Marketing Management Dersi 7. Ünite Özet

Introduction

A company that aims to achieve its objectives should answer a number of questions in sequence. The first question is related to the reason of existence of the company, an essential purpose or a motivation to exist. “What is our business?” and “what sort of dreams we have?”. These questions motivate the company to look within, and determine its mission and vision. Then the second question comes to the agenda; “Where is the company at the present time?” This question could be answered only by doing certain analyses.

Strategic Marketing Planning

As businesses have diverse functions and/or levels in their organizations, managers in all functions and/or levels should think in a strategic way and develop their own strategies according to the company’s overall plan. Strategic planning starts at the corporate level by describing an overall purpose and mission. At business level, strategies answer the following question: “How companies should compete in each of their businesses?”.

Strategic planning has a long-term perspective, whereas marketing planning has a shorter-term view derived from the perspective of the product and market portfolio of an organization designed to achieve its overall objectives. This shows the interdependence between strategic planning and marketing planning.

Strategic Marketing Planning process starts with corporate mission and objectives developed at the corporate level. Then, marketing department develops its own mission based on the corporate mission. Later, marketing managers analyse marketing environment.

Defining Corporate Mission and Vision

At the beginning, businesses are just ideas. If these set of ideas and beliefs regarding the business are given in a written form this written form, mirrors the ideas underlying mission and vision statements of corporation. A well-written mission statement guides and motivates people in the organization and emphasize company’s strengths in the marketplace.

Marketing Environment and Situation Analysis

Any enterprise, that cannot identify where it is, cannot acknowledge its own capabilities and resources; and thus, it would not be possible for it to produce necessary objectives and strategies. Therefore, before defining marketing objectives, a corporation needs to acknowledge its environment and decide where it is located and what its strengths are.

Micro external environment consists of actors or partners (e.g. customers, suppliers, etc.) that are close to the company and thus, has an impact on its ability to serve its customers. Macro external environment includes larger societal forces, for instance demographic and economic forces, which have an influence on micro external environment.

Company’s Macro External Environment

A company, trying to build relationships with customers in order to create satisfaction and value, is affected by several forces from a larger macro external environment. Within this environment, the company sets itself in the centre, and tries to analyse the macro external factors affecting the company, and other companies within that industry, country and even the World.

Demographic Environment

Demographic environment deals with human populations and its characteristics such as age, gender, income, occupation, etc. It is important to analyse demographic environment as it includes people consisting of consumers and customers who make up markets. For instance, women’s contribution to work force has been increasing in Turkey. This means that these women have less time to cook in households, and this has created a need for frozen foods.

Economic Environment

Economic environmental factors are variables or forces related to regulation of goods, money, energy and information exchange, and these forces include economic growth, industrial production, and developments in national and international trade.

Natural Environment

Countries’ climate, geography, natural, and physical characteristics require different marketing efforts. To produce goods and services, companies are using and harming these resources.

Corporate Social Responsibility is about actions that appear to further some social good, beyond the interests of the firm and that which is required by law.

Technological Environment

Technological environment includes forces which develop new technologies, creating new products, and also market opportunities.

Political and Legal Environment

Political environment consists of laws and regulations, government agencies, and pressure groups which have impacts on companies and individuals in a society.

Social and Cultural Environment

Social and cultural environment includes social and cultural values, judgements, lifestyles, traditions and beliefs of society26. While social environment includes variables related to social structure and consists of religion, family, social groups, class or caste structure, education, occupation, level of well-being, health conditions.

Company’s Micro External Environment

Marketing department’s responsibility is to build relationships with customers through creating satisfaction and value for customers. However, this is not a task you can accomplish alone. This means marketing departments need to build relationships with other companies, and suppliers to create value for customers.

The Company

Besides other actors or partners such as creditors and shareholders, marketing managers should also work in harmony with managers in the other departments such as finance, operations or research and development for creating value and developing relationships with customers. These interrelated groups also make up company’s internal environment.

Suppliers

As the name implies, suppliers provide resources, ingredients of products for production of goods, equipment, all kinds of supplies and services.

Marketing Intermediaries

Marketing intermediaries consist of resellers (e.g. wholesalers, and retailers) physical distribution companies (e.g. third-party logistic companies such as Ekol Logistics, and Kuehne-Nagel), marketing services agencies (e.g. advertising agencies), and financial intermediaries (e.g. banks, insurance companies).

Competitors

As the aim of marketing is to create value and satisfaction for customers, marketing managers try to anticipate the needs of target market and act according to those needs.

Publics

A public is a group which has an actual or potential influence or interest in a company.

Customers

Since the aim is to create value and satisfaction for customers, they are the most important actors in the micro external environment.

Internal Environment

Internal environment consists of elements within the company’s boundaries34. This means the internal environment of a company including variables which are within an organization itself and form the context in which the work is done35`; thus, they are controllable.

Situation Analysis

One of the tools to develop a situation analysis is called SWOT Analysis. Managers examine the internal environment (e.g. the company itself or marketing department itself) for Strengths and Weaknesses, and at the external environment (including forces in macro external environment and actors in micro external environment except for their own company or department) for Opportunities and Threats.

Setting Objectives and Goals for Strategic Business Units

Objectives clarify what is to be accomplished and by when; thus, they are the end results of planned activity37. They are important for success as they state direction, help evaluation, develop synergy, reveal priorities, provide coordination, and basis for effective management38. Objectives should be SMART, meaning Specific, Measurable, Achievable, Relevant and Time-bound/Timebased/Time sensitive.

Marketing Strategy

Marketing strategy aims to create customer value and achieve profitable and enduring relationships with customers.

Market Segmentation

Market Segmentation can be explained as dividing a market into distinct groups of customers sharing diverse needs, wants and purchase behaviours, and thus requiring different products and services. A market segment, on the other hand, consists of a group of consumers sharing similar needs, wants and purchase behaviours, thus requesting similar products.

Geographic segmentation divides the market according to the geographical units, such as regions, cities, or neighbourhoods.

Demographic segmentation divides the market age, according to variables, such as income, gender, occupation, education, religion, race, nationality, family size.

Psychographic segmentation divides the market according to buyer groups’ social class, lifestyle, or personality characteristics.

Behavioural segmentation divides the market according to consumers’ knowledge, attitudes, uses, or responses to a product.

Market Targeting

After segmenting markets, a company needs to select target market(s). A target a market consists of a group of customers sharing similar needs, wants and purchase behaviour, thus requesting similar products, and companies may target markets at different levels. At one extreme, companies choose to target very broadly (undifferentiated marketing). Undifferentiated marketing is also called mass marketing.

Market targeting strategies include undifferentiated marketing, differentiated marketing, concentrated marketing, and micromarketing.

Positioning

After deciding on the segments of the market to enter, a company should decide what position it aims to fulfil in those segments according to the selected marketing strategies. Doyle (1983) states that: “Positioning strategy refers to the choice of target market segment which describes the customers a business will seek to serve and the choice of differential advantage which defines how it will compete with rivals in the segment”.

Marketing Mix

The next step after positioning is developing a marketing mix according to the selected marketing strategies. Marketing mix includes the key elements for marketing strategy and these key elements are Product, Price, Place, and Promotion. Since all elements start with the letter “p”, marketing mix also called as 4Ps of marketing.

Product: Product is any offering a company offers with an aim to satisfy customer needs and wants. Products can be classified according to their durability and tangibility, and their use (consumergoods or industrial goods).

Price: Price is the money customers pay for the offering, and; thus, it is the value obtained from customers in exchange for the value offered.

Place: Place involves activities which make product available to target market, that is why place is also called distribution. Place includes a network of firms (also called distribution channels, marketing channels or marketing intermediaries) that aim to move products from producer to the ultimate customer.

Promotion: Promotion includes techniques companies use to communicate value propositions and to try persuading customers to buy their products.

7Ps of Marketing: The initial marketing mix (4Ps of marketing mix), is however further enhanced to 7Ps (including Participants, Process, Physical evidence65) for services, and then to 8Ps by adding Productivity and Quality.

Implementation and Control

Planning good strategies is only the first step for developing a successful strategic marketing. Implementation is a process of turning marketing strategies and plans into actions for achieving strategic marketing objectives.

Implementation phase has two parts. The first part is developing action programs which answers the following questions: “What will be done?”, “When will it be done?”, “Who will do it?”, and “How much will it cost?”69. Accordingly, staff, skills of the staff, their style of doing things and shared values become essential for the process70. The second part is developing budgets which is a projected profit and loss statement.

What if the Company Fails to Achieve its Objectives?

A good strategic marketing planning is a proprietary asset for companies as it sets the path by analysing the environment and allocating resources to create competitive advantage.

As stated before, successful marketing planning creates success at functional level which directly affects success at business level (e.g. competitive advantage), and accordingly success at business level brings success at corporate level (e.g. growth).