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Market Forecasting,Market Forecasting,Planning,Planning,

Implementation &Implementation &ControlControl

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Lecture OverviewLecture Overview

y Planning - benefits, approaches,Planning - benefits, approaches,

kindskinds

y Strategic Planning ProcessStrategic Planning Process

y Marketing Management ProcessMarketing Management Process

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Benefits of PlanningBenefits of Planning

y formal and systematic processformal and systematic process

y uncover opportunities/threatsuncover opportunities/threats

y sharper objectives and policiessharper objectives and policies

y performance standards - controlperformance standards - control

y

coordinate and focus effortscoordinate and focus effortsy communication toolcommunication tool

y flexibility - contingency planningflexibility - contingency planning

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Why dont some firmsWhy dont some firms

plan?plan?y timelytimely

y costlycostly

y flexibilityflexibility

y prefer ad hoc approachprefer ad hoc approach

y

experience and judgementexperience and judgement

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Three approaches toThree approaches to

planningplanningy 1. Top-down planning1. Top-down planning

y 2. Bottom-up planning2. Bottom-up planningy 3. Goals down - plans up3. Goals down - plans up

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Three kinds of plansThree kinds of plans

y Annual planAnnual plan

y Long-range planLong-range plany Strategic planStrategic plan

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Strategic PlanningStrategic Planning

y SWOTSWOT

y changing environmentchanging environment

opportunities and threatsopportunities and threats

y firms situationfirms situation

strengths and weaknessesstrengths and weaknesses

y strategic fitstrategic fit match between marketing opportunitiesmatch between marketing opportunities

and the firms goals and strengthsand the firms goals and strengths

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Situation AnalysSituation Analys

SS

WW

OO

TT

Things the company does well.Things the company does well.

Things the company does not do well.Things the company does not do well.

Conditions in the external environmentthat favor strengths.

Conditions in the external environment

that favor strengths.

Conditions in the external environmentthat do not relate to existing strengths

or favor areas of current weakness.

Conditions in the external environmentthat do not relate to existing strengths

or favor areas of current weakness.

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Strategic Planning ProcessStrategic Planning Process

1. Define company mission1. Define company mission

2. Set objectives2. Set objectives

3. Design business portfolio3. Design business portfolio

4. Plan functional strategies4. Plan functional strategies

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Mission StatementMission Statement

y what the organization wants towhat the organization wants to

accomplishaccomplish

y provides direction and guidelinesprovides direction and guidelines

y market oriented not productmarket oriented not product

orientedoriented

y not too narrow or too broadnot too narrow or too broad

y specific and realisticspecific and realistic

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We exist to create value for our share owners on a long-term basis bybuildinga business that enhances The Coca-Cola Companys trademarks. This also is our

ultimate commitment.As the worlds largest beverage company, we refresh the world. We do this bydeveloping superior soft drinks, both carbonated and non-carbonated, andprofitable non-alcoholic beverage systems that create value for our Company,our bottling partners and our customers.

In creating value, we succeed or fail based on our ability to perform asstewards of several key assets:

Coca-Cola, the worlds most powerful trademark, and other highlyvaluable trademarks.

The worlds most effective and pervasive distribution system.

Satisfied customers, who make a good profit selling our products.

Our people, who are ultimately responsible for building this enterprise.

Our abundant resources, which must be intelligently allocated.

Our strong global leadership in the beverage industry in particularand in the business world in general.

Coca-Colas Mission StatemCoca-Colas Mission Statem

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Step 2 - Set CompanyStep 2 - Set Company

ObjectivesObjectivesy What do we want to achieve?What do we want to achieve?

y hierarchy of objectiveshierarchy of objectives

y Good objectiveGood objective specificspecific

realisticrealistic

quantifiedquantified measurablemeasurable

time framedtime framed

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Step 3 - Design theStep 3 - Design the

Business PortfolioBusiness Portfolioy collection of businesses andcollection of businesses and

productsproducts

y decisionsdecisions addadd

buildbuild

maintainmaintain milkmilk

divestdivest

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Formal Portfolio AnalysisFormal Portfolio Analysis

y BCG - growth/share matrixBCG - growth/share matrix

market growth ratemarket growth rate

firms relative market sharefirms relative market share

y GE - strategic business planningGE - strategic business planning

gridgrid

industry attractivenessindustry attractiveness

relative business strengthsrelative business strengths

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G Portfolio MatrixG Portfolio Matrix

MarketGrow

thRate

Market Share Dominance

High

High

Low

Low

10%

10x 0.1x1x

Star

Cash Cow Dog

Problem Child

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Strategic Options for UsingStrategic Options for Using

the Portfolio Matrixthe Portfolio Matrix

Build

Hold

Harvest

Divest

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GE MatrixGE Matrix

MarketAttractiveness

Business Position

High

Low

Medium

MediumStrong Weak

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Product/Market expansionProduct/Market expansion

gridgridy Products (new or existing)Products (new or existing)

y Markets (new or existing)Markets (new or existing)

y Four sectorsFour sectors

Market penetrationMarket penetration

Market developmentMarket development

Product developmentProduct development

DiversificationDiversification

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Present Product New Product

Present Market

New Market

MarketPenetration

MarketDevelopment

ProductDevelopment

Diversification

Strategic Alternatives - 4 Sectors

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Step 4 - DevelopStep 4 - Develop

functional strategiesfunctional strategiesy each department/functioneach department/function

y marketing - one functional areamarketing - one functional area

y marketings role varies acrossmarketings role varies across

companiescompanies

y potential conflicts betweenpotential conflicts between

departmentsdepartments

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Marketing ManagementMarketing Management

ProcessProcess1. Analyze market opportunities1. Analyze market opportunities

2. Select target markets2. Select target markets

3. Develop the marketing mix3. Develop the marketing mix

4. Manage the marketing effort4. Manage the marketing effort

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Step 1 - Analyzing marketStep 1 - Analyzing market

opportunitiesopportunities

y changing environmentchanging environment

opportunities and threatsopportunities and threats

y changing firm situationchanging firm situation relative strengths and weaknessesrelative strengths and weaknesses

y fit - match opportunities with firmsfit - match opportunities with firms

objectives and resources (strengths)objectives and resources (strengths)y market information systemmarket information system

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Step 2 - Selecting targetStep 2 - Selecting target

marketsmarkets

y firm cannot satisfy everyonefirm cannot satisfy everyone

mass marketingmass marketingy segment total marketsegment total market

market segmentationmarket segmentation

y target marketstarget markets target marketingtarget marketing

niche marketingniche marketing

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Market SegmentationMarket Segmentation

ProcessProcessy 1. define total market1. define total market

y 2. segment market2. segment market

needs, characteristicsneeds, characteristics

homogenous groupshomogenous groups

y 3. select target markets3. select target markets

y

4. develop positioning strategy4. develop positioning strategy ...place the product will occupy in the...place the product will occupy in the

consumers mind relative toconsumers mind relative to

competing productscompeting products

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Step 3 - Developing theStep 3 - Developing the

Marketing MixMarketing Mix

y 4Ps4Ps

productproduct

priceprice

placement (distribution)placement (distribution)

promotionpromotion

y designed to satisfy a target marketdesigned to satisfy a target markety integrated - blended togetherintegrated - blended together

St 4 M i thSt 4 M i th

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Step 4 - Managing theStep 4 - Managing the

Marketing EffortMarketing Effort

y competitive marketing strategiescompetitive marketing strategies

leader, challenger, follower, nicherleader, challenger, follower, nicher

y marketing management functionsmarketing management functions analysinganalysing

planningplanning

implementingimplementing

controllingcontrolling

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SummarySummary

y Planning - benefits, approaches,Planning - benefits, approaches,

kindskinds

y Four steps in the StrategicFour steps in the StrategicPlanning ProcessPlanning Process

y Four steps in the MarketingFour steps in the Marketing

Management ProcessManagement Process