CLASS
LIVE SESSION
MM01
Analysis Marketing
Opportunities
•
•
•
•
Marketing planning
Demand Measurement & Forecasting
Marketing Information System
Indian Marketing Environment
MARKETING PLANNING
Planning – Designing the Blueprint
for the Future
•Planning is a process of designing the blueprint for the future.
•The basic function of management includes planning,
organizing, executing, coordination & controlling the future
course of action.
•Planning is the process of envisioning the future, establishing
objectives and goals for the firm, designing organizational &
marketing strategies and tactics to be implemented at different
points of time in future to achieve the goals.
What is Strategic
Planning?
• It is the managerial process that helps
to develop a strategic and viable fit
between the firm’s objectives, skills,
resources with the market opportunities
available. It helps the firm deliver its
targeted profits and growth through its
businesses and products.
Management Level & Focus of Planning
Managemen Planning
t Level
Focus
Key
Question
Marketing
Top Level of
management
Corporate Plan
What is the organization’s
mission?
How
do
we
organize the business?
Middle Level of
Management
Business Unit
Plan
What is our competitive strategy
for growth in that particular
business unit? What are our
competitive advantages?
Lower level of
Management
Operational Plans
How can we best support
both the corporate plan and
the business unit plan? What
are our operational
schedules?
Corporate Planning Process
Steps in Corporate Planning Process
1.Establishing corporate mission, objectives and goals
2.Establishing Strategic Business Units
3.Assigning resources to each Strategic Business Unit
4.Planning for Business Growth
Mission statement should posses
the following seven
characteristics:
•
•
•
•
It should not be an impossible statement.
It should be short and limited.
It should be motivating.
It should be enough to define the functions, the
clientele and the method of operation.
• It should be clear and should stress the company’s
policy.
• It should be distinctive and should define company’s
major competitive scope.
• It should indicate how objectives are to be
accomplished.
Corporate Objectives
•
•
•
•
•
•
•
•
•
•
•
A higher market share
High growth opportunities
Increased ability to compete in global markets
Product innovation
Recognition as a leader in technology
Better customer services
Good reputation with customers
Low cost compared with competitors
High quality goods and services
Brand image and loyalty
Wider profit margin
Corporate Objective of Unilever
Operation in India
• Unilever objective is to add vitality to life. We
meet everyday needs for nutrition, hygiene
and personal care with brands that help
people feel good, look good and get more out
of life.
• Our deep roots in local cultures and markets
around the world give us our strong
relationship with consumers and are the
foundation for our future growth.
5 questions that the firm
must ask itself
•
•
•
•
•
What is our business?
Who is our customer?
What does our customer need?
What will our business be?
What should our business be?
Stage 1 Assess Organizational
Opportunities and Resources
Market Opportunity
+
“Uncontrollable”
Environmental Events
(Circumstances)
Timing
Assessing Organizational
Opportunities and Resources
Core Competencies
(Relative skills)
Strategic Windows
Marketing
Mix
Will it fit?
• A temporary period of optimal fit
between the key requirements of
a market and a firm’s capabilities
Assessing Organizational
Opportunities and Resources
…identifies a company’s competitive
advantage that can be absolute or relative
Physical or Psychological
A Competitive Advantage exists
when your core competencies (relative to
competition) match marketplace opportunities
Business Unit Level Strategic Planning Process
Business
Mission
Internal Environment
(Strengths/Weakness
Analysi)
SWOT
Analysis
Formulation of
Business Goal
Formulation of
Business Strategy
Formulation of Programs
Implementation of the plan
Programs
Feedback and control
External Environment
(Opportunities and
Threats Analysis)
Levels of Strategic Planning
(Stage 1 SWOT Analysis)
Stages 3-4
Developing Corporate and
Business-Unit Strategies
• Market orientation: The organizationwide
generation of, dissemination of and
responsiveness to market intelligence
pertaining to current and future customer
needs.
Corporate & Business-Unit
Strategy
Strategic Business Unit (SBU)
A SBU is self supporting profit center organized
around some meaningful common element
such as….
Industry
Technology
SBU
Customer
need
Target
Market
• Analyze the current business portfolio & shape the
future business portfolio: build, hold, harvest, divest
• SBU ‘s change positions overtime
Remember
The
Market
What Is A Market ?
A market is . . .
 Access to a Sufficient Number of
potential customers sharing similar
wants/needs
 Who Want the Available Product
 Who have Sufficient Resources (Rs)
 who are willing to exchange value (Spend Rs)
 and are eligible (legal) to buy
Domestic carriers fly 19% more passengers in
February 2011
About 18.5% more passengers flew by domestic airlines
in February, but carriers are worried that the steep
increase in fuel costs would erode gains. India's seven
domestic airlines flew 4.57 million passengers in
February, up from 3.86 million a year earlier, data from
the directorate general of civil aviation (DGCA) show.
Market share for Jet Airways (India) Ltd and its lowfare subsidiary JetLite India Ltd remained static at
26.1%. State-run Air India Ltd's passenger share on
domestic routes slumped to 15.8% from 17.2% a year
earlier, and Kingfisher Airlines Ltd's fell to 19% from
22.7%. Low-cost carriers saw their market shares rise.
IndiGo's passenger traffic in February rose to 18.7%
from 14.9% a year earlier, SpiceJet Ltd's to 13.8% from
12%, and GoAir's to 6.6% from 5.5%.
Flight occupancy was in the range of 68-88%.
The increase in passengers is not providing the airlines any
comfort. Fuel costs have risen from about $75 a barrel in
December to about US$100. "We are staring at losses this
quarter," said an airline executive who declined to be
identified. "It's going to be a tough time for everybody." Fuel
accounts for 30-40% of an airline's cost in India. The airline
regulator received 1,137 complaints from passengers in
February. Jet drew the highest number of complaints at 4.1
per 10,000 passengers carried, followed by IndiGo's 3.1,
SpiceJet's 2.8, GoAir's 2.2, JetLite's 2.2, Kingfisher's 1.7 and
Air India's 1.1.
The marketing plan
Provides clear and unambiguous statement about the
strategies and actions that will be implemented, by
whom, when and with what outcomes.
Planning - the benefits
Planning - the pitfalls
•
Planning can become technique oriented.
•
Embracing planning eagerly with dedicated planning
departments can divorce the professional planner from
those who have to implement them.
•
Planning can fail if unreliable information is used.
The Planning Process
•
•
•
•
Analysing Market opportunities
Developing Marketing strategies
Planning Marketing Programs
Managing the Marketing Effort
The Marketing Process
Key Elements
• Analyzing marketing
opportunities
• Selecting target markets
• Developing the marketing
mix
• Managing the marketing
effort
• The strategic planning
and business portfolio
analysis processes help to
identify and evaluate
marketing opportunities.
• The purpose of the marketing
process is to help the firm
plan how to capitalize on
these opportunities.
The Marketing Process
Key Elements
• Analyzing marketing
opportunities
• Selecting target markets
• Developing the marketing
mix
• Managing the marketing
effort
• The segmentation process
divides the total market into
market segments.
• Target marketing determines
which segment(s) are
pursued.
• The market positioning for the
product is then determined.
The Marketing Process
Key Elements
• Analyzing marketing
opportunities
• Selecting target markets
• Developing the marketing
mix
• Managing the marketing
effort
• Competitor analysis guides
competitive marketing strategy
development.
• Strategy leads to tactics by
way of the marketing mix:
– The “Four Ps” – product, price,
place, promotion (seller
viewpoint)
– The “Four Cs” – customer
solution, cost, convenience,
and communication (customer
viewpoint)
The Marketing Process
Key Elements
• Analyzing marketing
opportunities
• Selecting target markets
• Developing the marketing
mix
• Managing the marketing
effort
• Marketing analysis
– Provides information helpful in
planning, implementation, and
control
• Marketing planning
– Strategies and tactics
• Marketing implementation
– Turns plans into action
• Marketing control
– Operating control
– Strategic control
• Marketing audit
The marketing planning process
SWOT Analysis
•
•
•
•
Strengths
Weaknesses
Opportunities
Threats
Components of SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Resources
Deficiencies in
resources , skills
and capabilities
Favourable situation
Unfavorable
situation
Identification of a new
market segmentation
Entry of new
competitors
Changes in
competitive or
regulatory
circumstances
Slow market
growth
Relative
competitive
advantages
Financial resources
Sources of outfit
Image
Infrastructure
Market leadership
Inadequate
measures viewed
against changes in
product/market
scope
Technological
changes
Major
technological
changes
Appearance of
substitute
products
Internal Capability Evaluation
Internal Resources
Rate of return in Excess
of the competitve level
Industry attractuveness
Competitive advantages
Barriers to Entry
Monopoly
Vertical
bargaining power
Cost
Advantages
Differentiation
Adantages
-Patents
-Brnads
-Retailing
capacity
- Market share
-Firm size
Financial
resources
Process
tecj\hnology
- Size of plants
-Access to low cost inputs
- Brands
- Product technology
-Distribution
-Service Capabilities
Market Opportunity Analysis
(MOA)
• Can the benefits involved in the
opportunity be articulated to a defined
target market?
• Can the target market be located and
reached with cost-effective media and
trade channels?
• Does the company have access to the
critical capabilities and resources
needed to deliver the customer
benefits?
Market Opportunity
Analysis (MOA)
• Can the company deliver the benefits
better than any actual or potential
competitors?
• Will the financial rate of return meet or
exceed the company’s required
threshold for investment?
Strategic Planning
Portfolio Design
• Step 1:
Analyze the current
business portfolio
• Step 2:
Shape the future
business portfolio
• Determine the future role
of each SBU and choose
the appropriate resource
allocation strategy:
–
–
–
–
Build
Hold
Harvest
Divest
• SBUs change positions
over time
The aim of a portfolio analysis is:
1) Analyze its current business portfolio and decide
which SBU's should receive more or less
investment, and
2) Develop growth strategies for adding new
products and businesses to the portfolio
3) Decide which businesses or products should no
longer be retained.
The BCG Matrix (Boston Consulting Group Matrix) is
the best-known portfolio planning framework. The
GE / McKinsey Matrix is a later and more advanced
form of the BCG Matrix.
Portfolio
Analysis
Boston Consulting Group’s
Market Growth- Market Share Matrix
Product-Market
Growth (%)
High
A strategic planning tool based
on the philosophy that a
product’s market growth rate
and market share are
important in determining
marketing strategy
Low
Relative
Low
Market Share
Increase market share, increase economies of scale, increase profits
High
Market Growth – Market Share
Matrix
Product-Market
Growth (%)
High
PROBLEM
CHILD
STARS
Low market share in growth mkt
needs much cash to incr mkt sh
CASH COWS
DOGS
Low
High
Relative
Market Share
Low
Source: Perspectives. No. 66. “The Product Portfolio.” Reprinted by permission from the Boston Consulting Group, Inc. Boston, MA Copyright  1970.
The Boston Consulting Group’s Strategic Business Unit Classification &
Suggested Strategies
S.B.U
Classification
S.B.U
Characteristics
Strategy
1. Dogs (Low
share,low growth)
•Generate
low Divest
profits or losses
•Consume
more
management time
Sell or liquidate the
business
because
resources can be better
used elsewhere
2.Question Marks
(Low share, high
growth)
•Requires a lot of Build/Harvest
cash for fast growth
•Continue investing
in the SBU or
withdraw form the
market
Increase the SBU’s
market share or shortterm cash flow and
eliminate R & D
expenditure
3.Stars (High share,
high growth)
•Generate
large Build
amount of cash
•Competitors attack
on SBU
Increase the SBU’s
market share
4.Cash Cows High
share, low growth
•Generate considerable
sums of cash
•Enjoy economies of
scales and higher
profit margins
Preserve the SBU’s market
share or increase the
short-term cash flow and
involve eliminating R&D
expenditure
Hold/Harvest
Strategy
Characteristics
G.E. Model and Strategies
High
Market Attractiveness
Medium
Low
Protect
Position
Invest to
build
Build
selectively
Build
Selectively
Selectivity/
Manage for
Earnings
Limited
expansion
for harvest
Protect and
Refocus
Manage for
Earnings
Divest
Medium
Business Strength
Weak
Strong
Typical (external) factors that affect
Market Attractiveness:
- Market size
- Market growth rate
- Market profitability
- Pricing trends
- Competitive intensity / rivalry
- Overall risk of returns in the industry
- Entry barriers
- Opportunity to differentiate products and
services
- Demand variability
- Segmentation
- Distribution structure
- Technology development
Typical (internal) factors that affect Competitive
Strength of a Strategic Business Unit:
Strength of assets and competencies
- Relative brand strength (marketing)
- Market share
- Market share growth
- Customer loyalty
- Relative cost position (cost structure compared with
competitors)
- Relative profit margins (compared to competitors)
- Distribution strength and production capacity
- Record of technological or other innovation
- Quality
- Access to financial and other investment resources
- Management strength
Strategic Planning
Product/Market Expansion Grid
Existing Products
New Products
Existing
Markets
Market
Penetration
Product
Development
New
Markets
Market
Development
Diversification
Present market
Product Strategy
Present product
Market
Penetration
• Increase share of
existing product in
existing market
• Two strategies:
• Persuade users to buy
more product OR
• Take business from
competitors
Product Strategy
New market
Present product
Market
Development
• Find new uses for
existing product
• Two strategies:
• Find new markets for
product OR
• Aim at a broader
market
• Major modification of
the product for the
current market
Present market
Product Strategy
New product
Product
Development
• Launch new products in
new market to minimize
risk
New market
New product
Diversification
(minimize risk)
Planning Is a Continuous Cycle
1. Assess
Marketing
Opportunities
and Resources
2. Develop or
Revise Mktg.
Goals Relative
to
Performance
5. Implement
Marketing
Plan
4. Develop or
Revise Plan
for Implementation and
Control
3. Revise or
Formulate
Marketing
Strategy
Short Range – Medium Range - Long Range
The Strategic Marketing
Process
6. Execute the plan
7. Control set performance standards,
evaluate the results & reduce any gaps
Theory
Reality
Intended
Strategy
Desired Performance
Implementation
Realized
Strategy
Actual Performance
Marketing Unit Organization
There is no single best way! It depends…
Alternatives for Organizing
the Marketing Unit
Centralized
or
Decentralized
Marketing
Functions
Product
Groups
Geographic
Regions
Low delegation of responsibilities, top
management delegates little authority
to levels below it.
Decentralized has high delegation of authority
Customer
Types
Measuring Marketing Plan
Performance
•
•
•
•
Sales analysis
Market share analysis
Marketing expense-to-sales analysis
Financial analysis
Qualitative targets
Figure 21.3
Sales analysis
Figure 21.8
Tracking Market Share
• Overall market share
• Served market share
• Relative market share
Methods of Improving Return
on Assets
• Method 1: Increase the profit margin by
increasing sales or cutting costs
• Method 2: Boost the asset turnover by
increasing sales or reducing assets that
are held against sales levels
Objective trade offs
•
Short term v long-term growth.
•
Profit margin v market positioning.
•
Direct sales effort v market development.
•
Penetrating existing markets v developing new ones.
•
Profit v non-profit goals.
•
Growth v stability.
•
Change v stability.
•
Low risk v high risk.
(2)- The marketing audit
•
Takes stock of a company’s marketing health.
•
Is the launching pad for the marketing plan.
•
Encourages management to reflect on the environment
and company’s ability to respond.
•
Encompasses the external and internal audit.
Marketing costs and profitability analysis
Marketing Decisions Flowing to the Marketing
Marketing
Environment
•Market Potential
•Target Market
•Competitive
Environment
Intermediaries
Marketing Information Systems
Internet
Record
System
Marketing
Intelligence
System
Analytical
Marketing
System
Marketing
Research
System
Marketing Mix
Factors
•Product
•Price
•Place
•Promotion
•Packaging
•People
•Process
•Physical Evidence
Marketing Decisions Flowing to the Marketing Environment
Major Environmental Factors Influencing Business
External
Environment
Demographical
Environment
Economic
Environment
Competitive
Environment
Cultural
Environment
Internal
Internal
Organizational
Organizational
Processes
Processes
Social
Environment
Legal
Environment
Technological
Environment
Dimensions of Marketing Environment
Technological Environment
•To what extent are existing technologies maturing?
•What technological developments or trends are affecting or could affecting or could affect our
industry?
Political Environment
•What changes in regulation are possible?
•What will their impact be?
•What tax or other incentives are being developed that may affect marketing strategy?
•What are the political risks of operating in a government jurisdiction?
Economic Environment
•What are the economic prospects and inflation outlets for the countries in which the firm
operates?
•How will they affect our marketing strategy?
Cultural Environment
•What are the current, emerging trends in lifestyles, fashions and other components of
culture?
•Why are they emerging?
•What are their implications?
Demographic Environment
•What demographic trends will affect the market size of the industry or its sub-markets?
•What demographic trend represents opportunities and threats to our business?
Income Classes (at 2001-02
prices)
Income
class
Rs per annum
48/$)
$ per annum (@ Rs
Low
<=45.000
<=940
Lowermiddle
45,000 – 90000
941 – 1,875
Middle
90,001 – 135,000
1,876 – 2,810
Uppermiddle
135,001 – 175,000
2,811 – 3,650
High
>175,000
>3,650
Mapping India’s Income Class
The Classes
1994-95
1999-00
2005-06
Rich (Above Rs. 2,15,000)
Benefit Maximisers : Own car, PCs
1 million
household
s
3 million
household
s
6 million
household
s
Consuming (Rs. 45,000 – 2,15,000)
Cost benefit optimizers: Have bulk of
branded consumer goods, 70% of two –
wheeler , refrigerators, washing machines
29 million
household
s
55 million
household
s
75 million
household
s
Climbers (Rs. 22,000 – 45,000)
48 million
Cash – constrained benefit seekers : Have at household
s
least one major durable mixer, sewing
machine/ television)
66 million
household
s
78 million
household
s
Aspirants (Rs. 16,000 –22,000)
New entrants into consumption : Have
bicycles, radio, fans
48 million
household
s
32 million
household
s
33 million
household
s
Destitute (Less than Rs.16,000)
Hand-to-mouth existence: Not buying
35 million
household
s
24 million
household
s
17 million
household
s
Urban India’s Income Classes by Size (in
million)
1995-96
2001-02
2006-07
The very rich
0.8 (5)
1.9 (11)
4.0 (23)
The consuming
class
The climbers
16.6 (93)
16.8 (94)
26.5 (150) 40.8
(230)
17.4 (98) 13.7 (77)
The aspirants
7.1 (40)
3.9 (22)
0.7 (4)
The destitute
5.3 (30)
2.7 (16)
0.9 (5)
Rural India’s Income Classes by Size (in
million)
1995-96
2001-02
2006-07
The very rich
0.4 (2)
0.7 (4)
1.2 (7)
The consuming
class
The climbers
15.9 (92)
19.9 (115)
37.3 (216)
57 (331)
34.8
(202)
68.1(395)
The aspirants
36.9 (214)
29.3 (170) 19.5(113)
The destitute
27.7 (161)
21.4 (124) 15.5 (90)
Indian Market in a Transition
The Important
Phase
1988 -93
Infancy
ECONOMY/ INCOME Runway growth
GROWTH
1993-98
1998-00
Adolescence
Slowing Down of Growth
Cooling Down
After 2001
Maturity
Recovery but not
like before
CONSUMER
DEMAND
Spurting
discontinuous
growth
COMPANY
PERFORMANCE
Abundance for all Early bird
find worms
Worms are
harder to
find
COMPANY
RESPONSE
Ride the wave
Operational
Make Strategic
performance choices/priorities
improvement
s
COMPANY’S
STRATEGIC
POSITION
Being there
Ride faster
on a slower
wave
Being better
Steady and
slow with ups
and downs
Winner and
losers begin to
emerge
Unique
Members of Competitive Environment
General Public
Competitors
Suppliers
Company
Intermediaries
Other
Players
•Consumers
Potential
•Consumers
Past Consumers
Market Entry Decisions
If we are in Business
Should we
Compete ?
In what ProductMarket should
We compete?
How Should we
Compete?
If Yes
Demand Forecasting
• Demand forecasting is a process of
estimating the future demand or sales
patterns of a firm by taking into account the
past information, opinion of industry
observers and evolving consumption pattern
for a desired time period.
Company Demand and Sales
Forecast
• Company demand is the company’s
estimated share of market demand at
alternative levels of company marketing
effort in a given time
• Company sales forecast is the
expected level of company sales based
on a chosen marketing plan and an
assumed marketing environment
Market Potential
• Market potential refers to the upper limit of
market demand . It is important for us to
understand that there are three key terms
involved in defining the market potential.
These include market, market expenditure by
the industry and defined market environment.
Measures of Market Demand
Potential Market
Available Market
Qualified Available Market
Target Market
Penetrated Market
Market Forecast: Market forecast refers to the estimates of future sales of a
company’s products in the market.
Primary
demand gap
Market Potential
Industry Sales
Sales (in units)
Company Sales
Actual Forecast
Secondary
demand gap
Current Time Period
Forecasting and Demand
Measurement
• Which market to measure?
– Potential market
– Available market
– Target market
– Penetrated market
Estimating Current
Demand
• Total market potential is the maximum
number of sales that might be available to all
of the firms in an industry during a given
period, under a given level of industry
marketing effort and environmental conditions
• Area market potential is the market potential
of a specific location:
– Market buildup method
– Multiple-factor index method
Market Demand
• Market demand is always defined with
reference to a price and a time period.
• Demand for a commodity may be defined as
the ‘Quantity of a commodity that will be
bought at a particular price and during a
given period or point of time.
Estimating Future Demand
•
•
•
•
•
Survey of buyers’ intentions
Composite of sales force opinions
Expert opinion
Past-sales analysis
Market-test method
Sales Forecasting
• Accurate sales forecasting is essential
for a firm to enable it to produce the
required quantities at the right time and
arrange well in advance for the various
factors of production, viz., buildings,
equipment, machine accessories, raw
materials, labor etc.
nsumer Survey Method
Forecasting Methods
Forecasting Methods
Survey Methods
Statistical Methods
Collective Opinion Method Reasoned Opinion (Delphi) Method Market Experiments Method
Time Series Analysis
Regression Analys
Graphical Method Semi Averages Method Moving Averages Method Least Squares
Marketing Information
System
A marketing information system (MIS)
consists of
people, equipment, and processes
to gather, sort, analyze,
evaluate, and distribute
needed, timely, and accurate information
to marketing decision makers
MIS Resources
• Internal company records
• Marketing intelligence
• Marketing research
Internal Records
•
•
•
•
Order-to-payment cycle
Sales information system
Databases and warehouses
Data mining
Improving the Quality of
Marketing Intelligence
• Train sales force to scan for new
development
• Motivate channel members to share
intelligence
• Network internally
• Establish a customer advisory panel
• Utilize government data resources
• Purchase information
• Collect customer feedback online
MARKETING RESEARCH
What is Market Research?
• Simply a matter of finding out as much
as you can before committing yourself
to an irretrievable step
• When you do not have answers through
your own Market Information and
Intelligence System
What to find out?
• What does the customer need?
• Who is the target audience and how
much can you find out about them?
• What is the competition?
• Are there any gaps in the market?
• Would the product be acceptable in the
market?
The MR Process
•
•
•
•
•
•
•
•
What is the Marketing Problem?
What is the Research Problem?
Developing the Research Plan
Research Approach
Research Instruments
Collecting the Information
Analysing the information
Presentation of findings
Marketing Research Defined
Systematic design, collection,
analysis, and reporting of data
and findings relevant to a specific
marketing situation facing a company
The Marketing Research
Process
•
•
•
•
•
•
Define the problem
Develop research plan
Collect information
Analyze information
Present findings
Make decision
Step 2
•
•
•
•
•
Identify data sources
Design research approach
Develop research instruments
Design sampling plan
Select contact methods
Data Sources
• Secondary data
• Primary data
Research Approaches
•
•
•
•
•
Observation
Focus group
Survey research
Behavioral data
Experimentation
Research Instruments
• Questionnaires
• Qualitative research techniques
• Mechanical devices
Sampling Plan
• Sampling unit: Who is to be surveyed?
• Sample size: How many people should
be surveyed?
• Sampling procedure: How should the
respondents be chosen?
Contact Methods
•
•
•
•
Mail questionnaire
Telephone interview
Personal interview
Online interview
THANKYOU