Marketing Planning

Defining Market Boundaries

The crux of any strategy formulation effort is market definition The problem of identifying competitive product-market boundaries pervades all levels of marketing decisions. Such strategic issues as the basic definition of a business, the assessment of opportunities presented by gaps in the market, the reaction to threats posed by competitive actions, and the decisions on major resource allocations are strongly influenced by the breadth or narrowness of the definition of competitive boundaries....

Concept Of Planning

Throughout human history, people have tried to achieve specific purposes, and in this effort some sort of planning has always found a place. In modern times, the former Soviet Union was the first nation to devise an economic plan for growth and development. After World War II, national economic planning became a popular activity, particularly among developing countries, with the goal of systematic and organized action designed to achieve stated objectives within a given period. Among market...

Process Of Setting Objectives

At the very beginning of the process of setting objectives, an SBU should attempt to take an inventory of objectives as they are currently understood. For example, the SBU head and senior executives may state the current objectives of the SBU and the type of SBU they want it to be in the future. Various executives perceive current objectives differently and, of course, they will have varying ambitions for the SBU's future. It will take several top-level meetings and a good deal of effort on the...

Factors In Appraisal Corporate Publics

Thus, the first consideration in the strategic process is to recognize the individuals and groups who have an interest in the fate of the corporation and the extent and nature of their expectations. The following groups generally constitute the interest-holders in business organizations 5. Banking community and other lenders 7. Community in which the company does business For the healthy growth of the organization, all eight groups must be served adequately. Of all...

Productscope Strategy

The product-scope strategy deals with the perspective of the product mix of a company i.e., the number of product lines and items in each line that the company may offer . The product-scope strategy is determined by making reference to the business unit mission. Presumably, the mission defines what sort of business it is going to be, which helps in selecting the products and services that are to become a part of the product mix. The product-scope strategy must be finalized after a careful...

Importance Of Environmental Scanning

Without taking into account relevant environmental influences, a company cannot expect to develop its strategy. It was the environmental influences emerging out of the energy crisis that were responsible for the popularity of smaller, more fuel-efficient automobiles and that brought about the demise of less efficient rotary engines. It was the environmental influence of a coffee bean shortage and geometric price increases that spawned the coffee-saver modification in Mr. Coffee automatic drip...

Distributionscope Strategy

For an efficient channel network, the manufacturer should clearly define the target customers it intends to reach. Implicit in the definition of target customers is a decision about the scope of distribution the manufacturer wants to pursue. The strategic alternatives here are exclusive distribution, selective distribution, and intensive distribution. Exclusive distribution means that one particular retailer serving a given area is granted sole rights to carry a product. For example, Coach...

Pricing Strategy For New Products

The pricing strategy for a new product should be developed so that the desired impact on the market is achieved while the emergence of competition is discouraged. Two basic strategies that may be used in pricing a new product are skimming pricing and penetration pricing. Skimming pricing is the strategy of establishing a high initial price for a product with a view to skimming the cream off the market at the upper end of the demand curve. It is accompanied by heavy expenditure on promotion. A...

Strategic Business Units Sbus

Frequent reference has been made in this chapter to the business unit, a unit comprising one or more products having a common market base whose manager has complete responsibility for integrating all functions into a strategy against an identifiable competitor. Usually referred to as a strategic business unit SBU , business units have also been called strategy centers, strategic planning units, or independent business units. The philosophy behind the SBU concept has been described this way The...

Meaning Of Corporate Appraisal

Broadly, corporate appraisal refers to an examination of the entire organization from different angles. It is a measurement of the readiness of the internal culture of the corporation to interact with the external environment. Marketing strategists are concerned with those aspects of the corporation that have a direct bearing on corporate-wide strategy because that must be referred in defining the business unit mission, the level at which marketing strategy is formulated. As shown in Exhibit...

Marketscope Strategy

Market-scope strategy deals with the coverage of the market. A business unit may serve an entire market or concentrate on one or more of its parts. Three major alternatives in market-scope strategy are single-market strategy, multimarket strategy, and total-market strategy. A variety of reasons may lead a company to concentrate its efforts on a single segment of a market. For example, in order to avoid confrontation with large competitors, a small company may find a unique niche in a market and...

Personal Selling Strategies

There was a time when the problems of selling were simpler than they are today. Recent years have produced a variety of changes in the selling strategies of businesses. The complexities involved in selling as we approach the next century are different from those in the past. As an example, today a high-principled style of selling that favors a close, trusting, long-term relationship over a quick sell is recommended. The philosophy is to serve the customer as a consultant, not as a peddler....

Sbu Objectives And Goals

The objectives and goals of the SBU may be stated in terms of activities manufacturing a specific product, selling in a particular market financial indicators achieving targeted return on investment desired positions market share, quality leadership and combinations of these factors. Generally, an SBU has a series of objectives to cater to the interests of different stakeholders. One way of organizing objectives is to split them into the following classes measurement objectives, growth survival...

Marketentry Strategy

Market-entry strategy refers to the timing of market entry. Basically, there are three market-entry options from which a company can choose (a) be first in the market, (b) be among the early entrants, or (c) be a laggard. The importance of the time of entry can be illustrated with reference to computers. Experience has shown that if new product lines are acceptable to users and if their impact is properly controlled through pricing and contractual arrangements, sales of an older line can be...

Portfolio Analysis Conclusion

Portfolio approaches provide a useful tool for strategists. Granted, these approaches have limitations, but all these limitations can be overcome with a little imagination and foresight. The real concern about the portfolio approach is that its elegant simplicity often tempts managers to believe that it can solve all problems of corporate choices and resource allocation. The truth is that it addresses only half of the problem the back half. The portfolio approach is a powerful tool for helping...

Sony Corporation Car Navigation Systems

Sony, lost time while trying to agree on standard software upgrades. Sony's unit sales increased, but at a slower growth rate than the market Sony's market share fell from 60 percent in 1993 to 23 percent in 1994 and 17 percent in 1995, and was estimated to drop to 15 percent in 1996. Exhibit 2 summarized the major competitors' market shares. Exhibit 3 compares sales performance of NaviKen and non-NaviKen companies. In Europe and the United States, Sony was also the first to launch car...

The New Campaign

By late 1992, Consumer Credit was ready to begin the process of attracting new, quality loans. A significant challenge lay ahead. Branch staff, who was once empowered to make credit decisions, had that authority reduced during the restructuring process. Now the Consumer Credit wanted to convince branch staff that the appropriate systems, policies, and controls were in place to actively meet customers' credit needs. Three things were needed to disseminate the new approach throughout the...

Priceflexibility Strategy

A price-flexibility strategy usually consists of two alternatives a one-price policy and a flexible-pricing policy. Influenced by a variety of changes in the environment, such as saturation of markets, slow growth, global competition, and the consumer movement, more and more companies have been adhering in recent years to flexibility in pricing of different forms. Pricing flexibility may consist of setting different prices in different markets based on geographic location, varying prices...

Kmart Corporation

A new concept in merchandising, backed by thousands of dedicated men and women, changed the S.S. Kresge Company from a fledgling newcomer in the variety store field to a multi-billion-dollar chain of general merchandise and specialty retail stores. In 1899, Sebastian Spering Kresge opened his first store in downtown Detroit. By 1912, Kresge had 85 stores with annual sales of more than 10 million. Kresge stores appealed to shoppers with the stores' low prices, open displays, and convenient...

Valuemarketing Strategy

In the 1990s, value has become the marketer's watchword. Today, customers are demanding something different than they did in the past. They want the right combination of product quality, good service, and timely delivery. These are the keys to performing well in the next century. It is for this reason that we examine this new strategic focus. Value marketing strategy stresses real product performance and delivering on promises. Value marketing doesn't mean high quality if it is only available...

Pricing Strategies For Established Products

Changes in the marketing environment may require a review of the prices of products already on the market. For example, an announcement by a large firm that it is going to lower its prices makes it necessary for other firms in the industry to examine their prices. In 1976, Texas Instruments announced that it would soon sell a digital watch for about 20. The announcement jolted the entire industry because only 15 months earlier the lowest-priced digital was selling for 125. It forced a change in...

Customer Groups

An adequate business definition requires proper consideration of the strategic three Cs customer e.g., buying behavior , competition e.g., competitive definitions of the business , and company e.g., cost behavior, such as efficiencies via economies of scale resources skills, such as financial strength, managerial talent, engineering manufacturing capability, physical distribution system, etc. and differences in marketing, manufacturing, and research and development requirements and so on,...

Corporate Strategic Direction

Corporate strategic direction is defined in different ways. In some corporations, it takes the form of a corporate creed, or code of conduct, that defines perspectives from the viewpoint of different stakeholders. At other corporations, policy statements provide guidelines for implementing strategy. In still others, corporate direction is outlined in terms of objective statements. However expressed, corporate direction consists of broad statements that represent a company's position on various...

Dimensions Of Product Strategies

The implementation of product strategies requires cooperation among different groups finance, research and development, the corporate staff, and marketing. This level of integration makes product strategies difficult to develop and implement. In many companies, to achieve proper coordination among diverse business units, product strategy decisions are made by top management. At Gould, for example, the top management decides what kind of business Gould is and what type it wants to be.

Marketcommitment Strategy

The market-commitment strategy refers to the degree of involvement a company seeks in a particular market. It is widely held that not all customers are equally important to a company. Often, such statements as 17 percent of our customers account for 60 percent of our sales and 56 percent of our customers provide 11 percent of our sales are made, which indicate that a company should make varying commitments to different customer groups. The commitment can be in the form of financial or...

Productelimination Strategy

Marketers have believed for a long time that sick products should be eliminated. It is only in recent years that this belief has become a matter of strategy. A business unit's various products represent a portfolio, with each product playing a unique role in making the business viable. If a product's role diminishes or if it does not fit into the portfolio, it ceases to be important. When a product reaches the stage where continued support is no longer justified because performance is falling...

Profit Impact Of Marketing Strategy Pims

In 1960, the vice president of marketing services at GE authorized a large-scale project called PROM, for profitability optimization model to examine the profit impact of marketing strategies. Several years of effort produced a computer-based model that identified the major factors responsible for a great deal of the variation in return on investment. Because the data used to support the model came from diverse markets and industries, the PROM model is often referred to as a cross-sectional...

Conflictmanagement Strategy

It is quite conceivable that the independent firms that constitute a channel of distribution (i.e., manufacturer, wholesaler, retailer) may sometimes find themselves in conflict with each other. The underlying causes of conflict are the divergent goals that different firms may pursue. If the goals of one firm are being challenged because of the strategies followed by another channel member, conflict is the natural outcome. Thus, channel conflict may be defined as a situation in which one...

Determining Sbu Strategy

SBU strategy concerns how to create competitive advantage in each of the products markets it competes with. The business-unit-level strategy is determined by the three Cs customer, competition, and company . The experience of different companies shows that, for the purposes of strategy formulation, the strategic three Cs can be articulated by placing SBUs on a two-by-two matrix with industry maturity or attractiveness as one dimension and strategic competitive position as the other. Industry...

Classifying Competitors

A business may face competition from various sources either within or outside its industry. Competition may come from essentially similar products or from substitutes. The competitor may be a small firm or a large multinational corporation. To gain an adequate perspective on the competition, a firm needs to identify all current and potential sources of competition. Competition is triggered when different industries try to serve the same customer needs and demands. For example, a customer's...

Intuitive Reasoning In Environmental Scanning

Traditionally, environmental scanning has been implemented mainly with the use of conventional methods, including marketing research, economic indicators, demand forecasting, and industry studies. But the use of such conventional techniques for environmental scanning is not without pitfalls. These techniques have failed to provide reliable insights into the future. Discussed below are a variety of new techniques that have been adapted for use in environmental scanning. These procedures require...

Marketgeography Strategy

Geography has long been used as a strategic variable in shaping market strategy. History provides many examples of how businesses started locally and gradually expanded nationally, even internationally. Automobiles, telephones, televisions, and jet aircraft have brought all parts of the country together so that distance ceases to be important, thus making geographic expansion an attractive choice when seeking growth. Consider the case of Ponderosa System, a fast-food chain of steak houses a...

Productpositioning Strategy

The term positioning refers to placing a brand in that part of the market where it will receive a favorable reception compared to competing products. Because the market is heterogeneous, one brand cannot make an impact on the entire market. As a matter of strategy, therefore, a product should be matched with that segment of the market in which it is most likely to succeed. The product should be positioned so that it stands apart from competing brands. Positioning tells what the product stands...

The First Farggi Tubs Ice Cream Parlour Is Opened

The first Farggi parlour opened its doors to the public in July 1993, almost one year after Haagen 12 This price policy would be continued during the following months Farggi accepted a role as price follower with respect to Haagen Dazs, so that when Haagen Dazs took the initiative 11 Swiss chocolate with black chocolate, vanilla with mild to increase prices, Farggi followed suit, raising prices by the chocolate and almonds, and vanilla with milk chocolate. same amount. Dazs opened its first...