The Delphi method
3. Time series analysis
4. Correlation methods
5. Market tests
Important Theories
Section 10 (university book) : The innovation process
Invention: creation of an idea
Innovation: creation of an idea plus + ( bringing into common use)
Types of innovation:
1. Radical innovation note that an idea may not be new to some customers but not to others, an idea may be
new to the organization also.
2. Incremental innovation
Models of innovation:
o
Technology-push(1st generation models 50s & 60s)
Innovation originates from the basic science activities within universities and government or by
focusing on the technological developments within innovative firms.
o Market- pull (2nd generation models 60s & 70s)
Innovation according to market needs. Over emphasis on this model only would lead to incremental
rather than radical innovations)
o The coupling or interactive model
Coupling of emerging tech innovations with the market needs, stresses the importance of intra and
inter organisational relationships.
Organizing for innovation:
o The organic and mechanistic models for org. appear at the two ends of the spectrum. The organic
model is strongly associated with innovative and adaptive org.
o The organic organizations promote the informal relations and interpersonal networks which
facilitate the flow of knowledge. E.g. the HP waw – a set of corporate value centered on trust,
respect and innovation reinforced by other mechanisms such as careful selection and excellent
employee benefits.
o The more organic the system of management employed by an organization, the more difficult it
becomes to distinguish the formal org. from the informal org.
Segmentalist vs integrative approaches:
Segmentalist mode: innovation is hindered by top managers who regard new ideas from below with
suspicion, that delays the approval process for new projects. They recognize problems as a sign of failure
rather than an area of development.
Integrative mode: you create a culture of pride where people feel they belong to the org, which promotes
innovation.
The product champion:
An individual who champions a project through various organisational obstacles that may arise during the
innovation process, often at a personal risk. He uses cross-functional personal networks instead of hierarchy.
Marketing Design and Operation Summary
20
The gate keeper:
An individual who facilitates communication between activities within the organization. They have strong inter
personal networks. They are exposed to large number of relevant information. They also act as information
filters, where they transfer only the relevant information.
Skunworks
Product development projects that worked outside of the constraints of processes, and drew upon
unofficially diverted resources. They help eliminate bureaucratic delays, permit quick decisions and thus
promote innovations. E.g. IBM , apple
The work environment:
many organizations don’t have an environment that encourages innovation. They have either enclosed offices or
cubicles that hinder the flow of information or have open areas that are distracting.
Design dilemmas: Open vs closed workspaces- workspaces vs social spaces- stability vs mobility and flexibility.
Section 4: black book p. 77:
The value chain:
Porter wanted to describe the internal process within the organization. Instead of describing that only, he preferred
to consider the broader industry value chain.
Porter argues that the ability of an enterprise to generate profits depends on its ability to realize added value, its
ability to derive revenues in its downstream markets in excess of its costs of production.




Firm infrastructure
Human resource
management
Technology development
Procurement
Inbound logistics operations  outbound logistics marketing and sales  service
The purpose is to draw attention to the specific activities of the enterprise so that they can be investigated
for their contribution for the competitive advantage of the enterprise as a whole.
Porter says that the route to superior performance is the ability to produce comparable products more efficiently or
to produce products that better serve the needs of relatively price insensitive target customers (differentiation).
Customer Relationship marketing:
In the past, marketing used to focus on one time purchases and marketing at the point of sales. Relationship
marketing is about creating a long term relationship with the customers. Companies focus now on how to add value
to the customers. It was found that retaining a customer is 3 or 4 times less expensive than attracting a new one. E.g.
Dove campaign for real beauty.
You know  data bases, speak  mail, email and ads., listen  feed back and surveys, reward  loyality cards and
discounts , Associate  forums with your customers
Identify, segment, adapt, evaluate and exchange.
Marketing Design and Operation Summary
21
Porter’s five forces:
Porter’s introduced the five forces as a very good approach for the organization to gain a competitive advantage.
They help the organizations to assess the industry if it’s attractable and decide whether a company should enter /
exit the industry or find a position in the industry where it can best defend itself against these forces or can influence
them in its favor.
1.
2.
3.
4.
5.
Rivalry among competitors
Bargaining power of buyers
Bargaining power of suppliers
Threat of new entrants
substitutes
Limitations of the five forces:
1.
2.
3.
4.
5.
6.
The model is too static
It’s not logic to consider suppliers as a threat.
It’s not customer focused. It focuses mainly on the company
It’s concerned mainly with the company’s interest more than the customer.
It gives equal weight for the buyer and the supplier
It misses 3 new forces: deregulation, digitalization and internationalization
Porter’s three generic routes to competitive advantages :
1. Cost leadership:
Adopters of this strategy usually have economies of scale. It enables them to offer the lowest price in the
market. This can be achieved also by working on the process of production, making it more efficient. This is
usually adopted by market leaders. E.g. Wall Mart
This represents a barrier to entry for new competitors.
2. Differentiation
Adopters of this strategy try to find a competitive advantage and differentiate themselves from their rivals.
This strategy needs extensive marketing efforts for proper positioning. If the org. positions its product as a
differentiated one in the mind of their customers, then they are willing to pay a premium price for it.
• They need:Continuous R &D.
Strong sales team
Company reputation for quality and innovation e.g. Mercedes
Risks:


Supplier increase their prices  pass along to customers  customer find substitute
Imitation by competitors.
3. Focus (Niche strategy)
Concentrate on a certain segment in the market. It allows small companies to compete profitably with large ones.
Adv: Customer loyality discourages other firms to enter.
Disadv: imitation, change in the target market segments.
Failure to achieve any of those strategy leads to a “stuck in the middle” case with no real competitive adv