mr1 summary complete summary chapter 2 + 5

8/3/2019 MR1 Summary Complete Summary Chapter 2 + 5

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Name:JoostvanAbeelenStudentNr.:101889

Course:MR1MarketingcommunicationSummary---

Chapter2:Strategyandenvironment

Businessplanning:Anon-goingprocessofmakingdecisionsthatguidethefirm

bothintheshorttermandforthelonghaul.

Abusinessplanisliketakingapicture,youfirstfocusonwhatsathand,andthenyousnaptosetthinginmotion.

MarketingPlan:Adocumentthatdescribesthemarketingenvironment,outlinesthemarketingobjectivesandstrategies,andidentifieshowthe

strategiesimbeddedintheplanwillbeimplementedandcontrolled.

Thethreelevelsofbusinessplanning

Strategicplanning:Isthemanagerialdecisionprocessthatmatchesthefirms

resources(suchasitsfinancialassetsandworkforce)andcapabilities(the

thingsitisabletodowell)toItsmarketopportunitiesforlongtimegrowth.

Functionalplanning:Themarketingplanning,howareyougoingtoachieveyourobjectives,doyouhaveenoughmoneyandresourcesforit?

Includesbothabroadfiveyearplantosupportthefirmsstrategicplanandadetailedannualplanforthecomingyear.

Operationalplanning:TheactualplanningthatFocusesonthedaytoday

executionofthefunctionalplansandincludesdetailedannual,semi-annualorquarterlyplans.

ThestrategicplanningcanbeseenastheWhat?

Thefunctionalplanningasthehow?

Theoperationalplanningasthewhen?

Strategicplanning:Framingthepicture

Strategicbusinessunits(SBUs)Selfcontaineddivisionsofacompanythat

aredifferentenoughtohavetheirownmissionobjectives,resourcesetc.(thinkofDisneythemepark,movies,cruiseetc.)

Step1:Definethemissionthroughamissionstatement.Aformaldocumentthatdescribestheorganisationsoverallpurposeandwhatithopestoachieve.


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Step2:EvaluatetheInternalandExternalEnvironment

LookatstrengthsandweaknesseswithintheInternalEnvironmentandafter

thatstartlookingatOpportunitiesandThreatswithintheExternalEnvironment.

Theexternalenvironmentconsistsofelementsoutsidethefirmthatmayaffectiteitherpositivelyornegatively.

Theeconomicenvironment

Onewaytolookformarketpotentialisthecountryseconomichealth.IndicatedbytheGrossdomesticproduct(GDP)(BrutoNationaalproduct).Thetotal

valueofgoodsandservicesacountryproduceswithinitsborderannually.

SimilartothatistheGrossNationalProduct(GNP)whichmeasuresthevalueofallgoodsandservicesproducedbyacountrysindividualsororganisations.

Whetherlocatedwithinthecountryornot.

Marketersalsoneedtoconsiderwhethertheycanconductbusinessasusualinanothercountry.TheEconomicinfrastructureisthequalityofacountrys

distribution.MarketersarealsofocusedontheeconomicfutureofacountrycalledtheLevelofeconomicdevelopmenttheylookatwhatstepsaretakento

reducepoverty,inequalityandunemployment.Therearethreelevels

LessdevelopedCountry(LDC)Theloweststageofeconomicdevelopmentinmostcasesfocusedonagriculturalincome

Standardofliving-Anindicatoroftheaveragequalityandquantityofgoodsandservicesacountryconsumes.Thestandardoflivingislow.

Developingcountries-Aneconomythatshiftsitsemphasisfromagriculture

toindustry,standardsofliving,educationandtheuseoftechnologyrise.

TheoverallpatternofchangesorfluctuationsofaneconomyiscalledtheBusinesscyclethecyclesisespeciallyimportanttomarketersbecauseofits

effectonconsumerbuyerbehaviour.

Thecompetitiveenvironment

Firmsmustkeepabreastofwhatthecompetitionisdoingsotheycandevelop

newproductfeatures,newpricingschedules,ornewadvertisingtomaintainorgainmarketshare.

MoreandmorefirmsuseCompetitiveIntelligence(CI)tolearnmoreabouttheircompetitors,theintelligenceisgatheredfromsourceslikenews,internet

andgovernmentaldocuments.

MostmarketerscompetefortheconsumersDisposableincomethatisthe

amountofmoneythatpeoplehaveleftafterpayingfortheirnecessities(vaste

lasten).WhattheyalsodoisProductcompetitionwheretheyofferthesametypeofproductinsamecategoryofwantsandneeds.Thinkofofferingcoffee

insteadofteawhenconsumerlongforahotdrink.ThethirdoptiontheyhaveisBrandcompetitionwherevariouscompaniesoffersimilargoodsorservices.

Marketersneedtounderstandthetotalstructureoftheindustrythattheyarein,

thereare4structuresinwhichcompetitioncanarise.


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1.Monopolisticstructure

Onlyonesellercontrolsthemarketsohecandecideshisownprices.

2.OligopolystructureArelativelysmallnumberofsellers,eachholdingsubstantialmarketshare,ina

marketconsistingofmanybuyers.Oligopoliesareoftencompaniesthatrequiresubstantialinvestment,likeanairline.

3.Monopolisticcompetition

Manysellerswhocompeteforbuyersbutonlyofferaslightlydifferentproduct,thinkofsportshoesellerslikeNike,Adidasetc.

4.Perfectcompetition

Manysmallsellers,offeringbasicallythesameserviceorgood.Nosinglefirmhas

asubstantiallargermarketsharethantheother.Perfectcompetitionmostlyhappenswithinagriculturalmarkets.

Thetechnologicalenvironment

Changesintechnologycandramaticallytransformanindustry,thatiswhy

marketersfocusonnewimprovements.Whenevertheyfoundonetheytrytopatentitmeaningtheycreatealegaldocumentthatgivesinventorsor

individualsandfirmstheexclusiverightstoproduceandselltheparticular

invention.

Thepoliticalandlegalenvironment

Thisenvironmentreferstothelocal,state,nationalandgloballawsand

regulationsthataffectbusinesses.Globalfirmsknowthatpoliticalactionstakenbyagovernmentcandrasticallyaffectthebusinessoperationsofoutsiders.Itiscallednationalisationwhenthedomesticgovernmentreimburses(vergoeden)

aforeigncompanyforitsassetsaftertakingoverthecompany.

Itiscalledexpropriationwhenadomesticgovernmentseizesaforeigncompanysassets.

Governmentsandeconomiccommunitiesimposenumerousregulationsabout

whatproductsshouldbemadeof,howtheyshouldbemade,andwhatcanbe

saidaboutthem.Localcontentrulesareaformofprotectionstipulatingthatacertainproportionofaproductmustconsistofcomponentssuppliedby

industriesinthehostcountryoreconomiccommunity.

Thesocio-culturalenvironment

Thistermsreferstothecharacteristicsofsociety,thepeoplewholiveinthatsociety,andtheculturethatreflectsthevaluesandbeliefsofthesociety(Yes,

CS2IShauntingyou!).

Thefirststepistolookatacountrysdemographics:Size,age,gender,ethnicgroup,income,education,occupationandfamilystructure.

EverysocietyhasasetofCulturalvaluesthisexplainswhymarketingefforts

thatarebiginonecountrycompletelyflopinanother.


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Collectivistculturesiswherepeopletendtoabandontheirpersonalgoalsto

thoseofastablecommunity.Inindividualisticculturestheoppositeistruehowever.Thereismorefocusonpersonalgoals.

Valuesaregeneralideasaboutgoodandbadbehaviour.Fromthesevaluesflow

normssomespecifictypesareCustomAnormhandeddownfromthepastthatcontrolsbasicbehaviour,

suchasdivisionoflabourinahousehold.

Moresarecustomswithastrongmoralovertone.Ofteninvolvesataboo,or

forbiddenbehaviour,suchasincestorcannibalism.

Conventionsarenormsregardingtheconductofeverylife.Thecorrectwayto

dress,furnishahouse,eatdinneretc.

Marketersalsoneedtotakecareofthelanguageofthecountrytheywanttosell

in.

Inmarketing,thetendencytopreferproductsofpeopleofonesowncultureoverthosefromothercountriesiscalledethnocentrism.

Step3:SetorganisationalorSBUobjectives.

Afterconstructingamissionstatement,topmanagementtranslatesthatmission

statementintoorganisationalorSBUobjectives,thesegoalsarederivedfromthe

missionstatementandbroadlyidentifywhatthefirmhopestoaccomplishwithinthegeneraltimeframeofitslongrangebusinessplan.TheobjectivesneedtobeSMART:Specific,Measurable,Attainable,Relevant,Time-bound.

Step4:Establishthebusinessportfolio

ForcompanyswithseveralSBUsitisimportanttoseehowtheycanusetheir

resourcestheensuregrowthforthewholeorganisation.Seefigurebelow:


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Justasthedifferentstockaninvestorownsiscalledaportfolio,therangeof

differentbusinessthatalargefirmsoperatesiscalleditsBusinessportfolio.Mostlytheyrepresentdifferentproductlinesandoperatewiththeirownbudget

andmanagement.Portfolioanalysisisatoolthatmanagementusestoassesthepotentialofafirmsbusinessportfolio.Severalmodelsareavailabletoassist

managementintheportfolioanalysisprocess.TheBostonConsultingGroupdevelopedtheBCGGrowth-marketsharematrixwhichrecognizes4differenttypesofSBUs

1.Stars

SBUswithproductsthathaveadominantmarketshareinhigh-growthmarkets.

Starsgeneratelargerevenues,butalsorequirealotoffunding.

2.Cashcows

Dominantmarketshareinalow-growthpotentialmarket.Becausethereisnotmuchopportunityfornewcompanies,competitorsdontoftenenterthemarket.

3.Questionmarks

Sometimescalledproblemchildren,SBUswithlowmarketsharesinfast-

growthmarkets.Itshowsthatthebusinesshasfailedtocompetesuccessfully.

4.Dogs

Asmallshareofaslow-growthmarket.Businessesthatoffspecialisedproductsinlimitedmarketsthatarenotlikelytogrowquickly.


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Step5:Developgrowthstrategies

Withinthemarketingdepartmentwecanrecognize4differentgrowthstrategies:

1.MarketpenetrationstrategiesSeektoincreasesalesofexistingproductstoexistingmarketssuchascurrent

users,non-usersandusersofcompetingbrands.Theydothisbycuttingprices,improvingdistributionetc.

2.Marketdevelopmentstrategies

Introduceexistingproductstonewmarkets.Reachingnewcustomersegments.

3.Productdevelopmentstrategies

Creategrowthbysellingnewproductsinexistingmarkets.Thismaymean

extendingthefirmsproductlinebydevelopingnewvariationsoftheitem.

4.Diversificationstrategies

Emphasisebothnewproductsandnewmarketstoachievegrowth.

Marketingplanning:SelectingthecamerasettingStep1:Situationanalysis

Step2:Setmarketingobjectives

Step3:Developmarketingstrategies(Lootat,product,pricing,promotion,distributioncalledthemarketingmix)

Step4:Implementandcontrolthemarketingplan

(seehowitworksoutbylookingattheReturnonmarketinginvestment(ROMI))

Creatingandworkingwithamarketingplan:Snappingthepicture

Thebestplaneverwrittenisuselessifitisnotactuallycarriedout.Thatswhatoperationalplansarefor.Theylookattheday-to-dayexecutionofthe

marketingplan.AfirmsCorporatecultureisimportantforitsinternal

environment.

International:ThecomplicatedworldofglobalmarketingWorldtradereferstotheflowofgoodsandservicesamongdifferentcountries.

Tohidefromtaxesandregulationstradingformsworkoutelaboratedealsin

whichtheytrade/bartertheirproductswitheachother.ThisiscalledCountertrade.Establishedundertheunitednationsafterthesecondworldwaristhe

GeneralagreementonTariffsandTrade(GATT)whichdidalottoreducetheproblemthatprotectionism(rulesthatgivehomecompaniesanadvantage)

creates.ThegroupthatmadethisruleisknownastheWorldTrade

Organization(WTO).

Manygovernmentssetimportquotasonforeigngoodstoreducecompetition

fordomesticindustries.Anembargoisaextremequotathatprohibitsspecifiedforeigngoodscompletely.Besidesthatgovernmentsalsousetarrifs(tarieven)


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onimportedgoodstogivedomesticcompetitorsandadvantageinthe

marketplace.

Afirmcanmakeacommitmenttoaforeignmarketbysettingupalicensingagreementthatgivesanotherfirmtherighttoproduceandmarketitsproduct

inaspecificcountryorregioninreturnforroyalties.BesidesthatFranchisingisaformoflicensingthatgivesthefranchiseetherighttoadaptanentirewayofdoingbusinessinthehostcountry.

Anevendeepercommitmentiscreatedbysettingupastrategicalliancewithoneormoredomesticfirmsinthetargetcountry.ThisisoftenaJointventure

wherebytwoormorefirmscreateanewentitytoallowthepartnerstopooltheirresourcesforcommongoals.Besidesthatcompaniescanalsocompletely

buyoutafirm(directinvestment)

Theappealofcateringtoglobalmarketbecomesbiggerandbigger,evensothat

companiesalreadystartasaGlobalmarketitself.Thesearecalledborn-global

firms.


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Productleveldecisions

Productdecisions

Therearethreewaystosellaproductinaforeignmarket:

1.StraightextensionstrategyRetainsthesameproductfordomesticandforeignmarkets.

2.Productadaptationstrategy

Recognisesthatinmanycasespeopleindifferentculturesdohavestronganddifferentproductpreferences.

3.Productinvention

Developsanewproductasitexpandstoforeignmarkets.

Promotiondecisions

Isitnecessarytomodifytheirproductinaforeignmarket?

Pricedecisions

Greymarketgoodsareitemsthatareimportedwithouttheconsentofthetrademarkholder.Anotherunethical/illegalpracticeisdumpinginwhicha

companypricesitsproductslowerthantheyareofferedathome.

Distributiondecisions

Establishingareliabledistributionsystemisessentialifamarketeristosucceedinaforeignmarket.


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Chapter5:Business-to-businessmarketing

Businessmarkets:Buyingandsellingwhenthestakesarehigh

Business-to-business(B2B)marketingisthemarketingofgoodsandservicesthatbusinessesandotherorganisationsbuyforpurposeotherthanpersonal

consumption.Somefirmsresellthesegoodsandservices,sotheyarepartofachannelofdistribution.Otherfirmsusethegoodsandservicestheybuytoproduceothergoodsandservicesthatmeettheneedsoftheircustomersorto

supporttheirownoperationsthesearecalledbusinesstobusinessmarketsor

organisationalmarkets.

Therearemanymajorandminordifferencesbetweenorganisationalandconsumermarkets.Tobesuccessful,marketersmustunderstandthese

differencesanddevelopstrategiesthatcanbeeffectivewithorganisational

customers.


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Largebuyers

Inbusinessmarketsyouneedtolookatthecompanyasawhole,notanindividual.Whentheybuyanewcoffeemachine,everyonewithinthecompany

needstolikeit.

NumberofcustomersMarketingisdifferentbecausethepotentialmarketofbuyersissmallers.ThatmeansnoTVadvertising,butfullfocusonthepowerofyourproductanda

strongsalesforce

Sizeofpurchases

Demandismuchlarger,thinkforinstanceoftheamountofA4papertheNHTVusesondailybasis.

Geographicconcentration

Businesscustomersareoftenlocatedinasmallgeographicarearatherthan

beingspreadoutacrossacountry.

Businesstobusinessdemand

Demandinbusinessmarketsdiffersfromconsumerdemand.Therearefourdifferentwaysindemandcanbederived.Understandingtheseisimportantfor

marketersinforecastingsalesandplanningmarketingstrategies.

1.Deriveddemand

Aneed,andthesatisfactionofthatneed.Abusinesssdemandforgoodsandservicescomeseitherdirectlyorindirectlyfromconsumerdemand.Ifmore

peoplewanttofly,KLMwillneedmoreplanes.2.Inelasticdemand

Itusuallydoesntmatterifthepriceofbusiness-to-businessproductgoesupor

down,businesscustomersstillbuythesamequantity.ThinkoftheA4paperagain,iftheyupthatwith0,20NHTVcouldntcareless.

3.Fluctuatingdemand

Therearegreaterfluctuationswithinbusinessdemandthanconsumerdemand.

Evensmallchangesinconsumerdemandcanchangethewayforbusinessdemand(ifpeopledontwanttoflyanymore,KLMhastoomuchplanes).Also

businessbuyinfrequently(Youdontbuyanewplaneeveryyearorso).

4.Jointdemand

Occurswhentwoormoregoodsarenecessarytocreateaproduct.Ifthesupplyofoneofthesepartsdecreasesitwillbedifficulttomanufacturetheproduct.


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Typesofbusiness-to-businessmarkets

Welllookatthethreemajorclassesofbusiness-to-businesscustomers:

Producers

Purchaseproductsfortheproductionofothergoodsandservicesthattheyin

turnselltomakeprofit.Resellers

Buyfinishedgoodsforthepurposeofreselling,renting,orleasingtoother

businesses.

Organisations

Governmentsmaybetheonlycustomersforcertainproducts(thinkoftheJoint

StrikeFighter).Toinformpossiblevendorsaboutpurchasestheyareaboutto

makegovernmentsregularlymakeinformationonfuturepurchasesavailabletobidders.Not-for-profitinstitutionsareorganisationswitheducational,

communityandotherpublicservicegoals:Hospitals,churches,universities,

museumsetc.

InadditionmarketerscanidentifypotentialcustomersusingtheStandard

IndustrialClassificationsystem(SIC)thisisanumericalcodingsystem

wherebycompaniesthatoperatewithinspecificindustrialsectors(theirSICcode)canbeidentified.Firmsusethistofindnewcustomers.

Thenatureofbusinessbuying

Justlikecompaniesthatselltoendconsumers,asuccessfulbusiness-to-business

marketerneedstounderstandhowhis/hercustomersmakedecisions.

Thebuyingsituation

Abuyclassframeworkidentifiesthedegreeofeffortrequiredbythefirmspersonneltocollectinformationandmakeapurchasedecision.Therearethree

differentclasses:

1.Straightre-buy


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TheroutinepurchaseofitemsthataB2Bcustomerregularlyneeds(thinkof

officeequipmentlikepaper,pensetc.)

2.Modifiedre-buyOccurswhenafirmwantstoshoparoundforsupplierswithbetterprices,quality,ordeliverytimes.Modifiedre-buysrequiremoretimeandeffortthan

regularre-buys.

3.New-taskbuy

Afirsttimepurchaseisanew-taskbuy.Uncertaintyandriskcharacterisebuyingdecisionsinthisclassification,andtheyneedthemosteffortbecausethebuyer

hasnopreviousexperienceonwhichtobaseadecision.

Theprofessionalbuyer

Professionalpurchasersfocusoneconomicfactorsbeyondtheinitialpriceofthe

product,includingtransportationanddeliverycharges.

ThegroupofpeopleintheorganisationwhoparticipateinthebuyingprocessarereferredtoastheBuyingCentreacrossfunctionalteamofdecisionmakers.

Dependingonthecomplexityofthepurchaseandthesizeofthebuyingcentre,a

participantmayassumeone,several,orallofthesixroles.

Thebusinessbuyingdecisionprocess

Step1:Problemrecognition

Thefirststepoccurswhensomeoneseesthatapurchasecansolveaproblem.Forstraightre-buysasimpleorderwillbeplacedandthedecisionprocessstops.


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Step2:Informationsearch

Thebuyingcentresearchesforinformationaboutproductsandsuppliers.TheywantProductspecificationslikeseize,weight,colour,features,serviceterms

anddeliveryrequirements.Afterthattheyneedtoidentifypotentialsuppliersandobtainproposals.

Step3:Evaluationofoptions

Thebuyingcentreassessestheproposals.

Step4:Productandsupplierselection

Thepurchasedecision,theselectionofthebestproductandsuppliertomeetthe

firmsneeds.Singlesourcingoccurswhenabuyerandsellerworkquitecloselytogether.Multiplesourcingmeansbuyingaproductfromseveraldifferent

suppliers.Outsourcingoccurswhenfirmsobtainoutsidesupplierstoprovide

goodsorservicesthatmightotherwisebesuppliedin-house.

Step5:Postpurchaseevaluation

Asseswhethertheperformanceoftheproductandthesupplierliveuptotheexpectations.


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Business-to-businessecommerce

Referstoanonlineexchangebetweentwoormorebusinessororganisations.

Internetistheprimarysource,butcompaniesalsouseintranetsthatonlygiveaccestoauthorizedemployees(comparabletothesystemofN@Tschool).In

contrastthereisalsoanExtranetthatallowscertainsuppliers,customersandotheroutsidetheorganisationtoaccessacompanysinternalsystem.

mr1 summary complete summary chapter 2 + 5

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